INDIA’S DRIVE FOR DEFENCE SELF RELIANCE

INDIA’S DRIVE FOR DEFENCE SELF RELIANCE

Context

• Defence Minister Rajnath Singh addressed the Controllers’ Conference of the Defence Accounts Department (DAD) in July 2025.
• Key Message: Government’s renewed push for indigenous defence manufacturing, especially large engines, a domain heavily dependent on imports.
• Significance: Aligns with the vision of Aatmanirbhar Bharat and India’s broader effort to reduce external dependence in critical military technologies.

STRATEGIC PUSH FOR INDIGENOUS LARGE ENGINE MANUFACTURING

• What Are Large Engines?
  • These are high-powered diesel or gas turbine engines used in tanks, ships, submarines, and aircraft.
  • India currently imports most of these from Germany, Russia, the US, and others.
• Why This Matters?
  • Large engines are mission-critical components – without them, major platforms are non-functional.
  • Control over such technologies improves strategic autonomy and reduces vulnerability to foreign sanctions or disruptions (e.g., Russia-Ukraine conflict effects on supply chains).
• Government’s Stand:
  • Defence Minister urged quick decision-making and Indian-led development of such technologies.
  • Marked a strategic shift from component assembly to core technology development.
• Expected Outcome:
  • Improved defence resilience, increased defence exports, and support to Make in India in critical tech.

ATMANIRBHAR BHARAT IN DEFENCE

A. Government Commitment

• Defence Minister declared: “Most of the equipment we once imported is now being made in India.”
• India is now producing a wide range of platforms:
  • LCA Tejas (fighter aircraft)
  • Dhanush and ATAGS (artillery guns)
  • INS Vikrant, Kalvari-class subs
  • Akash, BrahMos, Pinaka missile systems

B. Case Study – Operation Sindoor

• What Happened?
  • A recent military operation showcasing effective deployment of indigenously developed weapons and systems.
  • Highlighted the combat-readiness of Indian equipment under real conditions.
• Impact:
  • Boosted international confidence in Indian defence products.
  • Defence Acquisition Council (DAC) cleared ₹1.05 lakh crore worth of indigenous defence procurement.

ROLE OF DEFENCE ACCOUNT DEPARTMENT

• Function: DAD handles budgeting, procurement approvals, and payment systems for the Indian Armed Forces.
• Why It Matters:
  • Delays or errors in fund release directly affect military readiness (e.g., delay in spares or maintenance contracts).
  • The Minister stressed: “One mistake in financial process can cost a soldier’s life.”
• Transformation Needed:
  • From “controller” to “facilitator” – especially important as the private sector grows in defence production.
  • Emphasized flexibility in systems to deal with rapid procurement needs during crises.
• New Motto:
  • DAD now follows: “Alert, Agile, Adaptive” – fitting for a dynamic, modern defence finance ecosystem

STRATEGIC & ECONOMIC NEED

A. Strategic Necessity

• Two-Front Threat:
  • India faces simultaneous pressure from China and Pakistan.
  • The Army Chief has acknowledged a “high degree of collusivity” between these neighbours.
• Lessons from Past Wars:
  • 1962, 1965, and 1971 wars highlighted India’s dependence on foreign equipment and consequent vulnerabilities.

• Technological Denial Risk:
  • Countries can withhold supplies during geopolitical tensions (e.g., during Kargil War, sanctions delayed spares).
• Strategic Autonomy:
  • Developing in-house capability ensures uninterrupted supply of arms and ammunition during conflict or crisis.

ECONOMIC IMPERATIVE

• Import Reduction:
  • India imported 65–70% of defence equipment historically.
  • As of 2024, 65% is now domestically produced, showing tangible progress.
• Industrial Ecosystem:
  • 16 DPSUs (after restructuring ordnance factories), 400+ private sector license holders, 16,000+ MSMEs.
• Jobs & Economic Growth:
  • The defence sector acts as a growth engine, generating high-skill employment and fostering innovation.
• Defence Industrial Corridors (DICs):
  • UP and Tamil Nadu leading state-driven initiatives.
  • Focus: reduce logistics cost, cluster innovation, encourage startups.
• Specialised Hubs:
  • Bengaluru: Aerospace and missiles
  • Hyderabad: EW systems
  • Pune: Artillery and vehicles
  • Coastal Cities: Shipbuilding (Chennai, Kochi, Goa)

GLOBAL TRENDS

• Global Military Spending: Reached $2.7 trillion in 2024 (SIPRI).
• Defence Export Boom:
  • ₹21,083 crore (FY 2023-24) → ₹23,622 crore (FY 2024-25)
  • India exports to 100+ countries
• New Global Re-armament Phase:
  • Countries upgrading capital-intensive systems (e.g., hypersonic weapons, 6th-gen aircraft). India must keep pace.

HISTORICAL EVOLUTION OF DEFENCE MANUFACTURING IN INDIA

I. Colonial Legacy and Post-Independence Trajectory

🔹 British Legacy (Pre-1947)

• India inherited 18 ordnance factories from British rule in 1947.
• Their role was primarily to serve colonial needs, with minimal indigenous design or innovation.
• These factories laid the foundational infrastructure but lacked modern R&D capacity.

🔹 Post-Independence Expansion

• After independence, the government established 23 more ordnance factories to strengthen self-reliance.
• The focus was largely on production, not design, with strategic dependence on friendly nations.
• By October 2021, a major reform led to corporatization of 41 ordnance factories into 7 Defence Public Sector Undertakings (DPSUs) to enhance competitiveness and accountability.

II. Import-Dependent Era (1950s–1980s)

🔹 Geopolitical Context

• The Cold War alignment saw India lean towards the USSR due to U.S. support to Pakistan.
• This led to heavy reliance on Soviet defence hardware: MiG-21s, T-55 tanks, Ilyushin transport aircraft, etc.

🔹 Military Conflicts and Exposure of Weaknesses

• Wars in 1962 (China), 1965 & 1971 (Pakistan) exposed the technological and logistical weaknesses in India’s defence setup.
• India’s defence industry lacked capability in engines, electronics, and guided weapons.
• Post-1971, India began diversifying its imports to include systems from France, the U.S., and Israel.

III. “Lost Decade” of Defence Reforms (1990–1999)

🔹 Post-Liberalization Gap

• Despite 1991’s economic liberalization, defence manufacturing remained closed to private players until 2001.
• The decade saw stagnation in defence reforms due to bureaucratic inertia and scandals.

🔹 Bofors Scandal Fallout (1987)

• Allegations of corruption in the Bofors artillery deal led to:
  • Policy paralysis
  • Long delays in procurement
  • Erosion of political will to reform the defence acquisition system

iv. Shift in Import Trends – SIPRI Data Analysis

🔹 Post-1999 Diversification and Decline in Imports

• India’s arms imports declined by 9.3% between 2015–2019 and 2020–2024 (SIPRI).
• Reflects increasing success of indigenization and Make in India

COUNTRY WISE TRENDS

Despite declining trends, India was still the second-largest global arms importer (8.3%) between 2020–2024.

EARLY INDIGENISATION ATTEMPTS

🔹 Tejas LCA Programme

• Started: 1980s
• Challenge: Indigenous Kaveri engine failed development → dependence on GE F404/F414 engines.
• First flight: 2001, nearly 20 years after launch.
• Reason for delay: Weak supply chains, tech gaps, bureaucratic hurdles.

🔹 Integrated Guided Missile Development Programme (IGMDP – 1983)

• Aimed at developing:
  • Agni (ballistic missiles)
  • Prithvi (short-range)
  • Akash (SAM)
  • Trishul (tactical)
  • Nag (anti-tank)
• Successes:
  • Agni & Prithvi inducted into service.
  • BrahMos cruise missile co-developed with Russia – fastest in the world.

🔹 Self-Reliance Index Stagnation

• Target (1992): 70% self-reliance by 2004
• Reality (2006): Remained stuck at 30–35%
• Indicated a gap between policy ambition and institutional capacity.

POST 2014 REFORMS

Aatmanirbhar Bharat & Make in India

• Emphasis shifted from license production to design & development.
• Vision: Create globally competitive defence ecosystem with exports, innovation, and private participation.

🔹 Key Policy Reforms

• Defence Production and Export Promotion Policy (DPEPP) 2020
  • Target: ₹1.75 lakh crore output (₹35,000 crore exports) by 2025
• Defence Acquisition Procedure (DAP) 2020
  • Introduced “Buy Indian – IDDM” as the top priority
  • Encouraged innovation through “Make-I” and “Make-II” categories.
• Positive Indigenisation Lists
  • Over 400 items banned from import; mandated domestic procurement
• Defence Industrial Corridors (DICs)
  • UP & Tamil Nadu as clusters for MSMEs, startups, R&D
• RDI Scheme (2023)
  • ₹1 lakh crore allocated to fund innovation, dual-use tech, and R&D
• FDI Liberalization (2020)
  • Automatic route increased from 49% → 74%
  • 100% allowed via govt route to attract foreign OEMs
• Strategic Partnership Model
  • Encouraged joint ventures in submarines, fighter aircraft, and helicopters

CURRENT STATUS: DOMESTIC MANUFACTURING ECOSYSTEM

🔹 Public Sector Leadership (DPSUs)

• HAL: LCA Tejas, Dhruv, LCH, trainer aircraft (HTT-40)
• BEL: Radars, electronic warfare systems, communication systems
• MDL: Scorpene-class submarines, future Project 75I
• MIL & AWEIL: 35,000+ AK-203 rifles manufactured in Amethi under Make in India

PRIVATE SECTOR EMERGING STRONG

INDIA’S DEFENCE EXPORTS

• FY 2023–24: ₹21,083 crore
• FY 2024–25: ₹23,622 crore
• Target: ₹50,000 crore by 2029
• India now exports to 100+ countries

 WAY FORWARD

• Fast-Track Engine Development:
  • Indigenous marine, diesel, and jet engine tech critical for autonomy
• Enhance R&D and Innovation Ecosystem:
  • Increase budget for non-government R&D under the RDI scheme
• Single-Window Clearance:
  • Dedicated portal for defence startups & MSMEs to reduce red tape
• Public-Private Collaboration:
  • Expand partnerships through the SP Model and ToT agreements
• Upskill Workforce:
  • Defence-focused courses in IITs, NITs, and polytechnics
• Smart Imports:
  • Continue importing critical tech while pushing domestic substitutes

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