Indigenisation and Make-in-India Initiatives in Defence
India has historically been one of the largest arms importers in the world. To reduce foreign dependency and build strategic autonomy, the government launched the Make-in-India initiative in the defence sector. This policy push aims to transform India from a defence importer into a global design, development, and manufacturing hub. Through structured policy reforms, domestic capital procurement quotas, and technology transfer schemes, the country is expanding its indigenous defence industrial base.
Objectives of Defence Indigenisation
- Strategic Autonomy: Eliminates dependence on foreign suppliers during geopolitically sensitive times and regional conflicts.
- Economic Growth: Retains capital within the domestic economy, creates skilled jobs, and boosts the manufacturing sector.
- Technology Ownership: Builds core intellectual property rights within domestic research institutions and private enterprises.
- Export Capability: Shifts India’s status from a buyer to an exporter of advanced military platforms to friendly foreign nations.
Key Policy Frameworks and Mechanisms
Defence Acquisition Procedure (DAP) 2020
The Defence Acquisition Procedure 2020 replaced the earlier Defence Procurement Procedure 2016. It prioritizes domestic procurement categories and mandates higher levels of Indigenous Content (IC).
| Procurement Category | Minimum Indigenous Content (IC) Required | Priority Order |
| Buy (Indian – IDDM) | Minimum 50% | Highest Priority |
| Buy (Indian) | Minimum 50% (if indigenously designed) or 60% | Second Priority |
| Buy and Make (Indian) | Minimum 50% in the ‘Make’ portion | Third Priority |
| Buy (Global – Manufacture in India) | Minimum 50% | Fourth Priority |
| Buy (Global) | Minimum 30% for Indian vendors; Nil for foreign | Lowest Priority |
Make Categories for Prototype Development
- Make-I (Government Funded): The government funds up to 70% of the prototype development cost, capped at specific project limits.
- Make-II (Industry Funded): Industry bears the entire development cost for prototypes where commercial viability exists.
- Make-III (Import Substitution): Focuses on manufacturing items domestically as substitutes for imported assemblies and components.
Positive Indigenisation Lists (PILs)
The Department of Military Affairs and Department of Defence Production issue Positive Indigenisation Lists. Items listed under these lists face phased import bans, forcing the armed forces to procure them exclusively from domestic suppliers.
- Over 5,500 items have been placed on positive indigenisation lists across multiple tranches.
- Banned import items include light combat helicopters, artillery guns, assault rifles, conventional submarines, sonar systems, and radars.
- The SRIJAN portal acts as an online vendor development platform where Indian industry partners can offer indigenous substitutes for imported items.
Institutional Initiatives and Technology Schemes
Innovations for Defence Excellence (iDEX)
Launched in April 2018, iDEX provides a platform for problem-solving and innovation in defence technology. It connects startups, MSMEs, and individual innovators with the armed forces.
- Funding Support: Offers grants through the Support for Prototype and Research Kickstart (SPARK) scheme up to ₹1.5 crore.
- ADITI Scheme: Launched under iDEX to fund deep-tech and critical defence technologies like micro-electronics, quantum computing, autonomous weapons, and AI with grants up to ₹25 crore.
Technology Development Fund (TDF)
Executed by the Defence Research and Development Organisation (DRDO), TDF supports private industries, MSMEs, and academic institutions in developing dual-use technologies and military components. It covers up to 90% of the total project cost.
Strategic Partnership Model
Introduced under defence procurement rules, this model enables private Indian companies to partner with global original equipment manufacturers (OEMs). They joint-venture to manufacture complex platforms like submarines, fighter aircraft, helicopters, and main battle tanks inside India.
Infrastructure and Foreign Investment Reforms
Foreign Direct Investment (FDI) Limits
The government raised the FDI limit in defence manufacturing from 49% to 74% under the automatic route. FDI up to 100% is permitted through the government approval route for cases accessing modern technology.
Defence Industrial Corridors (DICs)
Two dedicated Defence Industrial Corridors promote cluster-based industrial growth, specialized supply chains, and testing infrastructure:
- Uttar Pradesh Defence Industrial Corridor: Comprises six nodes—Agra, Aligarh, Chitrakoot, Jhansi, Kanpur, and Lucknow.
- Tamil Nadu Defence Industrial Corridor: Comprises five nodes—Chennai, Coimbatore, Hosur, Salem, and Tiruchirappalli.
Major Indigenised Platforms and Systems
- Aerospace: Light Combat Aircraft (LCA) Tejas, Light Combat Helicopter (LCH) Prachand, Advanced Light Helicopter (ALH) Dhruv, and C-295 transport aircraft manufacturing facility in Vadodara.
- Naval Vessels: INS Vikrant (Indigenous Aircraft Carrier), Visakhapatnam-class stealth destroyers, Nilgiri-class stealth frigates, and Kalvari-class conventional submarines.
- Land Systems & Artillery: Advanced Towed Artillery Gun System (ATAGS), Dhanush Artillery Gun, Main Battle Tank Arjun, and Wheeled Armoured Platforms.
- Missile & Rocket Systems: Akash surface-to-air missile, BrahMos supersonic cruise missile, Astra air-to-air missile, and Pinaka Multi-Barrel Rocket Launcher.
Key Facts
- Buy (Indian-IDDM) is the highest priority category for defence capital procurement under DAP 2020.
- The SRIJAN portal functions as an online repository listing imported items made available to domestic industry for indigenisation.
- Foreign Direct Investment in defence is allowed up to 74% under the automatic route and up to 100% through the government route.
- Two dedicated Defence Industrial Corridors operate in Uttar Pradesh and Tamil Nadu.
- The ADITI scheme supports high-end strategic and deep-tech innovations with grants up to ₹25 crore.
- iDEX functions under the Defence Innovation Organisation, a non-profit company formed by BEL and HAL.
- Over 5,500 items face phased import embargoes under Positive Indigenisation Lists.
- INS Vikrant is India’s first indigenously designed and constructed aircraft carrier, built by Cochin Shipyard Limited.
- National capital procurement allocations reserve 75% of the modernization budget for domestic industry purchases.
- The Technology Development Fund scheme is administered directly by DRDO to assist private firms and startups.
