ISRO, DRDO, Next what?

India Opens DRDO to Private Sector

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In a significant step toward expanding private sector participation in defence manufacturing, Defence Minister Rajnath Singh has approved the transfer of technologies developed by the Defence Research and Development Organisation (DRDO) for all conventional missile systems to Indian industry for domestic production.

The Ministry of Defence announced the decision on Tuesday, describing it as a milestone that will enable the successful transition of DRDO-developed missile systems from the research and development stage to industrial-scale production. The move is expected to deepen the role of private companies and micro, small and medium enterprises (MSMEs) in India’s defence ecosystem while reducing reliance on imports and boosting domestic value addition.

According to an official Ministry of Defence release, the transfer of technology (ToT) covers all conventional missile systems—those designed for tactical and traditional battlefield roles that use conventional warheads rather than nuclear, biological or chemical payloads.

Strategic systems, including nuclear-capable missiles such as the Agni series, remain excluded and will continue to be handled under separate arrangements.The portfolio expected to open up includes a wide range of systems already developed or under advanced stages of development by DRDO.

These encompass the Akash family of surface-to-air missiles, the Very Short Range Air Defence System (VSHORADS), Astra air-to-air missiles, the Rudram series of anti-radiation and air-to-surface missiles, anti-tank guided missiles such as Nag and its variants, the Man-Portable Anti-Tank Guided Missile (MP-ATGM), the Naval Anti-Ship Missile-Short Range (NASM-SR), long-range land-attack cruise missiles, and the Pralay quasi-ballistic missile, among others.

Under the new framework, qualified Indian companies will be able to undertake indigenous production of these systems, subject to applicable qualifications, certifications and regulatory requirements. Sources in the Ministry of Defence indicated that competitive bidding is likely to be used to select firms that will receive the technology transfer, serve as development-cum-production partners, and handle systems integration in collaboration with DRDO laboratories.

The decision marks a clear departure from the long-standing model in which DRDO primarily transferred missile designs to defence public sector undertakings, particularly Bharat Dynamics Limited, for series production. Officials noted that private firms with the requisite industrial capacity, financial strength and defence manufacturing licences will now have a direct pathway to full-scale production rather than remaining limited to component or subsystem supply.The approval builds on recent initiatives by DRDO to broaden industry involvement. 

In mid-August, the Research Centre Imarat in Hyderabad, on behalf of DRDO’s Missiles and Strategic Systems cluster, issued an Expression of Interest inviting Indian private companies to partner in the development and production of missile and guided bomb systems. Eligible firms, which must meet criteria including a minimum annual turnover of Rs 100 crore, relevant licences and quality assurance capabilities, can be shortlisted as Development-cum-Production Partners. Selected partners are to be embedded in DRDO technical teams during development, 

with technology transferred free of cost on a non-exclusive basis once the development phase is complete, subject to clearances for sensitive materials such as explosives and propellants.Ministry officials emphasised that the objective is to enhance domestic manufacturing capabilities, strengthen the overall defence industrial base, and create opportunities for Indian MSMEs and technology partners across the supply chain. 

By leveraging private sector efficiency and scale, the government hopes to improve production capacity, cost competitiveness and the ability to meet the armed forces’ requirements more rapidly. Experience in other segments, such as rocket systems, has shown that private participation can lead to more competitive pricing and faster delivery.

The broader context is India’s sustained push for self-reliance in defence under the Atmanirbhar Bharat initiative. DRDO has already transferred thousands of technologies to industry over the years and has expanded its network of development and production partners. By March 2026, more than 130 companies had signed on as development-cum-production partners or production agencies, and thousands of technology transfer agreements and intellectual property rights had been made available for industry use.

Analysts view the missile technology transfer as particularly consequential because missiles form a critical pillar of India’s conventional deterrence and operational readiness. Opening production to a wider industrial base could accelerate the induction of indigenous systems, support export potential where clearances allow, and reduce the burden on public sector units that have traditionally shouldered the bulk of manufacturing.

The Ministry of Defence stated that DRDO will work closely with selected industry partners to facilitate technology absorption and ensure that production meets the stringent quality and performance standards required by the three services. Transfers will remain subject to all applicable regulatory and security protocols.

As India continues to modernise its armed forces and expand its defence manufacturing footprint, the decision is expected to reshape the landscape of missile production, giving private industry a larger stake in one of the most technologically demanding segments of the defence sector. Implementation details, including specific qualifying criteria and the timeline for initial technology transfers, are expected to be worked out in the coming months.