Introduction
Defence industrial capability is central to a country’s national security, economic growth and strategic autonomy. It enables the development and manufacture of military equipment within its own borders, strengthening a nation’s defence preparedness and reducing dependence on foreign suppliers. For India, this capability is especially important given its complex security environment, which demands preparedness across both land and maritime domains. India also needs to balance its defence requirements with broader developmental priorities to ensure the responsible use of public resources. Achieving self-reliance in defence is therefore a key part of India’s long-term vision to become a developed nation by 2047.
To reduce its dependence on defence imports, the Indian Government has introduced a range of policy measures to strengthen domestic manufacturing and encourage indigenous innovation. Initiatives such as Make in India, Atmanirbhar Bharat, the Defence Acquisition Procedure 2020 (DAP-2020), and the Innovations for Defence Excellence (iDEX) programme demonstrate this growth, as do efforts to expand the role of private industry in defence production. These initiatives have shifted the focus beyond domestic military equipment manufacturing. The focus is now on building domestic research and development capabilities to expand India’s presence in the global defence export market. The results are significant. India’s defence production reached ₹1,26,887 crore in FY 2023-24, up 16.7 per cent from the previous financial year.[1] Defence exports reached a record ₹23,622 crore in FY 2024-25, up 12.04 per cent from the previous year.[2]
These developments reflect the expansion of India’s industrial capacity and the growing participation of domestic manufacturers in international markets. However, India’s transition from defence indigenisation to global export leadership requires a qualitative transformation of its defence industrial ecosystem. Domestic production must be increasingly supported by independent research, competitive design, commercially viable innovation, reliable after-sales support, and sustained international demand.
This paper addresses three research questions. First, to what extent has India’s current indigenisation strategy strengthened indigenous design and technological capabilities? Second, which institutional, regulatory and industrial constraints impede the transition from defence production to internationally competitive innovation and exports? Third, what reforms in research and development, procurement, private-sector participation and emerging technologies could enable India to achieve defence export leadership by 2047? The paper examines the conceptual relationship between indigenisation and technological sovereignty, assesses India’s policy architecture and industrial performance, analyses structural constraints, and develops a phased policy roadmap to 2047.
From Indigenisation to Technological Sovereignty
Defence indigenisation means gradually replacing imported military equipment, components, and materials with domestically produced equivalents. Four stages help explain how India is seeking to reduce dependence on foreign suppliers. The first stage involves domestic assembly and licensed production. Manufacturing takes place in India, but key design decisions remain with foreign partners. The second stage focuses on replacing imported components with locally manufactured parts. The third stage involves local system design. This helps Indian institutions and companies exercise greater control over technology, system integration, and intellectual property. The final stage is technological leadership, in which a country can develop advanced systems, introduce new generations of technology, and compete effectively in international markets.
There is no fixed sequence for these stages. A country may be technologically advanced in some areas while remaining dependent on foreign expertise in others. India has made good progress in missiles, space technology, electronic systems and naval construction. However, challenges remain in aviation and certain advanced defence technologies. Technological growth will not entirely eliminate foreign dependence. Modern defence systems rely on complex supply chains, specialised materials and international research collaboration. Even technologically advanced countries depend on foreign suppliers for certain components. For India, the more practical goal is to identify critical dependencies and develop domestic alternatives. It needs to maintain control over essential military capabilities. It should also engage with international partners on more favourable technological terms.
India’s Defence Industrial Transformation: Achievements and Limitations
Three issues merit consideration. These are:
- Expansion of domestic production and procurement
- Growth in Defence Exports
- Policy instruments for Self-reliance
- Expansion of Domestic Production and Procurement
An important indicator of India’s evolving position is the expansion of domestic defence production. The Ministry of Defence reported production worth ₹1,26,887 crore in FY 2023-24.[3] Public-sector manufacturers, private enterprises, smaller suppliers, and specialised component producers have supported this expansion. The Defence Acquisition Procedure 2020 reinforced the policy preference for indigenous manufacturing by assigning the highest priority to the Buy (Indian-Indigenously Designed, Developed and Manufactured) category. It also introduced measures to increase domestic content and create procurement opportunities for Indian manufacturers.[4]
Positive indigenisation lists further stimulate demand for domestic products by identifying equipment that will no longer be imported after specified timelines. These measures serve an important economic function. They create a more predictable domestic market, enabling manufacturers to invest in production facilities, workforce development and supply chains. The domestic procurement preference can also support economies of scale. These factors are particularly important in an industry characterised by high fixed costs and long product development cycles.
The relationship between domestic procurement and export competitiveness is not self-regulating. Protected domestic demand may encourage manufacturers to supply the armed forces, which can hinder the development of products that meet the price, reliability, interoperability and delivery expectations of international customers. Domestic procurement should therefore be supported by competitive performance, quality assessment and measures to support export-oriented product development.
- Growth in Defence Exports
India’s defence export performance has improved markedly. Defence exports in FY 2023-24 reached ₹21,083 crore, rising to ₹23,622 crore in FY 2024-25.[5] Of this, private-sector companies accounted for ₹15,233 crore, while defence public-sector undertakings (DPSUs) contributed ₹8,389 crore.[6] The private sector therefore remained an important contributor to export earnings, while public-sector exports also increased substantially. The range of exported products includes defence equipment, components, electronic systems and other manufactured items.
Indian firms have also secured international opportunities across naval platforms, surveillance systems, aircraft components and missile systems. India signed the BrahMos missile contract with the Philippines in 2022, highlighting India’s potential to export technologically advanced products.[7] International sales can also influence research and development. The global arms market remains highly competitive. According to the Stockholm International Peace Research Institute (SIPRI), the United States, France, Russia, China and Germany are among the largest exporters of major arms for 2020-24.[8] India’s growing exports do not equate to leadership in the global defence system. The major challenge is to convert expanding export revenue into a valuable market position.
- Policy Instruments for Self-reliance
The SRIJAN portal helps identify items that domestic manufacturers may develop and supply. Defence industrial corridors in Uttar Pradesh and Tamil Nadu aim to enhance industrial clustering and manufacturing infrastructure. The government has also liberalised foreign direct investment rules, simplified certain industrial licensing arrangements, and earmarked a portion of the defence research and development budget for industry-led research.[9] These initiatives address multiple dimensions of the industrial ecosystem.
India’s defence policies are designed to address various aspects of domestic industrial development. Indigenisation lists create opportunities for Indian manufacturers, while defence industrial corridors encourage investment and industrial growth. Licensing reforms aim to make it easier for businesses to enter the sector, and research funding supports the development of new technologies.
Still, these measures will succeed only if implemented effectively. Replacing an imported component may require specialised materials, manufacturing facilities, access to technical information, and extensive testing. Similarly, an industrial corridor may attract manufacturing units without developing research facilities, a skilled workforce, or local supplier networks. These elements need to be sustained to support long-term growth. Research funding also does not guarantee commercial success. Prototypes may fail to progress to production without procurement commitments and sustained institutional support.
Institutional and Industrial Constraints
One of the biggest constraints is the continued dependence on foreign suppliers for selected critical technologies and components. Advanced combat aircraft, for example, require sophisticated engines, materials, sensors, software and electronic systems. Developing these technologies requires sustained research. Other requirements include extensive testing, specialised manufacturing processes and substantial financial investment. SIPRI’s analysis of international arms transfers confirms that India remains a major arms importer despite improvements in domestic production.[10] This is not proof that indigenisation has failed. It highlights the difference between expanding manufacturing capacity and achieving comprehensive technological autonomy. Import dependence can create strategic vulnerabilities and limit the scope to modify equipment to meet India’s operational requirements.
The Defence Research and Development Organisation (DRDO) has played a major role in the indigenisation effort by developing missiles, sensors, aircraft-related technologies, and other defence systems. However, the level and complexity of contemporary military technology are high, requiring a research system that goes beyond a single public institution.[11] Addressing this challenge requires looking beyond disparities in research funding. A comprehensive approach must account for priority-setting mechanisms, intellectual property governance, risk allocation, and pathways for translating innovations into production.
A mission-based model can address these challenges by identifying a limited set of strategically important technological objectives, assigning responsibility across institutions, and setting milestones from research through to operational deployment. India’s procurement framework includes Make and innovation categories to encourage domestic development. However, the effectiveness of these mechanisms remains uncertain and depends on timely decisions, realistic technical requirements, and clear testing and acquisition arrangements.[12] An upgraded procurement system is needed.
Innovation, Emerging Technologies and the Export Opportunity
The Innovations for Defence Excellence programme (iDEX), launched in 2018, provides a framework to connect defence users with start-ups, MSMEs, and individual innovators.[13] Through problem-based challenges and funding mechanisms, iDEX seeks to support technologies that meet operational requirements while fostering a broader innovation ecosystem. The ADITI scheme (Acing Development of Innovative Technologies with iDEX), launched in March 2024, expanded this approach by supporting the development of critical and strategic defence technologies.[14] The government announced a scheme outlay of ₹750 crore for FY 2023-24 to FY 2025-26 and grants of up to ₹25 crore for eligible projects.[15] These initiatives are important because innovation increasingly occurs outside traditional defence establishments. Start-ups and research enterprises can help. This can happen through software, robotics, artificial intelligence, and other technologies adaptable to military applications.
Innovation programmes, however, should be evaluated on their ability to move technologies into operational service and commercial production. The challenges or prototypes developed are an incomplete measure of success. Real indicators include the proportion of projects reaching user trials, the time required to obtain procurement decisions, the number of products entering serial production, and the export revenue generated by supported firms.
iDEX should therefore be more closely linked to procurement authorities. The country needs established manufacturers and export-promotion institutions. Successful innovators need a way to scale production, access supply chains, and compete internationally. Space-based capabilities are important for communications, navigation, and military situational awareness. India’s electronics capabilities create opportunities for collaboration between civilian technology institutions and defence users. However, dual-use technologies require careful governance because commercial applications and military functions overlap. Advanced sensors, secure communications, and electronic systems create opportunities because they can integrate across multiple platforms.
Policy Roadmap for Defence Export Leadership by 2047
India aims to achieve defence export leadership by 2047. This requires a phased strategy with clear, measurable objectives. Leadership should not be defined solely by export revenue or an arbitrary ranking. It should encompass indigenous design capability and technological depth. Industrial scale, product reliability and sustained international competitiveness are also important. A four-phase approach is recommended.
Phase I (2026-2030): Consolidating the Industrial Foundation
India’s priority should be to shift industrial growth towards a more integrated manufacturing and innovation system. To this end, the government should establish technology-specific roadmaps for critical areas such as electronic warfare, secure communications, and autonomous systems. Each roadmap should outline current capabilities and potential export markets.[16] Procurement processes should become more predictable, with project timelines, technical evaluation criteria, and conditions clearly defined. This predictability should extend from prototype development through to production. iDEX and other innovation programmes should be evaluated on outcomes rather than on administrative activity. Public reporting should distinguish between research projects, prototypes under evaluation, technologies adopted by the armed forces, and products entering export markets.[17]
India should also strengthen its testing and certification infrastructure. Shared facilities would reduce costs for smaller enterprises and improve the reliability of domestically developed products. Finally, export-promotion support should include market intelligence, international exhibitions, customer demonstrations, financing, and lifecycle support. These measures would help Indian companies move from isolated export contracts to repeat business.
Phase II (2030-2035): Building Technological Depth
The second phase should focus on technologies that support a wide range of defence systems. Defence investment should combine institutional research grants with industry-led projects. Specific programmes should be designed to address technological gaps. Universities and research institutions should also have greater opportunities. Reforms within the DRDO should focus on specialised research. Progress should be assessed regularly. More effective transfer of technology to manufacturers is needed.
Effective collaboration between public research institutions and industry is equally important. Research organisations can focus on complex, high-risk technological challenges. India should also pursue joint development projects with trusted international partners. This can help India access technologies and expand its reach in global markets. These partnerships must include clear provisions on intellectual property rights and maintenance. They should also include export permissions and build domestic expertise. International cooperation should strengthen India’s long-term technological capabilities.
Phase III (2035-2040): Establishing an Export-oriented Innovation Ecosystem
In this phase, the focus should be on developing more indigenous defence systems for international markets. Product design should take into account the needs of overseas buyers. This improves compatibility with other systems and reduces maintenance costs. It also eases upgrades and the training required for customers. Manufacturers should also offer different versions of the same platform to meet varying operational and budgetary requirements. On the basis of a shared technological base, companies can adapt products for different markets.
Beyond product development, India needs to strengthen export financing and foster greater industrial cooperation. Publicly supported financial assistance could help eligible manufacturers meet working-capital needs and manage the costs of international contracts. This support is subject to sound risk assessment, transparency and financial accountability. A coordinated national strategy should also identify potential export markets by assessing their defence requirements. India needs political relationships, purchasing capacity and the suitability of Indian equipment. Diplomatic engagement can help create opportunities.
Phase IV (2040-2047): Consolidating Global Competitiveness
The final phase is the most significant. It encompasses India’s evolving role in global leadership. India has a vision for 2047, supported by several indicators. The growth of the defence industry is the primary concern. India needs indigenous design and modernised maintenance services. For now, India does not need to dominate the global market. It should focus on domains where its local strengths can align with international standards. India should set aside the focus on self-sufficiency. According to the principle of liberal institutionalisation, India should be ready for shared production. Military technology should be developed carefully. India’s success depends on entering the global market.
Conclusion
India aims to become a leading defence exporter by 2047. This ambition goes beyond expanding industrial production and is linked to strategic autonomy and long-term security interests. Growing domestic defence manufacturing is important. Rising exports and initiatives such as DAP-2020 and iDEX are real. These have helped build a stronger base for indigenous production. Dependence on critical foreign technologies and procurement delays remain challenges.
The expansion of manufacturing must go hand in hand with greater control over indigenous design. To achieve its 2047 ambition, India needs to move beyond its basic strategy and build a more integrated approach. This approach should encompass research, manufacturing and exports. This will require substantial investment in research and development. Emerging technologies offer new possibilities, but translating them into meaningful advantages will depend on developing core industrial capabilities.
India’s progress should not be judged solely by the quantity of defence equipment manufactured or exported, but by its ability to develop advanced technologies. It should also encompass autonomy in critical design decisions. Atmanirbhar Raksha must mean more than producing equipment domestically. It should enable India to innovate with greater independence and to collaborate on mutually beneficial terms. India should establish itself as a reliable security partner in an increasingly complex international environment. A policy roadmap for 2047 is needed, focusing on strengthening indigenous design authority, reforming defence R&D and procurement, expanding private-sector participation, financing high-risk defence innovation, improving testing and certification, and developing strategic international partnerships.
Author Brief Bio: Dr. Sharanpreet Kaur is an Assistant Professor of International Relations at School of Social Sciences, Guru Nanak Dev University, Amritsar (Punjab). She is the author of the book “India’s Soft Power Diplomacy: Prospects, Challenges and Way Forward”. She is also a columnist for The Daily Guardian and the Eurasia Review and has written on issues related to India’s Foreign Policy. Dr. Kaur’s research and writing modules include Diplomacy, India’s Foreign Policy, Politics of South Asia, Central Asia and West Asia.
References:
[1] Ministry of Defence, Government of India, “Annual Defence Production Hits Record High of Approx. Rs. 1.27 Lakh Crore in Financial Year 2023-24,” press release, Press Information Bureau, 5 July 2024, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2030887.
[2] Ministry of Defence, Government of India, “Defence Exports Surge to a Record High of Rs 23,622 Crore in Financial Year 2024-25, a Growth of 12.04% over 2023-24,” press release, Press Information Bureau, 1 April 2025, https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=2117348.
[3] Kartik Bommakanti and Rahul Rawat, “Exporting Self-Reliance: The Policy Architecture behind India’s Defence Growth,” Expert Speak, Observer Research Foundation, 7 July 2025, https://www.orfonline.org/expert-speak/exporting-self-reliance-the-policy-architecture-behind-india-s-defence-growth.
[4] Ministry of Defence, Government of India, Defence Acquisition Procedure 2020 (New Delhi: Ministry of Defence, 2020), https://www.makeinindiadefence.gov.in/public/upload/writereaddata/DAP2030new_0.pdf.
[5] Ministry of Defence, “Defence Exports Surge.”
[6] Ministry of Defence, “Defence Exports Surge.”
[7] Ministry of Defence, Government of India, “India and Philippines Sign Contract for Supply of BrahMos Shore-Based Anti-Ship Missile System,” press release, Press Information Bureau, January 2022, https://pib.gov.in/.
[8] Mathew George et al., “Trends in International Arms Transfers, 2024,” SIPRI Fact Sheet, Stockholm International Peace Research Institute, March 2025, https://www.sipri.org/publications/2025/sipri-fact-sheets/trends-international-arms-transfers-2024.
[9] Ministry of Defence, Government of India, “Self-Reliance in Defence Manufacturing,” press release, Press Information Bureau, 4 February 2022, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1795540.
[10] George et al., “Trends in International Arms Transfers.”
[11] Department of Defence Production, Ministry of Defence, Government of India, “Defence Exports Promotion,” accessed 10 October 2026, https://www.defenceexim.gov.in/.
[12] Ministry of Defence, Defence Acquisition Procedure 2020.
[13] Ministry of Defence, Government of India, “New Procurement Policy,” press release, Press Information Bureau, 4 April 2022, https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1813159.
[14] Laxman Kumar Behera, “India’s Defence Industry: Achievements and Challenges,” ORF Issue Brief no. 708 (New Delhi: Observer Research Foundation, 6 May 2024), https://www.orfonline.org/research/india-s-defence-industry-achievements-and-challenges.
[15] Innovations for Defence Excellence, Government of India, “About iDEX,” accessed 10 October 2026, https://idex.gov.in/idex.
[16] Ministry of Defence, Government of India, “DefConnect 2024: Raksha Mantri Launches ADITI Scheme to Promote Innovations in Critical and Strategic Defence Technologies,” press release, Press Information Bureau, 4 March 2024, https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=2011171.
[17] Suchet Vir Singh, “Policy Recommendations for Achieving India’s Defence-Export Ambitions,” ORF Issue Brief no. 676 (New Delhi: Observer Research Foundation, 23 November 2023), https://www.orfonline.org/research/policy-recommendations-for-achieving-india-s-defence-export-ambitions.
