By T N Ashok
When Prime Minister Narendra Modi says India must “build arms and not just buy them,” he is articulating perhaps the most important shift in Indian defence policy since economic liberalization in 1991. The statement is not merely about weapons. It is about sovereignty, technology, strategic autonomy, jobs, exports and geopolitical influence.
For decades India was the world’s largest arms importer. Soviet tanks, Russian fighters, French submarines, British artillery, Israeli drones and American surveillance aircraft formed the backbone of India’s military. Today, New Delhi is attempting something far more ambitious: transforming itself from a buyer into a manufacturer.
The timing is significant. At the recent G7 summit in Évian-les-Bains, U.S. President Donald Trump publicly declared that the United States would come to India’s assistance if it were attacked, underlining the growing strategic convergence between Washington and New Delhi.
Yet even as Washington offers strategic assurances, India’s leadership remains convinced that national security ultimately rests on domestic capability rather than foreign guarantees.
India’s defence budget for FY 2025-26 stands at approximately ₹6.81 lakh crore, a rise of nearly 9.5 percent over the previous year. Capital expenditure devoted to modernisation and acquisitions is around ₹1.8 lakh crore.
For FY 2026-27, the allocation has risen further to approximately ₹7.85 lakh crore, with capital expenditure crossing ₹2.19 lakh crore. Aircraft, aero-engines, naval platforms and advanced technology systems remain major priorities.
The money is being directed not only towards weapons but also towards: Artificial intelligence, Cyber warfare, Space-based surveillance, Robotics, Electronic warfare, Drone technology, integrated command networks. The message is unmistakable. India wants to leapfrog into the next generation of warfare rather than merely replace ageing platforms.
Despite the rhetoric of self-reliance, India cannot yet manufacture everything. Major imports and acquisitions under discussion or in the pipeline include: Additional Dassault Rafale fighters and Rafale Marine aircraft from France. MQ-9B Predator armed drones from the United States. Additional S-400 Triumf air-defence systems. Advanced anti-submarine warfare platforms. Long-range surveillance systems. Satellite reconnaissance technologies. Integrated battlefield management systems. Naval propulsion and aero-engine technologies.
The challenge is that India increasingly insists that foreign suppliers transfer technology, manufacture locally, and partner with Indian firms rather than merely ship finished products. That has transformed the business model of global arms manufacturers.
The new doctrine has unsettled traditional suppliers. American defence giants view India as one of the largest future markets. However, India increasingly demands co-production and technology sharing rather than straightforward purchases. Washington sees India as a strategic counterweight to China and is therefore willing to transfer more technology than in the past.
France has adapted most successfully. Paris has shown flexibility on technology transfer and industrial partnerships. This partly explains why French defence firms continue to enjoy considerable success in India. Israel remains one of India’s most trusted defence partners because it specialises in areas India urgently requires: drones, missile defence, surveillance equipment and border-monitoring systems.
The UK’s role has diminished compared with earlier decades. British companies remain active but no longer dominate procurement decisions. Italy’s defence industry still seeks opportunities in India but operates under the shadow of the AgustaWestland bribery scandal controversy, which damaged trust for years.
India’s defence procurement history is littered with scandals. The most famous remains the Bofors scandal of the 1980s, which altered Indian politics and contributed to the downfall of the government of Rajiv Gandhi. Later came the AgustaWestland helicopter affair involving allegations of kickbacks in the purchase of VIP helicopters.
Names such as Ottavio Quattrocchi and Adnan Khashoggi became synonymous with the murky world of international arms brokering. The political consequences were profound. Today’s procurement system is far more digitised, transparent and scrutinised. Middlemen have not disappeared entirely, but their operating space has narrowed dramatically. The controversy surrounding the Dassault Rafale deal demonstrated that defence acquisitions remain politically explosive, but unlike earlier scandals, allegations failed to produce evidence of illegal kickbacks.
The real driver of India’s defence build-up is neither Pakistan nor terrorism. It is China. The 2020 clashes in Galwan Valley permanently altered Indian strategic thinking. Chinese military modernisation now includes: Hypersonic missiles, Fifth-generation fighters, Aircraft carriers, Cyber warfare capabilities, Space warfare systems, Massive drone fleets
Indian planners recognise that future wars will be fought across multiple domains simultaneously. The Chinese challenge explains India’s rush to acquire satellites, drones, sensors and integrated command systems.
Pakistan remains a major security concern, particularly because of cross-border terrorism. India’s security establishment continues to cite attacks such as: 2008 Mumbai attacks, 2016 Uri attack, 2019 Pulwama attack, 2026 Pahalgham tourist massacre. Groups such as Lashkar-e-Taiba and Jaish-e-Mohammed have been designated terrorist organisations by multiple countries, including the United States. These attacks drove India’s shift toward proactive responses including the Balakot airstrike and later cross-border counter-terror operations. The lesson drawn in New Delhi is simple: surveillance and intelligence are as important as tanks and fighter aircraft.
Much of India’s future spending may not be on traditional weapons. Instead, procurement priorities increasingly include: Border surveillance systems, Persistent drone coverage, AI-enabled intelligence analysis, Satellite imagery, Facial recognition systems, Secure military communications, Counter-drone technologies. These systems are viewed as force multipliers against both Chinese military pressure and terrorist infiltration.
The government hopes state-owned and private-sector companies will together create a domestic military-industrial complex. Among public-sector giants, the leading contenders are: Hindustan Aeronautics Limited, Bharat Electronics Limited, Bharat Dynamics Limited, Mazagon Dock Shipbuilders Limited
Among private players: Tata Advanced Systems, Larsen & Toubro, Adani Defence & Aerospace, Kalyani Group. For small arms specifically, private firms associated with the Kalyani Group, joint ventures involving Indian manufacturers, and state-owned ordnance entities appear capable of rapidly expanding production.
India’s military is modernising rapidly. Its police forces, however, often remain under-equipped. Many state police units still struggle with shortages of modern pistols, assault rifles, body armour, communications equipment and forensic technologies. The contrast is stark.
A terrorist armed with modern automatic weapons can often possess superior firepower to the first police responders arriving at a scene. The experience of insurgency in Kashmir, urban terrorism, organised crime and Naxalite violence has repeatedly exposed these gaps.
If Modi’s vision of building arms domestically succeeds, the greatest beneficiaries may not be the armed forces alone. State police forces could finally gain access to affordable, domestically produced small arms and surveillance systems on a large scale.
The significance of Modi’s statement lies in a single strategic calculation. India no longer wants to be merely a customer standing in line at the world’s armouries. It wants to become a producer, exporter and technological power in its own right.
The rise of China, persistent tensions with Pakistan, cross-border terrorism and the emergence of drone warfare have convinced New Delhi that security cannot depend indefinitely on foreign suppliers.
The world’s arms manufacturers still see India as one of their largest markets. But increasingly, they are discovering that access to that market comes with a new condition: if you want to sell to India, be prepared to build in India. That may prove to be the most consequential transformation in the global arms trade in the coming decade. (IPA Service)
