India is moving to transform its 16 defence Public Sector Undertakings (DPSUs) from domestic suppliers into global defence manufacturing giants. Union Defence Minister Rajnath Singh called this effort a national security imperative, not just an industrial or economic goal.

The push comes as DPSUs posted record output and handed over Rs 3,951 crore in dividends to the government, even as Rajnath Singh laid out a five-year roadmap focused on exports, technology leadership and global-quality standards.

At an annual performance review in Delhi on September 1, Defence Minister Singh noted that India’s total defence production in 2025-26 reached about Rs 1.8 lakh crore, with DPSUs contributing roughly Rs 1.29 lakh crore, around 72 per cent of the total. He described this as a key step toward an ‘Aatmanirbhar’ (self-reliant) defence industrial base.

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Record production, clear ambition: Defence driven by national security

“In pursuit of the ‘Make in India, Make for the World’ objective, we must resolve to transform all DPSUs into global giants,” Singh said. He repeatedly stressed that the stakes go beyond revenue and orders.

“The progress of DPSUs is not merely an economic or industrial necessity; it is a national security imperative. Recent global conflicts have demonstrated how crucial assured supply chains, surge capacity, critical spares, rapid repair capabilities, and the ability to sustain production during prolonged conflicts are for any nation,” he said.

As per the government release, India wants DPSUs that can scale up quickly in crises, keep platforms running with local spares and repairs, and avoid supply shocks during wars or global disruptions.

Six-point playbook to build “global giants”

The defence minister outlined a focused agenda for DPSUs:

  • Timely delivery of platforms and systems to the armed forces
  • Reducing import dependency through deeper indigenisation
  • Turning R&D spending into technology leadership — new tech, IP, prototypes and fielded products
  • Boosting defence exports to new markets and higher value brackets
  • Raising productivity via capex expansion and modern manufacturing
  • Supporting start-ups and MSMEs in the defence supply chain
  • Achieving quality equivalent to global standards to compete internationally

He also said R&D success should not be judged only by how much is spent, but by tangible outcomes. “We must identify niche technology areas where India can become not just self-reliant, but a global leader,” Singh said.

Rs 3,951 crore dividend: 7 DPSUs lead the pack

During the event, the CMDs of seven DPSUs presented dividend cheques totalling Rs 3,951 crore for 2025–26, as a return on the government’s equity holdings. The breakdown was as follows:

These payouts show order books and improving profitability across aerospace, electronics, shipbuilding, missiles and specialised materials.

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4 publications to chart the next five years

To institutionalise the push, Rajnath Singh released four key documents on the occasion:

  • ‘Aatmanirbhar DPSU – A Journey of DPSUs towards Self-Reliance’ – mapping indigenisation targets, new products and new processes for the next five years.
  • ‘DISHA’ – an industry–student initiative to give young minds hands-on exposure to defence technologies and modern manufacturing.
  • ‘Modernisation Roadmap of HAL’ – to transform Hindustan Aeronautics into a future-ready aerospace enterprise.
  • ‘Indigenisation Roadmap of HAL’ – to deepen self-reliance in the aerospace and defence sectors.

Together, these publications aim to align DPSUs around self-reliance, innovation and export readiness.

From domestic suppliers to export competitors

The government’s larger plan is to convert DPSUs into globally competitive system integrators that can:

  • Design, develop and deliver complex platforms (fighters, ships, missiles, electronic warfare systems) on time
  • Offer after-sales support, spares and upgrades to foreign buyers
  • Partner with start-ups and MSMEs to build a deep, resilient supply chain
  • Compete on quality, cost and delivery against established global defence firms

With defence exports already rising and order visibility strong, the policy push is designed to ensure DPSUs are not just meeting Indian Armed Forces’ needs but are also winning contracts abroad.

The meeting, attended by Minister of State (MoS) for Defence Sanjay Seth and Secretary (Defence Production) Sanjeev Kumar, also reviewed progress on indigenous manufacturing, advanced technologies, exports, supply chains, and the execution of big-ticket projects.