India’s government is drawing a conclusion from these wars. It is fostering capability-building in the private sector by providing technology that helps in the production of conventional missiles. This is technology developed by the Defence Research and Development Organisation (DRDO) and is considered a global benchmark. The aim is to create manufacturing depth before a crisis demands it.

Sanjay Soni, Managing Director of Hughes Precision Manufacturing, a major global ammunition production firm, explains the new policy of technology transfer to the private sector, “This is a major policy shift for arming India, with a thrust on wider capacity for weapons manufacturing and deepening the defence ecosystem. This will lead to speedier development of missiles and other advanced weaponry such as guided weapons. The template has been successful abroad, especially in South Korea, Turkey, and Israel. The private sector brings manufacturing efficiency to the core technologies.”

In August, the defence ministry approved the transfer of DRDO-developed technology for all conventional missile systems to Indian industry for domestic production. 

In September 2026 at the VIMARSH 2026 DRDO–Industry Synergy Meet, nine technology-transfer agreements were handed to 13 manufacturing partners. Indian Defence Secretary R.K. Singh has emphasised in media interactions that technology for 50 missile systems is in the process of being transferred to private Indian companies. 

In policy terms, the defence ministry also introduced a framework for sharing DRDO-developed software source codes with licensed manufacturers, intended to help them maintain and upgrade complex defence systems such as terminal guidance for missiles and early warning electronics for radars.

New Approach

India has long bought missiles from public-sector manufacturers, particularly Bharat Dynamics, while private firms supplied components, sub-assemblies, and engineering services. 

The new approach seeks to move private companies further up the value chain: towards licensed production, system integration, manufacturing improvements and, eventually, the development of variants. The government is trying to turn defence production from a series of procurement contracts into an industrial capability.

Major General Sudhakar Jee, VSM (Retd), Distinguished Fellow, Centre for Land Warfare Studies, told The Secretariat, “This new policy is a radical approach to add weapons manufacturing capability at scale. The private manufacturing depth is essential to match high-volume output demands seen in modern conflict scenarios for conventional missile systems (such as Akash, Astra, Nag, and Pralay) to transfer to private domestic industries for full-scale production. This will enhance defence preparedness by a quantum. It is a revolutionary new policy.” 

Stockpile Stewardship

The immediate rationale is stockpile resilience. 

The Ukraine war has demonstrated the scale at which artillery shells, air-defence interceptors, drones and precision weapons can be expended. The conflict has also shown how difficult it is to expand production after fighting begins. Factories need qualified suppliers, specialised machinery, trained workers, tested designs, and reliable sources of propellant, explosives, electronics, and guidance components. A production line in wartime cannot be switched on like a light. That’s why this emphasis on manufacturing on scale. 

The conflict involving Iran and Israel has supplied a related lesson. Missile defence is a contest of inventories as well as interception rates. An attacker can launch salvos; a defender must maintain interceptors, radars, and launchers over time. The cost of a defensive missile can be far higher than that of the incoming weapon. The result is a premium on replenishment. India’s planners have reason to consider the possibility of a prolonged confrontation in which the ability to manufacture and repair weapons at scale is the watchword for victory.

Private Sector Comes Marching In 

The leading beneficiaries are likely to be companies that already possess large engineering organisations, defence contracts and experience with demanding production standards. 

Larsen & Toubro is the clearest example. So are companies like Tata Advance Systems and Adani Defence and Aerospace. 

Sources in the defence ministry indicate that over time the sharing of technology will be broadened to include defence missile launch systems, naval platforms, precision engineering, electronics, and missile-related structures. 

Adani Defence is already investing in the missile sector.  The company broke ground on a ₹2,500-crore missile manufacturing ecosystem at Shivpuri in Madhya Pradesh. The project is intended to include composite-propellant and TNT production, creating a backward-integrated private sector facility. Adani Defence’s communication to the media pointed out that this was India’s largest private facility for missiles.

The government’s wider policy is designed to address this problem. At VIMARSH, the defence ministry announced measures to lower technical and financial entry barriers for small and medium-sized enterprises and deep-tech start-ups, including direct funding, incubation support and access to DRDO testing facilities. It also introduced SAMAR 2.0, a system intended to assess manufacturing maturity. The objective is to create a larger pool of firms capable of meeting defence standards, rather than leaving production concentrated in a few large organisations.

Lessons From The World

Globally, technology provided by the government and funding provided by the government to private sector defence firms have led to massive capacity building and innovation in the defence industry. 

Beijing has spent decades integrating military research, state-owned defence companies, universities and private industry. Its military–civil fusion policy encourages civilian firms to contribute technologies, manufacturing capacity, and talent to defence programmes. Private companies such as DJI, Huawei, and other technology firms have developed capabilities in drones, communications, artificial intelligence, sensors, and electronics that can have military applications. 

The Chinese model combines state direction, large domestic orders, research funding, and access to industrial infrastructure. Its strength lies in the scale of the ecosystem: a defence contractor can draw on a vast network of civilian suppliers, while civilian technology can be adapted for military use. 

A senior defence ministry official said on the condition of anonymity, “The real strength of this policy is transferring proven technology to the private sector. The initiative seeks to strengthen operational capabilities and deepen domestic value addition.”

America’s model is more decentralised, but its private companies benefit from a similar flow of public technology and demand. The Pentagon funds basic research, advanced prototypes, testing facilities, and procurement programmes, allowing firms to develop technologies that would be too risky or expensive to finance entirely on their own. 

Lockheed Martin’s Skunk Works is the classic example. Its secretive development organisation has produced aircraft such as the U-2, SR-71 and F-117 through close work with the US military. The relationship provides a private company access to government requirements, test infrastructure and long-term contracts, while the Pentagon gains access to commercial engineering talent and production expertise. More recently, companies such as SpaceX, Anduril, and Palantir have benefited from defence contracts that help finance technologies with both military and civilian uses.

If this amalgamation between government technology and private enterprise works, the commercial payoff could be substantial. India’s defence exports have risen sharply in recent years, reaching a record ₹23,622 crore in FY2024–25. With new technologies, the private sector could well see a lift-off in exports.

The government’s missile policy is therefore an industrial bet as much as a military one. It seeks to create parallel production lines, deepen the supplier base, and make replenishment possible under real wartime production pressure.

(The writer is a senior journalist and analyst. Views expressed are personal.)