Why in news?
The Ministry of Defence announced that India’s defence production has touched a record value of around ₹1.51 lakh crore in the financial year 2024–25. This marks a significant jump from the previous year and is attributed to reforms aimed at promoting self‑reliance.
Background
- India has long been one of the world’s largest importers of arms and defence equipment. The “Aatmanirbhar Bharat” (self‑reliant India) initiative aims to reduce dependence on foreign suppliers by encouraging domestic manufacturing.
- Defence production was opened to the private sector in the early 2000s, but state‑owned companies continued to dominate the market. Recent policies include import bans on certain categories, higher foreign direct investment limits and simplified procurement procedures.
Key developments
- Defence output in 2024–25 increased by over 18% compared with the previous year. Both public and private sector companies contributed, with ordnance factories, defence public sector undertakings and emerging private firms reporting higher sales.
- Several major weapons systems were delivered, including new indigenous artillery guns, armoured vehicles and naval platforms.
- Export orders for aircraft, missiles and surveillance systems have also risen, signalling growing confidence in Indian products.
Drivers of growth
- Policy reforms such as higher local procurement requirements and easier licensing have encouraged domestic investment.
- Increased defence budgets and long‑term orders provide financial security for manufacturers to scale up capacity.
- Collaborations between government research laboratories, universities and industry have improved innovation and quality.
Challenges
- Maintaining quality and timely delivery remains a challenge, especially for complex systems like fighter jets and submarines.
- Private companies often struggle to secure working capital and navigate bureaucratic hurdles in procurement.
- India still imports advanced sensors, engines and electronic components, highlighting technology gaps.
Way forward
- Continued investment in research and development will be necessary to master critical technologies and create globally competitive products.
- The government should support smaller suppliers through subsidies, training and easier access to defence contracts.
- Exports can be increased by signing mutual agreements with friendly countries and demonstrating reliability in service.