The Indian Army has unveiled a major initiative to provide long-term business certainty to India’s defence manufacturing ecosystem by committing to a five-year restoration and modernisation order pipeline worth over ₹75,000 crore, Business Line reported.

This marks a significant departure from short-term contracting practices and directly addresses the long-standing demand of defence industry stakeholders, including public sector undertakings and MSMEs, who have consistently argued that sustained order visibility is essential for investment in capacity, technology, and supply chains.

Industry executives have emphasised that companies cannot realistically build manufacturing capabilities or expand supplier networks on the basis of short-term contracts, particularly when their primary customer is the armed forces.

The five-year commitment is expected to provide the assurance required for vendors to invest in production lines, skilled manpower, and indigenisation, while simultaneously reducing dependence on imports.

The orders cover life-cycle enhancement of the Army’s T-72 ‘Ajeya’ and T-90 ‘Bhishma’ tanks, infantry combat vehicles (BMPs), and Armoured Recovery Vehicles (ARVs). The restoration programme is designed to bring these platforms to a “near-zero-hour and zero km state of operational readiness” by replacing worn-out mechanical, electronic, and engineering systems, thereby significantly extending their operational life.

Army sources have confirmed that the upgraded platforms will retain only their basic structures while being fitted with new-generation equipment. For the first time, tanks will also be equipped with drones for intelligence, surveillance, reconnaissance, and combat roles, reflecting lessons drawn from the Russia-Ukraine conflict.

The overhaul will involve replacement of components, sub-assemblies, and assemblies wherever required, and is expected to reduce import dependence for maintenance and spares.

Under the program, 790 T-72 tanks will be restored over five years at a cost exceeding ₹13,000 crore. Defence PSU Armoured Vehicles Nigam Ltd (AVNL), through its Vehicle Factory Jabalpur, will execute the programme with support from an ecosystem of around 1,200 MSMEs and start-ups.

AVNL has already completed restoration of two T-72 tanks as a pilot project earlier this year, demonstrating proof of concept.

Another 200 T-90 tanks will undergo phased restoration over the next five years at an estimated cost of ₹56,000 crore. The Army has also cleared the modernisation of 500 BMP infantry combat vehicles at a cost of under ₹5,000 crore. This work will be undertaken by AVNL’s Ordnance Factory Medak, which has achieved over 90% indigenisation, underscoring India’s growing self-reliance in defence production.

In addition, the Army has approved the restoration of 230 Armoured Recovery Vehicles over five years at a cost of ₹1,400 crore. Built by Bharat Earth Movers Ltd (BEML), these vehicles are critical for recovering and repairing tanks on the battlefield, ensuring sustained operational capability during combat operations.

Platform Qty Program/Action Timeline Estimated Cost (₹ Crores) Primary Executing Agency/Manufacturer Notes
T-72 tank 790 Restoration 5 years>13,000 Armoured Vehicles Nigam Ltd (AVNL)/Vehicle Factory Jabalpur AVNL completed 2 as pilot; ecosystem support from ~1,200 MSMEs & start-ups
T-90 tank 200 Phased Restoration Next 5 years ~56,000 Not specified (Army program) Higher restoration cost per unit than T-72s
BMP infantry combat vehicle 500 Modernisation Not specified Under 5,000 AVNL/Ordnance Factory Medak Ordnance Factory Medak claims >90% indigenisation
Armoured Recovery Vehicle 230 Restoration 5 years 1,400 Bharat Earth Movers Ltd (BEML) Critical for battlefield recovery and repair of tanks

This comprehensive program represents a strategic push towards modernisation and industrial empowerment. By equipping ageing platforms with new-generation systems and integrating advanced technologies such as drones, the Army is enhancing battlefield survivability and operational readiness. 

At the same time, the initiative strengthens the domestic defence manufacturing ecosystem, ensuring that critical capabilities are developed and sustained within the country.

The dual benefit of operational preparedness and industrial growth reflects the broader vision of Aatmanirbhar Bharat, where national security and economic resilience are pursued in tandem.

Agencies