What is Make in India for Defence?
Historical Background
Key Points
12 points- 1.
A core principle is prioritizing domestic procurement. The government has earmarked a significant percentage of the defence capital acquisition budget for procurement from domestic sources. For example, in recent years, approximately 75% of the capital outlay has been reserved for domestic vendors. This ensures that Indian companies get preference in defence contracts.
- 2.
The initiative promotes technology transfer and co-development. Foreign companies are encouraged to partner with Indian firms to transfer technology and jointly develop defence equipment. This helps in building indigenous capabilities and reducing dependence on foreign suppliers. A recent example is the joint venture between an Indian firm and Israel Aerospace Industries for aerospace electronics and radar technologies.
- 3.
The Defence Acquisition Procedure (DAP) outlines the guidelines and procedures for defence procurement. It includes provisions for promoting indigenization, such as preferential treatment for Indian vendors and incentives for using indigenous components. The DAP is regularly updated to streamline the procurement process and encourage domestic manufacturing. The latest draft, DAP-2026, emphasizes technology ownership by India, not just manufacturing.
- 4.
The Offsets Policy requires foreign vendors to invest a portion of the contract value in India. This can be done through technology transfer, local sourcing of components, or investment in Indian defence companies. The offsets policy helps in building the domestic defence industrial base and creating jobs. For instance, if India buys Rafale fighter jets from France, the French company is obligated to invest a certain percentage of the contract value in India.
- 5.
The government has established defence industrial corridors to promote defence manufacturing. These corridors provide infrastructure, incentives, and a conducive ecosystem for defence companies to set up production facilities. Two major corridors are in Uttar Pradesh and Tamil Nadu. These corridors aim to attract investment and create jobs in the defence sector.
- 6.
The Atal Innovation Mission (AIM) supports innovation and entrepreneurship in the defence sector. AIM provides funding, mentoring, and incubation support to startups and innovators working on defence technologies. This helps in fostering a culture of innovation and developing cutting-edge defence solutions. AIM is an initiative under NITI Aayog.
- 7.
The Services e-Health Assistance & Teleconsultation (SeHAT) scheme extends telemedicine services to armed forces personnel and their families. While not directly related to manufacturing, it improves the well-being of defence personnel, indirectly contributing to a more motivated and efficient workforce.
- 8.
The government provides financial incentives and subsidies to defence companies. These incentives include tax breaks, investment subsidies, and preferential access to government contracts. These incentives help in reducing the cost of manufacturing and making Indian defence products more competitive.
- 9.
The initiative focuses on simplifying regulations and procedures. The government has taken steps to reduce bureaucratic hurdles and streamline the process of obtaining licenses and approvals for defence manufacturing. This makes it easier for companies to set up and operate in the defence sector.
- 10.
The Strategic Partnership (SP) model identifies Indian private sector companies to partner with foreign OEMs Original Equipment Manufacturers to manufacture specific defence platforms. This model aims to create globally competitive Indian defence companies and promote technology transfer. Examples include partnerships for manufacturing submarines and fighter aircraft.
- 11.
A key shift is moving from 'Made in India' to 'Owned by India'. The focus is now on acquiring intellectual property (IP) rights and control over critical technologies, rather than just manufacturing foreign designs. This ensures that India can upgrade and maintain its defence equipment independently.
- 12.
The initiative recognizes that software is a critical component of modern warfare. Therefore, the policy focuses on upgrading software capabilities and treating software upgrades as an integral part of defence acquisition.
Visual Insights
Evolution of Make in India for Defence
Timeline showcasing the key milestones in the Make in India for Defence initiative.
India's historical reliance on defence imports led to the Make in India initiative to boost domestic manufacturing and strategic autonomy.
- 1999Kargil Review Committee emphasizes self-reliance in defence.
- 2014Make in India initiative officially launched.
- 2016Defence Procurement Procedure (DPP) introduced, prioritizing domestic vendors.
- 2022Increased focus on indigenous design and development.
- 2026Draft DAP-2026 emphasizes defence technology owned by India.
Make in India for Defence: Key Aspects
Mind map illustrating the key aspects and components of the Make in India for Defence initiative.
Make in India for Defence
- ●Policy & Framework
- ●Indigenous Manufacturing
- ●Technology Transfer
- ●Financial Incentives
Recent Developments
9 developmentsIn 2026, the Union Budget allocated a record Rs 7.85 lakh crore for defence, representing a 15.19% increase over the previous year, with a significant portion earmarked for domestic procurement.
The draft Defence Acquisition Procedure (DAP-2026) emphasizes defence technology owned by India, aiming to make India a 'design powerhouse'.
Recent bilateral defence cooperation agreements between India and Israel have focused on technology memoranda and joint production ventures.
The Indian Air Force is moving towards acquiring converted Boeing 767 aircraft from Israel Aerospace Industries to serve as Multi-Mission Tanker Transport planes, valued at approximately $900 million.
India's domestically built Tejas light combat aircraft incorporates Israeli avionics, including advanced radar and electronic warfare components.
India has expanded purchases of Israeli precision weapons, including SPICE air-to-surface bomb guidance kits produced by Rafael Advanced Defense Systems.
Israel Aerospace Industries and Indian firm DCX Systems recently announced a joint venture focused on advanced aerospace electronics and radar technologies.
The government is actively promoting the establishment of defence industrial corridors in Uttar Pradesh and Tamil Nadu to boost domestic manufacturing.
The Ministry of Defence has sought comments from stakeholders on the DAP by March 2026, indicating ongoing efforts to refine the policy framework.
This Concept in News
2 topicsGovernment to procure business jets for defense dignitaries
26 Feb 2026The news about procuring business jets for defence dignitaries, while not directly a 'Make in India' story *yet*, highlights a critical aspect of national security and defence preparedness. (1) It demonstrates the government's commitment to ensuring the safety and operational efficiency of its top officials, which is indirectly linked to a strong defence posture. (2) While this specific procurement might not be fully indigenized, it creates an opportunity for Indian companies to participate in future upgrades, maintenance, or even the development of indigenous alternatives. (3) It reveals the ongoing need for modernization and technological advancements in the defence sector, which can be addressed through the 'Make in India' initiative. (4) The implications are that future procurements should prioritize domestic sourcing and technology transfer to align with the 'Make in India' goals. (5) Understanding the 'Make in India for Defence' concept is crucial for analyzing this news because it provides the context for evaluating the government's long-term strategy for building a self-reliant defence sector and reducing dependence on imports. It allows us to ask critical questions about the extent of indigenization in defence procurements and the opportunities for domestic manufacturers.
India's Defence Modernization: A Sign of Maturity, Not Militarism
26 Feb 2026The news about increased defence spending highlights the practical application of the Make in India for Defence initiative. It demonstrates how the government is translating policy goals into concrete financial commitments. The news also reveals that the initiative is not just about manufacturing but also about acquiring advanced technologies and integrating them into Indian platforms. This news challenges the notion that India is simply a buyer of defence equipment and showcases its growing capabilities as a producer. The implications of this news are significant for India's strategic autonomy and its ability to project power in the region. Understanding the Make in India for Defence initiative is crucial for analyzing this news because it provides the context for understanding the government's priorities, the challenges it faces, and the potential benefits for India's economy and security. Without this understanding, it is difficult to assess the significance of the increased defence spending and its long-term implications.
Frequently Asked Questions
61. What's the most common MCQ trap regarding the percentage of defence capital acquisition budget earmarked for domestic procurement under Make in India for Defence?
The most common trap is confusing the *target* percentage with the *actual* percentage achieved in a given year. While the government aims for approximately 75% of the capital outlay to be reserved for domestic vendors, the *actual* procurement from domestic sources may fluctuate year to year. MCQs often present options with aspirational targets as if they are already achieved realities. Always look for qualifying words like 'aims to be' vs. 'is'.
Exam Tip
When you see a percentage related to domestic procurement, double-check if the question is asking about the *target* or the *actual* figure. Note the fiscal year being referenced.
2. Make in India for Defence aims to reduce import dependence. But what specific *strategic* vulnerability does this address beyond just saving foreign exchange?
Beyond saving foreign exchange, reducing import dependence addresses critical strategic vulnerabilities related to supply chain security and geopolitical leverage. Over-reliance on foreign suppliers means India is vulnerable to: answerPoints: * Supply disruptions during conflicts or crises, potentially crippling defence operations. * Political pressure from supplier nations, who might withhold critical technologies or spare parts. * Espionage and cyberattacks through compromised foreign-made equipment.
- •Supply disruptions during conflicts or crises, potentially crippling defence operations.
- •Political pressure from supplier nations, who might withhold critical technologies or spare parts.
- •Espionage and cyberattacks through compromised foreign-made equipment.
3. How does the Defence Acquisition Procedure (DAP) incentivize 'indigenization,' and what's the key difference between the current DAP and the draft DAP-2026 in this regard?
The DAP incentivizes indigenization by giving preferential treatment to Indian vendors and offering incentives for using indigenous components. This includes higher preference to 'Buy (Indian-IDDM)' category. The key difference between the current DAP and the draft DAP-2026 is the emphasis on *technology ownership* by India, not just manufacturing within India. DAP-2026 aims to make India a 'design powerhouse,' meaning owning the IP and design rights, not just assembling foreign-designed components.
Exam Tip
Remember the acronym IDDM (Indian Designed, Developed and Manufactured). Questions often test your understanding of the different acquisition categories and their priority.
4. What are 'Defence Industrial Corridors,' and what is the biggest practical challenge they face in attracting investment and boosting manufacturing?
Defence Industrial Corridors are designated regions aimed at promoting defence manufacturing through infrastructure development, incentives, and a conducive ecosystem. The biggest practical challenge is often land acquisition and ensuring a reliable supply chain. While corridors offer incentives, companies need readily available land, skilled labor, and a seamless supply of raw materials and components, which can be difficult to guarantee in practice.
5. Critics argue Make in India for Defence hasn't significantly reduced import dependence. What's their strongest argument, and how might the government respond?
The strongest argument is that while assembly and manufacturing within India have increased, the *core technologies* and critical components still largely come from foreign sources. This means India remains dependent on foreign vendors for crucial aspects of defence equipment. The government might respond by pointing to the increasing focus on technology transfer agreements, the push for indigenous design and development under DAP-2026, and the long-term nature of building a self-reliant defence industry. They might also highlight successes in specific areas like naval shipbuilding.
6. How does the 'Offsets Policy' work in Make in India for Defence, and what's a common misconception about its effectiveness?
The Offsets Policy requires foreign vendors winning defence contracts above a certain threshold to invest a portion of the contract value in India. This can be through technology transfer, local sourcing, or investments in Indian defence companies. A common misconception is that offsets automatically lead to significant technology transfer and indigenous capability development. In practice, many offsets are fulfilled through relatively low-tech manufacturing or services, rather than high-end technology transfer that truly builds India's design and innovation capabilities.
Exam Tip
Be aware that offsets are often a point of contention. While they *can* be beneficial, they don't automatically guarantee high-tech transfer. MCQs might try to trick you into assuming a direct, positive correlation.