India widens defence export access, simplifies approvals to boost global market reach
The Department of Defence Production widened the Open General Export Licence (OGEL) framework, extending its geographic coverage from 41 countries to all countries except sensitive or sanctioned destinations
Three separate export authorisation procedures were consolidated into a single unified OGEL framework, and OGEL validity was extended from two years to three years
Stakeholder consultation requirements were removed for exports of non-lethal defence items to most destinations and for items meant for international tenders and exhibitions, while safeguards remain for sensitive countries
A new provision allows OGEL grants aligned with long-term contracts that Indian companies hold with foreign Original Equipment Manufacturers (OEMs), and permits civil-end-use exports of specified small-calibre-arms parts/components and protective equipment
India's defence production touched a record ₹1.78 lakh crore and defence exports reached a record ₹38,424 crore in FY 2025-26
Open General Export Licence (OGEL) and India's Export Control Architecture
An OGEL is a standing, one-time export authorisation that lets an eligible company generate its own authorisations for multiple consignments of specified defence items, replacing the need for a separate licence per shipment. It sits within India's broader dual-use/strategic trade control system, where sensitive and dual-use goods are governed by the SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) list under the Foreign Trade Policy, administered by the Directorate General of Foreign Trade (DGFT).
Key Details
- SCOMET is organised into eight broad categories covering nuclear materials, munitions, and dual-use items; export of SCOMET-listed goods requires a licence from the relevant nodal ministry
- OGEL is specific to defence-related export items and is meant to reduce repetitive case-by-case authorisation for trusted, eligible exporters
- The 2026 reform expanded OGEL's country coverage (41 → nearly all countries, excluding sanctioned/embargoed states), extended validity (2 → 3 years), and merged three separate SOPs into one framework
This reform directly rewrites the OGEL mechanism — widening its geographic reach and simplifying renewal — which is the specific regulatory lever the government used to "widen defence export access."
Defence Production and Export Promotion Policy (DPEPP) 2020
DPEPP 2020 is the Ministry of Defence's guiding policy document for building India into a global defence manufacturing hub, setting production and export turnover targets and identifying enabling measures such as simplified export procedures, defence corridors, and ease-of-doing-business reforms.
Key Details
- DPEPP 2020 targeted a defence production turnover of ₹1.75 lakh crore by 2025, including ₹35,000 crore from exports
- Two Defence Industrial Corridors were set up to anchor this push: Uttar Pradesh (nodes at Aligarh, Agra, Kanpur, Chitrakoot, Jhansi, Lucknow) and Tamil Nadu (Chennai, Tiruchirappalli, Coimbatore, Salem, Hosur), the latter inaugurated in 2019
- The Ministry of Defence has separately stated an export target of ₹50,000 crore by 2029, up from about ₹24,000 crore recorded a few years prior — a roughly 40-fold rise in a decade
The OGEL/SOP simplification is a procedural reform implementing DPEPP 2020's stated goal of easing export processes; the FY 2025-26 record export figure of ₹38,424 crore shows India tracking toward the ₹50,000 crore by 2029 target.
Foreign OEM Long-Term Contracts and India's "Manufacture in India" Push
Under DAP 2020's procurement hierarchy, categories like Buy (Global — Manufacture in India) require foreign vendors to route a share of manufacturing/value addition through India, often via Indian companies holding long-term supply contracts with foreign OEMs. Easing export rules for firms with such contracts supports two-way defence industrial integration — Indian firms both source components from and supply components to global OEM supply chains.
Key Details
- The new OGEL provision specifically permits licence grants aligned with long-term Foreign OEM contracts, reducing the compliance burden for Indian companies embedded in global defence supply chains
- This complements offset policy under DAP 2020, where foreign vendors winning big-ticket Indian contracts must reinvest a portion of the contract value in India (including via Indian defence corridors, which get higher offset multipliers)
- MSMEs are highlighted as key beneficiaries, since procedural simplification lowers the compliance cost of entering export markets or global tenders
This provision addresses a specific friction point — Indian component suppliers to global primes (similar in spirit to the BDL-Javelin JV co-production model) — by aligning export authorisation with existing long-term OEM relationships rather than requiring repeated case-by-case clearance.
- OGEL country coverage: expanded from 41 countries to nearly all (excluding sanctioned/embargoed destinations)
- OGEL validity: extended from 2 years to 3 years; three separate SOPs merged into one
- FY 2025-26 defence production: ₹1.78 lakh crore (record high)
- FY 2025-26 defence exports: ₹38,424 crore (record high)
- DPEPP 2020 target: ₹1.75 lakh crore production turnover by 2025, including ₹35,000 crore from exports
- Ministry of Defence export target: ₹50,000 crore by 2029
- Two Defence Industrial Corridors: Uttar Pradesh and Tamil Nadu (inaugurated 2019)
- SCOMET dual-use control list: organised into 8 categories under the Foreign Trade Policy, administered by DGFT