ADVANCING HOMEGROWN CAPABILITIES: INDIA’S DEFENCE EVOLUTION

Inspired by the visionary goals of the ‘Make in India’ and ‘Aatmanirbhar Bharat Abhiyan’ campaigns, the Indian defence industry ecosystem is at a transformative juncture on its ambitious path toward achieving strategic self-reliance in defence production, which is more important than ever in the present volatile global world order. Comprehensive and strategic efforts are driving the indigenisation of defence modernisation while simultaneously carving out a distinctive identity for ‘Brand India’ in the global defence arena. This can also be credited to the export of cutting edge, cost-effective, and high-performance indigenous equipment and systems, demonstrating a seamless blend of innovation, efficiency, and resilience.

Aatmanirbhar Bharat as a Foundation for Viksit Bharat

On the occasion of the 79th Independence Day, Prime Minister Shri Narendra Modi reaffirmed Aatmanirbhar Bharat as a key foundation for Viksit Bharat, highlighting India’s significant progress across defence, technology, energy, space, and manufacturing sectors. He pointed to Operation Sindoor as a powerful testament to India’s defence self-reliance, celebrating indigenous capabilities and Made-in-India weaponry that empower decisive and independent action, underscoring that national security cannot be compromised by foreign dependence.

Strengthening Self-Reliance in Critical Technologies

Further emphasising the future, the Prime Minister called upon India’s innovators and youth to develop indigenous jet engines, aiming for complete self-reliance in critical defence technologies. The National Critical Minerals Mission, launched in the last financial year, was a significant step forward, and the recent reiteration of its vision and purpose by PM Modi further reinforces its importance. The mission explores and secures essential mineral resources across 1,200 sites, strengthening India’s strategic autonomy by ensuring that its industrial and defence sectors remain robustly self-reliant. Together, these milestones reflect a nation steadfast in its pursuit of strength, dignity, and its aspiration to emerge as a developed power by 2047 through strategic and innovative self-reliance.

Transformation of India’s Defence Ecosystem Since 2001

Since the defence sector was opened to private participation in 2001, shortly followed by the introduction of the Defence Procurement Procedure, India’s defence ecosystem has undergone a profound and multi-dimensional transformation. This evolution spans policy structures, organisational reforms, procedural overhauls, and a significant shift in stakeholder mindsets, all united by a steadfast commitment to indigenisation. In recent years, this transformation has gained further momentum and clarity of purpose, encapsulated in the visionary narrative of ‘Make in India, for the World.’

Catalysts Accelerating Domestic Manufacturing Capabilities

Concerted efforts to streamline ease of doing business, elevate the prioritisation of Indigenous Design, Development, and Manufacturing (IDDM) across the full spectrum of military equipment, and emphasise indigenous procurement policies have collectively served as powerful catalysts for strengthening domestic manufacturing capabilities. Over the past decade, the government has adopted an unwavering focus on deeply integrating the Indian industry into the global defence supply chain, thereby ensuring the sector’s long-term sustainability, competitive edge, and resilience.

Progress Achieved and the Road Ahead

While tremendous strides have been made across the entire defence value chain, the journey toward achieving comprehensive self-reliance remains a work in progress. Ongoing and intensified efforts are essential not only to fortify India’s industrial base but also to amplify its influence as an emergent geopolitical power through strategic defence diplomacy and robust industrial advancement.

Record Defence Production and Growing Role of the Private Sector

Building on the strategic efforts to boost indigenous defence capabilities, India’s commitment to strengthening self-reliance in defence manufacturing is clearly reflected in its latest production milestones. In the financial year (FY) 2024-25, annual defence production reached a record INR 1,50,590 crore, marking a robust 18 per cent increase over the previous year’s output of INR 1.27 lakh crore and a remarkable 90 per cent growth since FY 2019-20, when production stood at INR 79,071 crore. Defence Public Sector Undertakings (DPSUs) and other public sector entities continue to serve as the backbone of this expansion, accounting for approximately 77 per cent of total production. Simultaneously, the private sector has solidified its emerging and increasingly vital presence, with its contribution rising from 21 per cent in FY 2023 24 to 23 per cent in FY 2024-25, underscoring its growing significance in India’s rapidly evolving defence manufacturing ecosystem.

From Import Dependence to Strategic Autonomy

The shift from import dependence to domestic production has been both strategic and rapid, driven by decisive political leadership and sustained policy reforms. India has steadily progressed toward achieving genuine self-reliance in the defence and aerospace sectors, prioritising the creation of a robust industrial base rooted in indigenous design and manufacturing capabilities. This focused approach not only reduces vulnerability to external supply disruptions but also fosters innovation, technological advancement, and economic growth within the country. Such self-reliance enables India to maintain an independent policy stance in critical strategic domains, a vital advantage in today’s hyper-volatile geopolitical environment. By nurturing homegrown expertise and strengthening manufacturing infrastructure, India is laying the foundation for a resilient defence ecosystem capable of meeting current and future security challenges.

Indigenous Procurement as a Driver of Growth

The government’s strong emphasis on prioritising domestic procurement in defence acquisitions has significantly accelerated production growth. Both Defence Public Sector Undertakings (DPSUs) and private companies are key contributors to this new phase of expansion, supplying a diverse and growing range of indigenous products such as aircraft, missiles, surveillance systems, ammunition, small arms, artillery, protective gear, among others.

Expanding Portfolio of Indigenous Defence Equipment

The variety and scope of domestically produced defence equipment continue to broaden steadily. Reflecting this strategic shift, the Ministry of Defence signed a record 193 contracts worth INR 2,09,050 crore in 2024-25, the highest ever in a single year. Of these, 177 contracts valued at INR 1,68,922 crore were awarded to the domestic industry, underscoring the government’s commitment to strengthening national defence capabilities through homegrown manufacturing. This focus on indigenous procurement has also played a vital role in generating employment opportunities and advancing technological expertise within the country.

Policy Reforms and Innovation-Driven Initiatives

In recent years, the Indian government has launched a series of transformative initiatives to strengthen the country’s defence production capabilities and advance its goal of self-reliance. These measures include a liberalised Foreign Direct Investment (FDI) policy, the annual defence innovation event ‘Manthan’, the Defence Testing Infrastructure Scheme (DTIS), prioritised domestic procurement policies, specific domestic procurement allocations, and a significant rise in defence exports. Together, these initiatives create a supportive ecosystem that encourages innovation, enhances production capacities, and promotes India as a competitive player in the global defence market.

Rise of Global Partnerships and Joint Ventures

India is increasingly recognised as a market with immense growth potential, attracting active interest from numerous foreign Original Equipment Manufacturers (OEMs) and foreign governments eager to collaborate with Indian partners. The establishment of approximately 48 joint ventures between foreign OEMs and Indian industries stands as a clear testament both to the credible capabilities of Indian industry and to the strong support provided by the Indian government through its industry-friendly policies. This growing network of partnerships highlights the confidence foreign players have in India’s evolving defence manufacturing ecosystem and underscores the effectiveness of the government’s supportive role in fostering industry growth.

SIDM’s Role in Strengthening India’s Defence Industry

Building on the growing collaborations between Indian industry and global partners, the Society of Indian Defence Manufacturers (SIDM), as the country’s sole industry association dedicated to the aerospace and defence sector, has played a pivotal role alongside the Ministry of Defence in showcasing India’s industrial capabilities on the global stage. SIDM has actively collaborated with both industry stakeholders and the Ministry to foster a more conducive ecosystem, opening new avenues for domestic manufacturers. Its initiatives include organising export promotion webinars, hosting senior delegations from friendly foreign nations, leading industry delegations abroad, and conducting supply chain conferences with leading foreign OEMs. These efforts facilitate the integration of Indian MSMEs into global supply chains and promote the sharing of export opportunities, all of which significantly contribute to strengthening India’s presence in the international defence market.

Outlook for a Technologically Advanced and Global Defence Ecosystem

Continuing this momentum, the industry remains optimistic and confident that the collaborative efforts of the government, armed forces, and industry will foster the development of a technologically advanced and globally competitive defence ecosystem in India. This robust ecosystem will not only meet the current and future capability needs of India’s own armed forces but also serve the defence requirements of numerous friendly nations, reinforcing India’s position as a trusted partner in the international defence landscape.

Note: This article has been contributed by Rajinder Singh Bhatia, President, Society of Indian Defence Manufacturers, and Chairman, Kalyani Strategic Systems Limited. It was first published in Policy Watch, November 2025, Vol. 13, Issue 7.