Why India Needs A Robust Defense Industrial Base?

Why Is It In News?

In recent years, India has recorded a significant increase in defence production and defence exports, bringing renewed focus on the need to strengthen the domestic defence industrial base.

 

Introduction :

As India moves towards it’s goal of becoming a developed nation by 2047 and in a world marked by frequent conflicts and shifting geopolitical alliances, building a resilient defence industrial base has emerged as a national priority. In this context, strong indigenous defence industry is vital for ensuring national security, strategic autonomy and sustainable economic development.

 

A Glance At India’s Journey From Import Reliance To Self-Reliance :

1947 – 1962 : Post-Independence Phase

• India inherited a weak industrial base – minimal indigenous defence manufacturing
• Defence requirements largely met through imports from UK and Western countries
• Defence manufacturing – not a policy priority

1962 – 1971 : Strategic Realisation Phase

• Indo-China war exposed serious military and technological shortcomings
• Led to recognition of dangers of heavy import dependence
• Strengthening of DRDO
• Despite efforts, imports continued

1970’s – 1980’s : Cold War Era Imports

• Heavy reliance on Soviet Union for major defence platforms
• Imports included fighter aircrafts, tanks, submarines and missile systems
• Licensed production began
• Indigenous capacity focussed on assembly rather than original design
• India became one of the largest arms importers globally

 

1991 – 2000 : Post-Cold War Vulnerabilities

• Collapse of the Soviet Union disrupted defence supply chains
• LPG reforms did not significantly open the defence sector to private players
• Import dependence persisted
• Defence production dominated by PSU’s

 

2000 – 2014 : Peak Import Dependence

• 65-70% of India’s defence equipment was imported
• Indigenous programmes faced delays
• Limited competition and innovation in the manufacturing ecosystem

2014 Onwards :

• Launch of “Make In India” – marked a renewed focus on indigenous defence production
• Policy reforms – encouraged private sector participation
• Atmanirbhar Bharat initiative – accelerated defence indigenisation
• Introduction of negative import lists
• Rising domestic production

Why Indigenous Manufacturing Matters?

1. National Security And Strategic Autonomy
   • Reduces dependence on foreign suppliers, preventing vulnerability to sanctions, supply disruptions etc.
   • Ensures independent decision-making in foreign policy
2. Enhanced Preparedness In A Volatile State
   • Provides resilience and continuity in defence preparedness
3. Strengthens Economic Growth And Industrial Capacity
   • Generates high value employment and skilled jobs
   • Reduces outflow of forex spent on imports
4. Promotes Technological Advancement And Innovation
   • Drives research, development and innovation
   • Builds long-term capabilities in critical and emerging technologies
5. Supports Long-Term Strategic Vision
   • Aligns with India’s goal of becoming a developed nation by 2047
   • Ensures national security and economic growth reinforce each other

Present Policies And Initiatives :

1. Make In India
   • Focuses on promoting indigenous design and production of defence equipment by public and private industry
2. Atmanirbhar Bharat (Self-Reliant India)
   • Aim – to build domestic capability
   • Targets include ₹3 lakh crore defence production and ₹50,000 crore defence exports by 2029
3. Liberalised FDI
   • FDI limits raised up to 74% under automatic route and 100% with government approval
   • Encourages technology inflows and collaboration with global firms
4. Negative Imports List
   • Government has issued lists of defence items that are banned from import, forcing procurement from domestic sources
5. Strategic Partnership (SP) Model
   • Designed to promote long-term partnerships with Indian private firms to make major defence platforms
   • Encourages global OEMs to transfer technology to Indian partners
6. Production Growth
   • India’s defence production reached a record ₹1.54 lakh crore in FY 2024-25, up from about ₹46,429 crore in FY 2014-15
   • This is a 174% increase in indigenous production over 10 years
7. Licenses + Private Sector Participation
   • Nearly 788 industrial licences issued to 462 companies in recent years, boosting participation

Challenges :

1. Limited access to finance for MSMEs and defence startups
2. Slow technology transfer and weak industry-R&D linkages
3. Dependence on foreign components and supply chains
4. Export-related regulatory and licensing delays
5. High import dependence for critical technologies
6. Low economies of scale compared to established global defence manufacturers
7. Uncertain demand visibility – affecting long-term private sector participation

Way Forward :

1. Simplifying licensing and procurement procedures through time-bound clearances
2. Providing long-term demand assurance via procurement plans and contracts
3. Reorient DRDO towards frontier research, with production and scaling led by industry
4. Creating a dedicated defence export facilitation mechanism
5. Expand testing, certification and validation infrastructure to global standards
6. Enhance industry – academia – R&D collaboration for technology development
7. Strengthening MSMEs and startups with easier credits and grants

Conclusion :

Addressing procedural, technological and institutional challenges through sustained reforms is essential to build a resilient and globally competitive indigenous defence manufacturing base. This kind of transformation is crucial for achieving India’s vision of becoming a developed nation by 2047.

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