The New Era In India’s Defence Industry

SYNOPSIS

The Future of India's Defense Industry is shaped by increased budget allocations, emerging technologies like AI and quantum computing, and global partnerships with the U.S., Russia, and Israel. India is advancing indigenous defense capabilities and strengthening its global presence.

Shaping a resilient future: India harnesses emerging tech and partnerships to boost defense capabilities.

India's defence sector stands at the intersection of technological revolution and strategic partnerships, poised to transform from a major arms importer to a manufacturing powerhouse. This evolution promises to reshape national security capabilities while positioning India as an emerging player in the global defense industrial landscape.

Budget Allocation:

In the Union Budget for 2025-26, the Ministry of Defense was allocated ₹6.81 lakh crore (13.45% of the total budget), an increase of 9.5% over the previous year's allocations. Of this total, ₹1.80 lakh crore will be allocated for modernisation, of which ₹1.48 lakh crore is set aside for advanced technologies, weapons, and platforms.

Emerging Technology:

The modernization agenda of the nation puts an emphasis on generating investments across a number of emerging technologies, including Artificial Intelligence (AI), Machine Learning, Robotics, and initiatives in cyber and space technologies.  The Defense Research and Development Organization (DRDO) has seen a rise in its budget to ₹26,817 crore with significant investment into capital expenditure and funding Research and Development (R&D) projects to engage private sector support for innovation. Additionally, in supporting the development of technology, India has placed an order for the procurement of 156 light combat Prachanda helicopters for the Indian Air Force and the Indian Army, costing more than ₹627 billion. 

Furthermore, India is moving forward in hypersonic missile technology, next-generation electronic warfare systems, and automated defense systems.  India is focusing on indigenously built stealth fighter jets and improved drone warfare capabilities.  The government has launched the iDEX (Innovations for Defense Excellence) initiative to support start-ups and the participation of the private sector in next-generation defense solutions. India is also scaling up its cyber defense infrastructure to counter the ongoing growth in digitised threats, and working with the armed forces on blockchain technology to establish secure communications and employing “Quantum Computing” capabilities in the strategic defense domain.

Global Partnership:

India is in the process of building partnerships across the globe. Seven Indian startups, such as KaleidEO and EtherealX, have been selected for the Indo-U.S. space and defense partnership. The purpose of the program is to provide partnership opportunities with U.S. defense-related government agencies and industry partners that will result in additional revenue for India and improve bilateral and partnership ties. In addition, India is pursuing collaborative opportunities with Western companies like General Electric, Rolls-Royce, and Safran that are designed to develop indigenous military jet engines to displace imports and modernize defense capabilities (in this case, military aviation). India has agreed to multi-billion-dollar deals with both Russia and Israel for missile defense systems and advanced surveillance capabilities.

Finally, India is also increasing its defense exports around the world, striving towards a goal of being a significant player in the global arms trade. These examples reflect India’s strategic priority of enhancing capability to better address future challenges through increased investments, technological development, and international partnerships and cooperation.

JENIL JADHAV