India’s Defence Procurement And Indigenization
India’s Defence Indigenization and Make-In-India Push
India’s defence manufacturing story isn’t happening in the abstract anymore. It shows up in the budget, the shop floor, and the order book. According to official figures for 2025–26, the Ministry of Defence crossed a historic allocation while last year’s production value and exports hit fresh records. That mix—bigger budgets, more orders, and higher output—only matters if it translates into capability the forces can use and a durable supply chain the country can trust.
Now, you might be wondering how all this fits together. Procurement rules can feel dense. Acronyms multiply. And every few weeks a new headline announces yet another approval. Here’s the thing: once you map the bookends—how India buys, and how India builds—the story clicks. Defence Acquisition Procedure (DAP) 2020 tells you the routes to buy. Indigenization tools like iDEX and the ADITI scheme show you who builds and how fast. Defence industrial corridors make that building real by clustering land, utilities, labs, and suppliers. Add program snapshots—fighters, helicopters, artillery, transports, naval aviation—and you can see the pipeline filling, not just the policy.
This article keeps it straight. We’ll decode procurement categories and why leasing appeared in DAP 2020. We’ll tour the Uttar Pradesh and Tamil Nadu defence corridors, from nodes to anchors to new testing labs. We’ll ground the narrative with orders cleared this year—combat helicopters and artillery—and with platforms progressing through assembly lines like the C295. You’ll also get candid trade-offs—like offset policy changes and the challenge of absorbing new tech at speed. Along the way, every data point is sourced from government, academic, or company materials listed at the end. By the finish, you’ll know where India’s defence build-out stands today, and what to watch next.
The Policy Backbone of Defence Procurement
DAP 2020 consolidated how India buys equipment and services. It formalized categories that prioritize domestic design and manufacturing, raised indigenous content thresholds across key routes, and added a modern tool—leasing—to manage capability gaps without heavy upfront capital. According to the Ministry of Defence, DAP 2020 took effect on October 1, 2020 and has since guided most large approvals and contracts.
Procurement Categories And Indigenous Content
The capital routes include Buy (Indian–Indigenously Designed, Developed and Manufactured), Buy (Indian), Buy and Make (Indian), Buy and Make, and Buy (Global–Manufacture in India). There is also a Design and Development path and the Strategic Partnership (SP) Model for select big-ticket platforms. The policy raised indigenous content requirements to pull more value into the domestic base and nudge vendors toward local production plans. According to official documents, the DAP explicitly orients category choice toward higher local value addition where feasible.
Strategic Partnership Model In Practice
The SP Model, promulgated in 2017 as a dedicated chapter in the procurement rulebook, targets complex platforms—submarines, fighter aircraft, helicopters, and armored fighting vehicles. It pairs an Indian “strategic partner” with a foreign original equipment manufacturer for long-term capacity building and production. The model aims to balance competition, technology transfer, and lifecycle cost control by anchoring big programs inside India with credible industrial primes. Official notes confirm the model’s scope and intent.
Leasing As A Flexible Tool
Leasing, introduced in DAP 2020, recognizes that some capabilities can be met via operating or finance leases instead of purchase. The policy defines Lease (Indian) and Lease (Global) variants, allowing dry or wet lease structures. According to official briefings and analyses, leasing is meant to reduce initial outlays and accelerate availability for training or surge needs. A recent example includes leasing a flight refuelling aircraft to provide training hours for aircrews—exactly the kind of surgical capacity fill leasing was designed to enable.
Indigenization Levers and Funding
Procurement categories set direction; indigenization programs deliver the pipeline. Three levers stand out—iDEX and the ADITI scheme for innovation, the SRIJAN portal for import substitution, and the liberalized foreign direct investment (FDI) policy for capital and know-how. Together, they expand the supplier base, speed prototypes, and close parts gaps.
iDEX And ADITI Challenge Pipeline
According to the Ministry of Defence, the Innovations for Defence Excellence (iDEX) framework has signed hundreds of contracts and issued challenges across services. In March 2024, a new initiative—ADITI (Aatmanirbhar Defence Indigenisation Through Innovation)—was launched to fund deep-tech solutions in critical systems. These programs back startups and micro, small, and medium enterprises with problem statements, grants, and test access, lowering the barrier to work with the forces. The effect is visible: more vendors at trials and more niche subsystems designed domestically.
SRIJAN Portal Progress
The SRIJAN portal aggregates items currently imported by services and defence public sector undertakings and invites domestic industry to indigenize them. According to government updates, tens of thousands of items have been listed and a substantial subset already indigenized. The logic is simple: publish demand, show specifications, and let qualified Indian firms respond. It is a running scoreboard for import substitution that MSMEs can actually use.
FDI And Licensing Updates
According to the Department for Promotion of Industry and Internal Trade (DPIIT), FDI up to 74 percent through the automatic route is permitted in defence manufacturing, with up to 100 percent via government route for cases that bring modern technology. That single change, coupled with an emphasis on Buy (Global–Manufacture in India), made joint ventures and greenfield plants more bankable by clarifying control thresholds and exit options.
Defence Industrial Corridors
India announced two defence industrial corridors to cluster suppliers, labs, and anchor investments—one in Uttar Pradesh and one in Tamil Nadu. They are not just maps: both corridors list defined nodes, count signed memoranda of understanding, and have visible anchors and testing initiatives. According to the Ministry of Defence, as of early 2025 the two corridors together had more than two hundred fifty MoUs with investment commitments exceeding fifty thousand crore rupees.
Uttar Pradesh Corridor: Nodes And Anchors
The Uttar Pradesh Defence Industrial Corridor spans Lucknow, Kanpur, Jhansi, Chitrakoot, Aligarh, and Agra. That node structure matters for an aerospace and weapons supply chain: aviation work tends to cluster around legacy aerostructure talent in Kanpur and Lucknow, while precision metalworking and small arms find depth in Aligarh and Agra. In May 2025, a large BrahMos Aerospace integration and testing facility was inaugurated in the Lucknow node—an anchor that signals both demand and capability in the corridor. For a corridor to work, you need exactly that kind of long-horizon, multi-year program on the ground.
Tamil Nadu Corridor: Nodes, MoUs, And DTIS Labs
The Tamil Nadu Defence Industrial Corridor includes Chennai, Coimbatore, Salem, Tiruchirappalli, and Hosur. By early 2023, the state reported around one hundred thirty MoUs with more than sixteen thousand crore rupees in investment commitments, and activity has since broadened. In July 2025, the Ministry of Defence signed a memorandum to set up Defence Testing Infrastructure Scheme (DTIS) facilities in the corridor—one focused on unmanned aerial systems and another on electromagnetic warfare and electro-optics—located in the Chennai and Tiruchirappalli nodes. Testing access is often the bottleneck for small firms; these labs are designed to cut wait times and travel costs.
What Corridors Fix In The Supply Chain
India’s bottlenecks often show up in testing, certification, and vendor qualification. Corridors fix the “last mile” by co-locating utilities, land, and processes for security-cleared manufacturing and by linking firms to qualification agencies. The presence of DTIS labs, proximity to quality assurance organizations, and anchor programs reduce cycle time between design, test, and acceptance. In practical terms, a startup moving from a lab prototype to a fieldable subsystem can ship a shorter distance, book a nearer slot, and get feedback from the actual certifiers earlier.
Live Programs and The Procurement Pipeline
Policy and corridors matter because they show up in orders and deliveries. Over the past year, multiple flagship programs moved decisively: large helicopter buys, artillery approvals, naval aviation signatures, and transport assembly lines reaching Indian soil. Below are the clearest examples and what they mean.
Combat Air: Tejas And Engine Co-Production
India’s Light Combat Aircraft Tejas program has two parallel tracks: Mk1A deliveries under a previously signed order and expansion of the order book. In August 2025, the Defence Acquisition Council approved procurement of ninety-seven additional Tejas Mk1A fighters, a major boost to domestic production tempo. In parallel, India and a U.S. engine maker advanced plans for joint production of the F414 engine in India for the next-gen Tejas Mk2, with key U.S. government approvals announced in 2023 and subsequent industry steps in 2025. Timelines and technology transfer depth are significant variables here, so treat program milestones with care until the final manufacturing agreement is fully inked.
Rotary-Wing Push: Light Combat Helicopter Orders
On March 28, 2025, the Ministry of Defence signed two contracts with the national aerospace company to supply one hundred fifty-six Light Combat Helicopters, split between the Air Force and Army. The order followed earlier limited series inductions and gives a clear multi-year runway for the line. Designed for high-altitude operations, the platform fills a specific niche in India’s mission set and ties dozens of domestic suppliers into stable schedules.
Artillery And Land Systems: ATAGS And More
In March 2025, the Cabinet Committee on Security approved the procurement of three hundred seven Advanced Towed Artillery Gun Systems along with associated gun towing vehicles under the highest indigenization category. This closes a long development loop for a domestically designed 155 mm gun and locks in production for Indian primes and their supply chains. Artillery is a parts-hungry domain; a large order like this sustains barrel makers, metallurgy specialists, and testing ranges for years.
Strategic Transports And Maritime Aviation: C295 And Rafale Marine
Transport and naval aviation also saw action. The Airbus–Tata C295 program established an Indian final assembly line, with deliveries of India-built aircraft scheduled after initial units supplied from abroad. For carrier operations, India concluded a contract for twenty-six carrier-borne fighters, with the manufacturer confirming contract signature in April 2025. Both programs bring technology, training, and tooling into Indian facilities—one via a full assembly line, the other via sustainment and integration commitments—backed by formal company statements and government releases.
Exports, Partnerships and Global Positioning
Exports are a practical test of product maturity and process discipline. According to the Ministry of Defence, India’s defence exports reached a record value in the 2024–25 financial year, with both public and private sectors contributing. The multi-year trendline is steep, underscoring how procurement reforms and domestic production scale translate into globally saleable systems.
Record Defence Exports And Country Outreach
Official figures show exports scaling sharply over the past decade. The private sector’s share has grown as more subsystems and complete platforms meet certification and delivery standards for overseas customers. This is not just optics: export clearances, compliance, and after-sales support are hard gates that require credible processes inside firms and the Ministry alike.
BrahMos Philippines Case Study
In 2022, a contract with the Philippines for shore-based anti-ship missile systems set a benchmark for India’s complex platform exports. Subsequent deliveries in 2024 and 2025, with final consignments expected in sequence, demonstrate how production planning, training, and logistics are choreographed for a front-line regional navy. As a case study, it shows export viability for sophisticated systems when financing, training, and deployment timelines are jointly planned with the customer.
Import Mix Shifts And What They Mean
India remains a major arms importer, but the mix and sources are shifting. According to independent research, the share of imports from legacy suppliers has dropped over time as India diversifies to Western sources while growing domestic output. This aligns with policy goals: fill near-term gaps from abroad where required, increasingly build at home, and co-produce for the long term in areas like engines and sensors.
Quality, Testing and Certification
Capability only counts if the kit is safe, reliable, and certified. India’s quality and certification ecosystem has three pillars: airworthiness certification by CEMILAC for airborne stores, production quality assurance by DGQA and DGAQA, and new test capacity under the DTIS program.
Airworthiness And Military Certification
According to the Defence Research and Development Organisation, the Centre for Military Airworthiness and Certification is responsible for design certification and airworthiness of military aircraft, engines, unmanned systems, and airborne stores. It operates through a network of regional centres and issues the approvals that permit flight and integration. For private firms moving into airborne subsystems, early engagement with CEMILAC (Centre for Military Airworthiness and Certification) standards shortens the certification learning curve.
Production Quality Assurance
The Directorate General of Quality Assurance oversees quality of defence stores for the services, while the Directorate General of Aeronautical Quality Assurance focuses on airborne production quality for the Air Force and related domains. Ministry pages outline their roles and the procedures for vendor assessment, proof, and inspection. Recent initiatives also leverage accredited third-party inspection to scale capacity without diluting standards.
DTIS Test Infrastructure Coming Online
The Defence Testing Infrastructure Scheme funds greenfield and brownfield ranges and labs. In July 2025, the Ministry signed a memorandum to establish facilities in the Tamil Nadu corridor for unmanned systems and for electromagnetic warfare and electro-optical testing. That matters because access to instrumented ranges and accredited labs often decides whether a small firm can meet schedule on a trial. The labs also help prime contractors qualify suppliers faster.
Budgets, Financing, Offsets and Risk
Budgets set ambition; financing tools and rules shape how fast the ambition turns into metal. India’s latest allocation levels, the offset policy reset in DAP 2020, and the leasing option together define the risk-sharing landscape for big programs.
Budget Levels And Capital Outlay
For 2025–26, the Ministry of Defence announced an allocation exceeding six and a half lakh crore rupees, including a substantial capital budget for modernization and domestic procurement. Independent budget analyses corroborate the topline and note the distribution across salaries, pensions, and capital. The signal to industry is clear: multi-year funding for modernization is real, creating space for long-lead investments in tooling and workforce.
Offsets: What Changed And Why
DAP 2020 rationalized offsets by targeting investment and technology transfer more sharply and excluding offsets from certain government-to-government or single-vendor cases. Official briefs and expert analyses explain the rationale: offsets weren’t delivering the intended technology depth in those channels. The trade-off is debated, but the policy now leans on Make-in-India categories and co-production to hit capability and industrial goals.
Risk, Timelines, And Absorption Capacity
Every reform faces execution risk. Engine co-production timelines depend on licensing, tooling, and supplier readiness. Corridor MoUs must convert to factories with steady orders. Certification agencies need staffing to match the surge of prototypes. The good news is that the ecosystem now includes predictable budgets, testing labs in the pipeline, and repeat orders for indigenous platforms. The caution is to watch actual contract signatures, facility commissioning dates, and acceptance trials rather than only announcements.
Key Takeaways
India’s defence build-out is now anchored in three things you can see and measure: rules that prioritize local design and production, corridors and labs that cut test and certification friction, and program orders that keep lines warm for years. The procurement backbone—DAP 2020 with the SP Model and leasing—creates multiple paths to bring capability in fast. Indigenization levers—iDEX, ADITI, SRIJAN, and liberal FDI—pull startups and global partners into the pipeline. The corridors in Uttar Pradesh and Tamil Nadu aren’t just announcements; they have defined nodes, anchors like the BrahMos facility, and DTIS labs coming up to support unmanned and electromagnetic testing.
There are still questions that need honest watching—engine co-production timelines, supplier depth for avionics and special materials, and how quickly test and QA capacity scales. But the direction is clear, and the enablers are now visible in policy, budgets, and buildings. Share what you’re seeing on the ground—wins, bottlenecks, and workarounds. The more real-world feedback loops the ecosystem has, the faster it compounds. And that’s the point: durable capability, built at home, delivered on time.