At Aero India last year, the Ministry of Defense announced that 65% to 70% of India’s defense needs were now met domestically. This was a complete turnaround from a decade ago, when this was the proportion of imports. Defense production reached a record high of Rs 1.27 lakh crore ($15.4 billion) in FY24. This represents a 174% increase over FY15. Exports crossed Rs 23,622 lakh crore ($2.77 billion) in 2025, as India’s artillery, radars, counter-drone systems and BrahMos cruise missiles found buyers from the Philippines to Armenia.
However, India remained the world’s second-largest arms importer, ahead of Ukraine, which was facing a protracted war. The Stockholm International Peace Research Institute (SIPRI) has ranked India as the world’s second-largest importer of arms and military equipment from 2021 to 2025.
This trend will continue. From 2026 to 2031, India plans to make several high-value foreign purchases, despite pressures for localization. Some of these expensive aircraft are 114 Rafale fighter jets of the Indian Air Force (IAF) from France, 26 Rafale M aircraft of the Indian Navy, again from France, MQ 9B drones from the United States, P-8I maritime reconnaissance and surveillance aircraft from the United States, additional S 400 air defense systems from Russia, turbojet engines from France, and advanced missile systems from Israel.
The Indian Army is the least import-intensive but requires foreign armored propulsion devices and precision munitions. The 15-year plan calls for the purchase of 1,800 future tanks, more than 50,000 next-generation anti-tank guided missiles, and 400 precision-guided drone missiles, many of which will require foreign input. Javelin anti-armor systems ($46 million) and Excalibur precision-guided artillery shells ($47 million) were among the US sales approved in FY25.
Based on approved deals, Defense Acquisition Board approvals, and the 15-year defense plan, India will find it difficult to wean itself off dependence on this cutting-edge and critical technology. At the basic manufacturing level as well, India relies on imported raw materials such as titanium alloys, carbon fiber composites, specialty steels, and electronic metals.
Extensive dependency
India has sent a mission to the moon and reached Mars orbit but is far from mastering aero-engine technology. No other technology has proven to be a greater strategic liability than the inability to build a domestic payment system.
Propulsion – whether it is turbofan engines for fighter jets, marine diesel engines, gas turbines for ships, or tank engines – is the most important technology that India cannot produce on a large scale. Although more than 30 years have passed since the Kaveri program and the INS Arihant nuclear-powered plant, India will remain almost entirely import-dependent for payment across all services until 2034 and likely beyond.
This technology gap derailed delivery timelines for the original Light Combat Aircraft (LCA) MK1A. In 2021, Hindustan Aeronautics Ltd (HAL) contracted with US company General Electric to procure 99 F404-IN20 engines to power the 83 LCA Mk1A ordered by the Indian Air Force. The first engine arrived 14 months late. Only six engines were delivered, underscoring how the American component cemented indigenous fighter aircraft ambitions.
“Jet engines remain a critical field where dependencies will remain for decades,” says Dinakar Berry, a fellow in the Security Studies Program at Carnegie University in India. “Licensed manufacturing or co-development does not mean complete independence. Dependence on original equipment manufacturers (OEMs) for critical parts will remain.”
The Gas Turbine Research Establishment of the Defense Research Development Organization (DRDO) has been developing the Kaveri engine since 1986. Four decades and thousands of crores later, the engine is still underpowered for fighter jets.
Ravi Kumar Gupta, former Scientist G and Director of Public Interface. DRDO says gaps have been allowed “to form, persist, and widen due to insufficient funds (e.g., Kaveri drive, semiconductor devices, advanced embedded researchers) and/or bureaucratic hurdles, creating artificial gaps (e.g., titanium-related technologies).”
“Ironically, the annual foreign exchange inflow on procurement and MRO (maintenance, repair and operations) of aircraft engines ranges between $2 billion and tens of billions of dollars according to KPMG reports,” says Gupta.
GTRE is now collaborating with French company Safran to develop an engine for the fifth generation Advanced Medium Combat Aircraft (AMCA). France agreed to transfer the entire technology. This means that India’s next generation of fighter engines will arrive as soon as the mid-2030s. Commander Milind Kulshrishtha (Ret), a strategic analyst with expertise in technologies related to command and control (C4I) solutions, explains how the shortage of key spare parts for gas turbine maintenance is “adversely impacting warship deployment cycles and thus fleet readiness levels.”
“As a solution, the Navy has put in place a multi-supplier system where propulsion components are procured from various sources, including Indian vendors, to control the engine,” he says.
electronics
Another ancillary dependency is software. India is seeking access to the source codes for the Rafale fighter jets. It will likely be the first country besides France to produce these aircraft, but it will not have access to the source codes that make up the electronic brain of the aircraft. The source code covers the Thales RBE2 AESA radar, modular data processing unit, and SPECTRA electronic warfare suite, systems that collectively define a fighter’s sensor fusion, survivability, and electronic combat architecture.
The electronically scanned active array radar system and electronic warfare ecosystem have a common denominator: gallium nitride (GaN). A single article could bring many of India’s ambitious defense programs to a halt. India has sought GaN chip technology from France with the first batch of 36 Rafale fighter jets it has purchased. But France refused to transfer it under the compensation clause. DRDO scientists broke GaN manufacturing in 2023 and began production in 2024.
India has also developed its own AESA radar called Uttam. It has been declared ready for production in 2023. But equipping India’s fighter jets will be a daunting task. The first 40 LCA Mk1A fighter jets will be equipped with Israeli EL/M-2052 radars; HAL intends to integrate the original Uttam radars from Unit 41 onwards. The original radar will appear in the second batch of 93 LCAMK1A.
India’s electronics dependency has three layers – the first is hardware (manufacture of GaN chips), the second is system-level integration (placement of indigenous radar in weapons platforms like LCA, Su-30MKIs and future warships) and the third is software supremacy. Of these three, software sovereignty, as evidenced by the lack of access to software on imported platforms, appears to be the most difficult to achieve through domestic efforts alone.
India depends on various countries for basic defense manufacturing. Titanium, carbon fiber composites and special alloys are imported.
“These are highly controlled technologies with long development cycles, stringent qualification criteria and high intellectual property barriers,” says Rajanikanth Balaraman, co-founder and chief growth and technology officer at Unimech Aerospace and Manufacturing.
What should be done?
The Indian government has signed defense contracts that include conditions for transfer of technology. The Rafale deal delivered fighter jets but did not provide air-engine autonomy. Futures should correct this.
The development of aero engines must be treated as a national achievement. The Safran-GTRE partnership for the AMCA engine is encouraging. It must be funded and prioritized at the level that India once gave to its nuclear programme. India needs a dedicated aviation engine mission, with tight funding and a single program manager in charge.
The Indian Semiconductor Mission and the defense acquisition process currently operate in separate silos. Every new contract for a defense platform must specify local chip content requirements on a phased timeline. This would create demand signals that pull semiconductor investment toward defensive grade specifications.
India should not focus only on final assembly. It needs to build capacity in processing titanium and superalloys, advanced composite materials, precision optical systems, and specialized electronics that support every modern weapons system. This is an unglamorous, long-running affair that does not involve any ribbon-cutting ceremony. It is also the work that determines whether India’s next generation defense platforms are truly independent of imports.
