India's Defence Revolution

The recent inauguration of the TATA Aircraft Complex in Vadodara, Gujarat, marks a significant milestone in India's pursuit of self-reliance, or Atmanirbharta, in the defence sector. This facility will manufacture C-295 military transport aircraft, representing the first private sector Final Assembly Line (FAL) for military aircraft in India. The initiative highlights the government's commitment to enhancing indigenous production capabilities and reducing dependency on foreign imports.

Key Achievements in Defence Production

• Record Production Growth: India’s defence production reached an all-time high of Rs 1.27 lakh crore in FY 2023-24, a remarkable increase of approximately 174% from Rs 46,429 crore in 2014-15.
  • This shift from being a major arms importer to a burgeoning centre for indigenous production demonstrates the effectiveness of strategic government policies.
• Transition to Indigenous Manufacturing: Historically, India relied heavily on imports for its defence needs, with about 65-70% of equipment sourced from abroad. Currently, around 65% of defence equipment is manufactured domestically, underscoring a robust defence industrial base comprising 16 Defence Public Sector Units (DPSUs), over 430 licensed companies, and approximately 16,000 Micro, Small, and Medium Enterprises (MSMEs). Notably, the private sector contributes 21% of this production.
• Major Defence Platforms Developed: Under the Make in India initiative, key defence platforms such as the Dhanush Artillery Gun System, Advanced Towed Artillery Gun System (ATAGS), Main Battle Tank (MBT) Arjun, and Light Combat Aircraft (LCA) Tejas have been developed, showcasing India's growing capabilities in defence manufacturing.
• Defence Exports Surge: India's defence exports have surged from Rs 686 crore in FY 2013-14 to Rs 1,083 crore in FY 2023-24, reflecting a growth of over 30 times in a decade.
  • This growth is supported by effective policy reforms and a commitment to self-reliance in defence. Defence exports experienced a 32.5% increase over the previous fiscal year, demonstrating India's expanding international footprint.
• Export Highlights: India’s export portfolio includes a diverse range of advanced defence equipment such as bulletproof jackets, Dornier aircraft, and lightweight torpedoes. The inclusion of ‘Made in Bihar’ boots in the Russian Army’s equipment highlights India's high manufacturing standards and commitment to quality.
• Future Export Goals: India aims to increase defence exports to Rs 50,000 crore by 2029, with major markets including the USA, France, and Armenia. This ambition reflects India's intention to establish itself as a reliable global defence partner.

Key Government Initiatives

The Indian government has undertaken several initiatives to bolster defence production and achieve self-reliance:

• Liberalized FDI Policy: Increased foreign direct investment limits to 74% through the Automatic Route, and up to 100% for access to modern technology.
• Budget Allocation: A budget of Rs 6,21,940.85 crore for the Ministry of Defence in FY 2024-25 supports domestic manufacturing.
• Priority for Domestic Procurement: Emphasis on procuring capital items from domestic sources under the Defence Acquisition Procedure (DAP)-2020.
• Positive Indigenization Lists: Identification of 509 items for indigenization, with an embargo on imports beyond specified timelines.
• Streamlined Licensing Process: Simplified industrial licensing with a longer validity period.
• iDEX Scheme: The scheme was launched to engage startups and MSMEs in defence innovation.
• Defence Industrial Corridors: Establishment of corridors in Uttar Pradesh and Tamil Nadu to promote manufacturing.
• Public Procurement Preference: Implementation of the Public Procurement (Preference to Make in India) Order 2017 to support domestic manufacturers.