India’s defence sector has experienced a remarkable transformation in the last decade, transitioning from a dependency on imports to a strong focus on self-reliance and indigenous production. This shift reflects India’s rising strategic importance as a military powerhouse and its unwavering commitment to safeguarding national interests. With bolstered budget allocations, forwardthinking policy reforms, and the growing involvement of the private sector, India’s defence industry is making its mark as a key global player. This article delves into the milestones of this transformation, the factors driving it, and the vision that will define India’s defence future.
From Dependency to Self-Reliance in Defence
India’s historical reliance on imported defence equipment created vulnerabilities and dependence on foreign suppliers. Recognizing the strategic necessity of building a robust domestic defence sector, the government has prioritized self-reliance in defence production. This commitment is reflected in the substantial growth of India’s defence budget, which has increased significantly from Rs 2,53,346 crore in 2013-14 to Rs 6,21,940.85 crore in 2024-25. This funding boost has propelled investments in research and development, modernization efforts, and the construction of new manufacturing facilities.
Record-Breaking Defence Manufacturing
The “Make in India” initiative has been a cornerstone in advancing domestic defence production. By incentivizing local manufacturing and easing regulatory hurdles, the government has cultivated a conducive environment for both public and private sector participation. The results have been striking: in FY 2023-24, India’s domestic defence production hit a record Rs 1.27 lakh crore, marking a 174% increase from Rs 46,429 crore in FY 2014- 15. With continued focus and investment, India is on track to achieve a target of Rs 1.75 lakh crore in defence production for the current fiscal year, with a bold ambition of Rs 3 lakh crore by 2029.
India’s Growing Defence Export Capabilities
In parallel with domestic production, India’s defence exports have seen impressive growth. From Rs 1,941 crore in FY 2014-15, exports surged to Rs 21,083 crore in FY 2023-24, representing a 32.5% growth from the previous year. Over the past decade, exports have increased 21 times, from Rs 4,312 crore to Rs 88,319 crore. This growth is a testament to the quality and competitiveness of Indian defence products, and India’s reputation as a reliable supplier in the global arms market
is solidifying. India’s defence exports now reach over 100 countries, with major destinations including the USA, France, and Armenia. India aims to achieve Rs 50,000 crore in defence exports by 2029, positioning itself as a formidable player in the global arms trade.
India’s range of exported products spans advanced equipment like bulletproof jackets, Dornier Do-228 aircraft, Chetak helicopters, fast interceptor boats, and lightweight torpedoes. The inclusion of “Made in Bihar” boots in the Russian Army’s gear highlights India’s growing manufacturing prowess and adherence to international standards.
Key Drivers of Growth: Government Strategies
A series of government-led initiatives have significantly accelerated the growth of India’s defence sector. These reforms span various areas, from foreign direct investment (FDI) liberalization to simplifying procurement processes, creating a comprehensive strategy to fortify India’s defence manufacturing capabilities.
Notable initiatives include:
Liberalized FDI Policy: Raising the FDI cap to 74% under the automatic route and up to 100% under the government route has attracted substantial foreign investment, amounting to Rs 5,077 crore as of February 9, 2024.
Increased Budget Allocation: The FY 2024-25 defence budget of Rs 6,21,940.85 crore reflects the government’s commitment to modernizing the armed forces and boosting indigenous production.
Domestic Procurement Priority: The Defence Acquisition Procedure (DAP)-2020 prioritizes the procurement of capital items from domestic sources, further encouraging Indian-made defence products.
Indigenization Lists: These lists Forging a New Era: India’s Defence Transformation and Global Aspirations progressively identify items for indigenization, offering opportunities for domestic manufacturers and reducing dependence on imports.
Simplified Licensing Process: Streamlined industrial licensing has facilitated easier entry into the defence manufacturing sector for businesses.
iDEX Scheme: By involving startups and MSMEs in defence R&D, this scheme fosters innovation and accelerates industry growth.
Public Procurement Preference: The Public Procurement (Preference to Make in India) Order 2017 gives preferential treatment to Indian manufacturers in government purchases.
Defence Industrial Corridors: The establishment of defence industrial corridors in Uttar Pradesh and Tamil Nadu is catalyzing the development of defence manufacturing clusters.
Opening Defence R&D: By opening defence research and development to industry and startups, the government is encouraging greater collaboration and accelerating technological innovation.
Domestic Procurement Allocation: In FY 2024-25, Rs 1,05,518.43 crore (75%) of the Rs 1,40,691.24 crore capital acquisition budget has been earmarked for domestic procurement.
Looking Ahead: The Road to a Global Defence Power
India’s defence transformation is far from complete, and the government continues to refine policies to further strengthen the domestic industry and enhance its global competitiveness. Key areas for future growth include:
Technology Development: Significant investment in R&D to develop indigenous technologies and reduce reliance on foreign technology.
Skill Development: Building a highly skilled workforce to support the expanding defence manufacturing sector.
Infrastructure Development: Creating state-of-the-art infrastructure to support both domestic production and defence exports.
Procurement Process Optimization:
Further streamlining defence procurement procedures to improve efficiency and accelerate acquisitions.
India’s vision extends beyond mere selfsufficiency in defence. It aims to build a globally competitive defence industry that will contribute to both national security and economic growth. With strong political will, vast technical expertise, and an evergrowing industrial base, India is well on its way to realizing this vision and taking its place as a major force in the global defence sector.
