“Achieving self-reliance in defence and reducing import dependency for military hardware is important for India to maintain its strategic autonomy and shoulder new responsibilities commensurate with its emerging stature.” – Chief of Defence Staff General Anil Chauhan
Prime Minister Narendra Modi’s significant contributions to national security policymaking have led to the reformulation of security objectives and a strong commitment to bringing transformative changes in security governance. The “Aatmanirbharta” initiative, launched in May 2020, aims to foster indigenisation and productivity across various sectors. The defence sector, in particular, has seen remarkable progress in achieving self-reliance and is poised for further advancements.
The Union Budget 2022–23 reflects this defence renaissance. With around 70% of the defence budget reserved for domestic defence industries, the government has taken significant steps to promote indigenous production. Additionally, substantial contracts worth Rs 54,000 crore (US$ 7.1 billion) have been signed for domestic procurement, boosting the defence industry’s growth and capabilities.
Encouraging Indigenous R&D and Procurement
The government has allocated 25% of the research and development budget for industry-led R&D. This emphasis on research and innovation will strengthen India’s technological and manufacturing capabilities, enabling the country to meet its defence requirements internally.
To encourage domestic manufacturing and procurement, the Defence Acquisition Procedure (DAP) 2020 has given priority to indigenous sources. The government has also identified certain defence items for which import has been embargoed beyond specified timelines. These items are listed in the ‘Positive Indigenisation Lists,’ which include various critical defence equipment and weapons systems.
Over the past few years, there has been a consistent increase in the proportion of purchases made domestically. From 54% in 2018–19 to 68% in the current year (2022-23 up to September 2022), the percentage allocated to purchases made within the country has been on the rise. Out of the domestic purchases, 25% of the total is now earmarked for purchases from the private sector, promoting the growth of MSMEs and start-ups in the defence sector.
As a result of the government’s focus on indigenisation, defence procurement from foreign sources has declined from 46% to 36% over the last four years, promoting self-sufficiency in defence production.
Simplified Industrial Licensing Process and liberalised FDI Policy
The government’s efforts to simplify the industrial licensing process have resulted in the issuance of 595 industrial licenses to 366 enterprises operating in the defence sector until October 2022.
In line with the “Make in India” campaign, the government has liberalised the FDI policy, permitting 74% FDI through the automatic route in the defence manufacturing industry. This move is expected to attract significant investments from global defence majors, further bolstering India’s defence capabilities.
The relentless pursuit of Aatmanirbharta in defence technology is a testament to India’s commitment to self-reliance and security. With increased budget allocation, a focus on indigenous research and development, and policy reforms to promote domestic procurement, the defence sector is poised for significant growth. By fostering collaboration between the public and commercial sectors, India is well on its way to becoming a technologically advanced and self-sufficient force in the global defence arena.
Promoting Indigenisation through Make-I and Make-II Procedures
The Make-I and Make-II procedures outlined in DAP-2020 emphasise indigenisation of defence equipment through industry-funded projects at the prototype development stage. This streamlined process incorporates Single Stage Composite Trials of prototypes, eliminating quantity vetting and scaling for initial procurements in delegated cases. After simplification, the timelines for the Make-II procedure will be cut from the current total time period of 122-180 weeks to 101-109 weeks, expediting the indigenization efforts.
Mission DefSpace and iDEX: Encouraging Innovation in Defence and Aerospace
The Prime Minister introduced Mission DefSpace at DefExpo in October 2022, featuring 75 defence space challenges relevant to end users. These space-related challenges have been divided into five categories: launch system, satellite system, communication and payload system, ground system, and software system. Start-ups, MSMEs, and individual innovators from the private sector have been invited to participate in solving these challenges, fostering innovation in the defence space sector.
The iDEX ecosystem, formed in April 2018, aims to stimulate innovation and technology development in defence and aerospace by involving industries such as MSMEs, start-ups, individual innovators, R&D institutes, and academia. Through iDEX, these entities receive grants/funding and other assistance to carry out innovations and R&D that have the potential to cater to Indian defence and aerospace needs in the future. So far, 233 problems have been identified through iDEX, engaging 310 start-ups, and signing 140 contracts. In 2022, the iDEX Prime framework was introduced to provide start-ups with Grant-in-Aid up to US$ 1.2 million (Rs 10 crore) to facilitate the development of high-end solutions. The Army Design Bureau, Indian Navy, and Indian Air Force also provide financial support to start-ups and MSMEs to encourage their participation in defence innovation.
SRIJAN Portal: Enabling Indigenisation by Indian Industry
The Ministry of Defence has launched the SRIJAN portal to promote indigenisation by Indian industry, particularly MSMEs. The portal’s major goal is to collaborate with the business sector on indigenisation activities of Defence Public Sector Undertakings (DPSUs) and the armed services. It will be a non-transaction online marketplace platform. DPSUs/ Service Head Quarters (SHQs) will display their items on this site that they have imported or are about to import, with each item having a significant import value. They will also display things that are planned/targeted for indigenisation in the next years.
The Indian industry would be able to express interest in things that they can design, develop, and manufacture on their own or through joint ventures with Original Equipment Manufacturers (OEMs). Based on their requirements for the items and their individual guidelines and procedures, the concerned DPSUs/SHQs will connect with the interested Indian industry for indigenisation. The interested Indian industry can also connect with the applicable DPSUs/SHQs for indigenisation-related concerns using the contact information provided under each item. As of today, 19,509 previously imported defence equipment have been uploaded to the portal for indigenisation. So far, the sector has expressed interest in indigenising 4006 defence goods.
Offset Policy Reforms and FDI Cap Increase
The government has undertaken offset policy reforms with a focus on attracting investment and technology transfer for defence production. Higher multipliers are granted under the offset policy to incentivise investment and technology transfer. Specific conversations with Foreign Original Equipment Manufacturers (FOEM) are ongoing. The government intends to cut the share of defence and military goods imported even more and to strengthen domestic defence manufacture.
As part of its drive to foster ‘Make in India’ in the defence industry, the government has issued 107 licenses to 358 private businesses to manufacture weapons, for a total of 584 defence licenses. This has the potential to increase total FDI inflows into the defence sector, with a large amount of that being allocated to the establishment of manufacturing units, hence boosting employment. The increase in the FDI cap to 100% will attract more established foreign firms to contribute their technology because they will be able to own a controlling stake, resulting in greater FDI flows in India.
Establishment of Defence Industrial Corridors
Two Defence Industrial Corridors (DICs) have been established to attract a total investment of Rs 20,000 crore for the defence industry by 2024-25. The Uttar Pradesh Defence Industrial Corridor (UPDIC) and the Tamil Nadu Defence Corridor (TNDIC) aim to build domestic supply chains and boost the country’s defence manufacturing ecosystem. The Uttar Pradesh Expressway Industrial Development Authority (UPEIDA) is building the UPDIC, consisting of six nodes (Agra, Aligarh, Chitrakoot, Jhansi, Kanpur, and Lucknow). Similarly, the Tamil Nadu government is building the TNDIC, which consists of five nodes (Chennai, Coimbatore, Hosur, Salem, and Tiruchirappalli).
UPDIC has signed 108 memorandums of understanding with industries/organisations, with a potential investment of Rs 12,191 crore. In Tamil Nadu, preparations have been made with 53 firms through MoUs and other means for a possible investment of Rs 11,794 crore. UPDIC and TNDIC have received investments of Rs 2,242 crore and Rs 3,847 crore, respectively. State governments have also released their Aerospace and Defence Policies to lure private businesses as well as international companies, including OEMs, to these two corridors.
Today, our defence sector has achieved significant progress in producing a wide range of high-end necessities, including tanks, armoured vehicles, fighter planes, helicopters, warships, submarines, missiles, electronic equipment, special alloys, special purpose steels, and various types of ammunition. This progress is a testament to our commitment to achieve self-reliance in the fabrication of military equipment needed by our armed forces within the nation.
As a result of these initiatives, we have witnessed the development of state-of-the-art products such as the 155 mm Artillery Gun system ‘Dhanush,’ Advanced Towed Artillery Gun (ATAG), Main Battle Tank ‘Arjun,’ T-90 Tank, T-72 Tank, Armoured Personnel Carrier ‘BMP-II/IIK,’ Light Combat Aircraft ‘Tejas,’ Surface to Air Missile system ‘Akash,’ Su-30 MK1, Cheetah Helicopter, Advanced Light Helicopter, Dornier Do-228, High Mobility Trucks, INS Kalvari, INS Khanderi, INS Chennai, Anti-Submarine Warfare Corvette (ASWC), Arjun Armoured Repair and Recovery Vehicle, Bridge Laying Tank, Bi-Modular Charge System (BMCS) for 155 mm Ammunition, Medium Bullet Proof Vehicle (MBPV), Weapon Locating Radar (WLR), Integrated Air Command and Control System (IACCS), Software Defined Radios (SDR), Lakshya Parachute for Pilotless Target Aircraft, Opto Electronic Sights for Battle Tanks, Water Jet Fast Attack Craft, Inshore Patrol Vessel, Offshore Patrol Vessel, Fast Interceptor Boat, Landing Craft Utility, 25 T Tugs, and more, all produced in the country during the last few years.
Impressive Surge in Defence Exports
On 30 May 2023, the Narendra Modi government completed nine years in power, and a report released on the same day revealed that India has experienced a 23-fold increase in military exports during the period. The government attributed this growth to policy measures and reforms undertaken to boost defence exports. According to the report, “Indian defence exports have reached an all-time high, rising from Rs 686 crore ($82 million) in fiscal year 2013-14 to nearly Rs 16,000 crore ($1.9 billion) in fiscal year 2022-23. This astounding 23-fold surge underscores India’s development in the global defence manufacturing sector. Over the last nine years, the government has taken several policy initiatives and implemented reforms to boost defence exports. Export procedures have been simplified and made more industry-friendly, with end-to-end online export authorisation reducing delays and making doing business easier.”
The government aims to achieve an export target of Rs 36,500 crore (US$ 4.8 billion) by 2025. Indian defence exports have reached an all-time high of Rs 15,920 crore in 2022-23 by exporting to more than 85 countries. Sri Lanka, Nepal, the Maldives, Italy, France, Russia, Saudi Arabia, the Philippines, Poland, Spain, Mauritius, Bhutan, Israel, and Ethiopia are among the primary destinations for Indian defence products exports. India’s export range includes coastal surveillance systems, spares for radars, electronic systems, and light engineering mechanical parts, personal protective equipment, offshore patrol vessels, ALH helicopters, and SU Avionics.
BRAHMOS Missiles: A Showcase of Indian Defence Exports
The BRAHMOS missiles are the biggest showpiece of India’s defence exports. The BRAHMOS model is seen as a pioneer in Indian defence manufacturing, sustainability, and a crucial step towards self-reliance, as it has established the BrahMos Missile Industrial Complex. The India-Russia joint venture, which began with a modest capital infusion of $250 million in 1998, has now amassed an order book of $6 billion. Under the BrahMos consortium, over 200 Indian defence companies from both the public and private sectors have collaborated to design, develop, and supply essential components and sub-systems for the high-speed precision-guided BRAHMOS missile. India is in talks with as many as eight countries of Southeast Asia, Middle East, and Africa for exporting the BRAHMOS missiles.
Unveiling Aatmanirbhar Bharat II: Reforms and Partnerships
The overall goal is to ensure that the battleworthiness improves exponentially with indigenised reliable defence systems for the Armed Forces to be fully ready for war, be it conventional, electronic, or even on two fronts in the prevalent Hybrid Warfare environment. Soon, Aatmanirbhar Bharat II in the defence sector will be unveiled, which will include reforms regarding the production of core technologies via a public-private partnership (PPP) mode. It will also liberalise the testing and certification of products, a shift from past practices.
Strengthening Armed Forces for Current and Future Challenges
In the existing geo-political scenario, Indian armed forces will need preparations for operating in the Nuclear, Biological and Chemical (NBC) threat scenario. Unless our ‘Joint’ capabilities are substantially leveraged in a focused manner with a clear vision for harnessing the existing and the emerging core technologies, the gap between the ‘capability’ and our ability to undertake assigned missions would continue to grow.
Effective logistics support is the fusion of information, logistics, and transportation technologies to provide rapid crisis response, to track and shift assets even while en route, and to deliver tailored logistics packages and replenishments directly at the strategic, operational, and tactical level of operations. Modern technologies should be pursued to enhance airlift, sealift, and prepositioning capabilities to lighten deployment loads, assist pinpoint logistics delivery systems, and extend the reach and longevity of systems currently in the inventory.
India-US Cooperation: Advancing Defence Technology
During Prime Minister Modi’s historic visit to the United States from 20-24 June 2023, India and the US have entered a new phase of cooperation through several groundbreaking agreements. These encompass defence technology, defence collaboration, artificial intelligence, and otherHindustan Aeronautics Limited (HAL) key areas. Notably, General Electric (GE) and have signed a Memorandum of Agreement (MoA) for manufacturing GE F414 jet engines in India, specifically for the Light Combat Aircraft Mk2. The Basic Exchange and Collaboration Agreement (BECA) for geospatial collaboration has been signed, allowing India to use advanced US geospatial data for precise targeting. In defence, India will acquire advanced military equipment from the US, including SeaGuardian drones for the Navy and SkyGuardian variants for the Army and Air Force. GE Aerospace will establish an engine manufacturing plant in India for the Tejas Mk2 fighter jet. Two Indian start-ups, 114AI and 3rdiTech, have signed MoUs with the US to launch the US-India Defence Acceleration Ecosystem (INDUS-X), aimed at sharing defence technologies. The Initiative on Critical and Emerging Technology (iCET) has been launched to share and safeguard complex technologies between India and the US. Additionally, India will purchase MQ-9 Reaper combat drones from the US, strengthening security along borders and the Indian Ocean.
Strategic Ties with France: Submarines and Rafale Jets
India and France have strong strategic ties. Prime Minister Modi visited Paris from 13-14 July 2023. India is expected to buy three more Scorpène submarines, which will again be made by Mazagon Dock Ltd and the Naval group, as well as 26 Rafale jets (marine version of Dassault’s Rafale jets), intended for India’s first indigenous aircraft carrier commissioned in August 2022, which outperformed the American Super Hornet F18s in tests last year for Indian requirements.
India and France both through its island territories have deep interests in the Indian Ocean and are concerned about China’s growing assertiveness in the region. The Indian and French delegations discussed cooperation on civil nuclear issues, space, cyber security technology, counter terrorism, climate change, renewable energy and the international solar alliance.
India’s realisation of the need for self-reliance and its emphasis on promoting ‘vocal about local’ products have constructive implications for the economy, infrastructure, demography, and various systems, as well as the supply and demand chain. With the second-largest armed forces in the world and ranking fourth in military strength, India’s defence transformation is imperative for achieving self-sustainability and attaining the desired hypergrowth trajectory. India’s dynamic potential as a reliable supplier of defence equipment to friendly nations will further strengthen its strategic partnerships and solidify its role as a “Net Security Provider,” particularly in South Asia.
-The author is a veteran Infantry Officer with 36 years of Army Service, currently serving at Amity University as Director of Amity Centre for Defence and Strategic Studies (ACDSA). The data provided in this article has been sourced from MoD/GoI/PIB briefings and publications. The views expressed are personal and do not necessarily reflect the views of Raksha Anirveda
