Test firing of DRDO's AKASH air defence system

India’s defence sector is at a pivotal juncture, with a strong emphasis on ramping up research and development (R&D) investments to secure technological superiority and self-reliance.

At the recent CII Annual Business Summit, DRDO Chairman Dr. Samir V. Kamat underscored the urgent need for increased R&D funding in defence, highlighting that the current allocation stands at just 5% of the defence budget—far below the levels maintained by global leaders such as the United States (11–14%) and China (estimated 15–20%).

Dr. Kamat welcomed the Defence Minister Rajnath Singh’s commitment to gradually raise this figure to 10% over the next five years, a move seen as essential to keeping pace with emerging technologies and future defence challenges.

The government’s renewed focus is evident in the latest defence budget, which has substantially increased the allocation for DRDO. In the fiscal year 2025-26, the DRDO’s budgetary outlay has risen to ₹26,816.82 crore, marking a 12.41% increase over the previous year.

This enhanced funding is directed towards developing next-generation defence platforms, reducing reliance on foreign imports, and fostering indigenous innovation in critical areas such as missile and aerospace technologies, electronic warfare, cybersecurity, artificial intelligence (AI), autonomous systems, hypersonic weapons, and directed energy systems.

The capital expenditure for R&D projects has notably increased, supporting collaboration with private industry through models like the Development-cum-Production Partner and flagship schemes such as the Technology Development Fund.

Defence Minister Rajnath Singh, speaking alongside Dr. Kamat at the summit, highlighted the sector’s remarkable transformation over the past decade. Defence production has surged from ₹43,000 crore to ₹1,46,000 crore, with the private sector now contributing over ₹32,000 crore annually. The rise in defence exports—from ₹600–700 crore to ₹24,000 crore—reflects India’s growing stature as a global supplier, with products reaching nearly 100 countries and more than 16,000 MSMEs forming the backbone of the supply chain.

Singh emphasised India’s readiness to embrace new-age warfare technologies, including AI, cyber defence, unmanned systems, and space-based security, positioning the country as a potential hub for advanced engineering and high-precision manufacturing.

Despite these advancements, challenges remain in fully leveraging private sector innovation and supporting defence startups. While funding for prototype development has increased, critical initiatives like iDEX (Innovations for Defence Excellence) and ADITI (Advanced Defence Innovation & Technology Initiative) have faced some cuts, raising concerns about the pace of fostering indigenous technological breakthroughs.

Nevertheless, the government’s commitment to liberalising export licensing and promoting battle-tested Indian systems is expected to further boost international confidence and demand for Indian defence products.

India’s defence sector is poised for a significant R&D investment surge, with a clear strategy to double R&D spending, strengthen indigenous capabilities, and position the country as a global leader in defence technology.

The collaboration between government, DRDO, and private industry, coupled with a focus on emerging technologies, is set to drive self-reliance, economic growth, and international competitiveness in the years ahead.

Agencies