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INDIA’S DRIVE FOR DEFENCE SELF RELIANCE from Vajirao & Reddy Institute

By : Author Desk Updated : 2025-07-11 14:34:36

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
Country Trend Key Systems
Russia Declining dominance but still key (36% of imports 2020–2024) S-400, Su-30MKI, T-90
USA Rise post-2010, fall post-2016 C-17, Chinook, Apache, P-8I
France Sharp increase due to Rafale deal Rafale, Scorpene submarines
Israel Stable supplier of high-tech systems Barak-8, UAVs, AWACS, missiles
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
Company Key Contributions
TASL C-295 aircraft (Vadodara), UAVs, Boeing tie-ups
L&T Defence Missiles, artillery, naval systems, aerospace
Adani Defence UAVs, counter-drone systems, 150M round ammo plant in Kanpur
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
Challenge Area Explanation
Ease of Doing Business Startups face slow approvals, lack of commitment to procurement
Bureaucracy Delays in fund release, complex regulations
R&D Weakness Private sector lacks risk capital for long-term defence R&D
Import Dependence Still reliant on foreign engines, propulsion tech, electronics
Skill Gap Limited expertise in propulsion, radar, composites
Infrastructure Bottlenecks Need better logistics, testing facilities, and design hubs
Strategic Planning Deficit DAD and MoD must integrate long-term capability planning with financial agility
 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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