Defence Secretary Rajesh Kumar Singh has outlined an annual business opportunity of approximately $20 billion to $25 billion for India’s domestic defence industry over the next decade, while calling for faster procurement, deeper public-private collaboration and reforms to strengthen the country’s defence manufacturing ecosystem.
Speaking at the annual conference of the Society of Indian Defence Manufacturers (SIDM) in Delhi, Singh emphasised the need to accelerate defence acquisition while maintaining transparency, procedural integrity and legal accountability. He said procurement processes must move faster to meet operational and industrial requirements, but cautioned against bypassing established procedures.
Several major acquisition programmes are being processed at the highest levels, including the Multi-Role Fighter Aircraft (MRFA) programme and other key defence initiatives. Singh indicated that some procurement-related processes could translate into signed contracts before the end of 2026. He also said the Ministry of Defence hopes to secure final approval for proposed reforms to the Defence Acquisition Procedure (DAP) before the end of the year.
The Defence Secretary acknowledged improvements in the number of contracts signed but stressed that the pace of procurement must increase further. Expediting high-value acquisitions, advancing fighter aircraft procurement, progressing jet engine co-production arrangements and reducing delays in contract finalisation remain important priorities.
Defence Industry Faces $25 Billion Annual Opportunity
Singh placed greater private sector participation at the centre of the government’s efforts to establish a strong domestic defence industrial base. He said the government wants private companies to account for at least 50 per cent of India’s defence production over time, compared with an estimated current share of around 24 per cent.
According to figures cited in his remarks, private industry has contributed approximately 21 to 25 per cent of the value of defence production in recent years, with Defence Public Sector Undertakings (DPSUs) accounting for the remaining share.
The government has also increased the allocation of the defence capital procurement budget earmarked for domestic industry to 75 per cent, compared with 68 per cent in the financial year 2022–23. With India’s annual defence capital budget estimated at ₹1.6 lakh crore to ₹1.8 lakh crore, the domestic market presents substantial opportunities for manufacturers.
Singh said the domestic defence industry could access an annual business opportunity of approximately $20 billion to $25 billion over the next decade. Realising this potential, he indicated, would require stronger participation from private manufacturers, improved coordination across the defence ecosystem and timely execution of procurement programmes.
He called for a more balanced partnership between public and private manufacturers, noting that domestic defence production supports national security while also contributing to industrial expansion, employment generation and economic growth.
DRDO Reforms to Prioritise Research and Development
A central element of the reform agenda involves repositioning the Defence Research and Development Organisation (DRDO) towards research and the development of advanced defence technologies.
Singh said reforms have been initiated to establish clearer roles and responsibilities within the organisation. Under the proposed approach, DRDO would concentrate primarily on scientific research and technology development rather than routinely acting as a systems integrator or original equipment manufacturer in conventional areas.
The organisation may, however, continue production-related activities in specialised strategic fields where viable alternatives are unavailable. The approach aims to strengthen DRDO’s core research role while enabling Indian companies to commercialise technologies developed through public research investments.
The Defence Secretary also outlined plans to rationalise DRDO’s laboratory network to reduce duplication, improve coordination and increase research efficiency. His remarks referred to approximately 33 laboratories, while also discussing recommendations associated with the VijayRaghavan Committee report for consolidating a network of around 50 laboratories into approximately 33–35 core research centres.
The broader reform agenda includes reducing overlapping research activities, clarifying institutional responsibilities, improving accountability for project timelines and simplifying administrative procedures. Measures to reduce the administrative burden on scientists, including tasks related to Government e-Marketplace (GeM) tendering, are also under consideration.
Singh said talent and accountability would be central to the transformation, while acknowledging DRDO’s contributions to India’s strategic programmes and scientific capabilities. The intended division of responsibilities would allow research institutions to concentrate on advanced technologies while expanding the role of domestic industry in manufacturing and commercialisation.
Conventional Missile Technology Transfer Planned by November 2027
Singh announced that DRDO intends to transfer technology for conventional missile systems to private industry by November 2027, enabling companies to undertake commercial production.
The proposed technology transfer is intended to give private manufacturers a greater role in producing established missile systems while allowing DRDO scientists to concentrate on next-generation technologies.
The approach seeks to establish a clearer division between research and manufacturing responsibilities. DRDO would focus on developing technologies, while industry would take on a larger role in production and commercialisation, helping expand domestic manufacturing capacity.
The initiative forms part of the wider effort to increase private sector participation in areas traditionally dominated by government-owned entities. Its implementation will be an important element of the proposed changes to the defence industrial ecosystem.
Government Seeks Stronger Public-Private Partnership
The Defence Secretary called for a cultural shift within the Ministry of Defence and the Armed Forces, urging officials to regard companies as industry partners rather than merely vendors.
Drawing on his previous experience at the Department for Promotion of Industry and Internal Trade (DPIIT), Singh highlighted the importance of trust and cooperation between government institutions and domestic manufacturers.
He also encouraged companies to collaborate after receiving contracts, arguing that competition should not prevent manufacturers from working together to ensure timely project execution. Effective coordination among the Armed Forces, DRDO, DPSUs, private companies, MSMEs, startups and academic institutions would be essential to strengthening indigenous defence capabilities.
Singh referred to Operation Sindoor to underline the importance of direct engagement between military commanders and industry during urgent operational requirements. Such situations, he indicated, demonstrate the need for responsive domestic manufacturing and effective coordination between military users and suppliers.
The objective is to create an industrial ecosystem capable of responding quickly to changing operational demands, particularly during emergencies when equipment and supplies may be required at short notice.
More Opportunities for Private Defence Manufacturers
The government is seeking to expand private sector participation across several defence manufacturing segments, including ammunition, fighter aircraft, missiles and defence supply chains.
Licensed private domestic companies have been permitted to manufacture ammunition, while private industry participation is being encouraged in fighter aircraft production, including through the Advanced Medium Combat Aircraft (AMCA) programme.
The planned transfer of conventional missile technologies to private companies by November 2027 is another part of this effort. Indian manufacturers are also being encouraged to integrate into international defence supply chains, particularly in friendly countries and regions.
The corporatisation of the former Ordnance Factory Board into seven DPSUs has also changed the structure of government-owned defence manufacturing. Alongside these public sector entities, licensed private companies are being offered opportunities to participate in additional manufacturing activities.
Singh said the objective was to create a more competitive industrial ecosystem in which public sector enterprises, private manufacturers and emerging companies could contribute to national defence requirements.
Faster Procurement and Support for Startups
The Defence Secretary highlighted the need to adapt procurement and technology development processes to rapidly evolving capabilities, particularly drones and other emerging defence systems.
The Ministry of Defence is delegating greater authority to facilitate faster decision-making and encouraging spiral development, under which systems can be improved through successive development stages rather than waiting for a single finalised design.
Singh argued that fast-track procurement should become the norm rather than the exception, particularly in technology areas where capabilities evolve rapidly.
The Ministry is also considering measures to reduce entry barriers for startups and MSMEs. Proposals include reimbursement of trial costs and no-cost, no-liability field evaluations, which could help smaller companies demonstrate their technologies without bearing excessive financial risks.
Such measures are intended to encourage innovation, broaden industry participation and strengthen the domestic development of advanced defence technologies.
Reforms Linked to Strategic Autonomy
Singh’s address outlined a reform agenda combining faster procurement, a research-focused DRDO, conventional missile technology transfers, greater private sector participation and stronger cooperation across the defence ecosystem.
The proposed changes seek to reduce delays, improve accountability, expand indigenous manufacturing and create more opportunities for Indian companies to participate in international supply chains.
The government’s target of increasing the private sector’s contribution to at least 50 per cent of defence production represents a significant proposed shift from its current estimated share. Achieving this objective will depend on procurement reforms, timely technology transfers, effective project management and sustained cooperation between the government, research institutions and industry.
The estimated annual business opportunity of $20 billion to $25 billion over the next decade provides the economic context for the proposed changes. By encouraging domestic manufacturers to assume a greater role in production while enabling DRDO to focus on advanced research, the government aims to strengthen India’s defence industrial base and reduce dependence on external sources.
Ultimately, the reform agenda positions domestic defence manufacturing as both a national security priority and a driver of industrial growth, technological development and strategic autonomy.
