The Government of India is weighing a landmark policy shift by considering the opening of ballistic missile production to the private sector, reported Business Line.

Defence Secretary Rajesh Kumar Singh announced this development at the Confederation of Indian Industry (CII) Annual Business Summit 2026, signalling a decisive break from the long-standing monopoly of Defence Public Sector Undertakings (DPSUs) in this highly sensitive domain.

He emphasised that the move is intended to create a level playing field for private industry, aligning with the Draft Defence Acquisition Procedure (DAP) 2026 which seeks to amend and modernise the procurement manual that has been in place since 2020.

Singh noted that there is now a growing willingness to transfer technology to private firms for various categories of ballistic missiles, stressing that “the time has come” to operationalise such plans given their increasing strategic importance in modern warfare.

He assured industry leaders and armed forces personnel present at the summit that steps would soon be taken to ensure sufficient private sector involvement in this critical space.

This follows the government’s earlier decision to allow private participation in the indigenous fifth-generation fighter jet project under the Advanced Medium Combat Aircraft (AMCA) program, where three consortiums have been selected — two blending public and private sector expertise and one entirely private.

For the AMCA program, Singh explained that the selected consortiums would soon receive Requests for Proposals (RFPs), with the expectation of establishing a production line that complements Hindustan Aeronautics Limited (HAL).

This, he said, would foster a healthy combination of public and private capabilities, enabling India to build its aerospace industry at scale. He underscored that this initiative is part of a broader vision to transform India’s defence ecosystem into one that is globally competitive and technologically advanced.

Outlining the Defence Forces Vision 2047, Singh revealed ambitious targets: a year-on-year defence budget increase of 20 per cent over the next 21 years, a defence production output of ₹8.8 lakh crore, and defence exports reaching ₹2.8 lakh crore.

These goals, encapsulated in the mantra ‘Atmanirbhar, Agrani, and Atulya Bharat 2047’ (Self-reliant, Leading, and Incomparable India), are designed to place India firmly among the top three global exporters of high-quality defence equipment. He described these as staggering but achievable targets, reflecting the government’s confidence in the trajectory of India’s defence sector.

Singh highlighted that in the 1.5 years since he assumed office as Defence Secretary, projects worth ₹4.5 lakh crore have been awarded to industry, with 70 per cent of the value and 90 per cent of the contracts going to indigenous firms.

He urged industry players to build internal trust and avoid filing complaints against each other, as such disputes delay acquisition processes. He reiterated the importance of meeting timelines, a point he has stressed repeatedly in the past, to ensure the credibility and efficiency of India’s defence manufacturing ecosystem.

The Defence Secretary also announced that the government is working on a new line of credit (LoC) scheme to boost defence exports to less developed countries, thereby expanding India’s footprint in global markets.

He pointed to India’s transformative journey from being the world’s largest arms importer to becoming a global defence manufacturing hub. Defence exports have already skyrocketed to a record ₹38,424 crore in FY 2025-26, marking a 62.66 per cent increase over the previous fiscal.

In this milestone achievement, DPSUs contributed 54.84 per cent while the private sector accounted for 45.16 per cent, underscoring the growing role of private industry in India’s defence exports.

This policy shift towards private sector participation in ballistic missile production and fifth-generation fighter aircraft manufacturing represents a profound restructuring of India’s defence industrial base. It reflects the government’s determination to harness the innovation, efficiency, and competitiveness of private industry while maintaining strategic control over critical technologies.

With the Defence Forces Vision 2047 setting ambitious economic and strategic benchmarks, India is positioning itself as a formidable global player in defence manufacturing and exports, driven by the twin imperatives of self-reliance and strategic resilience.

Business Line