Launched in 2014–15, the Make in India campaign positioned defence manufacturing as a cornerstone of India’s self-reliance vision. Reforms like the strategic partnership (SP) model, Make-II, iDEXfunding, defence corridors, and liberalised FDI rules aimed to transform India from a major arms importer into a global producer and exporter. The private sector was envisioned as a key driver. A decade later, progress in artillery, radars, UAVs, and electronics highlights a promising trajectory for further growth.
However, a decade should yield transformative results, as seen globally. Israel developed a layered air and missile defence system. South Korea’s KF-21 fighter advanced from its 2022 first flight to contracts for 40 jets by 2028. Turkiye’s KAAN fifth-generation fighter, started in 2016, flew in 2024, pursuing engine independence and export markets. Turkish indigenous UAVs have also gained global demand.
The promise of 2015
In 2015, India imported over 60 per cent of its defence needs, per SIPRI data, with private firms contributing less than 15 per cent to production. Reforms sought to shift this balance. The SP model targeted private leadership in fighters, helicopters, submarines, and armoured vehicles. iDEX fostered start-ups, while defence corridors in Uttar Pradesh and Tamil Nadu supported MSME clusters. Positive indigenisation lists prioritised domestic sourcing for hundreds of items.
What has the private sector achieved?
Private players have delivered significant results:
- Artillery: Larsen & Toubro (L&T) and Bharat Forge developed the ATAGS and K9 Vajra-T howitzers, deployed in areas like Ladakh.
- Shipbuilding: L&T supplied offshore patrol vessels and interceptor boats, with private yards such as Adani are exploring submarine opportunities.
- UAVs and drones: iDEX-backed start-ups and firms like IdeaForge deployed UAVs along the LAC and LoC.
- Radars and electronics: Tata Power SED and joint ventures delivered advanced radars and command systems.
- Exports: Defence exports reached Rs 21,000 crore ($2.6 billion) in FY2023–24, a tenfold rise from 2016, with private firms driving over 70 per cent of the exports.
Private companies have invested in advanced facilities in Pune, Hyderabad, Coimbatore, and Bengaluru, producing machining, composites, and avionics. Start-ups are innovating in AI, robotics, loitering munitions, and swarm drones, building toward a robust ecosystem.
R&D: The engine of innovation
For large private players to lead India’s defence transformation, sustained investment in research and development (R&D) is critical. Developing cutting-edge technologies like jet engines, AESA radars, and advanced energetics requires significant capital and long-term commitment.
Companies like L&T, Bharat Forge and Tata Power SED must scale up R&D to create next-generation platforms and subsystems, ensuring global competitiveness. The government can support this by offering R&D tax incentives, co-funding high-risk projects, and establishing innovation hubs where industry, academia and start-ups collaborate. Such partnerships can accelerate breakthroughs in propulsion, sensors and AI, embedding intellectual property within India.
Opportunities for collaboration
Reforms have laid a strong foundation. The SP model holds potential for major contracts in fighters, submarines, and helicopters. Defence corridors provide land and partnerships for MSMEs. Over 200 iDEX contracts have spurred innovation, with pathways to production. Indigenisation lists, covering 500+ items since 2020, focus on spares and subsystems, paving the way for advanced technologies like rad-hard chips, seekers and turbines.
Start-Ups, MSMEs, and SMEs: The ecosystem’s backbone
Start-ups, MSMEs, and SMEs are vital to a thriving defence ecosystem. Initiatives like iDEX and corridor clusters have opened doors. Streamlining procurement can accelerate supply chain entry. Accessible certification for military standards (MIL-STD, JSS) and test facilities—like anechoic chambers and EMI/EMC setups—through transparent, fee-based services would speed development. Defence-specific credit guarantees can address working capital needs, enabling scale-up. Open architecture standards would allow SMEs to integrate sensors, AI and subsystems into larger platforms, fostering scalability and supporting Atmanirbharta.
Empowering private sector
Clear demand visibility enables confident investments, including in R&D. Multi-decade orders, similar to global models, support planning. Lifecycle contracts with recurring revenues for spares, upgrades and MRO ensure sustainability. Collaborative missions for propulsion, energetics, semiconductors and seekers will drive self-reliance, with government-backed R&D funding reducing financial risks for private players.
What needs to be done?
Five shifts can accelerate progress:
- Bankable demand: 10-year roadmaps for fighters, UAVs, artillery, and submarines with guaranteed volumes, aligned with the Armed Forces’ Technology Perspective & Capability Roadmap, but going beyond it.
- Lifecycle contracts: Emphasise through-life support, factoring in the lowest lifecycle costs for sustainability.
- Open architectures: MoD-owned standards to integrate MSME subsystems seamlessly.
- Critical technology missions: National programs for energetics, seekers, rad-hard microelectronics and propulsion, co-investing with industry to retain IP in India, supported by R&D grants.
- Exports as a metric: Promote exports with buyer’s credit and diplomatic backing to benchmark competitiveness.
Milestones for 2030
By 2030, India should target:
- 60 per cent domestic value-add in new platforms.
- Exports of $8–10 billion annually (from $2.6 billion in 2024).
- 10 indigenous platform families in production: MALE UAVs, loitering munitions, SHORAD/MRAD air defence, ATGMs, artillery, AESA radars, ASW corvettes, jet trainers, EW pods and SAR satellites.
- 80 per cent self-reliance in energetics, with surge capacity for shells, missiles, and rockets.
The path forward
Since 2015, reforms have fostered awareness and private innovation. Continued focus on streamlined procurement, predictable demand and R&D support will reduce import reliance. By empowering large private players to invest in R&D, alongside start-ups and SMEs, India can build a resilient defence ecosystem, turning vision into reality.
