Make in India: How has the Run been so far in the Defence Sector?

By Lieutenant General Saxena

The Make in India initiative marked its 12th anniversary on September 25, 2026. On September 25, 2014, Prime Minister Narendra Modi gave a clarion call to make India a global manufacturing, design, and innovation powerhouse. How has the run been? Here is a brief attempt to find out.

Early Years

While the ‘Make in India’ initiative was all-encompassing, implying design and innovation along with manufacturing, the focus, at least in the first six years, that is, up to 2020 or thereabouts, remained largely on manufacturing alone. Why so? Maybe, due to the following reasons:-

• In 2014, indigenous technology infusion was minimal.
• As regards the defence sector, there was a near void of indigenous technologies, and our import dependence was around 70% or thereabouts. In 2013, we were the World’s No. 1 defence importer, a position that we yielded in 2014 to Saudi Arabia by a small margin.
• Around 2014, we were importing almost all our war-waging resources from abroad: strike aircraft, tanks and armoured vehicles from Russia, such as MiGs, Sukhois, T-90s, and BMPs; maritime, surveillance, anti-submarine and logistics aircraft from the US, such as P8s and C-17s; and electronic warfare suites, AWACS and UAVs from Israel.

Many Successes

In such a scenario, where niche technologies were conspicuous by their near absence, the only way to start somewhere was to import technology and try to make the products here in India. Turning India into a manufacturing hub, thus, made a lot of sense. Here is a brief account of some successes:

• Larsen & Toubro licensed the K9 Thunder Self-Propelled Howitzer through Transfer of Technology (ToT) from the South Korean player, Hanwha. The ToT was in two phases: over 50% by 2017 and up to 60% by 2024-25.
• India and Russia entered into a nearly 100% ToT agreement for the advanced AK203 Assault Rifle. India will be manufacturing the small arms product at scale (about 600,000 to 670,000 units).
• Though currently stuck in a lot of delays and procurement hurdles, there is an agreement of 80% ToT between US aeroengine-maker GE Aerospace and India-run Hindustan Aeronautics Limited (HAL) for the F414 jet engines.
• The manufacturing capability, measured by the Manufacturing Gross Value Added (GVA) variable, has recorded a compounded growth of 10.88% from 2022-23 to 2025-26.

IDDM Born

While the ToT model proved to be an initial driver (kind of fait accompli), the idea to move beyond ‘manufacturing’ to ‘designing’ our own started to take root alongside. Just a couple of years into the run-time of ‘Make in India’, the Defence Procurement Procedure (DPP) in 2016 promulgated an acquisition category called IDDM (Indigenously Designed, Developed and Manufactured).

Not only was this category given the highest priority, but it would also, over time, prove to be the driver of building sovereign Intellectual property (IP) in India. The credit for this visionary thought must be given to the then Defence Minister, Manohar Parrikar, who went against the major opposition voices and granted approval to the IDDM recommendation by a few industry leaders like Zen Technologies Limited chairman and managing director Ashok Atluri, besides other industry veterans.

IDDM Successes

Slowly but steadily, the IDDM successes started to pour in; a few examples:

• Starting in 2003, HAL embarked on an indigenous design and development programme for a Light Combat Helicopter (LCH Prachand), leading to its successful maiden flight in 2010 with operational induction into the forces in October 2022.
• Some of the biggest IDDM successes came by way of artillery systems and the air defence control and reporting system (ADSCRS) and electronic warfare systems.

Here is a short take:

• Advanced Towed Artillery Gun System (ATAGS), the state-of-the-art howitzer, was totally designed, developed and manufactured by three industry giants, namely Tata Advanced Systems, Bharat Forge and the DRDO. This whopping Rs 7,000 crore procurement project will deliver its first 18 guns (out of 307) by February 2027.
• India has realised its air defence battle management and control system for the three Services: IACCS or Integrated Air Command and Control System for the Air Force, Akashteer System for the Army, and Trigun system for the Navy) completely designed and developed indigenously in India.
• As regards Electronic Warfare (EW) systems, we have been designing and developing indigenous systems end to end: Samyukta system for TBA followed by the latest Dharashakti System, Akash Tarang Anti-drone EW system, Swayam Raksha Kavach for the Tejas, Mithya EW countermeasure system for missile force … all indigenous.
• In the field of simulation, we have moved far. Not only is the Indian defence industry fully capable of meeting every single requirement of our armed forces, but Indian-designed simulators have also found takers globally.
• Take, for instance, Zen Technologies Limited. This company has deployed more than 1,000 simulators globally and has a robust sovereign IP portfolio that, as of July 2026, has 172 patents. Of these, Zen Technologies holds 144 patents, and its subsidiaries and related companies hold the remaining 28.

Not Without Challenges

By all counts, ‘Make in India’ has had a bold run, though the same has not been without challenges. Here is a brief glimpse:

• On the manufacturing front, there are challenges of overall throughput capability in what the industry can actually deliver. An open-source study has it that currently there is a huge order backlog which will take anything from two to ten years to clear.
• Then there is this abiding pattern that refuses to go away despite efforts by all concerned, and that issue is ‘acquisition blues’. Successive Procurement/Acquisition Rule Books have struggled to resolve chronic delays in the defence procurement system. To mention a few: six- to seven-year cycles knitting their way through some 12 stages of approvals, hard-to-meet QRs, vendors promising upfront at the RFI stage and not living up to it down the line (after years), approvals (AoNs) running out of their validity before the procurement process puts itself together, and the most worrisome of all, the trial process running into multiple iterations spread over years. All the problems are well known.
• Talking of reforms, the draft DAP-2026 has laid a special emphasis on addressing procurement delays. Provisions like concurrent running of linear procurement stages, external expert intervention in evolving doable QRs, splitting the trial monster into two smaller stages to weed out non-players early, allowing the users to choose the mode (implying range and depth) of DGQA trials, something that runs for protracted periods, and proactively encouraging the simulator-based trial and validation, etc. It will be the biggest boost to the ‘Make in India’ initiative if we can really convert the reform process to take real effect on the ground.

Making a Shift Going Forward

DAP 2026 is unambiguous about what its goal is. Simply stated, it is to make a transition of India from a ‘manufacturing hub’ to a ‘design powerhouse’ of the world. What are the keys to unlock this transition: build indigenous capability; build sovereign IP; build something where we have the know-how and, more importantly, the authority to modify/customise/upgrade our systems as and when demanded by operational circumstances without waiting for knowledge and permission from a ‘foreign’ player.

That said, what is the biggest imperative in achieving the above: protect, encourage, incentivise and boost the players that are capable of generating sovereign IP for the country.

Who are the players?

In our case, in the public sector domain, it is primarily the Defence Research and Development Organisation (DRDO), Defence Public Sector Undertakings ( DPSUs) and other Central Govt Research Organisations (CGROs) who utilise sovereign funding to design, develop and build Indian products. This category also includes those private sector players who receive government grants and subsidies under various schemes (iDEX, Make-1 Procedure, Technology Development Fund, etc.) that could run up to 70%, and in some cases, even 100%. Riding on government funds, the qualifying private sector players do R&D in designing and developing products that have the requisite indigenous content.

Apart from the above two broad categories, there are a few — very few, in fact — private sector players who, without any government grant or subsidies, spend hundreds of crores in R&D in creating an entire ecosystem of engineers, design teams, production infrastructure, supply chains and more to design, develop and manufacture purely indigenous products.

Ironically, when a private entrepreneur embarks on this route, she is not even sure that her product, even if it meets the required quality (measured in technology readiness level or TRL), will be selected by the armed forces for an award of contract. It is these players (let’s call them Private Self-Funded Indigenous R&D or PSFIR companies) who, as stated, are exceedingly few and the ones who need all the support from the system and the rule book provisions.

Why so? Because if a PSFIR vendor dies at the altar of an indifferent and insensitive system, one of the proud creators of sovereign IP, the one who risked her own capital to give the nation something that we could call ‘Indian’, also dies. Of course, with that death, hundreds of crores that she spent in creating the product also die a ‘sunk-cost’ death, and with that goes the institutional knowledge, the design capability, the years of accumulated engineering judgement to create Indian capability.

Nobody is advocating allowing a non-deserving and below-par product of a PSFIR vendor to pass the scanner just because it is an attempt to create sovereign IP, but only the ones that make the cut and pass all the stages of the unforgiving trial and tests should make it. The call is to be ‘fair’ and ‘just’ to a vendor who risks her own funds in making the strongest possible contribution to the spirit of ‘Aatmanirbhar Bharat’.

Any unfair/undeserving death of such a vendor will not only be a body blow to the very soul of ‘Aatmanirbhar Bharat’, but it will also be a deterrent warning to other budding vendors that self-funded defence R&D will not be rewarded. The market will not protect your investment. The procurement system will not recognise your risk.

The rational response from the above stark realisation will be to seek government-funded Make-I, iDEX, or TDF pathways, or to avoid defence R&D altogether. The result will be that India’s defence innovation base would remain overwhelmingly dependent on government-initiated programmes, precisely the model that the ‘Aatmanirbhar Bharat’ vision seeks to move beyond.

At the outset, the PSFIR companies must be given a definition and recognition both under the guiding principles, as well as under the requisite Chapters in the DAP 2026. Such companies must be equated with the DRDO, DPSUs, and CGROs in all matters of acquisition procedures, single-vendor status, and procurement preference.

The biggest disservice to PSFIR companies will be to equate them with players that put up acquired (stolen/fraudulently smuggled) IP on the line of procurement, skipping the long-winding and time-and-cost prohibitive stages of R&D, running through the labyrinth of concept formulation, proof-of-concept, lab validation, field evaluation, building a prototype, and proving the system to operational readiness stages.

How can a PSIFR vendor, out to generate sovereign IP, even match up in costs to a trader, who is bringing in acquired IP? And would it be fair to make PSFIR companies compete with foreign OEMs, who are government-funded, institutionally backed, and heavily subsidised by their own governments specifically to win export contracts? Suffice to say that the nation must protect the creators of real Indigenous capability if we intend to really serve the cause of ‘Make in India’.

But how has the run been so far? Great indeed. But there is a need to move on from a manufacturing hub to a design powerhouse, protecting and preserving the creators of sovereign IP, not as companies but as national strategic assets.

(Lieutenant General (Dr) V. K. Saxena, PVSM, AVSM, and VSM, is a retired senior Indian Army officer who was Director General of Army Air Defence)

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