DEFENCE PRODUCTION & EXPORT OF INDIA

DEFENCE PRODUCTION & EXPORT OF INDIA

DEFENCE PRODUCTION & EXPORT OF INDIA Production has grown at an extraordinary pace since the launch of the “Make in India” initiative, reaching a record ₹1.27 lakh crore in FY 2023-24. Once dependent on foreign suppliers, the country now stands as a rising force in indigenous manufacturing, shaping its military strength through homegrown capabilities. This shift reflects a strong commitment to self-reliance, ensuring that India not only meets its security needs but also builds a robust defence industry that contributes to economic growth.

Strategic policies have fuelled this momentum, encouraging private participation, technological innovation, and the development of advanced military platforms.

Key Points :

•  The surge in the defence budget, from ₹2.53 lakh crore in 2013-14 to ₹6.81 lakh crore in 2025-26, underlines the nation’s determination to strengthen its military infrastructure.
•  The value of defence production has surged to a record high of ₹1,27,434 crore, marking an impressive 174% increase from ₹46,429 crore in 2014-15.
•  65% of defence equipment is now manufactured domestically, a significant shift from the earlier 65-70% import dependency, showcasing India’s self-reliance in defence.
•  A robust defence industrial base includes 16 Defence Public Sector Undertakings (DPSU), over 430 licensed companies, and approximately 16,000 MSMEs, strengthening indigenous production capabilities.
•  The private sector plays a crucial role, contributing 21% to total defence production, fostering innovation and efficiency.
•  India targets ₹3 lakh crore in defence production by 2029, reinforcing its position as a global defence manufacturing hub.

Defence Export :

•  India’s expanding global footprint in defence manufacturing is a direct result of its commitment to self-reliance and strategic policy interventions. Defence exports have surged from ₹686 crore in FY 2013-14 to an all-time high of ₹21,083 crore in FY 2023-24, marking a 30-fold increase over the past decade.
•  Defence exports have grown 21 times, from ₹4,312 crore in the 2004-14 decade to ₹88,319 crore in the 2014-24 decade, highlighting India’s expanding role in the global defence sector.
•  Defence exports surged by 32.5% year-on-year, rising from ₹15,920 crore in FY 2022-23 to ₹21,083 crore in FY 2023-24.

Important items of Defence Export:

• • India’s diverse export portfolio includes bulletproof jackets, Dornier (Do-228) aircraft, Chetak helicopters, fast interceptor boats, and lightweight torpedoes.
• • According to the defence ministry data, India supplies bullet-proof jackets to 34 countries including Australia, Japan, Israel and Brazil.
• • Notably, ‘Made in Bihar’ boots are now part of the Russian Army’s gear, highlighting India’s high manufacturing standards.
• • India now exports defence equipment to over 100 countries, with the USA, France, and Armenia emerging as the top buyers in 2023-24.
• • The US, the UK and France are buying defence electronics from India, while Mauritius, Seychelles and the Maldives have procured fast interceptor boats.
• • Besides the Philippines, Vietnam is reportedly seeking to buy BrahMos supersonic cruise missiles, jointly developed by Russia and India. Indonesia is also a potential buyer of the missiles.

Important Initiative by Government of India

1. Innovations for Defence Excellence (iDEX)

•  Launched in April 2018, Innovations for Defence Excellence (iDEX) has created a thriving ecosystem for innovation and technology development in defence and aerospace.
•  By engaging MSMEs, startups, individual innovators, R&D institutes, and academia, iDEX has provided grants of up to ₹1.5 crore for developing innovative technologies.
•  To further enhance self-reliance in defence technology, ₹449.62 crore has been allocated to iDEX, including its sub-scheme Acing Development of Innovative Technologies with iDEX (ADITI), for 2025-26.

The scheme has three key objectives:

• • Facilitate rapid development of new, indigenised, and innovative technologies for the Indian Defence and Aerospace sector, to meet their needs in a shorter time span.
• • Create a culture of engagement with innovative startups, to encourage co-creation for Defence and Aerospace sectors.
• • Empower a culture of technology co-creation and co-innovation within the Defence and Aerospace sectors.

2. SAMARTHYA: Showcasing India’s Defence Indigenisation

• The success story of indigenisation and innovation in the defence sector was highlighted at the Aero India 2025 event ‘SAMARTHYA’, which showcased India’s progress in defence manufacturing.

3. Self-Reliant Initiatives through Joint Action (SRIJAN), 2020

• • Launched by the Department of Defence Production (DDP) in August 2020 to promote indigenisation under Atmanirbhar Bharat.
• • Serves as a common platform for Defence Public Sector Undertakings (DPSUs) and the Armed Forces (SHQs) to list imported items for domestic manufacturing.
• • As of February 2025, over 38,000 items are available, with more than 14,000 successfully indigenised.

4. Positive Indigenisation Lists (PILs)

•  The Department of Defence Production (DDP) and the Department of Military Affairs (DMA) have issued five Positive Indigenisation Lists (PILs) for Line Replaceable Units (LRUs), assemblies, sub-assemblies, sub-systems, spares, components, and high-end materials.
•  These lists set fixed timelines beyond which procurement will be restricted to domestic manufacturers.
•  Out of over 5,500 items listed, more than 3,000 have been indigenised as of February 2025.
•  Key indigenised technologies include artillery guns, assault rifles, corvettes, sonar systems, transport aircraft, light combat helicopters (LCHs), radars, wheeled armoured platforms, rockets, bombs, armoured command post vehicles, and armoured dozers.

5. Defence Industrial Corridors

•  Two Defence Industrial Corridors (DICs) have been set up in Uttar Pradesh and Tamil Nadu to boost defence manufacturing. These corridors provide incentives to companies investing in the sector.
•  Investments worth more than Rs 8,658 crore have already been made in the 6 nodes of UP viz. Agra, Aligarh, Chitrakoot, Jhansi, Kanpur and Lucknow and 5 nodes of Tamil Nadu viz. Chennai, Coimbatore, Hosur, Salem and Tiruchirappalli.
•  As of February 2025, 253 MoUs have been signed, with a potential investment of ₹53,439 crore.

6. Ease of Doing Business (EoDB)

•  The government has introduced several measures to improve ease of doing business in the defence manufacturing sector.
•  The validity of export authorisation for parts and components has been extended from two years to the completion of the order or component, whichever is later.
•  In 2019, the Defence Product List was streamlined to reduce the number of items requiring a manufacturing licence.
•  Parts and components of defence items were de-licensed in September 2019 to encourage investment.
•  The validity of defence licences under the Industries (Development and Regulation) Act, 1951, has been extended from three years to 15 years, with a further extension option of up to 18 years.
•  Over 700 industrial licences have been issued to 436 companies in the defence sector.
•  The introduction of an end-to-end digital export authorisation system has improved efficiency, with more than 1,500 authorisations issued in the last financial year.

7. Liberalized FDI Policy:

•  Foreign Direct Investment (FDI) in the defence sector was liberalised in September 2020 to attract foreign investment, allowing up to 74% FDI through the automatic route and above 74% through the government route.
•  Since April 2000, the total FDI in defence industries stands at Rs 5,516.16 crore.

8. TATA Aircraft Complex:

•  Tata Aircraft Complex was inaugurated in Vadodara in October 2024 to manufacture C-295 aircraft, boosting Atmanirbharta in defence with 40 made-in-India aircraft out of 56 under the programme.

9. Manthan:

•  The annual defence innovation event, Manthan, held during Aero India 2025 in Bengaluru, brought together leading innovators, startups, MSMEs, academia, investors, and industry leaders from the defence and aerospace sectors, reaffirming confidence in the government’s commitment to technological advancements and Aatmanirbhar Bharat.

10. Defence Testing Infrastructure Scheme (DTIS):

•  DTIS aims to boost indigenisation by providing financial assistance for setting up eight Greenfield testing and certification facilities in the aerospace and defence sector, with seven test facilities already approved in areas like unmanned aerial systems, electronic warfare, electro-optics, and communications.

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