Private Sector Will Drive Defence Manufacturing

India's defence sector is in the midst of a transformative shift.

- Amitabh Kant

From being largely dependent on public sector undertakings and imports, the country is now building a strong and self-reliant domestic defence industrial base. The catalyst for this change is a bold policy pivot towards strategic integration of the private sector in defence production and procurement. As we look ahead to India's ambition of becoming a global defence manufacturing hub, it is increasingly clear that the private sector must not only be a partner, but a leader in this journey.

The recently announced Advanced Medium Combat Aircraft (AMCA) programme, envisioned as India's first home-grown fifth-generation stealth fighter project, represents a watershed moment. By opening it to competitive bidding and seeking private participation, the government is embedding efficiency, innovation, and risk-sharing into the very architecture of the project.

This is a much-needed response to the limitations observed in earlier Defence Research and Development Organisation (DRDO)-dominated programmes like the Light Combat Aircraft (Tejas), which, despite eventual success, faced significant delays and cost overruns. The new model seeks to balance the strengths of DRDO's research capabilities with the execution muscle and industrial scalability of the private sector.

India's defence procurement ecosystem has long been characterised by opacity, limited competition, and an overwhelming reliance on State-owned enterprises. However, over the past decade, the ministry of defence has moved towards a more transparent, market-oriented system.