Marching Towards Atmanirbharta: India's Defence Revolution

Domestic production hit ₹1.27 lakh crore in FY 2023-24, with exports growing 30x in a decade
(Ministry of Defence)
October 28, 2024

Introduction
The recent inauguration
of the TATA Aircraft
Complex at the TATA
Advanced Systems
Limited (TASL) Campus
in Vadodara, Gujarat, on
October 28, 2024, marks
a key milestone in India’s
journey toward
Atmanirbharta in
defence. This facility, dedicated to manufacturing C-295 military transport aircraft, becomes
the first private sector Final Assembly Line (FAL) for military aircraft in India, underscoring
the government’s commitment to enhancing indigenous production capabilities. Under the
program, 56 C-295 aircraft will be delivered, with the initial 16 arriving from Airbus in Spain
and the remaining 40 produced domestically. This initiative exemplifies India’s shift toward
self-reliance in defence manufacturing, aimed at strengthening operational readiness and
reducing dependency on foreign imports.

India’s commitment to Atmanirbharta in defence is further evidenced by its transformation

from a major arms importer to an emerging centre for indigenous production. Driven by
strategic government policies, this shift reached a landmark in FY 2023-24, with the Ministry
of Defence reporting an unprecedented ₹1.27 lakh crore in domestic defence production. Once
reliant on foreign suppliers, India now places a high priority on self-reliant manufacturing to
meet its security needs, reinforcing its vision to strengthen national resilience and reduce
dependency on external sources.
Rise in India's Defence Production
India has achieved the highest-ever growth in indigenous defence production in value terms
during Financial Year (FY) 2023-24, driven by the successful implementation of government
policies and initiatives led by Prime Minister Shri Narendra Modi, focusing on attaining
Atmanirbharta. According to data from all Defence Public Sector Undertakings (DPSUs), other
public sector units manufacturing defence items, and private companies, the value of defence
production has surged to a record high of ₹1,27,265 crore, representing an impressive increase
of approximately 174% from ₹46,429 crore in 2014-15.

Historically, India relied heavily on foreign countries for its defence needs, with about 65-70%
of defence equipment being imported. However, this landscape has dramatically shifted, with
around 65% of defence equipment now manufactured within India. This transformation reflects
the country's commitment to self-reliance in this critical sector and underscores the strength of
its defence industrial base, which comprises 16 Defence Public Sector Units (DPSUs), over
430 licensed companies, and approximately 16,000 Micro, Small, and Medium Enterprises
(MSMEs). Notably, 21% of this production comes from the private sector, bolstering India's
journey toward self-reliance.

As part of the Make in India initiative, major defence platforms such as the Dhanush Artillery
Gun System, Advanced Towed Artillery Gun System (ATAGS), Main Battle Tank (MBT)
Arjun, Light Combat Aircraft (LCA) Tejas, submarines, frigates, corvettes, and the recently
commissioned INS Vikrant have been developed, reflecting the growing capabilities of India's
defence sector.

Consequently, the annual defence production has not only crossed ₹1.27 lakh crore but is also
on track to reach a target of ₹1.75 lakh crore in the current fiscal year. With aspirations to
achieve ₹3 lakh crore in defence production by 2029, India is solidifying its position as a global
manufacturing hub for defence.
India's Defence Exports Surge
India's defence exports have
reached an all-time high,
surging from ₹686 crore in
FY 2013-14 to ₹21,083 crore
in FY 2023-24, reflecting a
remarkable increase of over
30 times in export value over
the past decade.

This achievement is driven by

effective policy reforms,
initiatives, and improvements
in the ease of doing business
implemented by the
government, all aimed at
attaining self-reliance in defence. Notably, defence exports also experienced a substantial
growth of 32.5% over the previous fiscal year, rising from ₹15,920 crore.

India's export portfolio boasts a diverse range of advanced defence equipment, including
bulletproof jackets and helmets, Dornier (Do-228) aircraft, Chetak helicopters, fast interceptor
boats, and lightweight torpedoes. A noteworthy highlight is the inclusion of 'Made in Bihar'
boots in the Russian Army's equipment, marking a significant milestone for Indian products in
the global defence market and showcasing the country’s high manufacturing standards.

Currently, India exports to over 100 nations, with the top three destinations for defence exports
in 2023-24 being the USA, France, and Armenia. According to Raksha Mantri Shri Rajnath
Singh, the target is to further increase defence exports to ₹50,000 crore by 2029. This
expanding international footprint underscores India’s commitment to becoming a reliable
defence partner globally while bolstering its economic growth through enhanced defence
production and exports.
Key Government Initiatives
In recent years, the Indian government has implemented a series of transformative initiatives
aimed at bolstering the country's defence production capabilities and achieving self-reliance.
These measures are designed to attract investment, enhance domestic manufacturing, and
streamline procurement processes. From liberalizing foreign direct investment (FDI) limits to
prioritizing indigenous production, these initiatives reflect a robust commitment to
strengthening India's defence industrial base. The following points outline the key government
initiatives that have been pivotal in driving growth and innovation in the defence sector.

❖ Liberalized FDI Policy: The Foreign Direct Investment (FDI) limit in the defence
sector was raised in 2020 to 74% through the Automatic Route for companies seeking
new defence industrial licenses and up to 100% through the Government Route for
those likely to result in access to modern technology. As of February 9, 2024, ₹5,077
crore worth of FDI has been reported by companies operating in the defence sector.

❖ Budget Allocation: The allocation for the Ministry of Defence for the financial year
2024-25 is ₹6,21,940.85 crore, as part of the “Demand for Grant” presented in
Parliament during the ongoing Budget Session.

❖ Priority for Domestic Procurement: Emphasis is placed on procuring capital items

from domestic sources under the Defence Acquisition Procedure (DAP)-2020.

❖ Positive Indigenization Lists: Notification of five ‘Positive Indigenization Lists’

totalling 509 items of services and five lists of 5,012 items from Defence Public Sector
Undertakings (DPSUs), with an embargo on imports beyond specified timelines.

❖ Simplified Licensing Process: Streamlining the industrial licensing process with a

longer validity period.

❖ iDEX Scheme Launch: The Innovations for Defence Excellence (iDEX) scheme was
launched to involve startups and Micro, Small, and Medium Enterprises (MSMEs) in
defence innovation.
 ❖ Public Procurement Preference: Implementation of the Public Procurement
(Preference to Make in India) Order 2017 to support domestic manufacturers.

❖ Indigenization Portal: Launch of the Self-Reliant Initiatives through Joint Action

(SRIJAN) portal to facilitate indigenization by Indian industry, including MSMEs.

❖ Defence Industrial Corridors: Establishment of two Defence Industrial Corridors,

one each in Uttar Pradesh and Tamil Nadu, to promote defence manufacturing.

❖ Opening Defence R&D: Defence Research & Development (R&D) has been opened
up for industry and startups to foster innovation and collaboration.

❖ Domestic Procurement Allocation: Out of the total allocation of ₹1,40,691.24 crore

under the Capital Acquisition (Modernization) Segment, ₹1,05,518.43 crore (75%) has
been earmarked for domestic procurement in the Budget Estimates for 2024-25.

Conclusion
India's journey toward Atmanirbharta in defence reflects a transformative shift from reliance
on imports to becoming a self-sufficient manufacturing hub. The record achievements in
domestic production and exports underscore the government's commitment to enhancing
national security and bolstering economic growth through robust defence initiatives. With
strategic policies in place, a growing emphasis on indigenization, and a vibrant defence
industrial base, India is poised to not only meet its own security needs but also emerge as a key
player in the global arms market. The ambitious targets set for future production and exports
signify a strong resolve to reinforce the country’s position as a reliable defence partner
worldwide. As India continues to innovate and collaborate across sectors, it is well on its way
to solidifying its status as a formidable force in global defence manufacturing.

References:
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Santosh Kumar/ Ritu Kataria/ Saurabh Kalia