India's defence indigenization: From committees to capability

The budget’s increase in defence outlay signals a consolidation of the Centre’ mission to reinforce India’ strategic autonomy

- SHEHZAD POONAWALLA & STEVE RAJPUROHIT

The Union budget for 2026-27 signals a consolidation of the Indian defence industry's transition. Its allocation of ₹7.85 trillion to India’s ministry of defence—15.2% higher than in 2025-26 and 14.7% of total central government spending—is not a symbolic increase. It positions defence as a core component of state capacity rather than a discretionary outlay. It is consonant with the Narendra Modi-led government's vision of an ‘Atmanirbhar, Agrani and Atulya Bharat’ (self-reliant, pioneering and unparallelled India) by 2047, where strategic autonomy underpins national power.

Consider the scale of the shift. India’s defence budget has risen from ₹3 trillion in 2013-14, an increase of ₹5.32 trillion in just over a decade. More important than the absolute rise, however, is the changing composition of spending and its intent.

For decades, defence indigenization remained weak despite repeated expert assessments and official reviews. Multiple expert committees, from the A.P.J. Abdul Kalam Committee in the 1990s to the Kelkar, Sisodia and Naresh Chandra panels, identified structural weaknesses in procurement, R&D and industrial participation. The diagnosis was consistent: excessive reliance on imports, a dominant but inefficient public sector, limited private participation and weak incentives for technological absorption. Despite this, defence procurement remained import-oriented before 2014, the private sector faced procedural and policy uncertainty and indigenous content thresholds remained modest.

The NDA government under Prime Minister Modi adopted a systems approach, wherein both demand and supply of military products was looked upon holistically. Defence indigenization, which was neglected, got a major boost.