In pursuit of self-reliance
Even though the Indian policymakers have periodically articulated lofty goals of self-reliance, they have not institutionalised a robust methodology to measure it
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 "Industrial machines manufacturing components for arms and other weapons at an Indian factory (Photo: KALYANI SYSTEMS)")
Industrial machines manufacturing components for arms and other weapons at an Indian factory (Photo: KALYANI SYSTEMS)
The Modi government, after coming to power in 2014, has made self-reliance a core pillar of India’s defence policy. To climb the self-reliance ladder, the government has unleashed a plethora of reforms under the Make in India initiative and Atmanirbhar Bharat Abhiyaan. The reforms unleashed have begun to yield positive results, with India’s defence production and exports showing encouraging results year after year. By the end of 2025-26, the defence industry’s combined production hit a record ₹1.78 trillion, a 140 per cent jump from ₹74,054 crore in 2016-17. The latest defence production amounts to 3.8 per cent of India’s total manufacturing gross value added (GVA). More encouragingly, defence exports, which were almost negligible a decade ago, have jumped 25 times over the same period, from ₹1,522 crore to over ₹38,420 crore.
Behind this number lies the growing capability of the Indian arms industry, which has grown manyfold since the country’s independence, when it had a rudimentary industrial base. Today, the industry boasts a vast enterprise that includes not only traditional government-owned/controlled entities, but also a growing number of private players, including small and medium enterprises and startups.
The Indian arms industry now designs /manufactures a range of weapons and systems, spanning ballistic and tactical missiles, fighter aircraft, tanks, ships and submarines, electronics, rockets and a variety of ammunition.
The journey
Independent India’s defence production began with a modest industrial setup comprising 18 Ordnance Factories, an aircraft factory, and a few testing facilities (the latter were merged to form the Defence Research and Development Organisation or DRDO in 1958). The autarkic industrial policy that the independent India followed soon after independence kept the defence industry, along with sectors like space, atomic energy, railway and heavy industry, under the tight leash of government control. An ambitious self-sufficiency model drove the industry, the high point of which was India’s attempt to develop a combat aircraft, HF-24 Marut.
The 1962 debacle in the war with China was a rude awakening not just for India’s security planners, but also for the defence industry, which was found wanting in meeting the defence forces’ requirements.
In a move to quickly enhance India’s defence preparedness to counter evolving threats, substantial resources were devoted to defence, including the ramp-up of indigenous defence production. Several new Ordnance Factories and Defence Public Sector Undertakings (DPSUs) were set up, along with new labs under the DRDO. However, the modus operandi of India’s arms production post-1962 war with China was licensed production. The Cold War politics of the time led to a long and entrenched defence partnership with the Soviet Union, which was happy not only to supply arms directly to the Indian armed forces but also to transfer their technologies to manufacture them in India.
A major milestone in India’s license-based manufacturing was the MiG-21 fighter, produced by Hindustan Aeronautics Limited (HAL). This was subsequently adopted across other major weapon platforms and became entrenched in India’s defence manufacturing approach for decades to come.
Realising the pitfalls of excessive dependence on foreign technologies, India in the 1980s switched gears and attempted to develop its own major armaments indigenously. At the same time, it also sought to move away from purely license-based production towards co-producing weapons in partnership with foreign collaborators. The Integrated Guided Missile Development Programme and the light combat aircraft (LCA) programme, sanctioned in the 1980s, heralded India’s forays into self-reliance through indigenous design and development. The Indo-Russian joint venture to produce the BrahMos missile laid the foundation of the co-production model. The model has been extended to several other programmes and partners, including short-range and medium-range surface-to-air missile systems with Israel.
All the while, however, the Indian state-owned entities — DPSUs and the Ordnance Factories — remained solely responsible for India’s self-reliance. The private sector was a no-go area for arms production, even though the Indian government dismantled the License-Permit-Quota Raj in 1991 and allowed private players across economic sectors.
Industrial machinery manufactures components for arms and other weapons at an Indian factory. (Photo: Kalyani Systems)
It took 10 more years after India’s 1991 economic liberalisation for the defence industry to be finally opened to the private sector. However, the liberalisation announced in 2001 by the Atal Bihari Vajpayee government subjected private-sector participation to a stringent industrial licensing process, which proved a major hindrance.
The Modi government, soon after coming to power in 2014, announced several reforms, beginning with easing the licensing process. This was followed by an increase in the foreign direct investment cap, a simplified, domestic-industry-friendly procurement manual, an export promotion measure, five positive indigenisation lists, innovation schemes for startups, a policy for indigenisation of parts and components hitherto imported, and a dedicated budget for procurement from domestic industry. All of these have had a positive impact on India’s defence production, including by private players, which now account for about 25 per cent of India’s total defence production.
First Published: Oct 27 2026 | 1:53 PM IST
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