https://indianmasterminds.com

ADVERTISEMENT
ADVERTISEMENT

India’s Defence Push: DRDO’s 2025 Tech Transfer Policy Spurs MSME-Led Growth in Defence Manufacturing

DRDO’s 2025 ToT policy transforms defence manufacturing with record tech transfers, MSME incentives, and export growth.
Anti-Drone Bullet
Indian Masterminds Stories

New Delhi: In a landmark move to boost private sector participation in defence, the Defence Research and Development Organisation (DRDO) has unveiled its 2025 Transfer of Technology (ToT) policy. The new framework shifts focus from public sector undertakings to active collaboration with micro, small and medium enterprises (MSMEs) and start-ups, aiming to elevate India’s self-reliance and innovation in defence production.

The policy streamlines technology transfer processes, cuts compliance burdens, and enables faster industry adoption of DRDO-developed systems, with strong emphasis on dual-use and cutting-edge military technologies.

Strategic Framework for Self-Reliance

The 2025 ToT policy establishes a simplified, automation-driven process for transferring DRDO technologies to industry. Technologies are classified into:

  • Category ‘A’ (MILTECH) – Military systems exclusive to Indian Armed Forces and government agencies.
  • Category ‘B’ – Dual-use technologies with applications beyond defence.

This classification allows targeted approaches while safeguarding security. The policy aims to fuel indigenous capability, enhance ease of doing business, and promote innovation-led manufacturing.

Record-Breaking Technology Transfers

By 2024, DRDO had issued over 2,100 Licensing Agreements for ToT, including 256 in 2024 alone. This unprecedented scale spans multiple defence domains, giving industry access to decades of R&D investment.

Dr. Chandrika Kaushik, Director General (PC&SI) at DRDO, highlighted that over 2,000 licensing agreements and 200 production licences were completed in 2024, creating a foundation for long-term private sector growth in indigenous defence manufacturing.

Financial Incentives and Industry Partnerships

The policy offers significant financial support for MSMEs and start-ups. For Category ‘A’ technologies, ToT fees are waived for Development cum Production Partners (DcPPs), Production Agencies (PAs), and other selected firms.

The Technology Development Fund (TDF) provides up to ₹50 crore per project, covering 90% of costs. Since 2018, 81 projects worth ₹350 crore have been sanctioned, developing 26 technologies and disbursing ₹150 crore.

Defence Acquisition Council’s Support

In 2024, the Defence Acquisition Council (DAC) approved proposals worth ₹1.1 lakh crore, including Future Ready Combat Vehicles, Air Defence Radars, Electronic Warfare Systems, and advanced naval platforms.

In July 2025, approvals worth ₹1.05 lakh crore were cleared for Armoured Recovery Vehicles, Integrated Inventory Systems, Surface-to-Air Missiles, and more. Significantly, 99% of these were under Buy (Indian) and Buy (Indian-IDDM) categories.

Also Read: Operation Sindoor’s Success Owes to Civil-Military Cohesion, Says Raksha Mantri Rajnath Singh at AFHQ Services Day

Boost for MSMEs and Start-Ups

MSMEs and start-ups in DRDO projects receive feeder technologies at 50% of the estimated ToT fee. Programmes like iDEX have supported nearly 300 innovators, offering up to ₹1.50 crore in grants (₹10 crore for iDEX Prime).

Over 130 private industries have joined DRDO as development partners or production agencies in the last five years, benefiting from mentorship, testing access, and market linkages.

IP Access and Hand-Holding Support

DRDO has made its patent portfolio freely available to Indian companies, alongside over 20 testing facilities and firing ranges. Free hand-holding support is provided in phases—from 15 man-days for projects below ₹50 lakh to 60 man-days for projects above ₹5 crore—ensuring smooth technology absorption.

Impact on Production and Exports

India’s defence production hit a record ₹1.51 lakh crore in FY 2024-25, up 18% from ₹1.27 lakh crore the previous year. Private sector share rose to 23%, with 28% growth, while DPSUs grew 16%.

Defence exports reached ₹23,622 crore, a 12% jump from ₹21,083 crore in FY 2023-24, solidifying India’s role in global defence markets.

Strategic Outlook

The ToT policy is more than a procedural update—it is a systemic transformation aimed at making India a global defence technology leader. By fostering private sector innovation in advanced domains like AI, quantum computing, and robotics, the policy lays the foundation for India to become a net security provider in the Indian Ocean region and a key contributor to global defence innovation.

Also Read: Indian Army Inducts BEML-DRDO’s Indigenously Developed Semi-Automatic Minefield Marker, MMME Mk-II 


Indian Masterminds Stories
Join our WhatsApp Channel
ADVERTISEMENT
ADVERTISEMENT
Related Stories
ADVERTISEMENT
ADVERTISEMENT
NEWS
SFAC MD
ACC Appoints Two IAS Officers as GSTAT Technical Members; Extends Devendra Kumar’s DBT Mission Tenure
bihar
Bihar Tourism Push: Govt Launches ₹2,700 Crore Projects to Transform State into Global Tourist Destination
nmdc resized
NMDC Appoints Vivek Nishant Nath as Director (Commercial) for Five-Year Term
MRPL
MRPL Q1 FY27 Results: Net Profit Jumps to ₹946 Crore, Revenue Climbs to ₹41,609 Crore
IAS Arun K Vijayan
Nitta Gelatin India Appoints IAS Arun K Vijayan as Board Director After KSIDC Nomination Change 
punjab
Punjab CM Bhagwant Mann Invites Global Investors, Highlights State’s Textile Powerhouse Potential at BharatTex 2026 
CM Hemant Soren
Jharkhand CM Hemant Soren Orders Completion of Pending Road, Flyover and Bridge Projects Within Two Months
BPCL and Akasa Air Sign MoU
BPCL and Akasa Air Sign MoU to Boost Sustainable Aviation Fuel Adoption and Promote Green Aviation
ADVERTISEMENT
ADVERTISEMENT
Videos
Pulkit Khare
How Uttar Pradesh Is Preparing Its Youth for the AI Revolution
Haryana Leads India's First AI-Powered Bird Census
Haryana Leads India's First AI-Powered Bird Census
Divyanshu patel
How A Single-Minded Devotion of Divyanshu Patel Transformed Moradabad
ADVERTISEMENT
UPSC Stories
Tania Mishra IA&AS
Why Tania Mishra Chose IA&AS After Serving as a CISF Assistant Commandant
Tania Mishra cracked UPSC CSE 2023 with AIR 269 after serving as a CISF Assistant Commandant. Read her...
bhoopendra
Bhoopendra Dhakad: Raised in a Farming Family, Educated at IIT, Chosen by UPSC
IIT Kanpur graduate Bhoopendra Dhakad secured UPSC CSE 2025 AIR 494 after four attempts, overcoming setbacks...
ChatGPTImageJul62026at03_08_06P-2
Balancing Job & Dreams: How Jasmeet Kaur Turned Her Father's Dream into Reality with Rank 1 in UK PCS-2024
Jasmeet Kaur secured Rank 1 in the UKPSC-2024 examination after balancing her duties as a District Social...
CSR NEWS
ntpc
NTPC Strengthens Goa Healthcare Services with 19 Emergency Medical Vehicles Under CSR Initiative 
The CSR initiative includes BLS, ALS and cardiac ambulances along with medicine vans to strengthen healthcare...
MCL
MCL Invests ₹375.87 Crore in Odisha CSR Projects to Drive Healthcare, Education and Community Growth
Coal India Subsidiary Focuses on Healthcare, Education, Livelihood Support and Sustainable Growth Through...
SECL Ke Sushrut Gazette Notification
SECL’s ‘SECL Ke Sushrut’ Becomes First Coal PSU CSR Scheme to Get Gazette Notification
Ministry of Coal enables Aadhaar authentication for SECL’s flagship NEET coaching initiative, enhancing...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
Latest
SFAC MD
ACC Appoints Two IAS Officers as GSTAT Technical Members; Extends Devendra Kumar’s DBT Mission Tenure
bihar
Bihar Tourism Push: Govt Launches ₹2,700 Crore Projects to Transform State into Global Tourist Destination
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
Videos
Pulkit Khare
Haryana Leads India's First AI-Powered Bird Census
Divyanshu patel
ADVERTISEMENT
ADVERTISEMENT