 India’s Defence Indigenisation Push Deepens with Sixth Positive Indigenisation List and Expanding Domestic Manufacturing Ecosystem

Recent Developments:

• On 18 August 2026, the Department of Defence Production (DDP) under the Ministry of Defence notified the Sixth Positive Indigenisation List (PIL) comprising 405 strategically important items with an estimated business potential of ₹3,070 crore.
• The list includes Line Replaceable Units (LRUs), sub-systems, sub-assemblies, spares, components and raw materials required for major defence platforms and systems.
• The notified items cover Advanced Light Helicopter, Light Utility Helicopter, Su-30MKI, Light Combat Aircraft, AL-31FP engine, T-72, T-90, BMP-II, warships, missile systems, radars, sonars, fire-control systems and satellite communication systems.
• The sixth PIL includes 16 items of the Indian Coast Guard and 389 items of Defence Public Sector Undertakings, with each item carrying an indicative timeline for indigenous development.
• Once an item is successfully indigenised, its procurement will be undertaken from Indian industry, creating assured demand for domestic manufacturers.
• The development complements the broader transformation of India’s defence sector, with defence production reaching a record ₹1.78 lakh crore in FY 2025–26, representing 15.6% growth over the previous year.
• India’s defence exports also reached a record ₹38,424 crore in FY 2025–26, with Indian defence products being exported to more than 80 countries.

Positive Indigenisation Lists: Concept and Significance:

Meaning and Institutional Framework:

• A Positive Indigenisation List identifies defence equipment, components and other items that are required to be manufactured domestically within specified timelines.
• The initiative was introduced under the Aatmanirbhar Bharat framework to progressively reduce dependence on imported defence equipment and components.
• The lists are intended to create a predictable domestic market by assuring that successfully indigenised items will subsequently be procured from Indian industry.
• The SRIJAN Defence Portal, launched in August 2020, provides a digital platform through which Defence Public Sector Undertakings and Service Headquarters offer imported items to Indian industry, including MSMEs and start-ups, for indigenous development.
• By June 2026, more than 33,000 defence items had been offered through the SRIJAN Portal for indigenisation, including 5,012 items notified under the first five DDP Positive Indigenisation Lists. More than 15,700 defence items had been successfully indigenised during the previous five years.

Strategic Logic:

• PILs shift defence procurement from a predominantly buyer-oriented model towards a domestic design, development and manufacturing ecosystem.
• They provide Indian firms with assured demand, encourage investment in production capacity and reduce the risks associated with uncertain defence markets.
• The approach is particularly important for critical components and subsystems, because dependence on imported components can continue even when complete platforms are assembled domestically.

India’s Defence Production Transformation:

Production and Industrial Participation:

• India’s defence production increased from ₹46,429 crore in FY 2014–15 to ₹1.78 lakh crore in FY 2025–26, demonstrating a substantial expansion of domestic manufacturing capacity.
• Defence Public Sector Undertakings and other public-sector entities contributed approximately 76% of production in FY 2025–26, while the private sector contributed 24%, its highest-ever share.
• The private sector’s increasing participation is significant because a competitive defence ecosystem requires MSMEs, start-ups, large private firms, DPSUs, research institutions and academia to operate as an integrated supply chain.
• The Government has set a target of ₹3 lakh crore annual defence production and ₹50,000 crore defence exports by 2029.

Defence Exports:

• Defence exports increased from ₹686 crore in FY 2013–14 to ₹38,424 crore in FY 2025–26, representing a more than 56-fold increase.
• Indian defence products are now exported to more than 80 countries, indicating growing international acceptance of domestic defence manufacturing capabilities.
• Rising exports can generate economies of scale, support continuous production and improve the commercial viability of indigenous defence technologies.

Why Defence Indigenisation Matters:

Strategic Autonomy and National Security:

• Defence indigenisation reduces dependence on foreign suppliers and strengthens India’s strategic autonomy, particularly during wars, geopolitical crises, sanctions or disruptions in global supply chains.
• Indigenous production also reduces vulnerability to technology denial, export restrictions and delays in the supply of critical spares.
• Domestic control over design and production enables India to undertake upgrades according to its own operational requirements rather than depending entirely on foreign original equipment manufacturers.

Operational Readiness:

• Dependence on imported components can create prolonged procurement and maintenance cycles, particularly when suppliers face geopolitical constraints or production delays.
• Indigenous manufacturing can support faster replenishment, maintenance, repair and overhaul, thereby improving operational availability of military platforms.
• Domestic design also enables defence equipment to be customised for India’s diverse operational environments, including high-altitude Himalayan terrain, deserts, maritime zones and tropical conditions.

Economic and Industrial Benefits:

• Defence indigenisation stimulates investment in MSMEs, start-ups, private industry and specialised manufacturing clusters.
• It creates high-skilled employment and promotes technology spillovers into civilian sectors such as electronics, aerospace, advanced materials, robotics and telecommunications.
• Reduced imports can lower foreign-exchange outflows, while successful exports can generate foreign-exchange earnings and strengthen India’s position in global defence value chains.

Major Defence Indigenisation Reforms:

Defence Acquisition Procedure, 2020:

• The Defence Acquisition Procedure (DAP) 2020 gives the highest procurement priority to Buy (Indian-IDDM), meaning products that are indigenously designed, developed and manufactured.
• The framework seeks to increase indigenous content and encourage Indian companies to undertake domestic design and manufacturing rather than merely assembling imported systems.

Make Procedure:

• The Make-I category provides government funding for prototype development and can support up to 70% of development cost, while certain projects are reserved for MSMEs.
• Make-II involves industry-funded development and provides relatively flexible entry conditions, allowing Indian industry and innovators to propose indigenous solutions.
• The Make framework therefore seeks to shift defence procurement towards development-led acquisition and indigenous technological capability.

Innovation and Technology Development:

• Innovations for Defence Excellence (iDEX), launched in 2018, supports start-ups, MSMEs, innovators and academia in developing defence and aerospace technologies.
• The Technology Development Fund (TDF) supports industries, particularly start-ups and MSMEs, in developing indigenous defence technologies and provides funding of up to ₹10 crore for eligible projects.
• These mechanisms are important for reducing the technology gap between traditional defence manufacturers and emerging technology enterprises.

Strategic Partnership Model:

• The Strategic Partnership Model, introduced in 2017, seeks to establish long-term partnerships between Indian private companies and global Original Equipment Manufacturers.
• The model focuses on domestic manufacturing, technology transfer and development of capabilities in strategically important defence segments.

Defence Industrial Corridors:

• India has established the Uttar Pradesh Defence Industrial Corridor and Tamil NadDefence Industrial Corridor to create integrated manufacturing ecosystems.
• By April 2026, the Uttar Pradesh corridor had attracted investment commitments of ₹42,057 crore, with grounded investments of ₹4,409 crore, while the Tamil Nadcorridor had attracted investment commitments of ₹32,699 crore, with actual investments of ₹6,446 crore.
• These corridors can strengthen regional supply chains, reduce logistical costs and connect large defence manufacturers with MSMEs and specialised suppliers.

Defence Testing Infrastructure:

• The Defence Testing Infrastructure Scheme seeks to establish modern testing and certification facilities so that domestic manufacturers can test products without excessive dependence on foreign testing infrastructure.
• Such facilities are particularly important because reliable testing, certification and quality assurance are essential for both military acceptance and international exports.

Key Challenges:

Critical Technology Dependence:

• India continues to face technological gaps in fighter aircraft engines, advanced sensors, semiconductors, electronic warfare, cyber capabilities and specialised materials.
• Indigenous assembly of a platform does not necessarily imply complete technological sovereignty if critical components remain dependent on foreign suppliers.
• The next phase of indigenisation must therefore focus increasingly on design ownership, intellectual property, critical subsystems and deep-tier supply chains.

Research and Development:

• Defence research requires long development cycles, high capital expenditure and tolerance for technological failure, making sustained public and private investment essential.
• Greater collaboration among DRDO, universities, start-ups, MSMEs and established defence companies is required to convert laboratory technologies into deployable military systems.
• The Government has increased defence R&D allocation substantially, while since 2022–23, 25% of the defence R&D budget has been opened to industry, start-ups and academia.

Private Sector Participation:

• Although private-sector participation is increasing, the sector still faces challenges relating to procurement procedures, order visibility, testing, certification, intellectual property and access to defence infrastructure.
• Long procurement cycles and uncertain demand can discourage private investment in specialised defence manufacturing.
• Greater predictability in procurement and faster decision-making are therefore essential for creating a competitive industrial base.

Quality and Export Competitiveness:

• Global defence markets demand stringent standards relating to quality, reliability, cybersecurity, lifecycle support and after-sales service.
• India must therefore move beyond import substitution towards globally competitive products capable of competing on technology, cost and reliability.

Way Forward:

From Import Substitution to Technology Sovereignty:

• India should prioritise critical technologies such as aero-engines, advanced propulsion, semiconductors, radar systems, electronic warfare, autonomous systems and secure communications.
• Defence R&D should increasingly follow a mission-mode approach, linking military requirements with universities, start-ups, private industry and DRDO laboratories.
• Government procurement should provide greater long-term visibility of demand, allowing firms to invest confidently in specialised production capacity.
• Defence corridors should be integrated with testing facilities, skill centres, design laboratories, logistics networks and MSME clusters rather than functioning merely as industrial land banks.
• India should strengthen the entire lifecycle ecosystem covering design, production, testing, maintenance, repair, upgrade and export, thereby reducing dependence on foreign suppliers after initial acquisition.
• Export promotion should focus on long-term customer support, financing, certification and diplomatic engagement so that Indian defence products become competitive in global markets.

Value Addition for UPSC:

Prelims Facts:

• Sixth Positive Indigenisation List: 405 items, notified on 18 August 2026.
• Estimated business potential: ₹3,070 crore.
• Items under the sixth list: 16 Indian Coast Guard items and 389 DPSU items.
• Record defence production: ₹1.78 lakh crore in FY 2025–26.
• Defence exports: ₹38,424 crore in FY 2025–26.
• Export reach: 80+ countries.
• 2029 targets: ₹3 lakh crore defence production and ₹50,000 crore defence exports.
• SRIJAN Portal: Launched in August 2020 for indigenous development of defence items.
• iDEX: Launched in 2018 to promote defence innovation through start-ups, MSMEs and innovators.
• Defence Industrial Corridors: Uttar Pradesh and Tamil Nadu.

Mains Perspective:

India’s defence indigenisation strategy represents a transition from import dependence to capability creation, but true self-reliance requires more than domestic assembly or production of platforms. The strategic objective should be technology sovereignty, particularly in critical subsystems, intellectual property, design capabilities and deep-tier supply chains. The Sixth Positive Indigenisation List can strengthen this transition by creating assured domestic demand, but its long-term success will depend on sustained R&D, private-sector participation, testing infrastructure, skilled manpower, predictable procurement and globally competitive quality. Thus, Aatmanirbharta in defence should be measured not merely by the share of domestic procurement, but by India’s ability to design, develop, manufacture, maintain, upgrade and export critical defence technologies independently.