India's defence sector is at a historic inflection point. For decades after
independence, the majority of Indian weapons systems, platforms and military
technology were sourced from foreign supplier mainly Soviet Union and later
Russia. According to the Ministry of Defence (MoD) (2024a), India had a domestic
defence production of just ₹46,429 crore in FY 2013–14 and defence exports of only
₹686 crore. The Stockholm International Peace Research Institute (SIPRI) ranked
India as one of the largest arms importers in the first decade of the 21st Century. It
was responsible for over 12% of all international arms imports (SIPRI, 2024). The
advent of the ‘Make in India’ programme launched by Prime Minister Narendra Modi
in September 2014 was a definitive break from this. The initiative focuses on
transforming India into a global manufacturing hub and defence is one of the
priority sectors. The DAP 2020, DPEPP 2020, the Aatmanirbhar Bharat mission
(2020), a series of PILs, liberalized FDI norms, and the DICs in Uttar Pradesh and
Tamil Nadu (MoD, 2020a, 2020b) followed. Thus, progressively more ambitious policy
articulations occurred in subsequent years. The financial effects of these changes in
policies are multidimensional. The safe manufacture of a component is required in
domestic conditions and using material as per the prescribed standard of a defence
service. Defence production aptitude will facilitate a minimum market requirement
and standard conditions for defence production with quality assurance must be
suitable for the complete life of the product. Defence production aptitude will also
link world standards in defence production with optimum technical performance in
a successful price field. Although there has been a lot of attention from
governments and regulators, a comprehensive academic review of these financial
issues has yet to materialise. Moreover, this review should be data-driven and use
verified government and peer-reviewed sources. A significant amount of literature
available is either descriptive of the relevant policy (Behera, 2020; Singh & Gupta,
2021) or narrowly focused on the procurement processes themselves (Mukherjee,
2021). This study tries to address this lack by developing an analysis that is holistic
and evidence-based on the financial impact of Make in India in defence
manufacturing drawing on official government data and published literature.