How Defence Manufacturing is Forging India’s Superpower Ambition

 

The trajectory of a nation’s rise to superpower status is historically etched in its industrial prowess and its ability to defend its sovereignty without external crutches. For decades, India held the dubious distinction of being the world’s largest arms importer—a paradox for a nation with one of the largest standing armies and a burgeoning tech sector. However, the last decade has witnessed a tectonic shift.

By pivoting from a "buyer’s navy" and "importer’s army" to a global manufacturing hub, India is leveraging its defense sector as the engine of its broader manufacturing revolution. With production surging by 174% and exports hitting record highs, India is not just securing its borders; it is building a robust indigenous ecosystem that rivals the industrial strategies of global giants.

 

Historical Evolution: From Dependency to "Atmanirbharta"

Post-independence in 1947, India inherited a modest infrastructure of 18 ordnance factories. While these facilities provided basic equipment, the higher-end technological requirements of the Indian Armed Forces were met through strategic partnerships, primarily with the Soviet Union. By 2021, these factories had expanded to 41, but the system was plagued by inefficiencies and a lack of accountability.

The Era of Stagnation (1980s – 2014)

Early attempts at indigenization, such as the Light Combat Aircraft (LCA) Tejas project initiated in the 1980s and the Integrated Guided Missile Development Programme (IGMDP), were marathons of perseverance. While they eventually birthed iconic platforms like the Agni and Prithvi missiles, the "tech gap" remained wide. Until 2014, India maintained a 65–70% reliance on imports, making its national security vulnerable to geopolitical shifts and supply chain disruptions.

The Pivot (2014 – Present)

The introduction of the "Make in India" initiative in 2014 served as the catalyst for change. The government took a radical step in 2021 by restructuring the 41 Ordnance Factories into seven Defence Public Sector Undertakings (DPSUs). This corporatization aimed to improve efficiency, cost-competitiveness, and financial autonomy, shifting the focus from mere "production" to "innovation-led manufacturing."

 

The Decadal Renaissance (2015–2025): By the Numbers

The last ten years represent the most explosive growth period in India’s defense history. The sector has transitioned from a domestic provider to a global competitor.

Production and Export Milestones

In 2014-15, India’s defense production stood at a modest ₹46,429 crore. By 2023-24, this figure leaped to ₹1.27 lakh crore, reaching an estimated ₹1.46 lakh crore in 2024-25. This 174% rise is mirrored by an even more staggering export narrative.

Defense exports, which were under ₹1,000 crore prior to 2014, exploded to ₹23,622 crore in 2024-25—a 34-fold increase. India now exports to over 100 countries, including technologically advanced nations like the USA and France, and strategic partners like Armenia. This shift validates the quality and cost-effectiveness of Indian-made hardware, ranging from the BrahMos supersonic cruise missiles to Dornier aircraft and Artillery guns.

Key Policy Enablers

Several strategic "levers" were pulled to achieve this momentum:

• Positive Indigenisation Lists: The Ministry of Defence has notified five lists covering over 4,666 items. These items are banned from import, forcing a domestic substitution that has already saved an estimated ₹3,400 crore.
• SRIJAN Portal: This digital marketplace has listed over 12,300 items previously imported, of which a significant portion has already been successfully indigenized by local industry.
• Defence Acquisition Procedure (DAP) 2020: This policy prioritized "Buy (Indian-IDDM)" (Indigenously Designed, Developed, and Manufactured) categories, giving local firms the first right of refusal.
• FDI Reforms: Raising the Foreign Direct Investment (FDI) limit to 74% via the automatic route has encouraged global OEMs (Original Equipment Manufacturers) to set up shop in India.

 

Economic Contributions: The Manufacturing Multiplier

Defence manufacturing is no longer a siloed activity; it is an economic force multiplier that feeds into the civil economy.

Forex Savings and Job Creation

By meeting 65% of domestic needs through local production, India has effectively redirected ₹2.5 lakh crore that would have otherwise flowed out of the country. These funds are now circulating within the Indian economy, fueling R&D and infrastructure.

The human impact is equally profound. A single project, such as Adani’s Kanpur ammunition complex, has created 4,000 jobs. On a macro level, the sector supports over 16,000 MSMEs and 430+ large firms. These small-scale industries are the backbone of the supply chain, providing components for everything from radar systems to fighter jet engines.

The Private Sector Surge

Historically, defense was a state monopoly. Today, the private sector is the engine of growth. Giants like Tata, L&T, and Adani are now lead integrators for UAVs, missiles, and heavy ammunition. Interestingly, the private sector now accounts for 64.5% of total defense exports, proving its ability to meet international standards of precision and reliability.

Defence Industrial Corridors (DICs)

The establishment of dedicated corridors in Uttar Pradesh and Tamil Nadu has created specialized clusters. These corridors attract concentrated investment, leading to "spillover" effects into the aerospace and electronics sectors. For instance, the expertise gained in manufacturing carbon-fiber components for missiles is now being applied to civil aviation.

 

Comparing the "China Model"

India’s journey often draws comparisons with China. While China utilized its massive trade surplus to build a military-industrial complex over three decades, India is carving a niche through a "hybrid" model.

Feature	China’s Model	India’s Model
Strategy	Massive scale, state-led, copy-and-improve.	Niche high-tech (missiles, LCA), PPP (Public-Private Partnership) led.
Export Focus	Low-cost volume to developing nations.	Strategic high-value platforms (BrahMos, Tejas) to diverse markets.
Innovation	Aggressive reverse engineering.	Indigenous R&D through iDEX and academic collaboration.

While India’s production scale is currently smaller, its focus on transparent, high-quality platforms like the Akash missile system and HAL Tejas is building a "Brand India" that appeals to nations seeking reliable, non-coercive defense partnerships.

 

Future Prospects and Targets (2025–2030)

The roadmap for the next five years is ambitious. The government aims for a total production value of ₹3 lakh crore and exports of ₹50,000 crore by 2029. Analysts predict an 18% CAGR (Compound Annual Growth Rate) for the sector through 2030.

Technological Frontiers

To reach these heights, the focus is shifting toward "Future-Tech":

• iDEX (Innovations for Defence Excellence): Providing grants of up to ₹1.5 crore to startups to solve niche military problems.
• Hypersonics & UAVs: Significant investment is being funneled into unmanned aerial vehicles and hypersonic flight technology to ensure India stays ahead of the curve.
• Naval Platforms: With the commissioning of INS Vikrant, India has joined an elite club of nations capable of building aircraft carriers, a capability that will be expanded with upcoming submarine and destroyer projects.

 

Challenges on the Horizon

Despite the optimism, several hurdles remain:

1. R&D Expenditure: India’s R&D spend as a percentage of the defense budget remains around 5-6%, significantly lower than that of the US or China.
2. Raw Material Dependency: While we manufacture the platforms, we still import specialized alloys and semiconductor chips.
3. The "Teething" Issues of PPP: Aligning the bureaucratic pace of the Ministry of Defence with the rapid execution cycles of the private sector requires constant policy fine-tuning.

 

Conclusion: The Path to Superpower Status

Defence manufacturing is the ultimate litmus test for a nation’s industrial maturity. For India, it represents the transition from a consumer of global technology to a creator of it. By fostering a self-reliant ecosystem, India is reducing its strategic vulnerability, boosting its GDP, and creating a sophisticated workforce.

As India scales its exports and masters complex technologies like jet engines and stealth platforms, it doesn't just become a "manufacturing hub"—it becomes a global power center whose influence is backed by indigenous iron.