Following recent security operations, India is set to significantly boost the private sector’s role in defence manufacturing, aiming for greater self-reliance and faster procurement.
Boosting Private Sector in Defence
The Indian government is making a concerted effort to involve private companies much more deeply in defence manufacturing. This move is part of a strategy to leverage the government’s substantial buying power and pivot towards a leaner equipment procurement model.
Authorities have reached out to industry bodies and private defence firms, encouraging active participation. The focus is on increasing the indigenous production of crucial items like artillery guns, missiles, loitering and precision-guided munitions, and military-grade drones.
This push comes in the wake of “Operation Sindoor,” highlighting a renewed urgency to enhance domestic defence capabilities. The government aims to harness the full potential of industry, including Public Sector Undertakings (PSUs), private companies, and startups.
Streamlining Procurement: DAP 2025
To facilitate this shift, the government is revising the Defence Acquisition Procedure (DAP) 2020, with the goal of creating DAP 2025. This updated framework is expected to streamline the entire procurement process.
Key changes include compressing procurement schedules significantly, aiming for around two years for big orders, down from an average of about six years. The acquisition of Rafale Marine aircraft, completed in just 24 months, is a prime example of this expedited approach.
DAP 2025 will also focus on competitive bidding through tenders, moving away from nominations. It will encourage co-development with the Defence Research and Development Organisation (DRDO) and simplify documentation to make the process more practical and less voluminous.
A promising model involves PSUs like DRDO undertaking research and development, sometimes jointly with private partners. The actual production is then entrusted to private companies, as seen with the DRDO-designed 5.56x45mm CQB Carbine now manufactured by Bharat Forge.
Focus on Drones and Standoff Weapons
The nature of modern warfare is evolving, and there’s a significant thrust on standoff weapons, particularly drones and missiles. The government plans to nurture the domestic drone manufacturing ecosystem.
The idea is to identify and support up to five manufacturers of civilian drones who have the potential to expand into military-grade production. These companies will receive government support for technology tie-ups and clear guidance on future orders.
This strategy aims to provide the private sector with the visibility and confidence needed to invest and innovate in advanced defence technologies.
Boosting Defence Spending
While there’s no immediate need for a major revision to the record defence budget, officials indicate a slight increase in spending over and above the allocated amount for FY26 is possible. The Ministry of Defence is on track with its capital expenditure, having spent around 17-18% of its modernisation budget by the end of June.
Emergency procurement, largely initiated during Operation Sindoor, is expected to account for approximately 15% of the overall allocation this year. The Ministry of Finance has assured that there will be no constraints on the Rs 1.8 lakh crore capital expenditure.
- India is making a major push for private sector involvement in defence manufacturing.
- New procurement norms (DAP 2025) aim to drastically cut acquisition timelines.
- Indigenous production of artillery, missiles, and drones is a key focus.
- A ‘R&D by PSU, production by private’ model will be replicated.
- Defence spending is on track, with potential for increased capital expenditure.
This strategic shift is set to transform India’s defence industry, fostering a more robust, self-reliant, and diversified ecosystem capable of meeting future security challenges.
Following recent security operations, India is set to significantly boost the private sector’s role in defence manufacturing, aiming for greater self-reliance and faster procurement.
Boosting Private Sector in Defence
The Indian government is making a concerted effort to involve private companies much more deeply in defence manufacturing. This move is part of a strategy to leverage the government’s substantial buying power and pivot towards a leaner equipment procurement model.
Authorities have reached out to industry bodies and private defence firms, encouraging active participation. The focus is on increasing the indigenous production of crucial items like artillery guns, missiles, loitering and precision-guided munitions, and military-grade drones.
This push comes in the wake of “Operation Sindoor,” highlighting a renewed urgency to enhance domestic defence capabilities. The government aims to harness the full potential of industry, including Public Sector Undertakings (PSUs), private companies, and startups.
Streamlining Procurement: DAP 2025
To facilitate this shift, the government is revising the Defence Acquisition Procedure (DAP) 2020, with the goal of creating DAP 2025. This updated framework is expected to streamline the entire procurement process.
Key changes include compressing procurement schedules significantly, aiming for around two years for big orders, down from an average of about six years. The acquisition of Rafale Marine aircraft, completed in just 24 months, is a prime example of this expedited approach.
DAP 2025 will also focus on competitive bidding through tenders, moving away from nominations. It will encourage co-development with the Defence Research and Development Organisation (DRDO) and simplify documentation to make the process more practical and less voluminous.
A promising model involves PSUs like DRDO undertaking research and development, sometimes jointly with private partners. The actual production is then entrusted to private companies, as seen with the DRDO-designed 5.56x45mm CQB Carbine now manufactured by Bharat Forge.
Focus on Drones and Standoff Weapons
The nature of modern warfare is evolving, and there’s a significant thrust on standoff weapons, particularly drones and missiles. The government plans to nurture the domestic drone manufacturing ecosystem.
The idea is to identify and support up to five manufacturers of civilian drones who have the potential to expand into military-grade production. These companies will receive government support for technology tie-ups and clear guidance on future orders.
This strategy aims to provide the private sector with the visibility and confidence needed to invest and innovate in advanced defence technologies.
Boosting Defence Spending
While there’s no immediate need for a major revision to the record defence budget, officials indicate a slight increase in spending over and above the allocated amount for FY26 is possible. The Ministry of Defence is on track with its capital expenditure, having spent around 17-18% of its modernisation budget by the end of June.
Emergency procurement, largely initiated during Operation Sindoor, is expected to account for approximately 15% of the overall allocation this year. The Ministry of Finance has assured that there will be no constraints on the Rs 1.8 lakh crore capital expenditure.
- India is making a major push for private sector involvement in defence manufacturing.
- New procurement norms (DAP 2025) aim to drastically cut acquisition timelines.
- Indigenous production of artillery, missiles, and drones is a key focus.
- A ‘R&D by PSU, production by private’ model will be replicated.
- Defence spending is on track, with potential for increased capital expenditure.
This strategic shift is set to transform India’s defence industry, fostering a more robust, self-reliant, and diversified ecosystem capable of meeting future security challenges.
