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Indian Defence Import Dropped to 12% : How India Is Quietly Rewriting Its Defence Strategy 

India's foreign defence procurement has dropped to around 12% of capital defence spending in FY25 as indigenous manufacturing, defence exports, and Aatmanirbhar Bharat initiatives continue to strengthen the domestic defence industry.
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New Delhi: Indian defence import has fallen sharply to around 12% of total capital defence purchases in FY25, marking a major shift toward indigenous defence manufacturing under the government’s Aatmanirbhar Bharat initiative. The decline reflects years of policy reforms aimed at boosting domestic defence production and reducing reliance on overseas suppliers. Official data and Ministry of Defence initiatives show increasing support for local procurement, defence manufacturing, and exports.

India’s defence sector is now witnessing a significant transformation as domestic companies receive a larger share of military contracts, creating new opportunities for private firms, MSMEs, and public sector defence manufacturers.

Sharp Decline In Indian Defence Import

According to recent reports, foreign procurement in India’s capital defence spending has dropped dramatically compared to previous years.

Read also: Explained: Why India Needs an Indigenous Stage-III Jet Trainer to Replace the Hawk Fleet

In FY19, nearly half of India’s capital defence purchases came from foreign sources. By FY25, that figure had fallen to approximately 12%, reflecting the success of indigenisation policies and procurement reforms.

The reduction is not only financial but also strategic. India aims to strengthen national security by building critical military capabilities within the country and reducing exposure to foreign supply disruptions.

Positive Indigenisation Lists Driving Indian Defence Import Decline 

A major factor behind this transformation is the government’s Positive Indigenisation Lists. The Ministry of Defence recently notified its sixth Positive Indigenisation List, covering 405 strategically important defence items that will now be sourced from Indian industry. These items include components, sub-systems, spares, raw materials, and critical equipment used in aircraft, tanks, helicopters, and warships. The latest list is expected to create business opportunities worth approximately ₹3,070 crore for Indian defence manufacturers.

What Are Positive Indigenisation Lists?

Positive Indigenisation Lists are official government notifications that place selected defence items under import restrictions after a specified timeline. Once included in these lists, the items must be procured from Indian manufacturers, encouraging domestic production and technology development.

Defence Budget Increasingly Supports Indian Industry

The government has steadily reserved a larger portion of defence procurement spending for Indian companies. Under Defence Acquisition Procedure (DAP) 2020 and subsequent reforms, greater emphasis has been placed on domestic sourcing, indigenous design, and local manufacturing. This approach provides predictable demand for Indian firms and encourages investment in research, manufacturing capacity, and advanced defence technologies.

Defence Exports Reach New Heights

India’s defence export performance has improved significantly over the past few years. Government initiatives aimed at promoting indigenous manufacturing have helped Indian companies expand into international markets. The Ministry of Defence has highlighted growing exports and increasing participation by private industry in global defence supply chains.

Indian-made defence products, including radar systems, electronics, naval equipment, aerospace components, and military platforms, are now reaching multiple countries around the world.

Role Of The SRIJAN Portal In Indigenisation

The Ministry of Defence launched the SRIJAN portal to support domestic defence manufacturing. The platform allows Defence Public Sector Undertakings (DPSUs) and military services to identify items that can be developed by Indian industry. Thousands of defence items have already been indigenised through this initiative.

Official data shows that more than 15,700 defence items have been indigenised through the SRIJAN ecosystem, creating opportunities for startups, MSMEs, and established defence firms.

Indian Defence Import: Challenges Still Remain

Despite impressive progress, experts believe India still faces challenges in achieving complete self-reliance. Many advanced defence systems require sophisticated technologies, specialised materials, and high-end components that continue to depend on international partnerships. Building deeper research and development capabilities remains a key priority.

Large-scale acquisitions such as advanced fighter aircraft, submarines, and other strategic platforms also continue to require selective foreign collaboration in some areas.

Read also: SIPRI Report: Why India Is Still the World’s Second-Largest Arms Importer Despite Indigenous Defence Push

FAQs

What Is The Positive Indigenisation List?

The Positive Indigenisation List is a government notification that restricts imports of selected defence items and requires them to be sourced from Indian manufacturers.

Why Has India’s Foreign Defence Procurement Fallen To 12%?

India’s foreign defence procurement has declined due to Positive Indigenisation Lists, domestic procurement policies, and the Aatmanirbhar Bharat initiative that prioritises Indian manufacturers.

How Does Defence Indigenisation Benefit India?

Defence indigenisation reduces import dependence, strengthens national security, creates jobs, promotes technology development, and boosts defence exports.


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