Recent development/Investments

The Indian Defence Manufacturing sector has seen some major investments and developments in the recent past.

• A Green Propulsion System developed under the Technology Development Fund (TDF) scheme of DRDO, showcased successful in-orbit functionality on a payload launched during the PSLV C-58 mission. The project, led by Bengaluru-based start-up Bellatrix Aerospace Pvt Ltd, surpassed all performance parameters as per Telemetry data from the PSLV Orbital Experimental Module (POEM) at ISRO's Telemetry, Tracking, and Command Network (ISTRAC). This eco-friendly propulsion system, comprising indigenously developed components, offers a non-toxic solution ideal for low orbit space missions with high thrust requirements. The project, overseen by DRDO's Project Monitoring & Mentoring Group, highlights the success of the TDF initiative in fostering innovation within India's defence and aerospace sectors, particularly among start-ups and MSMEs.
• In January 2024, Bharat Electronics Ltd (BEL) partnered with the Foundation for Innovation and Technology Transfer (FITT) at IIT Delhi to translate breakthroughs in Naval Deep Tech research into products for the Indian Navy.
• On December 29, 2023, Defence Secretary Mr. Giridhar Aramane inaugurated a new design and test facility Aero Engine Research and Development Centre (AERDC) at Hindustan Aeronautics Limited (HAL) in Bengaluru, Karnataka. AERDC is engaged in designing and developing various engines, including the Hindustan Turbo Fan Engine (HTFE) for trainers, UAVs, and regional jets, and the Hindustan Turbo Shaft Engine (HTSE) for light and medium-weight helicopters.
• In a major move towards achieving India's goal of becoming the 'Global Hub for Green Shipbuilding' by 2030, GRSE signed a MoU in November 2023 with Shift Clean Energy (Shift), Seatech Solutions International (Seatech) and the American Bureau of Shipping (ABS), to develop Electric Tugs E-VOLT 50. The E-VOLT 50 aims to reduce carbon emissions, improve operational efficiency, and set new benchmarks for performance and environmental sustainability in the tugboat industry.
• As of December 4, 2023, 433 startups/MSMEs/individual innovators have been engaged and 302 contracts have been signed.
• Indian and American startups will now be able to co-develop and co-produce advanced technologies, including in areas of space artificial intelligence, under the India-United States Defence Acceleration Ecosystem (INDUS-X).
• In order to promote indigenous design and manufacturing, funds have also been earmarked for procurement from indigenous sources. For FY24, funds have been earmarked in the ratio 67.75:32.25 between Domestic and Foreign procurement in the Capital Acquisition Budget of the Ministry of Defence (MoD). In addition, the MoD has also directed spending an amount of US$ 181.1 million (Rs. 1,500 crore) towards procurement from start-ups.
• The 10th meeting of the Sub Committee on Military Cooperation between India and Malaysia was held in New Delhi on July 27, 2023. During the meeting, the existing defence cooperation between the two countries both sides explored effective and practical initiatives to further expand the bilateral defence engagements.
• The 8th India-Australia Defence Policy Talks (DPT) was held at Canberra in Australia on July 24-25, 2023. During the Defence Policy talks, both sides reviewed the bilateral defence cooperation between the two countries and explored new initiatives to further strengthen and deepen bilateral defence engagements. The discussions also focused on identifying ways to strengthen partnerships in the co-development and co-production of defence equipment. 
• The Defence Minister, Mr. Rajnath Singh handed over two 'Made in India' platforms, a Fast Patrol Vessel and a Landing Craft Assault ship, to the Maldives National Defence Forces, during a visit to the country in May 2023.
• Imphal and Indian Navy’s third indigenous stealth destroyer of the Project 15B class, planned to be commissioned later this year, undertook her maiden sea sortie on April 28, 2023. The ship incorporates several niche technologies and high indigenous content and is designed in-house by the Navy’s Warship Design Bureau and constructed by Mazagon Dock Ltd. (MDL) stands a proud testimony to the Indian Navy’s thrust on the national vision of ‘AatmaNirbhar Bharat’ and ‘Make in India’ initiative.
• Defence Minister, Mr. Rajnath Singh held bilateral meetings with Minister of Defence of Uzbekistan Lieutenant General Bakhodir Kurbanov, Minister of Defence of Belarus Lieutenant General Victor Khrenin and Minister of Defence of Kyrgyzstan Lieutenant General Bekbolotov B Asankalievich on the sidelines of Shanghai Cooperation Organisation (SCO) Defence Ministers’ meeting in New Delhi on April 28, 2023. 
• The Defence Research and Development Organisation (DRDO) and Indian Navy successfully conducted a maiden flight trial of a sea-based endo-atmospheric interceptor missile off the coast of Odisha in the Bay of Bengal on April 21, 2023. 
• The 8th India-Thailand Defence Dialogue was held in Bangkok on April 20, 2023. During the meeting, both sides expressed satisfaction at the ongoing defence cooperation between the two countries.
• The 4th Joint Defence Cooperation Committee meeting between India and the Philippines was held in New Delhi on March 31, 2023. During the meeting, both sides reviewed the ongoing bilateral defence cooperation and discussed effective and practical initiatives to further expand the engagements. The co-chairs reaffirmed their commitment to implement the 2006 agreement concerning defence cooperation, based on mutual trust and understanding, common interest and shared values of democracy and the rule of law.
• Indian Navy received a fully indigenised fuze YDB-60 for underwater Rocket RGB 60 in March 2023 manufactured for the first time by private Indian industry.
• The second Consultative Meeting on Defence Cooperation between India and Jordan was held today in New Delhi. The two countries discussed a range of issues including military training and courses, cyber security, military exercises, military medicine, and capacity building in various areas to enhance defence engagements. Both sides also exchanged their respective capabilities in the defence industry and research & development for forging collaborations in mutually beneficial areas.
• India and the Maldives conducted the 4th Defence Cooperation Dialogue (DCD) in Male, Maldives on March 19, 2023. During the interaction, the two nations reviewed the ongoing bilateral defence cooperation activities and both sides apparently expressed satisfaction at the increasing engagements.
• The Union Cabinet has accorded approval to sign a contract with Larsen & Toubro Limited (L&T) for the acquisition of three Cadet Training Ships, at an overall cost of US$ 379.5 million (Rs. 3,108.09 crore), under Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)} category. The delivery of ships is scheduled to commence in 2026.
• In January 2022, DRDO successfully flight-tested the final deliverable configuration of the Man Portable Anti-Tank Guided Missile. The indigenously developed anti-tank missile is a low-weight, fire & forget missile and is launched from a man-portable launcher, integrated thermal sight. The missile impacted the designated target and destroyed it.
• The 12th and largest-ever defence exhibition - DefExpo 2022 - marked the emergence of India’s defence industry as a sunrise sector for investment on a global scale, in line with the theme ‘Path to Pride’. Organised exclusively for Indian companies, the five-day event witnessed unparalleled participation of over 1,340 exhibitors, businesses, investors, start-ups, MSMEs, Armed Forces and delegates from several countries, with engagements spread over four venues.
• The Government has taken several policy initiatives in the past few years and brought in reforms to encourage indigenous design, development and manufacture of defence equipment, thereby promoting self-reliance in defence manufacturing & technology in the country.
• The Government has taken several policy initiatives in the past few years. Recently, the defence minister said that the Ministry of Defence has notified five positive indigenisation lists of the Services, comprising more than 500 items, and four other lists, with over 4,600 items for Defence Public Sector Undertakings (DPSUs), to ensure that the soldiers use Made in India weapons and platforms.
• These initiatives, inter-alia, include according priority to procurement of capital items of Buy Indian (IDDM) category from domestic sources under Defence Acquisition Procedure (DAP)-2020; Notification of four ‘Positive Indigenisation Lists’ of total 411 items of Services and three ‘Positive Indigenisation Lists’ of total 3,738 items of Defence Public Sector Undertakings (DPSUs), for which there would be an embargo on the import beyond the timelines indicated against them; Simplification of Industrial licensing process with longer validity period; Liberalization of Foreign Direct Investment (FDI) policy allowing 74% FDI under automatic route; Simplification of Make Procedure; Launch of Mission DefSpace; Launch of Innovations for Defence Excellence (iDEX) scheme by involving Start-ups & Micro, Small and Medium Enterprises (MSMEs); Implementation of Public Procurement (Preference to Make in India) Order 2017; Launch of an indigenization portal namely SRIJAN to facilitate indigenisation by Indian Industry including MSMEs; Reforms in Offset policy with thrust on attracting investment and Transfer of Technology for Defence manufacturing by assigning higher multipliers; and Establishment of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu; Earmarking of 25% of R&D Budget for Industry led R&D; Progressive increase in allocation of Defence Budget of military modernization for procurement from domestic sources, etc.
• Till October 2022, a total of 595 Industrial Licences have been issued to 366 companies operating in Defence Sector.
• India’s first indigenous aircraft carrier INS Vikrant was commissioned by the Prime Minister at Cochin Shipyard Limited in September 2022. The commissioning showcased the country’s growing prowess of indigenous manufacturing and a major milestone in the path towards ‘Aatmanirbhar Bharat’. With 76% indigenous content, the 262.5 m long and 61.6 m wide ship is equipped with state-of-the-art equipment/systems, designed for a crew of around 1,600 officers and sailors.
• INS Arihant carried out a successful launch of a Submarine Launched Ballistic Missile in October 2022. The missile was tested to a predetermined range and impacted the target area in the Bay of Bengal with very high accuracy. All operational and technological parameters of the weapon system have been validated.
• In April 2024, Strategic Forces Command (SFC), along with Defence Research and Development Organisation (DRDO), conducted the successful flight-test of New Generation Ballistic Missile Agni-Prime from Dr APJ Abdul Kalam Island off the coast of Odisha.
• In May 2022, India successfully fired the Extended Range Version of the BrahMos Air Launched missile from Su-30 MKI fighter aircraft. The launch from the aircraft was as planned and the missile achieved a direct hit on the designated target in the Bay of Bengal region.
• India’s defence manufacturing sector recorded increased production to US$ 11.85 billion in FY22 from US$ 10.9 billion in FY21.
• India’s defence production stood at US$ 2.24 billion (Rs. 17, 885 crore) in FY23 (until August 1, 2022)
• Defence production by PSUs stood at US$ 1.36 billion (Rs. 10,831 crore) in FY23 (until August 1, 2022)
• The 3rd Edition of Vietnam India Bilateral Army Exercise “Ex VINBAX 2022” is scheduled to be conducted at Chandimandir from 1-20 August 2022.
• In June 2022, the Ministry of Defence approved the procurement of military equipment and platforms worth US$ 9.84 billion (Rs. 76,390 crore) from domestic industries.
• Foreign Direct Investment (FDI) equity inflow in the defence sector for April 2000-March 2024 stood at US$ 19.87 million, as per data released by the Department for Promotion of Industry and Internal Trade (DPIIT).
• Hindustan Aeronautics Limited (HAL) and Bharat Electronics Limited (BEL) signed a contract for the co-development and co-production of the Long-Range Dual Band Infra-Red Search and Track System (IRST) for the Su-30 MKI under the MAKE-II procedure of Defence Acquisition Procedure (DAP) 2020 as a part of the Make in India initiative.
• India and Japan have agreed to enhance bilateral security and defence cooperation, including in the area of defence manufacturing in May 2022.
• The Startup Incubation and Innovation Centre, IIT-Kanpur (SIIC IIT-Kanpur) recently signed an MoU with the Defence Innovation Organisation (DIO) to nurture and support startups and SMEs in the defence sector through its flagship programme iDEX Prime.
• HAL has built and delivered more than 150 military Do-228 and to a variety of customers. HAL has also constructed two civilian Do-228 aircrafts.
• In November 2021, Defence Minister, Mr. Rajnath Singh, inaugurated the first private operationalised defence manufacturing facility in the Uttar Pradesh Defence Industrial Corridor (UPDIC), in Lucknow. The facility operated by Aerolloy Technologies — a wholly owned subsidiary of PTC industries — will manufacture parts for aircraft and helicopter engines, structural parts for aircrafts, drones and UAVs, submarines, ultra-light artillery guns, space launch vehicles and strategy systems.
• In November 2021, to demonstrate the growing India-Israeli technological cooperation, the Defence Research and Development Organisation (DRDO), India and Directorate of Defence Research and Development (DDR&D), Ministry of Defence, Israel, entered a Bilateral Innovation Agreement (BIA) to promote innovation and R&D in start-ups and MSMEs of both countries for development of dual use technologies.
• The Defence Research & Development Organisation (DRDO) and Indian Air Force (IAF) successfully flight tested two indigenously developed smart anti-airfield weapons in November 2021.
• The 11^thDefence Technology and Trade Initiative (DTTI) Group meeting between India and the United States (US) was held virtually on November 09, 2021. The aim of the DTTI Group is to focus on a bilateral defence trade relationship and create opportunities for co-production and development of defence equipment.
• In November 2021, the Indian Army signed an MoU with the Bhaskaracharya National Institute for Space Applications and Geo-Informatics (BISAG-N), Gandhinagar, Gujarat.
• The 12^thedition of DefExpo, India’s flagship event showcasing land, naval, air and homeland security systems will be held in Gandhinagar, Gujarat, from March 10 to March 13, 2022. The aim of DefExpo-2022 is to build and achieve ‘Aatmanirbharta’ (self-reliance) in defence and increase defence exports to US$ 5 billion by 2024.
• To boost the Indian Government’s ‘self-reliant’ India initiative in June 2021, Defence Minister, Mr. Rajnath Singh, approved the budgetary funds worth US$ 66.83 million (Rs. 498.8 crore) to Innovations for Defence Excellence (iDEX), a Defence Innovation Organisation (DIO) for the next five years.