BharatNotes Introduction
India's defence sector has historically been marked by high import dependence — India was consistently the world's largest or second-largest arms importer (SIPRI data) for years. The government's Atmanirbhar Bharat (self-reliant India) initiative, launched in May 2020, made defence indigenisation a strategic priority, backed by a comprehensive policy architecture. This chapter covers the key mechanisms, achievements, and challenges in India's defence self-reliance programme.
From DPP to DAP — Policy Framework Evolution
Defence Procurement Procedure (DPP)
The Defence Procurement Procedure (DPP) was the governing framework for defence acquisitions. It underwent multiple revisions (DPP-2002, 2005, 2008, 2011, 2013, 2016) but was criticised for:
- Long procurement timelines (often 10–15 years from induction to delivery)
- Complex categories and offset clauses that were difficult to implement
- Limited focus on technology transfer and domestic production
Defence Acquisition Procedure (DAP) 2020
The Defence Acquisition Procedure 2020 (DAP-2020) replaced DPP-2016 and came into effect on 1 October 2020. It represents the most comprehensive reform of India's defence procurement architecture.
Key changes in DAP 2020:
| Feature | Details |
|---|---|
| Atmanirbharta focus | Introduced a priority order for procurement categories; "Buy (Indian-IDDM)" has the highest preference |
| IDDM category | Indigenously Designed, Developed and Manufactured — the highest preference; requires product to be Indian-designed with >50% indigenous content |
| Leasing category | New "Leasing" category added — allows Indian military to lease equipment instead of purchasing (reduces upfront capital expenditure) |
| Reduced timelines | Streamlined approval processes; aimed at cutting average procurement time |
| Offset clause revision | Offset policy revised — exempted "Buy (Global)" category from offset obligations below a threshold; simplified offset banking |
| FDI provision | Incorporated FDI limits: 74% under automatic route for certain categories; up to 100% under government approval route |
Note on FDI: The 74% automatic route applies to categories like "Buy (Indian)", "Buy and Make (Indian)", and "Buy (Global – Manufacture in India)". The 49% cap remains for more sensitive categories involving design and development. FDI up to 100% is possible via the government approval route for cutting-edge technology transfer.
Positive Indigenisation Lists (PILs)
The Positive Indigenisation List (PIL) is a mechanism to drive import substitution — items on the list cannot be imported after a specified date; they must be sourced domestically.
Two separate PIL tracks:
Track 1 — Department of Military Affairs (DMA) PILs (for Armed Forces)
- 5 PILs notified covering 509 items (complex systems: platforms, weapons, sensors, ammunition)
- Items include: artillery guns, light combat helicopters, radars, armoured vehicles, corvettes, frigates, transport aircraft
- Import embargo dates are phased over 2020–2030
Track 2 — Department of Defence Production (DDP) PILs (for DPSUs)
- 5 PILs notified for Defence Public Sector Undertakings covering 4,666+ items (systems, sub-systems, components, spares)
- Of these, 2,972 items (worth Rs 3,400 crore import substitution value) had already been indigenised as of mid-2024
- A fifth list of 346 items was notified in July 2024, with Rs 1,048 crore import substitution value
Combined impact: The PILs have created a captive domestic market for Indian defence industry, incentivising private sector investment in defence manufacturing.
iDEX — Innovations for Defence Excellence
iDEX was established in 2018 under the Defence Innovation Organisation (DIO), Ministry of Defence, to harness India's startup ecosystem for defence technology innovation.
Structure:
- Nodal body: Defence Innovation Organisation (DIO); funded by DRDO and two DPSUs (HAL and BEL)
- Operates Defence India Startup Challenges (DISC) — multiple rounds
Funding mechanisms:
- SPARK grants: Up to Rs 1.5 crore for prototype development under DISC/Open Challenge
- ADITI Scheme (Acing Development of Innovative Technologies with iDEX): Launched March 2024; Rs 750 crore corpus (FY 2023-24 to 2025-26); grants up to Rs 25 crore per startup for deep-tech, critical technologies (AI, quantum, semiconductors, autonomous systems)
Achievements (as of February 2025):
- 549 problem statements issued to industry
- 619 startups and MSMEs engaged on the iDEX platform
- 430 contracts awarded
- 26 products developed under iDEX have received procurement orders totalling over Rs 1,000 crore
- Acceptance of Necessity (AoN) or RFPs worth Rs 2,380 crore issued for 37 products
DRDO Achievements — Key Indigenised Systems
| System | Type | Status |
|---|---|---|
| LCA Tejas (Mk1A) | Light Combat Aircraft | Inducted into IAF; MRCA contract for 83 Mk1A signed (2021); Mk2 variant under development |
| Pinaka | Multi-barrel rocket launcher (MBRL) | Inducted; upgraded Pinaka Mk-II with extended range; exported to Armenia |
| Akash-NG (New Generation) | Short-range surface-to-air missile | Development ongoing; improved over Akash Mk1 inducted in IAF/Army |
| QRSAM | Quick Reaction Surface-to-Air Missile | Completed user trials (2022-23); designed for Army air defence |
| Astra | Beyond Visual Range air-to-air missile | Inducted in IAF; Astra Mk1 (80+ km range); Mk2 under development |
| DRDO-HEMRL Kaveri Engine | Jet engine for LCA Tejas | Under advanced development; India's first indigenous combat aircraft engine |
| Varunastra | Heavyweight torpedo | Indigenously developed; inducted in Indian Navy |
Make in India in Defence
OFB Corporatisation — 7 New DPSUs
The Ordnance Factory Board (OFB) — a government factory system with 41 factories employing over 70,000 workers — was dissolved and corporatised into 7 new Defence Public Sector Undertakings (DPSUs) effective 1 October 2021:
| DPSU | Products |
|---|---|
| Munitions India Limited (MIL) | Ammunition, explosives |
| Armoured Vehicles Nigam Limited (AVNL) | Tanks, armoured vehicles |
| Advanced Weapons and Equipment India Limited (AWE India) | Small arms, assault rifles |
| Troop Comforts Limited (TCL) | Troop comfort items, clothing |
| India Optel Limited (IOL) | Optical and opto-electronic equipment |
| Gliders India Limited (GIL) | Parachutes, gliders |
| Yantra India Limited (YIL) | Propellants, explosives, fuses |
Rationale: Corporatisation aimed to introduce accountability, efficiency, and commercial orientation; OFBs had faced criticism for delays, quality issues, and cost overruns.
Defence Corridors
Two Defence Industrial Corridors have been established to cluster defence manufacturing:
- Uttar Pradesh Defence Industrial Corridor — nodes at Agra, Aligarh, Chitrakoot, Jhansi, Kanpur, Lucknow
- Tamil Nadu Defence Industrial Corridor — nodes at Chennai, Coimbatore, Hosur, Salem, Tiruchirappalli
Defence Exports — The Transformation
India's defence exports have grown dramatically under the Atmanirbhar initiative:
| Year | Defence Exports |
|---|---|
| 2016-17 | Rs 1,521 crore |
| 2022-23 | Rs 15,920 crore |
| FY 2023-24 | Rs 21,083 crore (record at that time; 32.5% growth; private sector 60%, DPSUs 40%) — PIB confirmed |
| FY 2024-25 | Rs 23,622 crore (12.04% growth over FY24) |
| FY 2025-26 | Rs 38,424 crore (all-time record as of April 2026) |
Government target: Rs 50,000 crore (approx. $6 billion) in defence exports by 2029.
Export destinations: Over 100 countries; key items — BrahMos cruise missiles (Philippines), Pinaka rockets (Armenia), Dornier maritime patrol aircraft, radars, ammunition.
SIPRI Data — India's Import Trajectory
According to SIPRI (Stockholm International Peace Research Institute) data:
- India was the world's largest arms importer from 2008 to 2018 (10-year period)
- India's share of global arms imports declined from ~14% (2014-18 period) to ~9.8% (2019-23 period) — reflecting some success of indigenisation
- However, India remains among the top 3 arms importers globally
- Major suppliers: Russia (traditional, but share declining), France (Rafale jets, submarines), USA (C-130J, Apache, P-8I), Israel (drones, radars)
Recent Developments (2024–2026)
Defence Exports — ₹23,622 Crore FY 2024–25 Record
India's defence exports reached ₹23,622 crore (approximately $2.8 billion) in FY 2024–25, a record that represents over 30-fold growth from ₹686 crore in FY 2013–14. The government's target is ₹50,000 crore by 2028–29. Major export products: Brahmos (Philippines contract: $375 million, 2022, with more buyers in pipeline), Pinaka MBRL system, Akash SAM, ATAGS artillery gun, Light Combat Helicopter (being offered to several countries), and a variety of ammunition, armoured personnel carriers, and patrol vessels.
Private sector contributed ₹15,233 crore (approximately 64%) of defence exports in FY 2024–25 (up from near-zero in 2014), led by companies like L&T, Tata Advanced Systems, Bharat Forge, and Mahindra Defence. DPSUs contributed ₹8,389 crore (36%). The Positive Indigenisation Lists (PILs) — now 5 editions with over 509 DMA items and 4,666 DPSU items — drive domestic procurement substitution.
UPSC angle: Defence exports data (FY25 record ₹23,622 crore), 30-fold growth story, Brahmos as flagship export, PIL items, and private sector's growing role are Prelims and Mains content.
iDEX (Innovations for Defence Excellence) — Scale-up 2024
iDEX, established under the Department of Defence Production in 2018, has contracted over 430 innovations from 619+ enrolled startups and MSMEs by 2024. The Defence India Startup Challenge (DISC) under iDEX has completed 11 rounds, supporting innovations in counter-drone systems, AI-based surveillance, armoured vehicle protection, and soldier wearables.
The iDEX Prime initiative (for larger companies on contracts above ₹50 lakh) and the Aditi (Acing Development of Innovative Technologies with iDEX) scheme — launched by PM Modi at Defexpo 2024 — target deep-tech startups with grants up to ₹25 crore for dual-use critical technologies. India's defence tech startup ecosystem has grown to over 450 companies, with GrowthCap (iDEX spinout) providing debt financing.
UPSC angle: iDEX metrics (430 contracts, 619 startups), DISC rounds, Aditi scheme, and the startup-defence industrial complex link are Prelims and Mains content.
Defence Production Budget and Capital Expenditure 2024–25
India's Defence Budget for FY 2024–25 was ₹6,21,940 crore — approximately 1.9% of GDP. The Capital Expenditure (for new weapons, equipment, and infrastructure) was ₹1,72,000 crore, of which over 75% was earmarked for procurement from domestic sources — reflecting the impact of Positive Indigenisation Lists. Revenue expenditure (salaries, maintenance) continues to dominate at approximately 52% of total defence budget.
India aims to raise defence spending to 2.5% of GDP as recommended by the Kargil Review Committee and subsequent defence reviews. Military modernisation without corresponding budget increases has created "committed liabilities" (payments for previously contracted systems) that crowd out new procurements — a structural challenge highlighted in CAG reports.
UPSC angle: Defence Budget 2024–25 (₹6,21,940 crore, 1.9% GDP), 75% domestic capex target, committed liability problem, and Kargil Review Committee recommendations are Mains GS-3 content.
Defence Exports FY 2025–26 — All-Time Record of ₹38,424 Crore (April 2026)
India's defence exports reached ₹38,424 crore in FY 2025–26, a 62.66% increase over the previous record of ₹23,622 crore in FY 2024–25, and a 25-fold growth over a decade from ₹1,521 crore (FY 2016–17). The number of exporting companies rose to 145 (from 128 in FY25), with exports reaching over 80 countries. DPSUs (HAL, BEL, BEML, MDL, etc.) contributed ₹21,071 crore — leading for the first time — while private companies contributed ₹17,353 crore.
This achievement validates the Atmanirbhar Bharat defence strategy combining: (a) Positive Indigenisation Lists (509 items for DMA, 4,666+ for DPSUs) reducing imports; (b) iDEX innovation ecosystem (619 startups, 430 contracts); (c) Defence Industrial Corridors in UP and Tamil Nadu; and (d) DAP 2020 "Make" categories prioritising domestic procurement. India's goal is ₹50,000 crore in defence exports by 2028–29.
UPSC angle: FY26 record (₹38,424 crore, 62.66% growth, 25-fold in a decade), DPSU vs private sector share, export markets, and connection to Atmanirbhar Bharat and iDEX are critical Prelims and Mains GS-3 data.
Exam Strategy
For Prelims:
- DAP 2020 effective date: 1 October 2020
- PIL (DMA): 5 lists, 509 items (armed forces import ban)
- PIL (DDP): 5 lists, 4,666+ items (DPSU import substitution)
- iDEX: 619 startups engaged; 430 contracts awarded; Rs 1,000 crore+ procurement orders (as of Feb 2025)
- ADITI scheme: Rs 750 crore; grants up to Rs 25 crore per startup
- OFB corporatised into 7 DPSUs effective 1 October 2021
- Defence exports FY 2023-24: Rs 21,083 crore (PIB confirmed)
- FDI in defence: 74% automatic route / 100% government route
For Mains (GS3):
- Atmanirbhar Bharat in defence: policy (DAP 2020) + import substitution (PIL) + innovation (iDEX) + production (OFB corporatisation, defence corridors) + exports
- Challenge: Most systems still rely on foreign sub-systems (engines, sensors, electronics); import substitution is at platform level, not full supply chain
- SIPRI context: India declining from largest importer to among top 3 — progress made but gap remains vs. China (which indigenised ~80% of defence needs)
- iDEX model: small-grant, fast-prototype, startup-driven innovation — applicable to other sectors (space, cybersecurity)
- Export growth: from Rs 1,521 crore (2017) to Rs 38,424 crore (2026) — 25x growth in a decade; connects to India's "Make for the World" narrative
