Syllabus: Challenges to internal security
Context
- India achieved its highest-ever defence production and exports in FY 2024–25 under the Atmanirbhar Bharat push.
- Government targets ₹3 lakh crore production and ₹50,000 crore exports by 2029.
Trends and Key Statistics
- Indigenous production rose to ₹1,27,434 crore in FY 2023–24, up 174% from 2014–15.
- Total defence output reached ₹1.54 lakh crore in FY 2024–25, reflecting strong annual growth.
- Exports surged to ₹23,622 crore, compared to under ₹1,000 crore in 2014.
- Private sector share increased from 21% to 23%, with 16,000+ MSMEs entering defence supply chains.
- MoD signed 193 contracts worth ₹2.09 lakh crore in FY 2024–25, of which 177 were with domestic firms.
Opportunities
- Defence Industrial Corridors in UP and Tamil Nadu attracted ₹9,145 crore actual and ₹66,423 crore potential investment.
- India exports defence products to 80–100 countries, expanding its global footprint.
- FDI up to 74% automatic and 100% via approval enables deeper technology partnerships.
- A digital export portal issued 1,762 authorisations, reducing delays and raising participation.
- Innovation supported through RDI Scheme (₹1 lakh crore), iDEX, and DRDO’s TDF (₹500 crore).
Government Initiatives
- Defence Acquisition Procedure (DAP) 2020 prioritises Buy Indian–IDDM and integrates new technologies.
- Defence Procurement Manual (DPM) 2025 streamlines revenue procurement with uniform, digital systems.
- Positive Indigenisation Lists restrict imports of thousands of items.
- Seven DPSUs created from OFB for efficiency and autonomy.
- Export reforms include OGL, simplified SOPs and an export promotion cell.
Challenges
- Limited capabilities in propulsion, sensors, materials, avionics restrict high-end indigenisation.
- Output still insufficient to fully meet annual services’ requirements.
- DPSUs face weak export performance, losing key global tenders.
- Reforms face implementation delays and procedural bottlenecks.
- Heavy dependence on imported sub-systems, creating supply-chain vulnerabilities.
Way Forward
- Invest heavily in deep-tech areas like stealth materials, seekers, propulsion and sensors.
- Strengthen private sector through long-term orders, test facilities, and transparent competition.
- Raise defence R&D to 8–10% of the defence budget.
- Expand export diplomacy through finance, maintenance hubs and training partnerships.
- Accelerate procurement reforms with single-window clearances and digital monitoring.
