{"id":3589,"date":"2026-01-05T21:47:17","date_gmt":"2026-01-05T16:17:17","guid":{"rendered":"https:\/\/vajiramandravi.com\/upsc-exam\/?p=3589"},"modified":"2026-01-06T12:05:01","modified_gmt":"2026-01-06T06:35:01","slug":"defence-indigenisation","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/upsc-exam\/defence-indigenisation\/","title":{"rendered":"Defence Indigenisation"},"content":{"rendered":"

Defence indigenisation<\/strong>\u00a0refers to the strategic objective of a country to develop and enhance its\u00a0own industrial and technological capabilities<\/strong>\u00a0for producing essential\u00a0defence equipment\u00a0<\/strong>and\u00a0systems<\/strong>. This approach aims to\u00a0reduce dependency<\/strong>\u00a0on foreign sources for military hardware, ensuring\u00a0self-sufficiency<\/strong>\u00a0in meeting the\u00a0national security\u00a0<\/strong>requirements.<\/p>\r\n

The ultimate goal is to establish a\u00a0robust defence industry<\/strong>\u00a0that can design, develop, and manufacture a wide range of military equipment, from\u00a0basic arms and ammunition<\/strong>\u00a0to\u00a0advanced weapon<\/strong>\u00a0systems and platforms.<\/p>\r\n

Background of Defence Indigenisation in India<\/h2>\r\n

India's journey toward defence indigenisation is characterised by a significant\u00a0defence budget<\/strong>, a substantial\u00a0defence industrial establishment<\/strong>, and a\u00a0history of defence production<\/strong>.<\/p>\r\n

    \r\n\t
  • Early Recognition of Need (1950s-1970s):\u00a0<\/strong>India recognised the need to reduce dependence on foreign sources, India took steps toward indigenisation, stimulated by the Wars of 1962, 1965, and 1971.<\/li>\r\n\t
  • Integrated Guided Missile Development Programme (IGMDP), 1983:<\/strong>\u00a0It aimed at developing strategic missile systems. Under\u00a0Abdul Kalam's\u00a0<\/strong>leadership, it concluded in 2008, boosting India's indigenous missile capabilities.<\/li>\r\n\t
  • Self-Reliance Index and Abdul Kalam's Initiative (1992):\u00a0<\/strong>In 1992, with a low Self-Reliance Index (ratio of indigenous content of defence procurements to the total expenditure on defence procurements in a financial year) of\u00a00.3<\/strong>,\u00a0Abdul Kalam<\/strong>\u00a0formed a committee to create a 10-year plan, targeting an SRI of 0.7 by 2005.<\/li>\r\n\t
  • Responsibility Transfer (2000s):<\/strong>\u00a0Responsibility for indigenisation shifted from the Department of Defence Production (DDP) and Directorate General of Quality Assurance (DGQA) to the Ordnance Factories Board (OFB) and Services. The Army and Navy devised 15-year Perspective Plans for Indigenisation.<\/li>\r\n\t
  • Defence Procurement Procedure (DPP):\u00a0<\/strong>There have been continuous developments and evolution of DPP from 2001 onwards.<\/li>\r\n\t
  • Project 75 (1997):<\/strong>\u00a0It focused on indigenous submarine development, emphasising self-reliance in submarine construction to reduce dependence on foreign sources.<\/li>\r\n<\/ul>\r\n

    Need for Defence Indigenisation<\/h2>\r\n

    India's goal of defence indigenisation is based on several aspects.<\/p>\r\n

      \r\n\t
    • India\u2019s Share in Global Arms Market:\u00a0<\/strong>India's share in the global arms exports market is minimal, accounting for only 0.2 per cent which goes against India\u2019s Balance of Payments.<\/li>\r\n\t
    • SIPRI\u00a0<\/strong>reports indicate that India ranked 23rd during the period 2017-21, with a marginal presence in the global arms market.<\/li>\r\n\t
    • India as the Largest Importer of Arms:\u00a0<\/strong>Despite efforts to promote domestic production and reduce imports, India remains the\u00a0largest importer of arms<\/strong>\u00a0in the world, accounting for 11 per cent of global arms imports during 2018-22.<\/li>\r\n\t
    • Development of Military Industrial Complex:<\/strong>\u00a0It is a network of individuals and institutions involved in the production of weapons and military technologies.\r\n\r\n
        \r\n\t
      • It aims to\u00a0increase military spending<\/strong>\u00a0by the national government and its establishment is necessary, ensuring\u00a0self-reliance<\/strong>\u00a0and\u00a0reducing dependence<\/strong>\u00a0on foreign sources.<\/li>\r\n<\/ul>\r\n<\/li>\r\n\t
      • Technology Transfer and Independence:<\/strong>\u00a0It allows the nation to develop and maintain critical defence capabilities by facilitating technology transfer through foreign collaborations.<\/li>\r\n\t
      • Exports:<\/strong>\u00a0With the increasing defence indigenisation, India can widen its export base.\r\n\r\n
          \r\n\t
        • For example, India is in the process of exporting\u00a0Brahmos Cruise\u00a0<\/strong>Missiles to the Philippines.<\/li>\r\n<\/ul>\r\n<\/li>\r\n\t
        • Research and Development:<\/strong>\u00a0Defence indigenisation promotes substantial investments in research and development (R&D) contributing to the growth of a\u00a0defence industrial ecosystem<\/strong>\u00a0in India and spin-off effects on other manufacturing sectors.<\/li>\r\n<\/ul>\r\n

          Government\u2019s Initiative towards Defence Indigenisation<\/h2>\r\n

          The Government has taken several policy initiatives in the past few years and brought in reforms to encourage indigenous design, development and manufacture of defence equipment, thereby promoting self-reliance in defence manufacturing & technology in the country.<\/p>\r\n

            \r\n\t
          • Defence Procurement Policy, 2016:<\/strong>\r\n
              \r\n\t
            • It was based on\u00a0Dhirendra Singh committee\u00a0<\/strong>recommendations and includes\u00a0the \"Buy (Indian-IDDM)\" category<\/strong>.<\/li>\r\n\t
            • It empowered the\u00a0Defence Acquisition Council<\/strong>\u00a0with a \"fast-track\" route for acquiring weapons.<\/li>\r\n<\/ul>\r\n<\/li>\r\n\t
            • Innovations for Defence Excellence (iDEX), 2018 or iDEX Prime, 2022:\u00a0<\/strong>\r\n
                \r\n\t
              • It engages industries, especially MSMEs, start-ups, individual innovators, research and development (R&D) institutes, and academia.<\/li>\r\n\t
              • iDEX provides\u00a0grants<\/strong>,\u00a0funding<\/strong>, and\u00a0support\u00a0<\/strong>for innovations and R&D.<\/li>\r\n<\/ul>\r\n<\/li>\r\n\t
              • SPRINT Challenges:<\/strong>\r\n
                  \r\n\t
                • The\u00a0Naval Innovation and Indigenisation Organisation (NIIO)<\/strong>\u00a0introduced the SPRINT initiative in 2022 in collaboration with the\u00a0Defence Innovation Organisation (DIO)<\/strong>.<\/li>\r\n\t
                • It aims to integrate at least\u00a075 new indigenous technologies\/products<\/strong>\u00a0into the Indian Navy under the SPRINT project.<\/li>\r\n<\/ul>\r\n<\/li>\r\n\t
                • Indigenous Manufacturing:\u00a0<\/strong>\r\n
                    \r\n\t
                  • To streamline the industrial landscape, the government has undertaken significant measures.<\/li>\r\n\t
                  • These include\u00a0simplification of the industrial licensing<\/strong>\u00a0process, extending validity periods and\u00a0liberalising FDI policy<\/strong>\u00a0allowing up to 74% FDI under the automatic route.<\/li>\r\n\t
                  • The share of\u00a0domestic procurement<\/strong>\u00a0in the total procurement has seen a significant uptrend i.e., 54% in 2018-19, 59% in 2019-20, 64% in 2020-21, and a significant increase to 68% in the current year with 25% earmarked for\u00a0private industry.<\/strong><\/li>\r\n\t
                  • There is a\u00a0substantial reduction<\/strong>\u00a0in defence procurement from\u00a0foreign\u00a0<\/strong>sources i.e., from 46% to 36% in the last four years (2018-19 to 2021-22).<\/li>\r\n<\/ul>\r\n<\/li>\r\n\t
                  • Defence Industrial Corridors:\u00a0<\/strong>The government has established two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu recognizing the significance of regional hubs for aerospace and defence.<\/li>\r\n\t
                  • Positive Indigenisation Lists:\u00a0<\/strong>It prioritises procurement from domestic sources, specifically under the\u00a0Buy Indian (IDDM) category<\/strong>\u00a0with\u00a0embargoes on imports.<\/strong><\/li>\r\n\t
                  • E-Biz Portal:\u00a0<\/strong>A major leap towards efficiency was the digitization of the application process for\u00a0Industrial License (IL)<\/strong>\u00a0and\u00a0Industrial Entrepreneur Memorandum (IEM)\u00a0<\/strong>through the E-Biz Portal.<\/li>\r\n\t
                  • Custom Duty and FDI Policy:\u00a0<\/strong>Creating a level playing field, uniform custom duty imposition on all Indian industries, whether public or private, ensures parity.<\/li>\r\n\t
                  • FDI policy allows composite foreign investment of up to\u00a049%<\/strong>\u00a0through the Government route (FIPB).<\/li>\r\n\t
                  • Vendor Development Guidelines:\u00a0<\/strong>To bolster private sector participation, especially SMEs, in defence manufacturing, comprehensive guidelines for Outsourcing and Vendor Development were introduced for DPSUs and the Ordnance Factory Board (OFB).<\/li>\r\n<\/ul>\r\n

                    Defence Acquisition Procedure 2020<\/h3>\r\n

                    It is a key initiative under the\u00a0Atmanirbhar Bharat Abhiyaan<\/strong>, that streamlines the procurement process for the defence sector. It aims to boost\u00a0Make in India<\/strong>\u00a0efforts, particularly benefiting\u00a0MSMEs<\/strong>, by facilitating the acquisition of\u00a0advanced technology<\/strong>, products, and services for the Tri-Services and allied defence services. The key features are:<\/p>\r\n

                      \r\n\t
                    • Reservation for Indian Vendors:<\/strong>\u00a0With up to 100% FDI in defence manufacturing allowed (up to 74% under the Automatic route and beyond 74% under the Government route), the DAP encourages\u00a0domestic industry participation<\/strong>, fostering increased production.<\/li>\r\n\t
                    • Enhancement of Indigenous Content:<\/strong>\u00a0Across categories, the focus is on\u00a0procuring indigenously<\/strong>\u00a0manufactured products and technologies, promoting self-reliance in defence production.<\/li>\r\n\t
                    • Make and Innovation:\u00a0<\/strong>The DAP supports indigenization efforts through initiatives like\u00a0Make I\/II\/III<\/strong>, funded by both government and industry and\u00a0iDEX\u00a0<\/strong>facilitates the incubation of startups in the defence sector.<\/li>\r\n\t
                    • Buy (Global-Manufacturing in India):\u00a0<\/strong>This new feature mandates that the\u00a0entire\u00a0<\/strong>or\u00a0part\u00a0<\/strong>of the manufacturing procedure for equipment \/ spare parts \/ Maintenance or Repair must be conducted by the\u00a0Indian subsidiary\u00a0<\/strong>of foreign investors.<\/li>\r\n\t
                    • Ease of Doing Business:<\/strong>\u00a0Easier and faster facilitation of operations and decision-making through the Project Management Unit, preference is given to manufacturers producing complete defence products, rather than parts.<\/li>\r\n<\/ul>\r\n
                      \"Dpp<\/figure>\r\n

                      Recent Rise In Exports of Indian Defence Products<\/h2>\r\n

                      India, traditionally known as a major arms importer, underwent a paradigm shift in its defence export strategy after\u00a0policy reforms<\/strong>\u00a0initiated by the government in\u00a02001<\/strong>. Later measures under the\u00a0Make-in-India<\/strong>\u00a0and\u00a0self-reliant India campaigns<\/strong>\u00a0provided India with a prominent position in the international defence market.<\/p>\r\n

                        \r\n\t
                      • Current Status of Exports and Trend:\u00a0<\/strong>The year 2022-2023 saw a remarkable rise, reaching \u20b916,000 crore (US $1.94 billion), a ten-fold increase from \u20b91,521 crore (US $184.59 million) in FY 2016-17 despite pandemic disruptions.<\/li>\r\n\t
                      • Export Deals with Countries:\u00a0<\/strong>Indian defence companies are now\u00a0exporting to over 85 Friendly Foreign Countries (FFCs)<\/strong>\u00a0in Africa, South Asia, Southeast Asia, and West Asia.<\/li>\r\n\t
                      • Major platforms like\u00a0Advanced Light Helicopter (ALH)<\/strong>,\u00a0Arjun Tanks<\/strong>,\u00a0BrahMos missiles<\/strong>,\u00a0Light Combat Aircraft (LCA)-Tejas<\/strong>,\u00a0Offshore Patrol Vessels<\/strong>, and surveillance systems are garnering interest.<\/li>\r\n\t
                      • India\u2019s Arms Exports to Specific Countries:\u00a0<\/strong>Major recipients include\u00a0Mauritius<\/strong>,\u00a0Mozambique<\/strong>, and\u00a0Seychelles\u00a0<\/strong>in Africa,\u00a0Myanmar\u00a0<\/strong>in Southeast Asia, and strategic deals with the\u00a0Philippines\u00a0<\/strong>for the\u00a0BrahMos\u00a0<\/strong>Shore-Based Anti-Ship Missile System.<\/li>\r\n\t
                      • Reasons for Recent Increase in Exports:<\/strong><\/li>\r\n\t
                      • The surge in exports is attributed to policy initiatives, especially the involvement of the\u00a0private sector,<\/strong>\u00a0which contributed\u00a070 per cent\u00a0<\/strong>to the total defence exports in FY\u00a02021-22.<\/strong><\/li>\r\n\t
                      • Apart from that, several policy initiatives, such as\u00a0liberalising FDI policies<\/strong>, issuing\u00a0Positive Indigenisation Lists<\/strong>, and\u00a0simplifying export procedures<\/strong>, contribute to the growth in defence exports.<\/li>\r\n\t
                      • Future of Indian Exports:\u00a0<\/strong>The\u00a0Draft Defence Production & Export Promotion Policy (DPEPP)<\/strong>\u00a02020 aims to export \u20b935,000 crore worth of aerospace and defence equipment annually by 2025 aligns with the overall goal of achieving a\u00a0\u20b91.75 lakh crore (US $25 billion)<\/strong>\u00a0turnover in defence manufacturing.<\/li>\r\n<\/ul>\r\n

                        \"Indian<\/p>\r\n

                        Challenges Faced by Defence Indigenisation and Exports<\/h2>\r\n

                        The following are the challenges which the Defence sector faces in its indigenisation and product exports:<\/p>\r\n

                          \r\n\t
                        • Lesser Defense Budget and Modernization:\u00a0<\/strong>India's defence budget for FY 2023-24 is \u20b95.94 lakh crore, positioning it as the fourth-largest military spender globally.<\/li>\r\n\t
                        • Concerns are raised about the budget being\u00a0below 2 per cent of GDP<\/strong>\u00a0and recommendations to\u00a0increase it to 3 per cent<\/strong>\u00a0for adequate preparedness.<\/li>\r\n\t
                        • Insufficient Infrastructure and Capacity:\u00a0<\/strong>Despite the positive strides in defence indigenisation, there is still insufficient infrastructure and capacity in the domestic defence industry.<\/li>\r\n\t
                        • Limited Participation of the Private Sector:\u00a0<\/strong>While efforts are being made to involve the private sector, a significant portion of defence production is still dominated by Defense Public Sector Undertakings (DPSUs).<\/li>\r\n\t
                        • Inadequate Investments in R&D:\u00a0<\/strong>Long-term success in defence indigenisation requires sustained investments in Research and Development (R&D).<\/li>\r\n\t
                        • Adequate funding for R&D initiatives is crucial to developing cutting-edge technologies and capabilities.<\/li>\r\n\t
                        • Establishment of Economies of Scale:<\/strong>\u00a0Achieving economies of scale is crucial for the defence industry.<\/li>\r\n\t
                        • This involves enhancing\u00a0productivity<\/strong>, ensuring\u00a0high<\/strong>-quality<\/strong>\u00a0standards, and concurrently\u00a0reducing costs<\/strong>.<\/li>\r\n<\/ul>\r\n

                          Measures to be taken in Future<\/h2>\r\n

                          The path forward for India to achieve its goal of becoming a net defence exporter and reaching a target of\u00a0US $5 billion in defence exports by 2025<\/strong>\u00a0needs to take several measures:<\/p>\r\n

                            \r\n\t
                          • Export High-Value Weapon Systems:\u00a0<\/strong>India should focus on exporting high-value weapon systems such as Aircraft Carriers, Arjun Mark 2 tanks, LCA-Tejas, and Light Combat Helicopters.<\/li>\r\n\t
                          • These platforms have garnered international interest and can significantly contribute to the total export value.<\/li>\r\n\t
                          • Comprehensive Export Deals:<\/strong>\u00a0In export deals, India should offer not only\u00a0weaponry\u00a0<\/strong>but also\u00a0training\u00a0<\/strong>and efficient\u00a0maintenance\u00a0<\/strong>services.<\/li>\r\n\t
                          • This comprehensive approach enhances the appeal of Indian defence products and builds\u00a0credibility\u00a0<\/strong>in the global arms market.<\/li>\r\n\t
                          • Leverage Defense Lines of Credit (LoC):<\/strong>\u00a0Extend defence\u00a0Lines of Credit (LoC)<\/strong>\u00a0to Friendly Foreign Countries (FFCs) to facilitate defence exports.<\/li>\r\n\t
                          • Enhance Private Sector Contribution:<\/strong>\u00a0Increase the contribution of defence private companies to\u00a0at least 50%<\/strong>\u00a0of total defence production.<\/li>\r\n\t
                          • Provide\u00a0incentives\u00a0<\/strong>and allocate\u00a0big projects<\/strong>\u00a0to private companies for the production of significant defence items, moving beyond the current focus on parts and components.<\/li>\r\n\t
                          • Establish a Dedicated Export Promotion Body:<\/strong>\u00a0Establish a dedicated body for defence export promotion to streamline and drive export-related initiatives.<\/li>\r\n\t
                          • This body should work in coordination with the\u00a0Ministry of External Affairs<\/strong>\u00a0(MEA) to strengthen defence diplomacy.<\/li>\r\n\t
                          • Also, establish a\u00a0Defense Diplomacy Division<\/strong>\u00a0within the\u00a0MEA\u00a0<\/strong>to implement and coordinate defence diplomacy initiatives.<\/li>\r\n\t
                          • Defense Modernisation Fund:\u00a0<\/strong>The establishment of a non-lapsable Defense Modernisation Fund as proposed in the budget 2023-24 would help to bridge the gap between projected requirements and budget allocations.<\/li>\r\n<\/ul>","protected":false},"excerpt":{"rendered":"

                            Defence Indigenisation refers to the objective of a country to develop its own industrial and technological capabilities for producing defence equipment and weapons.<\/p>\n","protected":false},"author":6,"featured_media":8210,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[173],"tags":[672,40],"class_list":{"0":"post-3589","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-quest-level-3","8":"tag-defence-indigenisation","9":"tag-quest"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts\/3589","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/comments?post=3589"}],"version-history":[{"count":1,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts\/3589\/revisions"}],"predecessor-version":[{"id":19887,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts\/3589\/revisions\/19887"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/media\/8210"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/media?parent=3589"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/categories?post=3589"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/tags?post=3589"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}