From innovation to industrialisation: How DRDO’s missile tech is reaching Indian factories

This development is aimed at shifting missile programmes from the development stage towards industrial production, while expanding the role of domestic companies, including micro, small and medium enterprises (MSMEs), in the wider missile supply chain. The production will be subject to applicable qualifications, certifications and regulatory requirements, according to the Defence Ministry.

The decision, announced on August 25, 2026, is significant as it moves India’s missile indigenisation push beyond simply developing weapons within government laboratories. The next challenge is to manufacture those systems at scale, build a wider supplier ecosystem and capture more of the economic value within India.

From DRDO technology to industrial production

For years, DRDO has been at the centre of India’s indigenous missile-development effort, working with the armed forces and an expanding network of Indian industry partners. The latest decision seeks to strengthen the next stage of that process: taking technologies developed by DRDO into industrial production. The transfer, the government said, will enable domestic industries to undertake indigenous production of conventional missile systems, subject to the required qualifications, certifications and regulations. It also said the move is intended to strengthen India’s defence industrial base and create opportunities for Indian MSMEs and other technology partners.

That distinction is important. The announcement does not mean that every Indian defence company can immediately manufacture every DRDO missile. Companies will still have to meet the relevant technical, quality and regulatory requirements. But it does create a wider route for industry to absorb DRDO technologies and participate in their production.

The timing matters

The move comes as DRDO’s missile ecosystem has been producing a steady stream of systems and technologies that are moving closer to induction. In June, DRDO and the Indian Air Force successfully flight-tested the RudraM-II air-to-surface missile. The programme involved the Research Centre Imarat and other DRDO laboratories, alongside Development-cum-Production Partners, Hindustan Aeronautics Ltd, the Regional Centre for Military Airworthiness, the Missile System Quality Assurance Agency and other industries.

The government’s broader list of systems moving through development and trials also includes the Long Range Land Attack Cruise Missile, Very Short-Range Air Defence System, Vertical Launch Short Range Surface-to-Air Missile, Naval Anti-Ship Missile, RudraM-II and other missile and weapon programmes. The implication for industry is that a growing pipeline of indigenous systems will eventually require production capacity, suppliers and manufacturing infrastructure.

India has already built the industry-transfer mechanism

The latest missile decision is not starting from scratch. DRDO’s Development-cum-Production Partner (DcPP) model is designed to bring Indian public- and private-sector companies into the development and production of defence technologies. Under the model, DRDO identifies manufacturing partners and transfers the required technologies for production.

As of March 2026, as many as 134 companies had partnered with DRDO as DcPPs or Production Agencies, while 2,180 technology-transfer agreements had been signed. More than 2,780 intellectual-property rights had also been opened for use by Indian industry. DRDO had said that it has a network of more than 2,200 industries capable of producing subsystems, systems and equipment.

That provides the industrial base into which the latest missile technology-transfer push can potentially feed.

The business opportunity goes beyond the missile maker

The commercial significance of the move is not limited to companies capable of assembling complete missile systems. A missile production programme typically creates demand across a network of specialised suppliers, from propulsion and structures to electronics, guidance, navigation, sensors and other subsystems.

The government itself has highlighted the role of MSMEs and other technology partners in the supply chain as one of the objectives of the latest decision. This could make the transition from development to production particularly important for smaller defence manufacturers.

Instead of relying primarily on imported components or a limited number of large integrators, a larger indigenous production base could allow more Indian companies to participate at different levels of the missile supply chain. The government has also been expanding other mechanisms to support this ecosystem. The Technology Development Fund, for instance, provides grants of up to Rs 50 crore for critical defence technologies, with a particular focus on startups and MSMEs. An additional Rs 500 crore corpus has been sanctioned for emerging technologies. As of June 2026, 80 projects worth a total Rs 334 crore were being implemented under the scheme.

The bigger problem is no longer just development

Recently, Rajnath Singh had stressed that developing an advanced weapon is only one part of building military capability. Speaking at the inauguration of DRDO’s Advanced Weapon System Complex in Hyderabad in June, he said large-scale production capability was equally important alongside technological superiority. He called for shorter development-to-production timelines, simpler manufacturing processes, greater indigenous content and systems that could be rapidly mass-produced when required.

India has demonstrated an ability to develop and test increasingly sophisticated indigenous missile systems. The next industrial challenge is to ensure that these systems can move efficiently from laboratories and testing ranges into factories and eventually into the hands of the armed forces in sufficient numbers.

Missile production is already becoming an industry story

There are already examples of DRDO-developed systems being taken forward with significant industry participation. In 2025, DRDO said 22 Acceptance of Necessity approvals had been accorded for DRDO-developed systems worth approximately Rs 1.30 lakh crore, to be manufactured by Indian industry. The list included the Integrated Air Defence Weapon System, Quick Reaction Surface-to-Air Missile system, Long Range Air-to-Surface Supersonic Cruise Missile, Astra Mk-II, NAG Missile System and other systems.

That number is not the value of the latest missile technology-transfer programme, nor does it represent guaranteed orders for the companies receiving technology. But it illustrates the size of the potential procurement pipeline that Indian industry could eventually serve as indigenous systems move through development, acceptance and production.

DRDO’s technology-transfer policy is also changing

The government has been trying to make technology transfer more attractive to industry. The defence minister said in May that a new Transfer of Technology policy had been implemented under which the earlier 20% ToT fee was waived for Development-cum-Production Partners, Development Partners and Production Agencies. DRDO had, at that point, transferred more than 2,200 technologies to industry.

DRDO has also opened its testing facilities to industry on a payment basis, with hundreds of companies using the facilities for R&D support each year. The objective is effectively to lower some of the barriers between government R&D and private-sector manufacturing.

What it could mean for India’s missile supply chain

The biggest potential change could therefore happen below the level of the prime contractor. A conventional missile programme can involve multiple layers of industrial participation. As more technologies are transferred, companies could potentially enter the ecosystem as manufacturers of complete systems, subsystems or specialised components. That could widen the domestic value captured from each missile programme.

It also fits into India’s push to reduce import dependence. The government said the latest decision is intended to increase domestic value addition and reduce reliance on imports, alongside strengthening operational capability.