Despite protracted negotiations, 2025 has seen two major conflicts where the warring countries haven’t made peace with one another. Israel-Iran and India-Pakistan’s skirmishes have dominated headlines, even as the Russia-Ukraine and Israel-Hamas wars continue intermittently. Technological superiority has mattered here, as both Iran and Pakistan couldn’t protect themselves from missiles and drones launched from Israel and India, respectively.
Both countries had their air defence systems in place- Iran had its indigenously developed Bavar-373, and Pakistan used Chinese-supplied HQ-16 Air Defence systems. Both didn’t work the way they were expected to, giving their adversaries the upper hand.
Although not all global conflicts are widely reported, many countries still allocate more resources to defence rather than to health or economic growth. The demand for reliable, adaptable, and technologically superior defence solutions has skyrocketed, with countries worldwide spending a record $2.4 trillion on defence.
India has always been one of the most lucrative markets for defence exporters. Moving from its traditional reliance on Soviet-made defence equipment, top global defence exporters like the US, Israel and France have courted India for defence contracts.
Reservations about India’s defence capabilities
In August 2007, India made headlines with its mega-contract for 126 Medium Multi-Role Combat Aircraft (MMRCA), worth $20 billion, which was awarded to France’s Rafale jet. However, the deal was watered down to 36 jets after the manufacturer, Dassault Aviation, expressed reservations about HAL’s capabilities to produce 108 of these jets in India, forcing the government to eventually proceed without the manufacturing clause.
India urgently needed an upgrade for its fighter jets, as many of the IAF’s squadrons were outdated and the indigenous Tejas light combat aircraft was seeing huge delays.
This controversy exposed India’s vulnerabilities in defence indigenisation, where we’ve held the title of the world’s largest arms importer until 2024. PM Modi announced the Aatmanirbhar Bharat initiative in May 2020, hoping to reduce reliance on exports and boost domestic manufacturing. Though this initiative has borne fruit so far, India still remains the world’s second-largest arms importer, though the value of imports is hard to come by.
Implementing the Aatmanirbhar Bharat initiative
Many defence PSUs have had to double down on their efforts to meet the armed forces’ updated defence specifications, collaborating with global Original Equipment Manufacturers (OEMs) for this. Allocation for R&D has also surged 21% from Rs.23,855.61 cr in FY2024-25 to Rs.26,816.82 cr in FY 2025-26.
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These efforts have helped India boost its defence production to Rs.17,885 crore (US$2.24 billion) by FY2022-23. Our defence exports increased 9 times in 7 years from Rs.1,512 crore in 2016-17 to Rs.15,980 crore in 2022-23.
What Aatmanirbhar Bharat actually aims to achieve
For the central government, the Aatmanirbhar Bharat initiative is much more than just import substitution. India aims to be better integrated into the global supply chain for defence, even as it has seen promising success in exporting its indigenously developed defence technologies to countries like Armenia (Surface-to-air Akash Missiles) and the Philippines (BrahMos missiles).
With proven technological superiority, India can become a reliable defence supplier to allied countries, helping it secure resources to counter the threats posed by China and its allies. China has already moved far ahead with its defence indigenization, using its arms exports as a leverage to win over allies. India needs to urgently catch up, especially as arms exports are increasingly being seen as a deterrence for future conflict threats.
