India Defence Self-Reliance: Production and Exports

Why in News?

As India marks its 80th Independence Day, the country’s defence sector has recorded significant growth in budgetary support, indigenous production, exports, research and private-sector participation. These developments reflect India’s transition from import dependence towards a more self-reliant and technologically capable defence ecosystem.

Transformation of India’s Defence Sector

India’s defence policy increasingly links national security with domestic industrial capability. Under Atmanirbhar Bharat, the government has focused on:

• modernising the armed forces;
• encouraging indigenous design and production;
• expanding private-sector participation;
• supporting start-ups and MSMEs;
• reducing dependence on imported equipment;
• promoting defence exports; and
• developing critical and emerging technologies.

The objective is not complete economic isolation but the creation of domestic capacity in strategically important systems.

Defence Investment and Military Modernisation

Growth in Defence Budget

India’s defence budget increased from ₹2.53 lakh crore in 2013–14 to ₹7.85 lakh crore in 2026–27, representing approximately 3.1-fold growth.

Growth in Capital Expenditure

Capital expenditure increased from ₹94,587.95 crore in 2014–15 to ₹2.19 lakh crore in 2026–27, registering approximately 2.3-fold growth.

Capital expenditure supports the purchase and development of:

• aircraft and helicopters;
• missiles and air-defence systems;
• warships and submarines;
• communication and surveillance equipment;
• artillery and armoured platforms; and
• supporting military infrastructure.

Defence Production and Exports

Record Indigenous Production

India’s defence production reached a record ₹1.78 lakh crore in 2025–26.

The public sector remains the principal producer, while private companies are acquiring a larger role in components, platforms, innovation and exports.

Expansion of Defence Exports

Defence exports increased from ₹686 crore in 2013–14 to ₹38,424 crore in 2025–26. This represents approximately 56-fold growth over 12 years.

Indian defence products now reach more than 80 countries.

National Targets for 2029

The government aims to achieve:

• ₹3 lakh crore in annual defence production; and
• ₹50,000 crore in annual defence exports.

Research, Innovation and Testing Infrastructure

Defence Research and Development

Defence R&D allocation increased from ₹13,716.14 crore in 2014–15 to ₹29,100.25 crore in 2026–27, an increase of more than 112%.

Since 2022–23, 25% of the defence R&D budget has been opened to:

• private industry;
• start-ups;
• MSMEs; and
• academic institutions.

This seeks to widen the country’s defence-technology base beyond government laboratories.

Defence Testing Portal

Testing facilities across 24 DRDO laboratories have been made accessible through the Defence Testing Portal.

The portal enables domestic manufacturers and start-ups to:

• identify specialised testing facilities;
• request paid access;
• validate products and components; and
• reduce the need to create expensive testing infrastructure independently.

Defence Acquisition Reforms

Defence Acquisition Council

• The Defence Acquisition Council (DAC) is the apex body responsible for major capital-acquisition decisions of the Ministry of Defence.
• It grants Acceptance of Necessity (AoN), which formally recognises the armed forces’ requirement and allows the procurement process to proceed.
• The DAC has granted AoN for more than ₹6 lakh crore of systems designed by DRDO and intended to be manufactured by Indian industry.

Major approved indigenous acquisitions include:

• 97 Tejas Mk-1A fighter aircraft: approximately ₹62,000 crore
• 156 LCH Prachand helicopters: approximately ₹62,700 crore

Evolution of the Procurement Framework

Defence Procurement Procedure, 2016

DPP 2016:

• streamlined defence procurement;
• promoted Make in India; and
• created the foundation for later indigenisation reforms.

Defence Acquisition Procedure, 2020

DAP 2020:

• gives priority to indigenous procurement;
• encourages Indian design and development;
• increases opportunities for domestic companies; and
• supports greater indigenous content in defence equipment.

Defence Procurement Manual, 2025

DPM 2025 governs revenue procurement required for the operation and maintenance of the armed forces.

It streamlined approximately ₹1 lakh crore of procurement by:

• accelerating approvals;
• relaxing penalties for indigenous projects; and
• providing greater assurance of long-term orders.

Draft Defence Acquisition Procedure, 2026

The draft DAP 2026 proposes:

• simpler acquisition categories;
• stronger support for indigenous design and development; and
• indigenous-content requirements of up to 60%.

Innovation-Support Schemes

Innovations for Defence Excellence

iDEX connects the armed forces with start-ups, MSMEs and independent innovators.

• Approved outlay: ₹498.78 crore
• Start-ups, MSMEs and innovators engaged: 676
• Design and development contracts by March 2026: 551

It provides a pathway for innovative solutions to move from military problem statements to prototype development and possible procurement.

ADITI Scheme

The Acing Development of Innovative Technologies with iDEX (ADITI) scheme supports the development of strategically important and advanced defence technologies.

• Outlay: ₹750 crore
• Implementation period: 2023–24 to 2025–26
• Implementing framework: Defence Innovation Organisation

Technology Development Fund

The Technology Development Fund (TDF) supports Indian industries in developing critical defence technologies.

• Maximum grant: ₹50 crore
• Projects under implementation by June 2026: 80
• Value of projects: ₹334 crore
• Additional corpus for deep and emerging technologies: ₹500 crore

Technology Transfer and Industry Participation

DRDO is connecting public research with commercial manufacturing through its Development-cum-Production Partner framework.

Progress recorded by March 2026 included:

• technologies transferred to 134 partner companies;
• 2,180 technology-transfer agreements signed; and
• more than 2,780 intellectual property rights opened for industry use.

Technology transfer enables companies to manufacture tested defence systems without independently developing every technology from the beginning.

Indigenisation and Domestic Manufacturing

Positive Indigenisation Lists

Positive Indigenisation Lists identify defence items that must be procured from domestic sources within prescribed timelines.

By May 2026:

• 10 lists had been notified;
• five were issued by the Department of Military Affairs;
• five were issued by the Department of Defence Production; and
• the lists covered 5,521 items.

They create predictable demand for Indian manufacturers while progressively restricting imports of listed items.

SRIJAN-DEEP Platform

The SRIJAN Defence Equipment Empowerment Platform (DEEP) is a digital repository supporting indigenous defence sourcing.

As of May 2026, it contained:

• more than 41,000 vendors; and
• approximately 2.7 lakh products.

It helps connect defence requirements with domestic suppliers and strengthens local supply chains.

Defence Industrial Corridors

Uttar Pradesh Defence Industrial Corridor

By April 2026, it had recorded:

• investment commitments of ₹42,057 crore; and
• grounded investments of ₹4,409 crore.

The BrahMos Integration and Testing Facility in Lucknow has also commenced missile manufacturing.

Tamil Nadu Defence Industrial Corridor

It had attracted:

• proposed investment of ₹32,699 crore; and
• realised investment of ₹6,446 crore.

The two corridors seek to create manufacturing clusters, common infrastructure, skilled employment and stronger linkages among large firms, MSMEs and research institutions.

Ease of Doing Business and Defence Trade

Industrial Licensing

The validity of industrial licences was extended:

• from seven years, extendable by three years;
• to 15 years, extendable by three years, providing a maximum of 18 years.

Licences under the Arms Act can now receive lifetime validity.

Defence Exim Portal

The revamped Defence Exim Portal provides:

• end-to-end digital processing;
• automated company verification;
• simplified registration;
• real-time application tracking; and
• secure payment integration.

It is intended to make defence exports and imports more transparent and efficient.

Foreign Direct Investment

The defence-sector FDI limit permits:

• up to 74% through the automatic route; and
• up to 100% through the government route.

By March 2026, the sector had attracted FDI inflows of ₹6,670.59 crore.

Higher FDI limits are intended to bring capital, specialised technology, manufacturing capability and integration with global supply chains. However, strategically sensitive investments remain subject to government scrutiny.

Operational Self-Reliance in 2025–26

Ammunition Indigenisation

The Indian Army achieved approximately 91% self-sufficiency in ammunition by indigenising 159 of the 175 ammunition variants in its inventory.

This improves operational preparedness by:

• reducing dependence on external suppliers;
• enabling faster replenishment;
• limiting vulnerability to international disruptions; and
• supporting domestic production capacity.

Missiles and Emerging Technologies

Strategic and Precision-strike Systems

India successfully tested:

• Agni-4 Intermediate-Range Ballistic Missile;
• Agni-5 long-range surface-to-surface ballistic missile;
• TARA glide weapon; and
• RudraM-II air-to-surface missile.

These tests validated indigenous capabilities in long-range deterrence and precision strikes against ground targets.

Air-defence Systems

DRDO advanced:

• Kusha Long-Range Air Defence Missile;
• Very Short-Range Air Defence System (VSHORADS); and
• an integrated air-defence system combining missile interceptors, short-range weapons and laser technologies.

A layered air-defence network uses different systems to intercept threats at different ranges and altitudes.

Hypersonic Technology

DRDO conducted a 12-minute ground test of an actively cooled scramjet combustor.

A scramjet engine:

• uses oxygen from the atmosphere instead of carrying an oxidiser;
• maintains supersonic airflow through the combustion chamber; and
• can support sustained flight at hypersonic speeds.

Active cooling protects the combustor from the extreme heat generated during high-speed operation.

Maritime Defence and Strike Capabilities

Indigenous Naval Platforms

The Indian Navy commissioned 12 warships and submarines, including:

• INS Surat;
• INS Nilgiri; and
• INS Vaghsheer.

INS Mahendragiri, a stealth frigate with more than 75% indigenous content, also entered service.

Other developments included:

• launch of SHACHI, the first of 11 Next Generation Offshore Patrol Vessels;
• commissioning of INS Dunagiri;
• commissioning of INS Sanshodhak; and
• commissioning of INS Agray.

The completion of the indigenous Sandhayak-class survey fleet improves hydrographic surveying, maritime-domain awareness and support for naval operations.

Naval and Ballistic Missile Capabilities

DRDO successfully tested:

• the Naval Anti-Ship Missile–Medium Range; and
• a multi-layered Ballistic Missile Defence capability.

These systems strengthen India’s capacity to address aerial, ballistic and maritime threats.

Significance of Defence Self-Reliance

1. Strategic Autonomy

Domestic production reduces dependence on foreign suppliers during wars, sanctions and global supply-chain disruptions.

2. Operational Preparedness

Local manufacturing permits faster maintenance, repair, ammunition replenishment and technological upgrades.

3. Economic Development

Defence production generates skilled employment and creates demand for metallurgy, electronics, aerospace, artificial intelligence and advanced materials.

4. Export Competitiveness

Growing exports improve India’s position as a reliable defence partner and support long-term strategic relationships.

5. Innovation Ecosystem

Schemes such as iDEX, ADITI and TDF connect the armed forces with start-ups, academia, MSMEs and private companies.

6. Resilient Supply Chains

Indigenisation lists, technology transfers and defence corridors help create domestic networks of component and subsystem manufacturers.

Conclusion

India’s defence transformation represents a shift from import-led acquisition towards indigenous design, development and manufacturing. Higher investment, acquisition reforms, innovation schemes, indigenisation lists and industrial corridors have expanded domestic capability. Sustained progress will depend on converting research into timely procurement, mastering critical technologies and ensuring consistent quality. A competitive and technologically advanced defence-industrial base will strengthen India’s military preparedness, strategic autonomy and role as a dependable security partner by 2047.