India’s Defence Transformation (2014–2026), Key Pillars, other Details

Over the last decade, India’s defence sector has witnessed an unprecedented transformation driven by Atmanirbhar Bharat, technological innovation, military modernisation and strategic reforms. The focus has shifted from being one of the world’s largest defence importers to becoming a self-reliant defence manufacturing and export hub.

Key Pillars of India’s Defence Transformation

India’s defence transformation over the last decade has been driven by a combination of higher investments, technological innovation, indigenous manufacturing, institutional reforms, operational modernisation, and proactive defence diplomacy. Together, these pillars have laid the foundation for a self-reliant, future-ready and globally credible defence ecosystem.

Strengthening Defence Capability

India has significantly enhanced its military capability through sustained investments, indigenous platform development and technological modernisation.

Rising Defence Investments

• Defence capital expenditure increased from ₹94,588 crore in 2014–15 to ₹2.19 lakh crore in 2026–27, reflecting a strong focus on capability creation and modernisation.
• Increased investments have enabled acquisition of advanced weapon systems, military infrastructure development and greater support for indigenous defence manufacturing.

Expanding Defence Research and Development

• Defence R&D allocation increased from ₹13,716 crore in 2014–15 to ₹29,100 crore in 2026–27, registering a growth of over 112%.

• Since 2022–23, 25% of the defence R&D budget has been earmarked for industry, startups and academia to promote collaborative innovation.
• DRDO has opened advanced testing facilities of 24 laboratories to private industry through the Defence Testing Portal, improving technology development and validation.

Strengthening Indigenous Military Platforms

• The Tejas Light Combat Aircraft received Final Operational Clearance and emerged as the flagship indigenous fighter aircraft programme.
• The government approved procurement of 97 Tejas Mk-1A aircraft worth about ₹62,000 crore, strengthening the Indian Air Force.
• The Arjun Mk-IA Main Battle Tank enhanced indigenous armoured warfare capability.
• The Light Combat Helicopter (LCH) Prachand strengthened high-altitude combat capability, with approval for procurement of 156 helicopters worth nearly ₹62,700 crore.
• Indigenous systems such as Akash missiles, BrahMos missiles, anti-drone systems and surveillance platforms have increasingly become integral to India’s military preparedness.

Building a Defence Innovation Ecosystem

A major pillar of India’s defence transformation has been the creation of a strong innovation ecosystem that connects startups, industries, academia and DRDO with the needs of the armed forces.

• iDEX (Innovations for Defence Excellence): iDEX has become the government’s flagship programme for defence innovation. By March 2026, it had engaged 676 startups and innovators and supported 551 defence innovation projects in areas such as drones, artificial intelligence, autonomous systems and surveillance technologies.
• ADITI Scheme: The ADITI Scheme was launched with an outlay of ₹750 crore to support cutting-edge and future technologies. It focuses on developing next-generation military technologies through startups and innovators.
• Technology Development Fund (TDF): Technology Development Fund (TDF) provides financial assistance of up to ₹50 crore for indigenous technology development. By June 2026, 80 projects worth ₹334 crore were under implementation, and some technologies developed under the scheme were successfully tested in PSLV space missions.
• DRDO–Industry Partnership: DRDO has strengthened cooperation with Indian industries through the Development-cum-Production Partner (DcPP) model. By 2026, 134 companies had partnered with DRDO for production and technology development.
• Technology Transfer by DRDO: DRDO has signed more than 2,180 technology transfer agreements with Indian industries, helping domestic companies manufacture advanced defence equipment within the country.
• DRDO–Academia Collaboration: DRDO has established 15 Defence Industry Academia Centres of Excellence (DIA-CoEs) working on 82 critical technology areas, creating a strong link between research institutions and defence requirements.
• Opening DRDO Facilities to Industry: The testing infrastructure of 24 DRDO laboratories has been opened to private companies through the Defence Testing Portal, enabling startups and industries to test and validate defence products.
• Sharing Intellectual Property: More than 2,780 DRDO patents and intellectual property rights have been made available for industrial use, accelerating indigenous innovation and manufacturing.
• Developing Future Defence Talent: DRDO has established five Young Scientist Laboratories and trains over 3,500 apprentices annually, creating a pipeline of skilled manpower for future defence technologies.

These initiatives have transformed India’s defence innovation landscape by encouraging indigenous research, supporting startups, promoting industry participation and reducing dependence on foreign technologies.

Expanding Defence Manufacturing Capacity

India’s defence sector has witnessed a structural shift from being primarily a defence buyer to becoming an emerging defence manufacturing hub under the vision of Atmanirbhar Bharat.

• Growth in Defence Manufacturing: Defence production reached a record ₹1.78 lakh crore in 2025–26 compared to ₹84,643 crore in 2020–21, registering a growth of more than 110% in five years and reflecting the rapid expansion of indigenous manufacturing capabilities.
• Increasing Private Sector Participation: Defence Public Sector Undertakings (DPSUs) and other PSUs contribute around 76% of total production, while the private sector accounts for nearly 24%, indicating growing participation of private industry in defence manufacturing.
• Expansion of Defence Industrial Ecosystem: India today has 16 Defence Public Sector Undertakings, around 500 licensed defence companies and nearly 17,000 MSMEs engaged in defence manufacturing, creating a broad and resilient domestic industrial base.
• Growth in Industrial Licences: The number of defence industrial licences increased from 258 in 2015 to 834 in 2026, reflecting policy reforms, improved ease of doing business and rising investor confidence in the sector.
• Reform of Ordnance Factory Board (OFB): In 2021, the government dissolved the 200-year-old Ordnance Factory Board and reorganised its 41 factories into seven new Defence Public Sector Undertakings to improve efficiency, accountability, competitiveness and technological capability.

Outcome: These reforms have strengthened India’s domestic defence manufacturing capacity, reduced import dependence, expanded industrial participation and positioned the country as an emerging global defence production hub.

Emergence as a Defence Exporting Nation

India’s defence exports have become one of the strongest indicators of its growing technological capability, manufacturing strength and global strategic relevance.

• Rapid Export Growth: Defence exports increased from just ₹686 crore in 2013–14 to a record ₹38,424 crore in 2025–26, registering a growth of more than 5500% in little over a decade.
• Expanding Global Reach: Indian defence equipment is now being exported to more than 80 countries, reflecting the growing international acceptance of Indian military products. Rising exports indicate increasing trust in the quality, reliability and cost-effectiveness of Indian defence technologies and manufacturing standards.
• Broader Industrial Participation: The number of defence-exporting companies has increased to 145 firms, showing the emergence of a wider and more competitive defence manufacturing ecosystem.
• Diversification of Exported Products: India now exports a wide range of products including artillery systems, radars, missiles, patrol vessels, electronic warfare systems, defence components and other military equipment.

The Government has set a target of achieving ₹50,000 crore worth of defence exports by 2029, aiming to position India among the leading defence exporters globally.

Procurement and Policy Reforms

Policy reforms have played a crucial role in promoting self-reliance and reducing import dependence.

Defence Procurement Reforms

• Defence Procurement Procedure (DPP) 2016 streamlined acquisition processes and strengthened the Make in India initiative.
• Defence Acquisition Procedure (DAP) 2020 prioritised indigenous procurement and promoted domestic design, development and manufacturing.
• Defence Procurement Manual (DPM) 2025 improved transparency and accelerated procurement processes worth nearly ₹1 lakh crore.
• Draft DAP 2026 proposes higher indigenous content requirements of up to 60% and simplified acquisition categories.

Promoting Indigenisation

• Five Positive Indigenisation Lists covering 5,012 defence items have been notified to progressively replace imports with domestic production.
• Through the SRIJAN Portal, more than 15,700 defence items have been indigenised.
• DPSUs have placed domestic orders worth over ₹9,782 crore through indigenisation initiatives.

Strengthening Defence Supply Chains

• SRIJAN DEEP was launched as a digital database of defence industries to improve supply-chain resilience.
• By May 2026, over 41,000 vendors and nearly 2.7 lakh defence products had been mapped on the platform.

Defence Industrial Corridors

To strengthen domestic defence manufacturing and attract large-scale investments, the Government launched two dedicated Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu.

• Uttar Pradesh Defence Industrial Corridor: The corridor has attracted investment commitments worth ₹42,057 crore, of which ₹4,409 crore has already been grounded. The establishment of the Defence Technology and Test Centre (DTTC) is further supporting testing, certification and innovation in defence manufacturing.
• Tamil Nadu Defence Industrial Corridor: The corridor has received investment commitments worth ₹32,699 crore, with actual investments crossing ₹6,446 crore. It is emerging as a major hub for aerospace, defence manufacturing and advanced engineering industries.

Both corridors are strengthening domestic supply chains, creating employment opportunities and attracting advanced manufacturing investments.

Emerging Technologies and Operational Excellence

India’s defence modernisation is increasingly focused on future warfare technologies, advanced missile systems, artificial intelligence and indigenous combat capabilities.

• Strengthening Strategic and Space Capabilities: Mission Shakti (2019) made India the fourth country in the world to demonstrate Anti-Satellite (ASAT) capability by successfully destroying a satellite in space.
• Enhancing Strategic Deterrence: Mission Divyastra (2024) successfully tested a long-range missile equipped with Multiple Independently Targetable Re-entry Vehicle (MIRV) technology, enabling a single missile to strike multiple targets.
• Leveraging Artificial Intelligence for Warfare: Around 75 Artificial Intelligence (AI)-based technologies have been inducted for surveillance, cyber security, logistics management, autonomous systems and battlefield decision-making.
• Advancing Hypersonic Missile Technology: DRDO successfully conducted a long-duration ground test of an actively cooled scramjet combustor in January 2026, marking a major milestone in indigenous hypersonic missile development.
• Building Advanced Testing Infrastructure: India established a dedicated Hypersonic Wind Tunnel in Hyderabad to support research, testing and development of next-generation hypersonic weapon systems.
• Demonstrating Indigenous Combat Capability: During Operation Sindoor, indigenous systems such as Akash air defence missiles, BrahMos supersonic cruise missiles, anti-drone systems and airborne surveillance platforms showcased their operational effectiveness.
• Developing Integrated Air Defence Systems: In August 2025, DRDO successfully tested an advanced air defence architecture integrating missile interceptors, short-range air defence weapons and laser-based systems to counter modern aerial threats.

Continuous investments in AI, autonomous platforms, directed-energy weapons, hypersonic systems and advanced missile technologies are preparing India for future multi-domain warfare.

Building a Future-Ready Defence Workforce

India’s defence modernisation is not only focused on advanced weapons and platforms but also on creating a young, skilled and technology-driven workforce.

• Agnipath Scheme (2022): Introduced to build a younger and more agile armed force, the scheme provides military training, skill development and educational opportunities through institutions such as the Indira Gandhi National Open University (IGNOU) and the National Institute of Open Schooling (NIOS).
• Promoting Defence Research Talent: The Defence Research and Development Organisation (DRDO) established five Young Scientist Laboratories in 2020, with a sixth laboratory planned for 2026, to encourage innovation in emerging defence technologies.
• Creating Skilled Human Resources: More than 3,500 apprentices receive training every year in DRDO laboratories, while the Defence Institute of Advanced Technology (DIAT) plays a key role in developing future defence scientists and technologists.

Expanding Defence Diplomacy and Global Partnerships

Alongside military modernisation, India has strengthened defence cooperation with major powers and enhanced its role in regional and global security.

• Deepening Strategic Partnerships: Defence ties with the United States expanded through the Logistics Exchange Memorandum of Agreement (LEMOA), Communications Compatibility and Security Agreement (COMCASA) and Basic Exchange and Cooperation Agreement (BECA), while cooperation with Russia continues through S-400 air defence systems and Su-30MKI upgrades. France remains a key partner through Rafale fighter aircraft, Scorpene submarines and defence manufacturing collaborations.
• Broadening Global Engagement: India signed a Security and Defence Partnership with the European Union (EU) in 2026 and strengthened defence cooperation with Japan, Australia and the United Arab Emirates (UAE) through military exercises, logistics agreements and defence industrial partnerships.
• Strengthening Multilateral Security Cooperation: Through platforms such as the Quadrilateral Security Dialogue (QUAD), Shanghai Cooperation Organisation (SCO) and ASEAN Defence Ministers’ Meeting Plus (ADMM-Plus), India actively promotes maritime security, counter-terrorism, freedom of navigation and a rules-based international order.
• Emerging as a Net Security Provider: Guided by the Security and Growth for All in the Region (SAGAR) vision and the Mutual and Holistic Advancement for Security and Growth Across Regions (MAHASAGAR) doctrine, India is increasingly recognised as a reliable security partner and a stabilising force in the Indo-Pacific region.

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