In its press release of March 24, 2025, the Ministry of Defence (MoD) proclaimed that 65% of the defence equipment is now being manufactured domestically, adding that this significant shift from earlier times when the import dependency was as high as 65-70% showcases India’s increasing self-reliance in defence.
Presenting the union budget for the FY 2014-15 on July 10, 2014, the then Finance Minister Arun Jaitley had indeed bemoaned that India was the largest buyer of defence equipment and that our domestic manufacturing capacities were still at a ‘nascent stage’. Does it then mean that this reversal of fortunes is the result of a decade of relentless pursuit of the disjointed policy of Aatmanirbharta, or self-reliance, in defence production?
First the facts. Going by the official data, the value of domestic defence production has jumped from ₹46,429 crore in FY 2014-15 to ₹1,27,434 crore in FY 2023-24. During the same period, defence exports went up from a meagre ₹1,941 crore to ₹ 21,083 crore. The latest data released by the MoD shows that exports increased by another ₹2,539 crore in FY 2024-25, registering an annual growth of 12.04%.
These facts are undoubtedly remarkable, and it would be unfair to disparage the achievement which they reflect, but the picture that emerges from them is at odds with India’s image as a leading importer of arms. According to the March 2025 report of the Stockholm International Peace Research Institute (SIPRI), India was the second largest importer of arms in the world during 2020-24, accounting for 8.3% of the global imports, with war-torn Ukraine topping the list with 8.8% of the global imports.
It is another matter that the MoD is not impressed by the SIPRI data, which shows that India has been among the top two importers of defence equipment for more than two decades. When questioned by the Standing Committee on Defence in December last year about the factors that had led to India being the largest defence importer in the world (which was then the case), the MoD informed the committee that there was ‘no reliable source of information confirming that India (was the) largest defence importer’.
It would be more appropriate to conclude from the MoD and SIPRI data that the import of defence equipment is gradually falling because of the increasing domestic production of defence equipment. It can also be conceded that this is the direct result of the putative ‘Make-in-India’ policy of preferring Indian manufacturing companies as the prime contractors and insisting on transfer of technology to them by the foreign companies for local manufacturing of equipment
One can question the methodology used by SIPRI to calculate the extent of a country’s dependence on defence imports but dismissing the data altogether even as a useful trend indicator cannot serve any useful purpose. After all, it is the same March 2025 report which also shows that India’s share of the global imports has fallen from 9.1% in 2015-19 to 8.3% in 2020-24. Can this fact also be dismissed as not being credible?
Be that as it may, it would be more appropriate to conclude from the MoD and SIPRI data that the import of defence equipment is gradually falling because of the increasing domestic production of defence equipment. It can also be conceded that this is the direct result of the putative ‘Make-in-India’ policy of preferring Indian manufacturing companies as the prime contractors and insisting on transfer of technology to them by the foreign companies for local manufacturing of equipment. This is borne out by another set of figures released by MoD on March 29, 2025.
Of the 193 contracts awarded by MoD in 2024-25, with the total contract value surpassing ₹2,09,050 crore, as many as 177 contracts, or 92% of the total contracts, were awarded to the domestic companies. The cumulative value of the contracts awarded to the domestic companies amounts to ₹1,68,922 crore, which is 81% of the total contract value.
The MoD also claimed that this ‘significant focus on indigenous manufacturing aligns with the vision of self-reliance in defence production, boosting local industries and generating employment across the sector’. While the facts are indisputable, to equate rapidly expanding local manufacturing with self-reliance in defence production is questionable. It is deniable that in most of these cases, the Indian companies are manufacturing defence equipment with technology transfer from the foreign partners. This runs contrary to the idea of self-reliance.
A simple dictionary meaning of the term ‘self-reliance’ is reliance on one’s own powers and resources rather than those of others. It would be legitimate to argue that this is too narrow a definition and that in the contemporary world, it is not possible for any nation to become self-reliant by using only its own resources. There may be some exceptions like the USA but exceptions only prove the rule.
A more pragmatic and contemporaneous bare-bones definition of self-reliance in defence would be the ability to use one’s own resources and powers to design and develop cutting edge technologies, remain ahead of adversaries in technological advancement and innovation, access without hinderance the raw material required for defence production, and to harness these resources for production of the state-of-art equipment, platforms, and weapon systems.
Viewed in this perspective, and when compared with the state of self-reliance of its immediate adversary to the north, India’s self-reliance project has a lot of catching up to do. India is not yet self-reliant in design, development, and production – entirely on its own or without any dependence on foreign sources, which are prone to being chocked for geopolitical considerations – of large platforms like stealth fighters or even a multi-role fighter aircraft, diesel-electric submarines, armoured fighting vehicles, assault rifles, and the like.
Not that no major platform is being built in India; the problem, however, is that for each such platform being made locally, India is critically dependent, to varying degrees, on the foreign companies, whose continued and timely support cannot be taken for granted. This is best illustrated by the production schedule of the indigenous Light Combat Aircraft Tejas Mk-1A which was upset because of the delay in the delivery of F404-IN20 engines by GE Aerospace to Hindustan Aeronautics Limited (HAL).
The relations between the countries which have been the main providers of technology and exporters of defence equipment to India are becoming increasingly complex, queering India’s pitch for self-reliance. It was not too long ago, for example, that India faced the prospect of being sanctioned by the USA because of its continued defence ties with Russia. Consequently, a pall of uncertainty loomed over many an ongoing and in-the-pipeline contracts with the USA.
Self-reliance is all about the ability to insulate itself from such potential complications in the shifting sands of the contemporary geopolitics. A closer analysis of the policy being pursued by the MoD to achieve self-reliance reveals three fault lines: equating increasing local production with self-reliance, disjointed efforts at indigenisation, and insufficient investment in defence research and development (R&D).
As for equating local production with self-reliance, much has already been said. While the MoD can continue to rightfully take the credit for promoting the local industry by pursuing the current policy of mainstreaming the Indian companies as the prime contractors in defence contracts, new quantifiable goals need to be set for achieving self-reliance in design, development, and production of some major platforms, with dependence on foreign companies being limited to technologies, expertise or raw material which could potentially be sourced from multiple sources.
This would necessarily mean focussing on development and production of technologies and platforms that are required, say, ten-fifteen years hence, for that would be the average time required for design and development of futuristic technologies. Meanwhile, India will have to continue to depend on transfer of technology for local production. This requires long-term planning, the absence of which has sadly been the bane of India’s efforts to achieve self-reliance in defence production.
The second factor that has resulted in what one may call fragmented self-reliance is the focus on indigenisation of parts and components or development of minor technologies which go into manufacturing of a system, rather than indigenisation of the critical components or technologies for manufacturing a major platform, which are susceptible to denial regimes and without which the platform in question cannot be operationally exploited.
The prime example of this approach is the iDEX (Innovation for Defence Excellence) and Technology Development Fund (TDF), both of which are excellent schemes and have produced sterling results, but apparently these schemes have collectively not led to complete indigenisation of any equipment, platform, or weapon system.
And lastly, the money factor. Defence R&D is the backbone of self-reliance. Despite several efforts to rope in the private sector, Defence Research and Development Organisation (DRDO) continues to be the main defence R&D agency of the government. However, the proportion of the R&D budget to the total defence budget has come down from 5.47% in 2014-15 to 3.94% in 2025-26. As a proportion of the GDP also, the R&D budget has come down during the same period from a meagre 0.12% to 0.08%. Considering that a sizeable portion of the budget goes into payment of salaries and other revenue expenditure, the actual sums available for research are not enough to propel a major self-reliance push.
It is hard to believe that the South Block is not conscious of these snags in the current policy and, more importantly, what will it take to set the things right to make India truly self-reliant in defence production. What is holding it back from taking the necessary steps remains an enigma, though.
–The writer is a former Financial Advisor (Acquisition), Ministry of Defence. The views expressed are personal and do not necessarily reflect the views of Raksha Anirveda
