Despite a rich tradition of manufacturing weapons, post-independence, India’s domestic defence industry faced stagnation, leading to increased dependence on imports for strategic needs. Corruption scandals further compounded the challenges, highlighting the urgent need for indigenous development and manufacturing capabilities, particularly in light of the evolving global security landscape.
Recognizing the precariousness of the situation, Prime Minister Narendra Modi and the Bharatiya Janata Party (BJP) laid down a comprehensive vision for indigenous defence manufacturing in its 2014 manifesto. The cornerstone of this vision was the "Make in India" initiative, championed by PM Modi. This initiative has been instrumental in encouraging domestic production and fostering innovation within the defence sector.
To achieve this goal, a series of bold decisions and policy reforms have been set in motion. Upon assuming power, the government embarked on a transformative path, emphasizing the development of domestic defence manufacturing capacity under the "Atmanirbhar Bharat" campaign. Reforms in the Defence Procurement Policy, such as the introduction of categories like "Buy Indian - Indigenously Designed, Developed and Manufactured" (IDDM) have been pivotal in prioritizing procurement from domestic sources. Additionally, the introduction of Defence Acquisition Procedure (DAP) 2020 and the release of lists for indigenization have further bolstered the domestic defence manufacturing ecosystem.
One of the key areas of focus has been the increase in the defence budget and its effective utilization in developing the domestic defence manufacturing ecosystem.
In FY 2023-24, a record 75% of the defence capital procurement budget, approximately Rs. 1 lakh crore, was allocated to the domestic industry, up from 68% in the previous fiscal year. The Ministry of Defence received a total budget allocation of Rs. 5.94 lakh crore, constituting 13.18% of the total budget of Rs. 45.03 lakh crore, with a significant portion dedicated to capital outlay for modernisation and infrastructure development, amounting to Rs. 1.63 lakh crore. This has led to unprecedented advancements in technology and infrastructure within the defence sector. Furthermore, to catalyze investment and promote indigenization, the government announced the creation of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu. These corridors are poised to become engines of economic growth and hubs for defence manufacturing in their respective regions.
Additionally, Prime Minister Narendra Modi inaugurated the Hindustan Aeronautics Limited (HAL) Helicopter Factory in Tumakuru, Karnataka, which is the largest helicopter manufacturing facility in India. Initially, the factory will produce Light Utility Helicopters (LUHs). Furthermore, the foundation stone for the manufacturing facility of 40 C-295 transport aircraft was laid by the Prime Minister in Vadodara, Gujarat, in October 2022. The first Made in India C-295 aircraft is expected to be delivered from September 2026.
Moreover, private sector participation has been encouraged through initiatives like "Innovations for Defence Excellence" (iDEX), which is aimed at fostering indigenous innovation and technology development. To facilitate the indigenization of defence items by Indian industry, initiatives like the SRIJAN portal have been launched. So far, over 30,000 defence items have been uploaded onto the SRIJAN portal for indigenisation, inviting participation from industries, including MSMEs, to collaborate in the indigenisation process.
Furthermore, the government has undertaken structural reforms within the defence sector, including the carving out of seven new defence companies from the Ordnance Factory Board. This move aims to streamline operations and enhance efficiency within the defence manufacturing ecosystem.
In tandem with these efforts, foreign direct investment (FDI) policies in the defence sector have been liberalized to encourage foreign original equipment manufacturers to invest, manufacture, and export from India. To date, companies engaged in the defence sector have reported foreign direct investment (FDI) totaling Rs. 5077 crores. This not only serves the requirements of the Indian Armed Forces but also positions India as a key player in the global defence market.
The results of these concerted efforts are already visible, with a significant increase in industrial licenses issued for defence manufacturing and a decline in arms imports. India has not only reduced dependence on imported defence hardware but has also led to a nearly 23-fold increase in defence exports since 2013-14, reaching an all-time high of Rs. 15,920 crore in FY 2022-23.
India's defence exports now reach over 85 countries, with notable exports including BrahMos missiles, Akash missile systems, radars, simulators, armoured vehicles, and artillery guns. Indigenous defence equipment production has surged to Rs. 1 lakh crore in 2022-23, further vindicating the government's commitment to promoting indigenous research and development in the defence sector.
Most importantly, these defence reforms have not only strengthened the Indian Armed Forces but have also led to the creation of a plethora of direct and indirect jobs, as well as critical infrastructure, making the everyday lives of our Armed Forces personnel safer and more efficient.
In conclusion, the Modi Government's steadfast commitment to transforming India's defence sector has not only strengthened national security but has also driven economic growth and job creation and has set the stage for India to emerge as a global leader in defence production.
