India’s decision to open the conventional missile sector to private industry marks an important inflection point in the evolution of the country’s defence-industrial strategy. Defence minister Rajnath Singh recently approved the transfer of Defence Research and Development Organisation (DRDO)-developed technologies covering conventional missile systems to eligible Indian defence companies, both public and private, for domestic production.

The significance of the decision extends well beyond technology transfer. It represents an attempt to move India’s missile ecosystem from a predominantly State-led model of development and nominated production towards a more competitive industrial structure in which multiple companies can develop manufacturing capacity, integrate complete weapon systems and compete for orders.

This is a logical extension of measures undertaken earlier in 2026 to dilute Bharat Dynamics Limited’s (BDL) near-monopoly in tactical missiles and create a wider network of development-cum-production partnerships. Private companies can now compete for technology transfer, qualify as Development-cum-Production Partners (DCPPs), and emerge as full-system integrators rather than remaining confined to supplying components or subsystems.

The systems potentially covered are substantial: surface-to-air missiles, air-to-air weapons such as Astra, anti-radiation missiles including the Rudram family, anti-ship and anti-tank missiles, land-attack cruise missiles and quasi-ballistic tactical systems such as Pralay. Longer-range conventional strike systems, including land-attack cruise missiles in the roughly 1,000-1,500 km category, are also being considered for greater private-sector participation. Nuclear-capable strategic systems, particularly the principal Agni series, remain subject to much tighter controls.

India wants to build a missile industrial base rather than merely produce missiles. The immediate rationale is familiar- Atmanirbhar Bharat, import substitution and greater domestic capacity. But the strategic logic is deeper. Modern warfare has demonstrated that precision weapons are no longer niche capabilities reserved for limited contingencies. They are increasingly central to sustained campaigns in which stocks can be rapidly depleted and industrial capacity becomes a determinant of military effectiveness.

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For India, this has an obvious China dimension. A prolonged conflict would test not merely the quality of individual weapons but the country’s ability to replenish them at scale. A missile ecosystem dependent on a limited number of production lines cannot provide the resilience that a major military power requires.

The old model, in which the State developed a weapon and nominated a public-sector enterprise for production, was useful in building an initial industrial base. But it also created structural limitations. Limited competition reduced pressure on manufacturers to improve productivity, lower costs, and expand capacity. The new model seeks to correct this by separating technological ownership from manufacturing monopoly. This is also consistent with the direction of the draft Defence Acquisition Procedure 2026, which seeks to establish a level playing field between public and private manufacturers.

Expanding beyond BDL can create redundancy, accelerate production and strengthen wartime resilience. Private firms can also move up the value chain-from components and subsystems to full-system integration involving guidance, propulsion, seekers, software and testing. This will deepen supply chains, integrate MSMEs and raise indigenous value addition. A broader industrial base can simultaneously support India’s growing defence-export ambitions by enabling scale, competitive pricing and reliable supply. The objective, therefore, is the creation of a resilient ecosystem capable of designing, producing, upgrading and exporting sophisticated missile systems.

Missiles combine some of the most demanding areas of defence engineering: propulsion, seekers, guidance, control systems, electronics, software and materials. A company capable of manufacturing a missile subsystem is not automatically capable of integrating a complete weapon system to the reliability standards required by the armed forces.

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Companies will have to navigate defence manufacturing licences, explosives-related approvals, quality certification, security requirements and specialised testing infrastructure. Developing the necessary workforce and facilities will require substantial capital and patience.

Greater private participation should not become a contest between private companies and institutions such as DRDO, BDL and Bharat Electronics Limited (BEL). The objective should instead be to create an ecosystem in which DRDO focuses increasingly on advanced research and next-generation technologies while industry takes greater responsibility for production, integration and lifecycle support.

Legacy arrangements do not disappear merely because policy changes. The government will, therefore, need to ensure that competition is genuine rather than simply adding private firms to an otherwise unchanged procurement structure.

The greatest challenge may ultimately be one of scale. Private companies will invest in dedicated production facilities only if they have reasonable confidence about future orders. At the same time, the government cannot guarantee every company a sufficient production run merely to protect private investment. India will, therefore, need a procurement architecture that provides predictable demand while preserving genuine competition. The same principle applies to advanced systems. Conventional long-range and eventually hypersonic weapons will require substantially greater technological maturity and industrial capability. The distinction between conventional and strategic systems will also remain important: Nuclear-related missile programmes will continue to operate under a far more restrictive security framework.

Technology transfer must translate into absorbed technology. Competition must translate into lower costs and faster production. Private investment must translate into actual capacity. And increased capacity must ultimately translate into military resilience.

India is moving away from an industrial model in which the State was simultaneously the principal developer, customer and manufacturer, towards one in which the State acts as technology provider, regulator and customer while a wider industrial base undertakes production. That is a significant structural change. The objective should be to create a defence-industrial architecture capable of surviving the pressures of modern warfare, where technological advantage matters, but so do production volumes, supply-chain resilience, cost, innovation and the ability to replace losses quickly.

India’s strategic autonomy will ultimately depend on whether it can design and manufacture sophisticated missiles in sufficient numbers and sustain their production under wartime conditions. The opening of the conventional missile sector to private industry is an important step in that direction.

Harsh V Pant is vice-president, ORF. The views expressed are personal