Defence Secretary Rajesh Kumar Singh announced that India’s defence industry is poised for significant expansion, driven by reforms and public-private partnerships. During a recent conclave, he emphasized the government’s commitment to creating a technologically advanced and combat-ready force capable of addressing modern warfare complexities. This aligns with the broader initiative of “Atmanirbhar Bharat,” which focuses on self-reliance in defence production. The defence budget is set to rise from ₹6.21 lakh crore to ₹6.81 lakh crore in 2025-26, a 9.5% increase. Over the next decade, India plans to allocate approximately $30 billion annually for modernization efforts, with 75% earmarked for domestic procurement.
Defence exports have surged to ₹21,000 crore, marking a nearly 30-fold increase over the past decade. Singh noted that the current industrial ecosystem includes 16 defence PSUs, 430 licensed companies, and around 16,000 MSMEs, which are critical to this growth. The Ministry of Defence aims to streamline acquisition processes and reduce entry barriers for new technologies and players in the market. This approach is intended to foster an adaptive and agile defence industrial ecosystem capable of responding swiftly to evolving warfare needs. Singh highlighted the relaxation of Foreign Direct Investment (FDI) policies and industrial licensing procedures as vital elements for propelling the domestic defence industry forward. The government has declared 2025 as the “year of reforms” to enhance efficiency in defence procurement and production systems.
This strategic shift towards enhancing domestic capabilities and fostering collaboration between various stakeholders is expected to position India as a significant player in the global defence landscape.
The expansion of India’s defence industry is significantly driven by key public-private partnerships (PPPs) that aim to enhance indigenous production capabilities and foster innovation. Here are the primary aspects of these partnerships: The Strategic Partnership Model (SPM) model facilitates collaboration between Indian private companies and foreign original equipment manufacturers (OEMs). It aims to establish production lines in India, ensuring technology transfer and building local manufacturing capabilities. The Make in India Initiative launched in 2014, this initiative encourages foreign companies to set up manufacturing units in India and collaborate with local firms. It aims to boost domestic manufacturing across various sectors, including defence. Recent revisions to the Defence Procurement Procedure (DPP) prioritise indigenous products and simplify procurement processes. Categories like ‘Buy Indian’ and ‘Buy and Make
Companies like Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), and Bharat Dynamics Limited (BDL) play a crucial role in developing advanced defence equipment. Their collaborations with private firms help integrate innovative technologies into the defence ecosystem. The government is fostering collaboration among various stakeholders, including financial institutions, to create a unified platform for discussions on empowering the defence ecosystem. This approach is critical for securing funding and support for new projects. The Indian government has relaxed foreign direct investment policies and industrial licensing procedures, making it easier for private players to enter the defence sector. This is expected to attract more investments and accelerate growth in domestic manufacturing.
For 2025, the Ministry of Defence has declared a “Year of Reforms” aimed at modernizing the armed forces and enhancing overall defence preparedness. These reforms cover multiple areas, including structural changes, technological advancements, and procedural improvements. Establishing Integrated Theatre Commands to enhance coordination and operational efficiency among the Army, Navy, and Air Force. This involves integrating different branches of the military under a unified command structure for more effective joint operations. The goal is to eliminate inter-service rivalries, streamline decision-making, and optimise resource utilisation. Focusing on incorporating emerging technologies like artificial intelligence, machine learning, hypersonics, and robotics. These technologies are crucial for modernizing the armed forces and developing new tactics and procedures, especially in cyber and space domains.
Enhancing research and development (R&D) and promoting partnerships between Indian industries and foreign Original Equipment Manufacturers (OEMs) to position India as a credible exporter of defense products; facilitating technology transfer and knowledge sharing between the defense sector and the civil industry; streamlining and expediting defense acquisition processes to enable the swift acquisition of new technologies and equipment; and fostering greater cooperation among the armed services through shared operational requirements and joint operational training, which ensures the forces are prepared to conduct integrated operations across various domains. The ultimate goal is to eliminate inefficiencies and ensure deeper collaboration among stakeholders.
Optimising welfare measures for veterans and leveraging their expertise to contribute to ongoing reforms and innovation in the defence sector. Instilling a sense of pride in Indian culture and ideas, ensuring the armed forces adopt global standards while developing indigenous capabilities suited to India’s unique needs. This involves incorporating best practices from modern militaries that align with India’s specific conditions.
These public-private partnerships are essential for transforming India’s defence landscape into a self-reliant and technologically advanced sector. By promoting collaboration between government entities, private companies, and financial institutions, India aims to enhance its strategic capabilities while reducing dependency on foreign imports.
