Defence Atmanirbharta: Record Production and Exports
Kartavya Desk Staff
Source: PIB
Subject: Economy
Context: India recorded its highest-ever defence production and exports in FY 2024–25 under the Atmanirbhar Bharat initiative, marking a major shift towards indigenous manufacturing.
• The Government announced ambitious targets to reach ₹3 lakh crore production and ₹50,000 crore exports by 2029, signalling India’s rise as a global defence exporter.
About Defence Atmanirbharta: Record Production and Exports
Trends / Key Statistics of India’s Defence Industry:
• Record Defence Production: Indigenous defence manufacturing touched ₹1,27,434 crore in FY 2023–24, rising sharply from ₹46,429 crore in 2014–15—a 174% growth driven by sustained policy reforms.
• Highest Ever Overall Output: India’s total defence production for FY 2024–25 reached ₹1.54 lakh crore, reflecting continuous annual expansion across DPSUs, private firms, and MSMEs.
• Rising Defence Exports: Exports climbed to ₹23,622 crore in FY 2024–25, up from less than ₹1,000 crore in 2014, showing India’s growing global competitiveness and platform reliability.
• Private Sector Participation: The private sector’s share grew from 21% to 23% within a year as over 16,000 MSMEs entered the supply chain producing high-value sub-systems and components.
• Massive Domestic Procurement: In FY 2024–25, the Ministry of Defence signed 193 contracts worth ₹2.09 lakh crore, with 177 contracts awarded to domestic companies, boosting self-reliance.
Opportunities for India’s Defence Industry:
• Defence Industrial Corridors: UPDIC and TNDIC attracted ₹9,145 crore actual investment with ₹66,423 crore potential, creating clusters for aerospace, land systems, and advanced manufacturing.
• Expanding Export Markets: India now exports defence products to 80–100 countries, offering opportunities to expand partnerships through training, maintenance, logistics, and technology packages.
• High FDI Inflow Potential: Liberalised norms allowing 74% automatic FDI and 100% through approval make India a preferred destination for foreign OEM collaboration and technology transfer.
• Digital Export Authorisations: An end-to-end digital portal issued 1,762 export approvals in FY 2024–25, reducing clearance time, improving transparency, and raising exporter participation by 17%.
• Innovation Ecosystem: Schemes like the ₹1 lakh crore RDI Scheme, iDEX grants, and DRDO’s TDF (₹500 crore) offer huge opportunities for start-ups and academia to co-develop next-gen defence tech.
Government Initiatives:
• Defence Acquisition Procedure (DAP) 2020 prioritises Buy Indian–IDDM, speeds clearances, integrates advanced tech (AI, robotics, cyber).
• Defence Procurement Manual (DPM) 2025 streamlines ₹1 lakh crore revenue procurement with uniform rules and digital processes.
• Positive Indigenisation Lists ban imports of thousands of items, encouraging domestic production.
• Reorganisation of Ordnance Factories into seven DPSUs to improve autonomy and efficiency.
• Export Facilitation Reforms: Open General Export Licences, simplified SOPs, digital authorisation, and export promotion cell.
Challenges Associated with India’s Defence Industry:
• Shallow Technological Base: India still lacks indigenous capability in high-end propulsion, sensors, materials, and electronics, leading to 58% of procurement through licensed production.
• Insufficient Production Scale: Despite improvements, domestic output is still too low to meet annual procurement needs, keeping India dependent on foreign OEMs for major platforms.
• Export Limitations of DPSUs: DPSUs have struggled internationally—examples include HAL’s Tejas losing to Korean KF-21 and GRSE losing major global tenders, impacting export ambitions.
• Policy–Implementation Gap: Many reforms announced since 2014 see slow on-ground execution due to bureaucratic delays, lengthy negotiations, and multi-layered compliance pathways.
• Dependence on Imported Components: India relies heavily on foreign suppliers for speciality steels, composites, servos, avionics, and electronics, creating supply-chain vulnerabilities.
Way Ahead:
• Build Deep-Tech Capability: Increase investments in propulsion, stealth materials, seeker technology, and advanced sensors to reduce dependence on foreign components and raise export competitiveness.
• Strengthen Private Industry: Offer long-term procurement commitments, testing infrastructure, and transparent competition so private firms and MSMEs can scale production and innovate freely.
• Boost R&D Spending: Raise defence R&D allocation from <1% to 8–10% of the defence budget, matching global defence leaders and enabling India to design complex strategic platforms.
• Expand Export Diplomacy: Use concessional finance, maintenance hubs, and joint training to enhance India’s attractiveness in African, ASEAN, and Middle Eastern defence markets.
• Accelerate Procurement Reforms: Introduce single-window clearances, real-time PMUs, and digital monitoring to cut procurement delays and ensure timely delivery to the Armed Forces.
Conclusion:
India’s defence sector has entered a decisive phase of self-reliance with record production, exports, and ecosystem growth. To sustain this momentum, India must expand deep-tech capacity, accelerate private-sector participation, and strengthen global partnerships. With consistent reforms, India is poised to emerge as a major global defence manufacturing hub by 2030.
Despite India’s efforts to enhance domestic defence manufacturing, its status as the second-largest arms importer persists. Critically examine the obstacles hindering India’s self-reliance in defence production. Suggest policy measures to address these challenges.