Drivers of Change in the Indian Defence Industrial Base: From Indigenisation to Structural Capacity-Building

Indigenisation and self-reliance have been the key objectives of India’s defence industrial policy since the 1990s. However, over the last decade, these objectives have become central to the agenda of the new political dispensation, and accordingly, the policy framework has been designed to make the defence industry a champion industry in the manufacturing sector, alongside its role in ensuring national security. India’s leadership has consistently maintained that indigenisation is not synonymous with isolation; rather it is a process of innovation, investment and integration aimed at capacity-building through global cooperation and consortium-driven manufacturing. The main focus of the successive policy frameworks is to transform India from a buyer to a builder, from a processor to a programmer, and from a purchaser to a proprietor of critical technological capabilities.

However, India’s efforts to indigenise critical technologies—from combat aircraft and aero-engines to main battle-tanks—have confronted a persistent design–execution gap. Indigenisation efforts have taken many years, burdened by prolonged technological deficiencies that have created significant capability gaps between policy ambition and operational reality. Against this backdrop, this article examines two questions: first, whether the changing policy framework of the last decade has substantively enhanced the capability of India’s defence industrial base; and second, how specific post-Kargil war policy measures broke with the earlier state-led model to create conditions for a collaborative, private-sector-integrated
ecosystem.

Employing qualitative institutional analysis and drawing on policy documents, the study finds that while recent frameworks represent a genuine structural departure from the licensed-assembly model, the transition from indigenisation to innovation remains incomplete. Bridging the design–execution gap requires not merely procurement reform, but also the integration of academic Research and Development (R&D) into the defence industrial ecosystem as a core institutional priority