India’s defence industry is undergoing a profound transformation as private corporations step into roles traditionally dominated by public sector undertakings, according to a TOI report.
The government has shortlisted TATA Advanced Systems Limited, Larsen & Toubro, and Bharat Forge to develop prototypes for the Advanced Multirole Combat Aircraft (AMCA) program, India’s most ambitious defence manufacturing project.
Once these prototypes are proven, the Indian Air Force will issue a larger tender for acquisition, with the selected company enjoying a natural advantage. Hindustan Aeronautics Limited, long the state’s monopoly in fighter jet production, has been excluded from the initial shortlist, signalling a decisive shift towards private-sector leadership in strategic defence platforms.
This marks a watershed moment in India’s military-industrial history. For the first time, the most complex and capital-intensive defence platform—a fighter jet—may be led by private industry rather than a public monopoly.
The move is part of a broader dismantling of state dominance in defence production, which for decades relied on HAL, the Ordnance Factory Board, and DRDO labs. While this system ensured sovereignty, it also created delays, limited innovation, and dependence on imports.
Reforms over the past decade, including higher FDI limits, production-linked incentives, and procurement changes, have opened core areas such as fighters, missiles, drones, and armoured platforms to private firms.
Smaller companies are also making their mark. Defence Minister Rajnath Singh recently inaugurated Nibe Defence’s new manufacturing complex in Shirdi, which will produce over 5,00,000 artillery shells annually alongside rockets, explosives, and loitering munitions.
NIBE has already delivered its first Suryastra long-range multi-barrel rocket launcher system to the Indian Army, capable of striking targets at ranges between 150 and 300 kilometres. With Israeli technology transfer, NIBE plans to expand into loitering munitions with ranges up to 1,000 kilometres, as well as satellites and precision drones. Singh emphasised that the private sector should eventually account for half of India’s defence manufacturing capacity, up from 23% today, citing efficiency, research capabilities, and risk-taking as key advantages.
India’s defence production has surged to record levels, reaching ₹1.54 lakh crore in FY 2024–25, compared to ₹46,429 crore in 2014–15. While PSUs still account for 77% of production, the private sector’s share has steadily risen. TATA Advanced Systems has become a comprehensive defence integrator, with capabilities spanning aircraft assembly, armoured vehicles, and aerospace structures, and has expanded internationally with operations in Morocco and discussions with African and European nations.
Larsen & Toubro has entrenched itself in naval systems, submarines, missile launch infrastructure, and heavy engineering, leveraging its nuclear expertise. Bharat Forge has repurposed its metallurgical strengths into artillery systems, armoured platforms, and ammunition. Other players such as Adani Defence and Mahindra Defence are entering missile manufacturing, drones, and electronic warfare.
Beneath these giants lies a vibrant ecosystem of start-ups and SMEs. Over 16,000 MSMEs are strengthening indigenous capabilities. Companies like ideaForge supply surveillance drones, NewSpace Research develops swarm combat systems, and Sagar Defence Engineering focuses on maritime drones.
Tonbo Imaging and Paras Defence have advanced optics and night-vision systems, while Data Patterns and Astra Microwave contribute to electronics. Johnnette Technologies has supplied loitering munitions to the Army, and Alpha Design Technologies, now part of Adani, exemplifies mid-sized firms moving into aerospace integration. Government initiatives such as iDEX have enabled these firms to bypass delays and scale rapidly, forming the innovation backbone of India’s emerging military-industrial complex.
Exports are also rising sharply. India’s defence exports hit ₹38,424 crore in FY 2025–26, a 62% increase from the previous year. Private firms contributed 45.16% of exports, compared to 54.84% from PSUs. Unlike state-owned firms, private companies are structurally incentivised to seek overseas markets, customise products, and build long-term support ecosystems.
Defence manufacturing is becoming a tool of diplomacy, with the India–EU trade deal expected to accelerate joint ventures and embed Indian firms into global supply chains.
This outward orientation marks India’s shift from being a buyer of last resort to a competitive supplier of armoured vehicles, drones, artillery, electronics, and potentially combat aircraft subsystems.
The rise of a private-sector-led military-industrial complex brings speed, innovation, scalability, and export potential.
However, it also requires strong governance, transparent procurement, and safeguards against excessive concentration of power to ensure that commercial incentives remain aligned with national security priorities. Corporate India has indeed received a call of duty, and it is raring to go.
TOI
