Govt. approves transfer of DRDO developed missile tech to Indian defence industry
The Ministry of Defence has approved the transfer of DRDO-developed technologies for conventional missile systems to the Indian defence industry, enabling domestic production
The Defence Ministry described the move as an "important milestone" in promoting greater participation of domestic industries in the defence ecosystem
The technologies covered include missile systems, warship systems, defence electronics (radars, sonars, fire-control systems), satellite communication equipment, and high-explosive anti-tank ammunition, to be produced by industry subject to applicable qualifications, certifications, and regulatory requirements
The decision follows the Department of Defence Production's notification of the sixth Positive Indigenisation List, comprising 405 strategically important items with an estimated business potential of ₹3,070 crore
Over the preceding five years, more than 15,700 defence items have reportedly been indigenised, substituting roughly ₹9,000 crore worth of imports
DRDO's Transfer of Technology (ToT) Framework
Transfer of Technology (ToT) is the mechanism by which DRDO licenses its indigenously developed defence technologies to Indian industry — public and private — for production, moving systems from the R&D/prototype stage to serial manufacture. DRDO's ToT Policy classifies technologies into two categories: Category A (military-use technologies developed for the armed forces) and Category B (dual-use technologies with civilian applications), each carrying different licensing terms.
Key Details
- Under the ToT Policy, the ToT fee is typically waived for Development-cum-Production Partners (DcPPs) and Production Agencies (PAs) that partnered during development; other industries pay a one-time licensing fee
- No royalty is charged on sales to the Indian Armed Forces/government departments; a nominal royalty (around 2%) applies to sales in the Indian commercial market and exports
- DRDO has signed over 2,000 ToT agreements with nearly 150 companies to date, cumulatively enabling an estimated ₹7 lakh crore in defence production
- ToT is distinct from Transfer of Technology under defence offset obligations (foreign OEM to Indian industry) — this transfer is domestic, DRDO (a government R&D body) to Indian private/public industry
The latest approval extends ToT specifically to "all conventional missile systems" developed by DRDO, opening a high-value, technologically sensitive segment to serial production by qualified Indian defence manufacturers rather than limiting it to DRDO-affiliated production agencies alone.
Defence Acquisition and Indigenisation Categories — 'Make in India' in Defence
Indian defence procurement follows the Defence Acquisition Procedure (DAP), which prioritises categories in a defined order of preference: Buy (Indian-IDDM: Indigenously Designed, Developed and Manufactured) > Buy (Indian) > Buy and Make (Indian) > Buy (Global). Separately, the Department of Defence Production issues "Positive Indigenisation Lists" — items that cannot be imported beyond a notified timeline and must be sourced domestically — to build predictable demand for domestic industry.
Key Details
- Positive Indigenisation Lists were first notified in 2020; the government has since issued multiple successive lists (the article references the sixth list, covering 405 items worth an estimated ₹3,070 crore business potential)
- DAP 2020 (Defence Acquisition Procedure) is the current governing procurement framework, superseding DPP 2016, with IDDM as the most preferred category
- Defence Production and Export Promotion Policy targets a domestic defence production turnover of ₹3 lakh crore and exports of ₹50,000 crore by 2029 (targets periodically revised)
ToT of DRDO missile technology operationalises the IDDM/indigenisation push by giving Indian industry the underlying design and production know-how, rather than merely creating import-substitution demand through procurement lists alone.
Strategic Significance for Internal/External Security — Missile Self-Reliance
Domestic missile production capacity reduces dependence on imported or licensed foreign missile systems for critical capabilities (air defence, anti-tank, anti-ship, and precision-guided munitions), which has direct bearing on operational readiness, supply-chain security during conflict, and long-term cost efficiency for the armed forces.
Key Details
- DRDO-developed missile systems already in service or induction include the Akash (surface-to-air), Nag (anti-tank guided missile), Astra (air-to-air), Pinaka (multi-barrel rocket system), BrahMos (India-Russia joint venture supersonic cruise missile), and MRSAM (Medium Range Surface-to-Air Missile, developed jointly with Israel Aerospace Industries)
- Defence platforms such as Konkurs-M and Invar (anti-tank guided missiles, originally of Russian origin) have historically been license-manufactured in India by public sector units such as Bharat Dynamics Limited (BDL)
- Defence procurement approvals of this nature typically flow through the Defence Acquisition Council (DAC), chaired by the Defence Minister, before matters requiring higher financial sanction go to the Cabinet Committee on Security (CCS)
Widening the base of qualified Indian manufacturers for missile systems (beyond DRDO's own production agencies and select defence PSUs) is intended to build surge production capacity — a lesson reinforced by recent operational experience where indigenous systems played a significant role.
- Sixth Positive Indigenisation List: 405 items; estimated business potential ₹3,070 crore
- Defence items indigenised over the preceding five years: over 15,700, substituting an estimated ₹9,000 crore in imports
- Domestic procurement orders placed by Defence PSUs: approximately ₹10,000 crore up to March 2026
- DRDO's cumulative ToT footprint: over 2,000 agreements with nearly 150 companies, enabling an estimated ₹7 lakh crore in defence production
- ToT royalty on Indian commercial/export sales: around 2%; nil on sales to Indian Armed Forces/government
- Governing procurement framework: Defence Acquisition Procedure (DAP) 2020, IDDM as the most preferred category