India Has Already Placed Defence Orders Worth Nearly Rs 2 Lakh Crore: Former DRDO Chairman

Hyderabad: India’s defence manufacturing ecosystem has witnessed remarkable growth in recent years. The Defence Acquisition Council (DAC) recently approved defence acquisition proposals worth around Rs 3.5 lakh crore under the Acceptance of Necessity (AoN) framework, one of the largest military modernisation approvals in India’s history, said Satheesh Reddy, member, National Security Advisory Board and former secretary, DDR&D and chairman, DRDO.

He was speaking during “MSME Spark 3.0 - Aerospace & Defence Manufacturing”, organised by the Federation of Telangana Chambers of Commerce and Industry (FTCCI), in association with the Department of Industries & Commerce, Government of Telangana, at a hotel in Banjara Hills, Hyderabad. The conclave brought together over 400 policymakers, defence experts, industry leaders, innovators, investors, startups, and MSMEs to deliberate on emerging opportunities in India’s rapidly expanding aerospace and defence manufacturing ecosystem.

Reddy said that India has already placed defence orders worth nearly Rs 2 lakh crore and has ordered around 220 Tejas fighter aircraft, making it one of the country’s largest indigenous defence aviation programmes with an estimated value exceeding Rs 1.19 lakh crore. He also said that the conclave was being held at a significant time coinciding with the first anniversary of Operation Sindoor, which demonstrated to the world the strength of India’s indigenously developed defence systems, arms, ammunition, and advanced technologies.

He credited Indian industries, especially MSMEs, for their contribution towards the success of the operation, and emphasised that India’s growing defence capabilities were a result of sustained indigenous innovation and manufacturing.

Hyderabad A Major Centre For Defence, Aerospace

Highlighting the changing nature of modern warfare amid evolving geopolitical conflicts, including the Iran-USA and Israel conflicts, he observed that technology-driven warfare and drone systems have become decisive factors in national security. He stressed the need for greater participation of women in India’s defence and security sectors and noted that Hyderabad has emerged as a major centre for defence and aerospace industries due to the presence of several premier defence institutions and industries.

Reddy said India’s defence manufacturing ecosystem has witnessed remarkable growth in recent years. He noted that the Defence Acquisition Council (DAC) recently approved defence acquisition proposals worth around Rs 3.5 lakh crore under the Acceptance of Necessity (AoN) framework, one of the largest military modernization approvals in India’s history. He said that India has already placed defence orders worth nearly Rs 2 lakh crore and has ordered around 220 Tejas fighter aircraft, making it one of the country’s largest indigenous defence aviation programmes with an estimated value exceeding Rs 1.19 lakh crore.

He also pointed out that India’s defence exports have been steadily increasing and the Ministry of Defence aims to achieve defence exports worth Rs 50,000 crore by 2028. Encouraging startups and MSMEs to actively participate in the sector, he remarked that funding support is no longer a major challenge for innovation-driven enterprises. He highlighted that nearly 80 per cent of the value contribution in the Akash Missile programme came from MSMEs, demonstrating the critical role of small industries in national defence capability building.

Addressing the gathering, scientist Chandrika Kaushik, Director-General (Production Coordination & Services Interaction), DRDO, said the conference was most appropriately timed as it coincided with the first anniversary of Operation Sindoor, a focused, measured, and non-escalatory operation carried out using indigenous defence systems and technologies. She said that the success of the operation, including strikes on multiple enemy airfields and destruction of several aircraft and terror infrastructure, underscored the growing strength of India’s indigenous defence manufacturing ecosystem and the significant role played by MSMEs.

The 'Whole-Of-Country' Approach

She emphasised that from the government’s perspective, the need of the hour is a “whole-of-country” approach towards building operational capability and self-reliance in defence manufacturing. She said India’s defence budget for the current year stands at Rs 7.85 lakh crore, with a capital outlay of Rs 2.19 lakh crore, of which over 75 per cent has been earmarked exclusively for domestic industry. This, she said, presents enormous opportunities for Indian MSMEs, startups, and private enterprises.

Kaushik noted that more than 2,000 industries are currently contributing as development partners in DRDO projects across sectors, including missiles, radars, torpedoes, arms, ammunition, and advanced systems. She said that DRDO has signed over 2,200 licensing agreements, with more than 90 per cent involving private industry participation. Under the new Technology Transfer (ToT) Policy 2025, DRDO offers free renewal, free handholding support for twelve weeks, and zero licence fee for development partners and production agencies.

She stated that more than 750 DRDO patents are now being offered royalty-free and at zero cost to Indian industry to encourage indigenous innovation. Highlighting DRDO’s Development-cum-Production Partner (DcPP) model, she said over 130 DcPPs are currently co-developing systems with DRDO for induction into the armed forces.

On startup and MSME support, she said DRDO’s Technology Development Fund (TDF) provides grant-in-aid support of up to 90 per cent of project cost or Rs 50 crore specifically for MSMEs and startups. She also said that more than 18,000 tests have been conducted at DRDO facilities over the past three years and exports of DRDO technology-based products have crossed Rs 13,000 crore.

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