Defence leads drive to innovate and make in India

The Defence Acquisition Procedure 2020 prescribed 50 percent indigenous content in procurement contracts.
INS Vikrant is an indigenous aircraft carrier in service with Indian Navy
INS Vikrant is an indigenous aircraft carrier in service with Indian NavyFile Photo | PIB

India’s defence ecosystem has undergone major transformations in recent years, with key institutional and policy changes spurring indigenisation, domestic capital procurement and exports. Atmanirbhar Bharat and Make in India are two goals of the government that have fueled large-scale changes in the sector. 

In an era of uncertainty, achieving these goals would help mitigate risks on account of disruption or manipulation of critical supply chains—precisely the kind of challenges that have constrained Ukraine’s performance on the battlefield against Russia.

The Defence Acquisition Procedure 2020 prescribed 50 percent indigenous content in procurement contracts. Further, in a bid to encourage foreign original equipment manufacturers to set up maintenance and manufacturing facilities in India, a new procurement category has been introduced to enable ab initio indigenisation of spares. The defence ministry has released several Positive Indigenisation Lists for procurement, including 5,000 items currently imported by defence public sector units.

A notable step was the ‘Srijan’ indigenisation portal launched in August 2020 to help domestic partners play an active role in the goal of self-reliance. Over 34,000 items that were being imported have been uploaded on the portal, of which nearly one-third are already in the process of being indigenised.

Two defence industrial corridors have been established in Tamil Nadu and Uttar Pradesh. These have attracted investments to the tune of Rs 7,000 crore. In November 2023, the Swedish arms major SAAB announced the first 100 percent FDI project to manufacture the Carl Gustav M4 rocket system in India.

There has been laudable progress in building platforms, especially by the Warship Design Bureau of the Indian Navy. The INS Vikrant aircraft carrier, dedicated to the nation by the prime minister in September 2022, is the largest warship built in India’s maritime history. It is spawning new technological capabilities across industries, including for SMEs and MSMEs.

Narendra Modi’s sortie last November in the homegrown single-engine Tejas light combat aircraft was a huge boost for the Make in India initiative. There is equal focus on missiles, long-range artillery guns, multi-barrel rocket launchers and tanks, besides advanced radars, sensors and electronic capabilities crucial in an era of network-centric warfare.

The government recently constituted a high-powered committee to undertake a holistic review of the functioning of the Defence Research and Development Organisation. Building ‘fit to purpose’ domestic capabilities in defence R&D and innovation commensurate with the emerging challenges remains the guiding principle.

The government has stipulated that a significant portion of the defence capital procurement budget should be diverted to the domestic industry. Since 2020–21, the budget for domestic procurement has risen significantly, from around 40 percent of the total capital procurement budget (Rs 52,000 crore) in 2020–21 to 75 percent (Rs 99,223 crore) in 2023–24. Moreover, since 2022–23, 25 percent of this domestic capital procurement budget has been exclusively earmarked for the private defence industry sector.

As a result of these initiatives, India’s defence production crossed Rs 1,00,000 crore for the first time in 2022–23 to touch Rs 1,08,684 crore. DPSUs accounted for nearly 75 percent of the total output, with the private sector contributing about 20 percent and joint ventures the rest. The defence production target for 2023–24 is Rs 1,35,000 crore. By 2025, it is expected to reach Rs 1,75,000 crore.  

An innovation ecosystem for defence manufacturing, Innovations for Defence Excellence or iDEX, was launched in April 2018 to foster innovation and technology development by engaging industries including MSMEs, start-ups, individual innovators, R&D institutes and the academia.

The iDEX Prime framework was launched in 2022 to support start-ups with grants-in-aid up to Rs 10 crore to enable the development of high-end solutions. Funding under the Technology Development Fund scheme has been enhanced from Rs 10 crore to Rs 50 crore per project. A Dare to Dream Innovation contest was launched by the DRDO to support start-ups and innovation. About 25 percent of the defence R&D budget in 2023–24 has also been earmarked for academia and private industry.

With growing domestic production and the demonstrated use of indigenous products by the armed forces, defence exports are set to rise. India has set a defence export target of Rs 35,000 crore by 2025. 

Equally path-breaking is the government’s consistent efforts to craft policies that provide equitable career opportunities to women, thereby tapping a large talent pool. The Nari Shakti initiative has played a major role in transforming the armed forces. Sainik Schools, which have long served as the grassroots institutions for recruitment, are no longer a male bastion. In an epic decision, the doors of the National Defence Academy, the premier tri-services training institute, have also been thrown open to women. The number of female officers in the armed forces has risen in recent years from a mere 3,000 to more than 10,000.

Greater self-reliance and resilience in the defence sector is needed to achieve the goal of Viksit Bharat by 2047. The transformation underway in the defence-industrial complex has set the stage for multiple stakeholders to rally together to promote domestic innovation, while cementing strategic partnerships around the world. The day is not far when India will become an integral part of global defence value chains.  

Sujan Chinoy

Director General, Manohar Parrikar Institute for Defence Studies and Analyses

(Views are personal)

Related Stories

No stories found.

The New Indian Express