by Dr. Jaipal Singh
Self-Reliance & Export Boom
During the last over one decade, India’s defence exports have emerged as a significant pillar of the country’s strategic and economic aspirations and growth, simultaneously reflecting the steady transformation of its indigenous defence manufacturing capabilities of even the strategic equipment and weaponry. Driven by the vision and mission of Make in India and Atmanirbhar Bharat (self-reliant India) and consequent sustained policy and allied reforms, India has slowly but decisively expanded its footprint in the global arms market by exporting a diverse range of military equipment, including artillery systems, patrol vessels, missiles, radars, electronic warfare systems, protective gear, etc. The growing confidence of many friendly foreign countries, including those of Western origin, in Indian defence products underscores their reliability, cost-effectiveness and technological advancement. Augmented indigenous Defence manufacturing and exports not only strengthen India’s geopolitical credibility and influence but also contribute substantially to its economic growth, employment generation and strategic self-reliance. In this piece of writing, the author intends to explore the subject right from the early days of Independence from colonial era.
A Brief History of Defence Production & Exports
From Independence in 1947 until the closing years of the twentieth century, India’s defence export portfolio remained almost negligible, with the defence needs and preparedness largely overshadowed by its overwhelming dependence on foreign military imports, overwhelmingly of Russian origin. Post-independence, the first Prime Minister Jawaharlal Nehru and the Congress government led by him prioritized socioeconomic development and industrialization over military spending, relying on the policy of non-alignment and diplomacy to maintain peace across borders. They viewed defence through the lens of economic self-reliance and well-being, assuming that major wars were unlikely in a peaceful co-existence framework. This idealistic stance proved to be faulty and changed drastically only after the Chinese betrayal and Sino-Indian War of 1962, followed by yet another similar shock from the neighbouring Pakistan in 1965. These wars compelled the top Indian leadership and government to focus on defence in taking steps toward military modernization, expansion, simultaneously augmenting domestic defence production.
During the early ydecades after Independence, the country concentrated primarily on establishing a domestic defence industrial base through organisations such as the Defence Research and Development Organisation (DRDO), state-owned ordnance factories, and a few public sector undertakings, some of which such as the Hindustan Aeronautics Limited (HAL, 1940) and Mazagaon Dock Shipbuilders Limited (MDL, 1934) were already set up during the colonial period. India’s strategic compulsions arising from the wars of 1947–48, 1962, 1965 and 1971 compelled policymakers to prioritise self-sufficiency in defence production rather than its export orientation. Even the idea of self-sufficiency did not gain sufficient priority, focus and attention of the successive Congress or Congress supported governments partly due to policy considerations and partly because of economic compulsions besides being overly influenced with Nehruvian ideology. Consequently, the indigenous industry focused mainly on the licensed production of foreign-origin aircraft, tanks, naval vessels and small arms and clothing to meet domestic military requirements.
During the Cold War era, especially from the 1960s onward, India developed close defence cooperation with the former Soviet Union (now Russia), which became its principal supplier of advanced military aircraft, naval vessels, armoured vehicles and other equipment as also the only principal foreign country assisting creation of indigenous industry to meet basic defence needs as also manufacture of the specialized equipment. More state owned defence undertakings such as Bharat Electronics Limited (BEL, 1954), Garden Reach Shipbuilders & Engineers (GRSE, 1960), Bharat Earth Movers Limited (BEML, 1964), Bharat Dynamics Limited (BDL, 1970), Mishra Dhatu Nigam, etc. were created during the second half of the last century. Although indigenous programmes such as the LCA Tejas, Arjun tank and various missile development initiatives were conceived during this period, technological limitations, bureaucratic delays and constrained industrial capacity hindered India achieving self-sufficiency as also emergence as a credible defence exporter. Defence exports during these decades were confined mainly to limited supplies of non-lethal equipment, spare parts, patrol boats and other basic military hardware to a few friendly developing countries in Asia and Africa.
By the 1990s, economic liberalisation and changing geopolitical realities gradually encouraged India to reconsider the commercial and strategic potential of defence exports. However, rather unstable and weak governments at Centre, lack of adequate political and strategic vision/will and resource constraints as also inadequate private sector participation continued to remain a significant bottleneck in export-oriented planning and development. Consequently, defence exports still remained relatively small in scale, other limiting factors being competitiveness in global markets and continuing dependence on imported critical technologies. Nevertheless, the decade paved the way for future expansion by accelerating indigenous research, modernisation efforts and policy discussions aimed at transforming India from a predominantly import-dependent nation into a more self-reliant and defence export-capable nation in the ensuing years.
The Prime Minister Vajpayee government (1998–2004) actually accelerated building of the defence capabilities besides laying down the foundational groundwork for shifting the Indian defence from a primarily closed, import-dependent sector to one embracing domestic private participation and global integration. The initial reforms undertaken during his stewardship paved way for creation of the baseline for the modern, export-oriented defence industry. Some the key efforts taken during his government include the opening to Private Sector in 2001, allowing Foreign Direct Investment (FDI) up to 26%, streamlining procurement by establishing the Group of Ministers (GoM) on National Security, implementation of the Defence Procurement Procedure (DPP). These steps broke the monopoly of the state-run industries in the defence sector and facilitated transparency and efficiency as well as a structured system for the capital acquisitions. The other significant steps taken by the Vajpayee Government included creation of the National Security Council (NSC) in November 1998 for an integrated strategic planning, and aligning indigenous production capabilities with India’s long-term geopolitical and national security goals. A push was also given to the DRDO with the goals of transitioning towards the self-reliance, thereby setting the stage for indigenous platform developments in different disciplines.
During the next ten years of the Congress led Manmohan Singh UPA Government, although initiatives taken by the previous Vajpayee Government continued albeit at a slower pace, not much initiative was taken for the indenisation of defence needs, encouragement of private sector and export orientation in defence research and production. However, one significant achievement of this time includes the Indo-US Civil Nuclear Deal (2008) which was an exclusive and joint high-stakes diplomatic initiative of the then Indian and US governments. This ended India’s nuclear isolation globally, as also unlocked heavy-payload military procurement from US defence industry, which was otherwise held up due to ongoing sanctions following the nuclear tests made by India in May 1998. For illustration, after the sanctions were lifted, India signed multi-billion dollar direct commercial/FMS contracts for the acquisition of high end military hardware like C-17 Globemaster III, C-130J Super Hercules, and P-8I Poseidon aircraft.
The modern “Make in India” and “Atmanirbhar Bharat” frameworks in the defence sector as adopted in “the Amrut Kaal (also Amrit Kaal) vision” to make India a developed nation by 2047 are direct structural evolutions of the foundational policies evolved under the Vajpayee Government (1998–2004). What was conceptualized as the initial breakdown of state monopolies in the defence sector later systematically materialized into a sophisticated, highly regulated, export-heavy ecosystem under Prime Minister Narendra Modi led NDA Government since 2014 that has continued till date. The transformation from Vajpayee’s initiatives to contemporary manufacturing policies and implementation could be briefly summarized across the following four primary evolutionary heads:
(1) The Procurement Framework (From DPP 2002 to DAP 2026): The Vajpayee government had launched the first-ever Defence Procurement Procedure (DPP) in 2002, establishing a singular, structured template for how the military would acquire hardware, introduce accountability and basic sourcing logic to the erstwhile rather ad hoc and chaotic system. Over more than two decades, the DPP underwent numerous revisions (2006, 2013, 2016) until it was comprehensively overhauled into the Defence Acquisition Procedure (DAP) 2020. The framework has been further advanced to a Draft DAP 2026 structure. While the DPP 2002 created a standard path for the defence equipment, the DAP 2020/2026 meticulously prioritizes domestic design and production among other things. Some of the key highlights include reduction in acquisition categories and bureaucratic red-tapism, enhancement of indigenous content under make & buy category, rationalising technology readiness levels and faster timelines.
(2) Private Industry Participation: Until 2001, defence manufacturing in the country was exclusive domain of the Defence Public Sector Undertakings (DPSUs) and the Ordnance Factory Board (OFB). The Vajpayee government dismantled this state-run monopoly by allowing domestic private sector participation. This private participation has evolved from the initial basic sub-contracting into full-scale ownership through policies like the Strategic Partnership (SP) Model under Make in India programme. This model encouraged many private firms, such as Tata, L&T, and Mahindra, to form joint ventures with global Original Equipment Manufacturers (OEMs) to build advanced platforms like submarines, fighter jets, and armoured vehicles domestically. The Defence Procurement Manual (DPM) 2025 mandates industry-friendly provisions, provides up to 5-year guaranteed orders for indigenous products, and strips away the legacy requirement for private entities to obtain “No Objection Certificates” from state-run entities to participate in open bids.
(3) Foreign Direct Investment (FDI): The Foundation (2001) laid by the Vajpayee Government had opened defence to FDI for the first time up to 26%, which was considered restrictive by many corporate entities. Under the Make in India initiative by the present government, the government policy on this cap has been progressively liberalized, allowing 74% FDI under the automatic route and up to 100% via the government route wherever access to the modern state-of-the-art technology is guaranteed.
(4) The Defensive Mindset Shift: The major policy shift has been from the “Import Substitution to Export Promotion”. Needless to mention, as per the Foundation laid down by the Vajpayee Government in early 2000s, the initial reforms focused on import substitution i.e. attempting to build items locally to avoid foreign reliance during critical geopolitical crise. The Modern focus changed this approach on its head by utilizing protectionist domestic mandates to build global scale, culminating in the Defence Production and Export Promotion Policy (DPEPP). India has now gone for an aggressive indigenization utilizing Positive Indigenization Lists, rolling import embargoes that legally ban the import of thousands of weapon systems, sub-systems, and military components. This has not only enabled domestic development but also converted domestic manufacturing into a high-volume assembly engine, enabling transformation in Indian defence ecosystem from a global buyer into a competitive exporter. This is evident from the fact that defence exports recently in 2024-25 recorded a high of Rs.23,622 crore, ranging from BrahMos missiles to advanced light helicopters and artillery in the global markets. (Courtesy:www.boloji.com)
(The writer is a former civil servant and held important assignments in Defense and Infrastructure (Power & Energy) Sectors for more than three decades)
