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A PIB Backgrounder issued for the 80th Independence Day places India's defence production at a record ₹1.78 lakh crore in FY 2025-26, with Defence PSUs and other public entities supplying about 76% and the private sector 24%.
Defence exports rose from ₹686 crore in FY 2013-14 to ₹38,424 crore in FY 2025-26 — a 56-fold rise reaching more than 80 countries; DPSUs contributed ₹21,071 crore (54.84%) and private firms ₹17,353 crore (45.16%).
The stated targets are ₹3 lakh crore of annual defence production and ₹50,000 crore of exports by 2029.
Ten Positive Indigenisation Lists covering 5,521 items had been notified till May 2026 — five each by the Department of Military Affairs and the Department of Defence Production.
In a parallel Akashvani address on the eve of Independence Day, Raksha Mantri Rajnath Singh said the Defence Acquisition Council granted Acceptance of Necessity worth over ₹8.75 lakh crore in the past year and that India now has 145 defence exporters.
Govern all capital acquisition by the armed forces while pushing indigenous design, development and manufacture
Key: Came into effect on 28 September 2020, superseding the Defence Procurement Procedure (DPP) 2016. Its most preferred category is Buy (Indian-IDDM) — Indigenously Designed, Developed and Manufactured. Positive Indigenisation Lists are issued within this policy architecture. A draft DAP 2026 proposes simpler acquisition categories and indigenous content requirements of up to 60%.
Streamline defence acquisition and align it with Make in India
Key: Introduced the Buy (Indian-IDDM) category with a minimum indigenous content threshold, and laid the base for DAP 2020.
Speed up revenue (as against capital) procurement
Key: Streamlined nearly ₹1 lakh crore of revenue procurement through faster approvals, relaxed penalties for indigenous projects and assured long-term orders.
Fund start-ups, MSMEs, individual innovators and academia to build defence and aerospace technologies
Key: Launched in April 2018 at DefExpo 2018. It is the executive arm of the Defence Innovation Organisation. Outlay ₹498.78 crore; 676 innovators engaged and 551 design and development contracts signed as of March 2026.
Support deep-tech innovation in defence with larger grants than a standard iDEX challenge
Key: ₹750 crore outlay for 2023-24 to 2025-26, disbursed through the Defence Innovation Organisation.
Fund Indian industry — especially MSMEs and start-ups — to develop critical defence technologies
Key: Grants of up to ₹50 crore per project. As of June 2026, 80 projects worth ₹334 crore were under implementation, with an extra ₹500 crore corpus sanctioned for deep and emerging technologies.
Place a staggered, time-bound import embargo on listed defence items so that they are sourced only from Indian industry
Key: The first list of 101 items was notified in August 2020. Till May 2026, 10 lists covering 5,521 items had been notified — five by the Department of Military Affairs (finished platforms and equipment for the services) and five by the Department of Defence Production (components and sub-systems for DPSUs).
Offer items currently imported by DPSUs and Service Headquarters to Indian industry for indigenisation
Key: A digital repository launched in 2020 by the Department of Defence Production (srijandefence.gov.in). As of May 2026 it listed over 41,000 vendors and 2.7 lakh products.
Concentrate defence manufacturing investment, infrastructure and vendor clusters in two states
Key: Announced in the Union Budget 2018-19. The Uttar Pradesh corridor has six nodes — Aligarh, Agra, Jhansi, Kanpur, Chitrakoot and Lucknow; the Tamil Nadu corridor has five — Chennai, Hosur, Coimbatore, Salem and Tiruchirappalli. The BrahMos Integration and Testing Facility at Lucknow, in the UP corridor, has begun manufacturing missiles.
Improve autonomy, accountability and efficiency in ordnance supply
Key: The OFB was dissolved with effect from 1 October 2021 and its 41 production units transferred to seven new DPSUs: Munitions India, Armoured Vehicles Nigam, Advanced Weapons and Equipment India, Troop Comforts, Yantra India, India Optel and Gliders India.
Recruit soldiers, airmen and sailors on a four-year engagement to lower the average age profile of the forces
Key: Launched on 14 June 2022. Agniveers serve four years including training; up to 25% may be retained in the regular cadre for a further period of at least 15 years, while the rest receive a Seva Nidhi package built from equal contributions by the Agniveer and the government.
Open government testing infrastructure to private manufacturers and start-ups
Key: A Ministry of Defence digital platform through which testing facilities across 24 DRDO laboratories can be booked on payment by domestic manufacturers, start-ups and industry.
Simplify export and import authorisation in the defence sector
Key: Provides end-to-end application processing, automated company verification, simplified registration, real-time tracking and secure payment integration.
The apex body for capital acquisition in the Ministry of Defence. It accords Acceptance of Necessity (AoN) — the first formal approval in the procurement cycle — and decides the acquisition category. It was constituted in 2001 on the recommendations of the Group of Ministers set up after the Kargil Review Committee.
The military R&D agency of the Ministry of Defence, functioning under the Department of Defence Research and Development. It designed the Agni series, the Kusha long-range air defence missile, VSHORADS, RudraM-II and the scramjet combustor referred to in the backgrounder.
A not-for-profit Section 8 company under the Companies Act, 2013, set up under the Department of Defence Production to fund defence innovation. iDEX is its executive arm and the ADITI scheme is routed through it.
Notifies five of the ten Positive Indigenisation Lists — those covering finished platforms, weapons and equipment sought by the three services.
Notifies the other five Positive Indigenisation Lists — line replacement units, sub-systems and components for DPSUs — and administers SRIJAN, the Defence Industrial Corridors and the DPSUs created from the Ordnance Factory Board.
| Aspect | DMA lists | DDP lists |
|---|---|---|
| Notified by | Department of Military Affairs | Department of Defence Production |
| What is embargoed | Finished platforms, weapon systems and equipment procured by the services | Line replacement units, sub-systems and components sourced by DPSUs |
| Buyer affected | The three armed forces | Defence Public Sector Undertakings |
| Number of lists till May 2026 | Five | Five |
| First list | 101 items, notified August 2020 | Notified subsequently under the same policy architecture |
An AoN is the Defence Acquisition Council's in-principle approval that a capability is needed and can be bought in a particular category — it is the start of the procurement cycle, not a signed contract. That is why the AoN figures quoted in this backgrounder (over ₹6 lakh crore cumulatively for DRDO-designed systems, and over ₹8.75 lakh crore granted in the past year) are far larger than actual annual production. Money is spent only after the tender, trials, cost negotiation and contract stages that follow. AoN accorded under an indigenous category such as Buy (Indian-IDDM) is what converts policy intent into orders for Indian industry.
Simple Analogy: An AoN is like a household deciding, and minuting, that it will buy a car this year and that it will be an Indian-made one — the model, the price and the payment come later.
The institutional reforms that followed produced the Defence Acquisition Council, the Strategic Forces Command and the Nuclear Command Authority — the DAC whose AoN figures anchor this backgrounder is a direct descendant of the Kargil review.
Defence manufacturing is one of the 25 sectors identified under Make in India; the indigenisation lists and the DAP categories are the defence-sector equivalent of the demand-side pull that PLI provides in electronics and pharmaceuticals.
The defence FDI ceiling was raised from 49% to 74% under the automatic route in September 2020, with investment beyond that permitted through the government route — the ₹6,670.59 crore of inflows by March 2026 is the measurable outcome of that liberalisation.
iDEX, ADITI and the Technology Development Fund place the Ministry of Defence among the largest public funders of deep-tech start-ups in India, alongside instruments such as the Startup India Seed Fund.
The dissolution of the Ordnance Factory Board into seven DPSUs in October 2021 is one of the largest corporatisations of a government department in recent Indian administrative history and is regularly examined as a case in public enterprise reform.
GS Paper 3 > Internal Security > Defence Technology and Indigenisation; GS Paper 3 > Indian Economy > Industrial Policy
General Awareness > Current Affairs > Defence
CDS/AFCAT General Knowledge > Defence Organisations and Programmes
General Awareness > Government Schemes and Industry
Defence indigenisation figures, DAP 2020 and DRDO systems appear almost every year in Prelims and in CDS/AFCAT general knowledge; export and production totals are updated annually and are worth memorising in the latest form.
The most preferred acquisition category under DAP 2020 — equipment Indigenously Designed, Developed and Manufactured, carrying the highest indigenous content requirement.
The Defence Acquisition Council's initial approval of a procurement proposal and its category; it precedes the tender and contract.
A notified list of defence items placed under a staggered import embargo so that they may be procured only from Indian industry after a stated date.
DRDO's framework for transferring a technology to an Indian firm that then partners in its development and production — 134 companies and 2,180 technology transfer agreements as of March 2026.
The lump-sum exit package paid to Agniveers not retained after four years, funded by equal contributions from the Agniveer and the government.