India today stands at an inflection moment in its quest to become a global defence manufacturing powerhouse. The vision of transitioning from ‘ Make in India’ to ‘Make for the World’ is bold, but the path is fraught with challenges that demand urgent attention. Are we ready to seize this opportunity? Though India has a right mix of competencies and competitiveness, the answer hinges on addressing five critical issues: aligning policy, industry, and diplomacy for export success; need to manufacture high-tech products, competitiveness and ensuring our industry meets global standards; increasing investments in strategic R&D; building trust and resilience: evolving from a mere manufacturer to a trusted, low-cost partner in global security and lastly, building confidence, sustainability, and growth of small players by ensuring long term supply arrangements with technical support, especially for the home-grown SMEs. With the right strategy, and road-map in place, India can transform its defence sector into a ‘go to’ source for countries in need, but the clock is ticking.
India’s defence journey is one of remarkable progress. Decades ago, we were heavily reliant on imported platforms and weapons. Today, organisations like Defence Research and Development Organisation (DRDO), Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), and Bharat Forge have built a robust ecosystem for indigenous manufacturing. Last year, defence production soared to ?1.27 lakh crore, with exports accounting for nearly ?21,083 crore in FY 2023-24 which is a clear evidence of growing capability.
India’s non-aligned geopolitical stance is a unique asset, making us a palatable partner for many nations. This neutrality can be leveraged to promote our defence products, but only if we better align our policies to promote industries and get them market access through adroit commercial diplomacy. For instance, Indian companies are already supplying components to countries like United States, Armenia and France proving that quality can attract global buyers. However, scaling this requires a cohesive strategy: Despite continuous initiatives to strengthen its defence-industrial foundation, India still relied heavily on foreign suppliers accounting for 9.8% of global arms imports between 2019 and 2023 highlighting a persistent strategic dependency in its defence procurement. The government’s efforts to revise the Defence Acquisition Procedure and signing of Security of Supply Agreement (SOSA) or negotiating Reciprocal Defence Procurement Agreement with the U.S. are all steps in the right direction, but we must ensure that these policies and agreements translate into swift, tangible outcomes.
Moreover, our siloed approach in governance, cloaked in secrecy, limits collaboration with academia, startups, and industry. The higher authorities do not market or allow any information in the press or in public domain which limits the scope of good R&D.
The DRDO’s Prototype-Centric Project (PCP) model, which involves industry from project inception, is a positive step, but we must dismantle silos entirely. Without alignment of the ecosystem across policy, industry, and diplomacy to ensure long-term export success, our export ambitions risk remaining aspirational.
Another hurdle is whether India’s defence industry can deliver to global standards in quality, scale, timelines, and pricing. While we have shifted from importing to manufacturing, critical technologies like aero-engines, anti-missile systems, advanced UAVs and fighter jets of 5th generation and above still rely on foreign expertise. India exports small components to the U.S. and France, however exporting complete systems like multi-role light attack helicopters - Prachand and Akash missiles face hurdles in competitive markets due to the dominance of established exporters (US, Western Europe and Russia) and the need for proven reliability. Foreign buyers prioritise systems with established operational histories, a challenge for India’s relatively new indigenous platforms.
On the flip side collaborative models with foreign OEMs for co-design and co-development are gaining traction, the notion that “nobody will transfer us the technology” is only half-true. What went absolutely right here is the C-295 programme, a very tangible example of Government of India’s vision as it was the first ever programme given to Indian private aerospace industry to do what was never done before. The programme is a landmark collaboration between Airbus (Spain), Tata Advanced Systems Limited (India), and Indian Defence Public Sector Undertaking (DPSUs). Similarly, success of BrahMos, supersonic cruise missile developed jointly by DRDO and Russia’s NPO Mashinostroyeniya and even General Atomics’ partnership with Bharat Forge to manufacture main landing gear components, subassemblies, and assemblies for remotely piloted aircraft.
It showcases how private industry and MSMEs can build a deep supply chain for aircraft production in India. Yet, the industry’s evolution from ‘build-to-print’ to ‘design-to-development’ is slow. Lengthy acquisition cycles, often five to seven years, render technologies obsolete before they reach the market, undermining both industry and armed forces. Speed is thus paramount. Simplifying procurement, fostering urgency, and ensuring after-sales support are critical to earning global trust. Without these, India risks being outpaced by competitors who deliver faster and cheaper.
The third issue is the urgent need for strategic R&D. This is going to build internal capacity, increase patents leading to reduced dependency on global supply chains. Technologies like quantum communication, GPS-denied navigation, and long-life batteries are redefining defence landscapes. Yet, India’s R&D spending of 3.9% of the defence budget lags far behind the 10-15% allocated by nations like the U.S. and China.
The promise to increase this to 10% over five years is encouraging, but funding alone isn’t enough. A cultural shift is needed to embrace risk. As rightly put by Dr Samir V. Kamat, Chairman of the Defence Research and Development Organisation (DRDO), the fear of failure, reinforced by CAG audits that penalise unsuccessful projects, stifles innovation. R&D is inherently uncertain. Citing the America’s Defense Advanced Research Projects Agency’s (DARPA) willingness to invest in high-risk, low-reward R&D which proves that failure is part of progress. We must adopt similar flexibility, closing underperforming projects without fear of blame.
The fourth challenge is transitioning from a supply chain participant to a reliable, low-cost partner in global security. India’s maritime heritage and strategic location in the Indian Ocean position us to offer naval capabilities to smaller nations through forums like QUAD and BIMSTEC. Yet, our shipbuilding industry contributing less than 1% to global tonnage, pales beside China’s 51% dominance.
DPSUs, comfortable with Navy and Coast Guard orders, have little incentive to diversify into commercial vessels like bulk carriers or LNG tankers. Declaring shipbuilding an infrastructure sector could unlock investments, enabling public-private partnerships and foreign collaborations.
Lastly, a critical missing piece in achieving the ambitious target of ?50,000 crore in defence exports by 2029 lies in strengthening the capacities of SMEs and startups. This can be effectively addressed by placing consistent, long-term orders spanning five years and more through these enterprises. Such a commitment and assured purchase would provide the stability they need to invest in machinery, scale production, and grow sustainably, rather than risk closure within a year of operation.
The future beckons, but the path forward demands clarity, courage, and conviction.
We believe that India is poised to ‘Make for the World,’ but the window of opportunity is narrow. By aligning our ecosystem, meeting global standards, scaling our SMEs, investing in futuristic technologies, and positioning ourselves as a trusted security partner, India will be able to transform from a buyer’s nation to a builder’s powerhouse.
The authors work for CUTS International, a 41 year old global NGO working on public policy research and advocacy issues.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)
India’s defence journey is one of remarkable progress. Decades ago, we were heavily reliant on imported platforms and weapons. Today, organisations like Defence Research and Development Organisation (DRDO), Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), and Bharat Forge have built a robust ecosystem for indigenous manufacturing. Last year, defence production soared to ?1.27 lakh crore, with exports accounting for nearly ?21,083 crore in FY 2023-24 which is a clear evidence of growing capability.
India’s non-aligned geopolitical stance is a unique asset, making us a palatable partner for many nations. This neutrality can be leveraged to promote our defence products, but only if we better align our policies to promote industries and get them market access through adroit commercial diplomacy. For instance, Indian companies are already supplying components to countries like United States, Armenia and France proving that quality can attract global buyers. However, scaling this requires a cohesive strategy: Despite continuous initiatives to strengthen its defence-industrial foundation, India still relied heavily on foreign suppliers accounting for 9.8% of global arms imports between 2019 and 2023 highlighting a persistent strategic dependency in its defence procurement. The government’s efforts to revise the Defence Acquisition Procedure and signing of Security of Supply Agreement (SOSA) or negotiating Reciprocal Defence Procurement Agreement with the U.S. are all steps in the right direction, but we must ensure that these policies and agreements translate into swift, tangible outcomes.
Moreover, our siloed approach in governance, cloaked in secrecy, limits collaboration with academia, startups, and industry. The higher authorities do not market or allow any information in the press or in public domain which limits the scope of good R&D.
The DRDO’s Prototype-Centric Project (PCP) model, which involves industry from project inception, is a positive step, but we must dismantle silos entirely. Without alignment of the ecosystem across policy, industry, and diplomacy to ensure long-term export success, our export ambitions risk remaining aspirational.
Another hurdle is whether India’s defence industry can deliver to global standards in quality, scale, timelines, and pricing. While we have shifted from importing to manufacturing, critical technologies like aero-engines, anti-missile systems, advanced UAVs and fighter jets of 5th generation and above still rely on foreign expertise. India exports small components to the U.S. and France, however exporting complete systems like multi-role light attack helicopters - Prachand and Akash missiles face hurdles in competitive markets due to the dominance of established exporters (US, Western Europe and Russia) and the need for proven reliability. Foreign buyers prioritise systems with established operational histories, a challenge for India’s relatively new indigenous platforms.
On the flip side collaborative models with foreign OEMs for co-design and co-development are gaining traction, the notion that “nobody will transfer us the technology” is only half-true. What went absolutely right here is the C-295 programme, a very tangible example of Government of India’s vision as it was the first ever programme given to Indian private aerospace industry to do what was never done before. The programme is a landmark collaboration between Airbus (Spain), Tata Advanced Systems Limited (India), and Indian Defence Public Sector Undertaking (DPSUs). Similarly, success of BrahMos, supersonic cruise missile developed jointly by DRDO and Russia’s NPO Mashinostroyeniya and even General Atomics’ partnership with Bharat Forge to manufacture main landing gear components, subassemblies, and assemblies for remotely piloted aircraft.
It showcases how private industry and MSMEs can build a deep supply chain for aircraft production in India. Yet, the industry’s evolution from ‘build-to-print’ to ‘design-to-development’ is slow. Lengthy acquisition cycles, often five to seven years, render technologies obsolete before they reach the market, undermining both industry and armed forces. Speed is thus paramount. Simplifying procurement, fostering urgency, and ensuring after-sales support are critical to earning global trust. Without these, India risks being outpaced by competitors who deliver faster and cheaper.
The third issue is the urgent need for strategic R&D. This is going to build internal capacity, increase patents leading to reduced dependency on global supply chains. Technologies like quantum communication, GPS-denied navigation, and long-life batteries are redefining defence landscapes. Yet, India’s R&D spending of 3.9% of the defence budget lags far behind the 10-15% allocated by nations like the U.S. and China.
The promise to increase this to 10% over five years is encouraging, but funding alone isn’t enough. A cultural shift is needed to embrace risk. As rightly put by Dr Samir V. Kamat, Chairman of the Defence Research and Development Organisation (DRDO), the fear of failure, reinforced by CAG audits that penalise unsuccessful projects, stifles innovation. R&D is inherently uncertain. Citing the America’s Defense Advanced Research Projects Agency’s (DARPA) willingness to invest in high-risk, low-reward R&D which proves that failure is part of progress. We must adopt similar flexibility, closing underperforming projects without fear of blame.
The fourth challenge is transitioning from a supply chain participant to a reliable, low-cost partner in global security. India’s maritime heritage and strategic location in the Indian Ocean position us to offer naval capabilities to smaller nations through forums like QUAD and BIMSTEC. Yet, our shipbuilding industry contributing less than 1% to global tonnage, pales beside China’s 51% dominance.
DPSUs, comfortable with Navy and Coast Guard orders, have little incentive to diversify into commercial vessels like bulk carriers or LNG tankers. Declaring shipbuilding an infrastructure sector could unlock investments, enabling public-private partnerships and foreign collaborations.
Lastly, a critical missing piece in achieving the ambitious target of ?50,000 crore in defence exports by 2029 lies in strengthening the capacities of SMEs and startups. This can be effectively addressed by placing consistent, long-term orders spanning five years and more through these enterprises. Such a commitment and assured purchase would provide the stability they need to invest in machinery, scale production, and grow sustainably, rather than risk closure within a year of operation.
The future beckons, but the path forward demands clarity, courage, and conviction.
We believe that India is poised to ‘Make for the World,’ but the window of opportunity is narrow. By aligning our ecosystem, meeting global standards, scaling our SMEs, investing in futuristic technologies, and positioning ourselves as a trusted security partner, India will be able to transform from a buyer’s nation to a builder’s powerhouse.
The authors work for CUTS International, a 41 year old global NGO working on public policy research and advocacy issues.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)
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