Hopeful Of LCA-2 Induction In Good Numbers After September: Defence Secretary | Exclusive | India News

Last Updated:July 27, 2026, 20:26 IST

In an exclusive interview with Moneycontrol, the defence secretary said the government’s job is to develop a drone ecosystem of global levels in the country.

Defence secretary Rajesh Kumar Singh speaks exclusively to Moneycontrol’s Nalin Mehta on how India is building a drone ecosystem of global levels, rising private sector investments and the transformation of India’s defence ecosystem. Singh also holds additional charge as Secretary, Department of Defence Research and Development and as Chairman, DRDO. Edited excerpts.

Q: You have forcefully argued that technology is the foundation of strategic power, and India is looking for strategic autonomy. Can you outline some of the key policy measures in the defence sector that have enabled the shift into a level playing field for the private sector, ease of doing business, long term visibility and orders? What has changed in the last 2-3 years?

I continue to believe strongly that technological sovereignty and industrial strength will decide your military capabilities as well and our job is to ensure that we increasingly design, develop and produce our own weapons and platforms.

The structural transformation we are trying to do, really, is that we create a level playing field for the private sector as well as for startups. Create visibility in terms of orders on the demand side, given that it is a single buyer market, and we create ease of doing business on the supply side so that both new entrants and existing players feel confident and make investment in our defence ecosystem.

We have also tried to ensure indigenization in terms of making sure that in our system of procurement, 75% of our budget is earmarked for domestic orders and that imports become an exception rather than a norm, and also ensuring that within these domestic procurement, it is the IDDM category- which is indigenous design, development and manufacturing – which gets top priority.

Q: India has about 16 defence PSUs, 500 licensed defence companies, 17,000 MSMEs roughly. What kind of growth do you foresee for companies working in this sector and what is your message for investors?

This is a sector which has reached a certain critical mass. It is growing well. It is backed up given the fact that there is a monopsony. The government buying will matter and government buying is going to step up. Our budget has increased significantly in the last financial year. So there is a budget support. Overall, geopolitical conflicts have risen at the highest rate, perhaps since World War 2, across the world. There is an upside in this market and therefore there is investor interest.

From our side, we are supporting it on the demand side through visibility in orders and, on the supply side, through greater ease of doing business.

Some of the interest that is being reflected is shown, for example, by the fact that we had about 250 odd industrial licenses issued till 2015. Thereafter, in the last 10-11 years the number has gone to over 800.

We have multiple licenses coming in every day. Investor interest is there. The venture capitalists are coming in, the startups are moving in, and the government is trying to ensure that in this sector, we support them through orders that are placed as quickly.

To ensure that particularly the startups who have a funding issue, who have funding constraints, we give them orders so that they are able to capitalize on the investments and on the technology development that they have done.

Q: Given that the government is the only buyer in this case, can you outline specific measures on how do you encourage startups in terms of research funding and expansion? How does that work and how is it changing?

From the DRDO, we now have an internal earmarking that 25% of our R&D budget is reserved for industry, for startups and for academia. We also have this scheme of centers of excellence. We have some 11 centers of excellence across different academic institutions where we work, along with the academia in specific domains in defence.

As far as procurement is concerned, defence is the only department which has a scheme called IDEX, which actually promotes startups, ensuring that they are supported till they build prototypes.

Thereafter, of course, they have to go through a bidding process. But in our revived defence procurement procedure, we are trying to bring in systems where if something is developed in consultation with or in conjunction with the services or with us, that we should give him some repeat orders, at least for a certain period of time, say five years until and thereafter make it open.

All those reform measures are either completed or they are on the anvil under the new procedure that we have, the draft of which is already available in the public domain.”

Q: What are the lessons India learnt from Operation Sindoor? We saw drones dominating the conflict. With countries like Ukraine producing about 11 million drones a year, how are we changing the way we look at drone production? What has changed since then?

Obviously, we have to ensure that we keep up with the trends. In modern warfare, it is very clear that increasingly we are going to see much more usage of unmanned systems of precision, long range standoff weaponry of different types, and a much greater focus on autonomous systems of different types, land, and may be underwater as well. And of course, drones is what everybody talks about and how it has made a significant difference in the Middle East and the Ukrainian conflicts.

Our job is to ensure that we develop a drone ecosystem of global levels in this country. We’ve tried to, again, do that by ensuring that for drones and for low cost, but fast moving weather is fast moving. We provide a system of quick inductions, quick trials, and that you will see we’ve already done that through the emergency procurement right after Operation (Sindoor) in which almost Rs 31,000 crore worth of equipment was ordered very, very quickly. The bulk of it was on drones and counter-drone systems and lightweight radars.

Over time, you will see that in these areas, government support will be through the orders that it places. But, for drones for different items of new age warfare, we will ensure that quick inductions are done through fast tracked procedures to give support to this fast evolving drone and unmanned ecosystem in this country.

Q: You have talked eloquently in the past about lessons from the Apple model of indigenous production with about 18-19% of indigenous components. Do you see a similar model emerging in defence production, with elements of indigenisation?

People deliberately misunderstand what you say. Obviously, there are areas where design, manufacturing and everything should be in India. That applies to the LCA, Tejas, the Pinakas and all of those. There are areas where your TRL (Technological Readiness Level) levels are low. That is the area where I am saying you might need to start with a lower level of indigenisation and then gradually build up that ecosystem so that you achieve design and technological sovereignty.

So, depending on the TRL level you can go for assembly in certain areas. If it is a 5, 6 or higher level, you should be able to go for entirely IDDM (which is Indian Designed, Developed and Manufactured) and hopefully, the bulk of our procurement will be in that category. But it is not going to happen overnight, despite what some people might say or claim.

Q: The Union Budget this year has reserved about Rs 2.19 lakh crore for capex, Rs 29,100 crore for defence research and development and 75% of capex only for defence contracts. What shifts are you seeing for end-to-end manufacturing for domestic companies to meet that target of 75%?

So, for the last two years that I have been here, we have comfortably exceeded that 75% target. We have ensured that most of our contracts are signed with domestic players and we will ensure that this will continue to be the case. This will involve many cases which are full IDDM and many cases which are what we call ‘Buy Indian’. This means that you will have a public or private Indian company but the technology and some of the components may be coming from outside. The notion that we can avoid that and go for straight end-to-end indigenisation is a pipe dream. It can’t be done overnight but as I said, where we have TRL 5 or 6 plus, we should aim for that. The journey should be clear that we gradually develop this large ecosystem and over time ensure that most of our complex platforms and equipment gets manufactured in India with technology, design and software control in our hands.

Q: For PSUs and private sector manufacturing in defence, the split in production is roughly about 70:30. Do you see that changing over time, with more share for private sector?

The private sector’s share used to be about 20% a few years back. It has been growing at a faster pace than the public sector, which is why it has now reached 24%. To that extent, the PSU share has shrunk. Through the steps that we have taken in terms of changing the Defense Procurement Manual by removing this product reservation for certain PSUs – when it comes to ammunition or for example, sort of doing the unthinkable, like opening up the AMCA (Advanced Medium Combat Aircraft) program for the private sector as well as the public sector bidders.

All of those are steps that are intended to ensure that over time, we reach a stage where this becomes a 50:50 split between the public and the private sector.

Q: One of the things that the government is really pushed for in the creation of Defence Corridors in UP and Tamil Nadu? What is the level of interest you are seeing in the Defence Corridors? How are they shaping up?

So the the last figures that I saw, we have overall commitments in terms of investment of about Rs 70,000 crore across these two corridors and about Rs 10,000 crore of investment, which is grounded already. So, it is promising. It is moving up. And we’ve seen some public sector units like BrahMos setting up near Lucknow.

Quite a few projects are happening or are about to be grounded. So yes, it is promising and I hope we can sort of ensure that these corridors become defence hubs in the future.

Q: Can we expect more Defence Corridors to be setup?

Frankly, Defence Corridor is not a scheme in the sense that we are setting up some infrastructure and asking people to come. It is more of a signal that these areas are where we think there is a possibility of having a large defence ecosystem. So, it really does not matter so much. It’s more of an announcement.

The real issue is, as I said, providing visibility in terms of orders and Government of India and the state governments providing ease of doing business, including in many cases, state governments give capital incentives, other other types of programs for support. So that combination of factors is what will drive defence industrial investment in this country.

Q: Other countries are now very interested in Indian weaponry like the BrahMos or Pinaka. What are the core sectors where you see India taking a lead in defence production, including for other countries?

I am going to link this with what I mentioned earlier about our TRL levels, where we have achieved design and reached a stage where we have sovereignty in a sense over the software, the design, the upgrade capability.

So, I see it in land systems and missiles, armored land systems, missiles, rocket launchers like Pinaka – which are long range rocket systems. A lot of the shipbuilding activities as well. So, in all of these areas where our TRL level is high, even platforms like the Doniers and, of course the BrahMos, in all of these areas, there is a tremendous scope for getting more export orders.

The fact that many of these platforms have seen action during Op Sindoor also ensures that there will be interest. You mentioned BrahMos. We have potentially three finalized orders: Philippines in the first phase, and both Indonesia and Vietnam on the verge of getting the final contracts done. Akash and the various types of artillery systems – we have had a lot of success with exports to Armenia, for example, and there’s a lot of interest all around.

So yes, this is a good time for defence exports. We reached almost Rs 39,000 crore last year, and we feel that Rs 50,000 crore by 2030 will be easily achievable.

Q: What is your sense of how much quantum of investment do you see coming into the private sector over the next 4 to 5 years?

We have never done a study of that type, frankly. And perhaps we should. What we have done is the Department of Defence Production has created a large registry of all grounded industrial licensees and defence industries in the country. Maybe we can take a step forward and also look at investment, but I would not be able to venture a guess right now.

But I do want to say that if we have a capex of Rs 2,19,000 crore for the current year, 75% of that will be spent in this country. So about Rs 1,52,000 crore at least will be spent in this country. We reached 172 lakh crore of overall production. That is, after adding exports. So, that the size of the market is very clear.

Q: How many Indian companies are currently exporting weapons tech? How do you expect that number to change as we go forward?

That’s quite a surprise to me also that actually there are as many as 145 countries which export different kinds of equipment, from the bulletproof jackets and ballistic helmets to the more complex systems like the BrahMos, the Akash.

PSUs, of course, are also getting a lot of export orders now, particularly for the standard artillery shells and things like that. Munitions.

In fact, the growth in the recent past has been more in public sector exports, taking advantage of the global geopolitical conflicts which are leading to a lot of countries rearming. During 2025-26, we had 1,800 export authorizations to over 100 countries. And about 145 different companies doing it. So yes, as I said, defence exports, like the defence industry, in general, is now reaching a critical mass.

Q: What is the capacity utilisation of PSUs? Are they ready for this kind of an expansion?

I think they are certainly ready. Their order books are full, particularly companies like Munitions India, for example. Their order books are quite full and they will, perhaps, have to look at additional capex to expand their capacity because they may be already fully utilizing their capacity. That is something that we will need to look at for the future.

But I’m very clear I am agnostic about it. It can be a PSU, it can be a private company. What I want is industrial capacity in this country to produce both platforms and ammunition and that is what we are aiming at.

Q: Is there space for any new defence PSUs to be set up?

I don’t think so. I would imagine, if you ask my personal opinion, I think we have these large number of new companies formed by the corporatization of the OFBs (Ordnance Factory Boards). And of course, we have the older companies, which are the shipyards and the HAL (Hindustan Aeronautics Ltd) type of companies. For the newer companies, maybe some round of consolidation rather than for the new companies is perhaps more relevant.

Q: You have opened up missile production for private players. Will this only concern production or are targeting design development as well beyond the BrahMos? Are we looking at JVs as well on the BrahMos model?

No. In missiles we are for the most part looking at DRDO’s technologies, which for a long time was earmarked essentially for one missile-producing PSU – which is Bharat Dynamics Limited (BDL). Now that we have – and given the changing nature of warfare – we need a much larger volume of missile production. The production scale has to go up. Therefore, and it is in that sense that we want to do ToTs with private sector companies. And we intend to ensure that when it comes to conventional missiles, at least, we will allow private sector also to come in and seek ToT and start production of those kinds of missiles.

Q: For the LCA project how far are we down on that? By when can we expect an indigenous fifth generation fighter in operational terms? Where are we now in the process?

The RFPs have been issued to three consortia. One is a pure private sector company: TASL (Tata Advanced Systems Limited). One is a private-public consortia: Larsen & Toubro (L&T) with wBharat Electronics Limited (BEL) and Bharat Forge (Kalyani Group) with Data Patterns and BEML.

Pre-built meeting was conducted on 1 July for these parties. The last date of submission of this RFP was 26th of July, and thereafter we will hopefully move towards finalization of this bid. I think five prototypes are being looked at and we intend to sort of try to ensure that the first prototypes should be flight tested by 2028.

Q: There has been a lot of debate around the Sukhois as well. What is the thinking on buying new aircraft outside of the AMCA?

No, we have not thought about Sukhois. If you are asking about the new version of the Sukhois, no. But we are actively looking at upgrading the existing Sukhois which we have been producing under licence from the Russians. It is a success story. It is a very important platform with the induction of the BrahMos missiles on it, and we are hoping to upgrade and improve it further.

Q: What is your view on improving the delivery timelines of HAL for delivering the LCA. There’s been a lot of debate around that. When can we see the induction of the LCA-2 in operational roles?

On LCA-2, I think seven prototypes are now ready. Now that the engines have come. The Air Force inducting them involves a checklist of things that they would have should have achieved. My understanding is that on some of the critical areas they are almost there.

The last date I have from HAL is that by September they intend to meet whatever minimum requirement the Air Force has. On others, they are giving them some concessions. So, hopefully by September. If the engine delivery program keeps up – August onwards, they are supposed to give two engines every month. So, with that available, I hope that by, or after, September we can start inducting these aircraft in good numbers.

Q: You are also acting as Chairman of DRDO. How do you see the role of DRDO in enabling the systemic shift in our defense architecture and our ecosystem overall?

I think that’s one of the sort of unsaid or not so well known stories about our private sector that almost all of the private sector companies that have come up have relied on or taken technology transfers from DRDO. This is quite natural because after all, R&D in defence is almost exclusively the preserve of DRDO. Now we have finally shown that we will give contracts to the private sector based on DRDO technologies.

You must be aware of the ATAGS (Advanced Towed Artillery Gun Systems) where already a contract worth Rs 7,000 crore has been signed. There is a contract for close quarters carbines – again signed for about Rs 4500 crore. This is one of the largest small orders in the world. There’s a whole bunch of other private sector and public sector players who are producing things like the Pinaka – both the launchers and the warheads.

So in total, my understanding is that there are some 145 odd companies have taken maybe 2,000 plus ToTs from DRDO. Overall, if you see the volume of production that this has entailed cumulatively over the years, over several decades, that reaches almost Rs 7 lakh crore. In a in a sense, DRDO has played a vital role through its technology transfers in creating this volume of defense production, where the private sector increasingly is playing a very important role.

Q: Can you tell us about key focus areas in terms of technology investments?

Obviously there are areas where there are gaps and the jet engine is the most well known of that. But there are also areas – all kinds of engines, right from the larger capacity tank engines to the engines for our missile programs to the drone programs. In all of that there is significant import dependance, and we have to work on that.

We are working on some of those. Some through large scale programs, which will involve cabinet approvals. Others where we will do research and development directly. So that is one specific sort of gap that I can think of.

Of course, there are other areas where we’ve made a lot of progress where the TRL level, as I mentioned, has reached 5.⅚ plus and where we can hopefully increasingly design and develop things ourselves.

The other area of dependency, frankly, is in terms of materials. A lot of the permanent magnets, some of the payloads for our drones and even for our satellite systems. Significant levels of dependence still exists there. Those are the areas where we really need to work much more.

Q: You are also presiding over a very possibly a major shift in our operational architecture with theater commands. When do we expect to see those being implemented?

That subject is not really mine. Although I have had consultation on this with my counterparts in DMA. On timelines, I will not be able to guess. Dialogue is on and let us see where it goes.

Q: In changing our defence architecture, planning princess and encouraging private sector, you might have looked at other countries and how they do it. Which are the other countries you looked at where you maybe drew lessons from to adapt to our purposes?

If you look at technology development, technology absorption, technology creation, among our Asian peers, I think Korea is a pretty good example. They have done well with their defence, production, homegrown defence, production. USA is a world leader and continues to be in disruptive technologies of different types. Those are two are probably some of the areas. And, of course, we have to learn from the Chinese as well in terms of quickly absorbing technologies and then developing and building it at industrial scale much faster than other countries have been able to do.

I think there are good examples from all of these countries. We have to use that model of, as I mentioned, a hybrid production model where public and private sector are both given an equal role. Where we have hard wired very strong accountability in terms of timelines and in terms of contract fulfillment. We have to do that across the board both for the PSUs and the private sector, the contract is the first part. Thereafter, ensuring that the contracts are fulfilled on time, where all of them have an active role. Those are going to be key to us being able to emulate some of the global pairs that I mentioned.

Q: Would it be fair to say that a new military industrial complex being created in this country? And, given the numbers you just talked about in terms of exports, is India emerging as the back office of the world in defence, as we have been for IT?

I do agree that India needs to develop a large defence industrial ecosystem. Military industrial complex is a bit of a pejorative word. It was used in the US in the context of the Cold War. where the military industrial complex takes over your geopolitical sort of strategy and creates wars all around the world to sustain it. I would prefer to call it a defence industrial complex. It is meant for our defence, and it is meant to ensure that the world’s largest populated country has the hard power that it needs to protect itself during this critical phase of our national development, when we move up the ladder in terms of becoming a top 2 or 3, ultimately, maybe even number one in terms of our GDP weight in the global economy. We should be able to protect ourselves well. And to do so we need a large defence industrial complex complex. And you can see some signs of that beginning to emerge under the leadership of Honorable Prime Minister Modi.

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