Rajesh Kumar Singh Sees $20–25 Billion Annual Boost for Indian Defence Industry

Defence Secretary Rajesh Kumar Singh has said India’s domestic defence industry could see an annual business opportunity of around $20 billion to $25 billion over the next decade, as the government presses ahead with procurement reforms, greater private-sector participation and a redesign of the country’s defence innovation and manufacturing ecosystem.

Speaking at the annual conference of the Society of Indian Defence Manufacturers (SIDM) in Delhi, Singh said defence acquisition must move faster to match operational needs and industrial capacity, but without weakening transparency, procedural discipline or legal accountability. He stressed that the goal was to speed up decision-making while still following established processes.

The Defence Secretary said several major acquisition proposals were currently being examined at the highest levels, including the Multi-Role Fighter Aircraft (MRFA) programme and other important defence initiatives. He suggested that some procurement-related processes could result in signed contracts before the end of 2026. He also said the Ministry of Defence was hoping to secure final approval for changes to the Defence Acquisition Procedure (DAP) before the end of this year.

While acknowledging that the number of contracts signed has improved, Singh said the pace still needs to rise. He identified faster movement on high-value acquisitions, fighter aircraft procurement, jet engine co-production arrangements and contract finalisation as key priorities.

Private industry to be central to defence production

Singh placed private industry at the centre of the government’s long-term plan to build a stronger domestic defence industrial base. He said the objective is for private companies to eventually account for at least 50 per cent of India’s defence production, compared with an estimated current share of about 24 per cent.

According to the figures cited in his remarks, private industry has contributed roughly 21 to 25 per cent of the value of defence production in recent years, with Defence Public Sector Undertakings (DPSUs) making up the rest.

He pointed out that the government has already increased the share of the defence capital procurement budget reserved for domestic industry to 75 per cent, up from 68 per cent in financial year 2022–23. With India’s annual defence capital budget estimated at ₹1.6 lakh crore to ₹1.8 lakh crore, he said the domestic market offers substantial room for manufacturers.

That, Singh said, is why the private sector could see an annual business opportunity of around $20 billion to $25 billion over the next 10 years. Realising that potential, however, will depend on stronger private participation, better coordination across the defence ecosystem and timely execution of procurement programmes.

He called for a more balanced relationship between public and private manufacturers, noting that domestic defence production is not only about national security but also about industrial growth, jobs and economic development.

DRDO reforms aimed at sharper focus on research

A major part of the reform effort, Singh said, is to refocus the Defence Research and Development Organisation (DRDO) on research and advanced technology development.

He said reforms have been set in motion to define clearer roles within the organisation. Under the proposed approach, DRDO would primarily concentrate on scientific research and the development of technologies, instead of routinely functioning as a systems integrator or original equipment manufacturer in conventional areas.

At the same time, DRDO could continue production-related work in specialised strategic areas where there are no viable alternatives. The idea is to strengthen the organisation’s core research role while allowing Indian industry to take on more responsibility for turning publicly funded technologies into products.

Singh also said the government is looking to rationalise DRDO’s laboratory network to reduce duplication, improve coordination and make research more efficient. He referred to around 33 laboratories, while also mentioning recommendations linked to the VijayRaghavan Committee report, which called for consolidating a network of about 50 laboratories into roughly 33–35 core research centres.

The broader changes under consideration include reducing overlapping work, clarifying institutional responsibilities, improving accountability for project timelines and simplifying administrative procedures. Singh also pointed to possible measures to reduce the administrative load on scientists, including work linked to Government e-Marketplace (GeM) tendering.

He said talent and accountability would be central to the process, while also acknowledging DRDO’s contribution to India’s strategic programmes and scientific capabilities.

Conventional missile technology to move to industry by 2027

Singh announced that DRDO plans to transfer technology for conventional missile systems to private industry by November 2027, enabling companies to produce these systems commercially.

The move is intended to give private manufacturers a larger role in the production of established missile systems while allowing DRDO scientists to focus on next-generation technologies.

The proposal reflects the government’s effort to create a clearer separation between research and manufacturing responsibilities, with DRDO handling technology development and industry taking up production and commercialisation.

It also fits into the wider push to increase private-sector participation in areas that have traditionally been dominated by state-owned entities.

A call for a new public-private culture

The Defence Secretary urged a change in mindset within the Ministry of Defence and the Armed Forces, saying companies should be treated as industry partners rather than simply as vendors.

Referring to his earlier experience at the Department for Promotion of Industry and Internal Trade (DPIIT), Singh said trust and cooperation between government institutions and domestic manufacturers are essential if the sector is to grow.

He also encouraged companies to work together after receiving contracts, saying competition should not stop manufacturers from cooperating to ensure timely execution of projects. According to him, close coordination among the Armed Forces, DRDO, DPSUs, private companies, MSMEs, startups and academic institutions will be necessary to strengthen indigenous capabilities.

Singh referred to Operation Sindoor to highlight the need for direct engagement between military commanders and industry during urgent operational requirements. He said such situations show why domestic manufacturing must be responsive and why military users and suppliers need to coordinate closely.

The aim, he said, is to build an industrial ecosystem that can react quickly to changing operational needs, especially during emergencies when equipment and supplies are required at short notice.

More room for private manufacturers

The government is also looking to expand the role of private companies across several defence manufacturing areas, including ammunition, fighter aircraft, missiles and supply chains.

Licensed private domestic firms have already been permitted to manufacture ammunition, while the government is encouraging greater private participation in fighter aircraft production, including through the Advanced Medium Combat Aircraft (AMCA) programme.

The planned transfer of conventional missile technologies to private companies by November 2027 is another part of this effort. Indian manufacturers are also being encouraged to join international defence supply chains, particularly in friendly countries and regions.

Singh noted that the corporatisation of the former Ordnance Factory Board into seven DPSUs has also changed the structure of government-owned defence manufacturing. Alongside these entities, licensed private companies are being given additional opportunities to take part in manufacturing.

The objective, he said, is to create a more competitive ecosystem in which public sector enterprises, private manufacturers and emerging companies all contribute to India’s defence requirements.

Fast-track procurement and startup support

Singh said procurement and technology development systems must adapt to rapid changes in defence capabilities, especially in drones and other emerging technologies.

He said the Ministry of Defence is delegating more authority to enable quicker decisions and is encouraging spiral development, in which systems are improved through successive stages rather than waiting for one final design before induction.

Fast-track procurement, he argued, should become standard practice rather than an exception, particularly in technology fields where capabilities evolve quickly.

The ministry is also weighing steps to lower barriers for startups and MSMEs. These include reimbursement of trial costs and no-cost, no-liability field evaluations, which could allow smaller firms to test their technologies without taking on excessive financial risk.

Such measures, Singh said, are meant to encourage innovation, widen industry participation and strengthen domestic development of advanced defence technologies.

Reforms tied to strategic autonomy

Taken together, Singh’s remarks outlined a reform agenda that combines faster procurement, a research-focused DRDO, technology transfers for conventional missile systems, greater private-sector participation and deeper cooperation across the defence ecosystem.

The changes are intended to reduce delays, improve accountability, expand indigenous manufacturing and create more opportunities for Indian firms to enter global supply chains.

The government’s target of raising the private sector’s contribution to at least 50 per cent of defence production would mark a major shift from the current estimated share. Reaching that target, Singh indicated, will depend on procurement reform, timely technology transfer, effective project management and sustained collaboration between government, research institutions and industry.

The estimated annual opportunity of $20 billion to $25 billion over the next decade provides the economic backdrop to these efforts. By pushing domestic industry to take on a larger share of production while asking DRDO to concentrate on advanced research, the government is seeking to strengthen India’s defence industrial base and reduce reliance on external sources.

Singh said the overall direction is to treat domestic defence manufacturing not only as a national security requirement but also as a driver of industrial growth, technology development and strategic autonomy.