"India's defence production reaches record ₹1.78 lakh crore in FY 2025-26"
Acceptance of Necessity (AoN)
DAC's formal first step approving a defence procurement proposal's necessity.
Positive Indigenisation List (PIL)
A list of defence items whose import is progressively banned, compelling domestic sourcing.
India's defence manufacturing sector has historically been dominated by Defence Public Sector Undertakings (DPSUs) and Ordnance Factories, with private industry — including MSMEs — largely excluded from the supply chain. For much of the post-independence period, India ranked among the world's largest arms importers, a situation that represented both a strategic vulnerability and a significant drain on foreign exchange. The constitutional basis for defence production rests with the Union List (Entry 1), while industrial licensing is governed by the Industries (Development and Regulation) Act, 1951, with the Department of Defence Production under the Ministry of Defence as the nodal authority.
The policy pivot toward indigenisation accelerated after 2014 under the twin frameworks of 'Make in India' and 'Aatmanirbhar Bharat'. The Defence Acquisition Procedure (DAP) 2020 replaced the earlier DPP 2016 and placed a new 'Atmanirbhar' procurement category — covering items that are indigenously designed, developed, and manufactured — at the top of the preference hierarchy. Complementing this, Positive Indigenisation Lists (PILs) progressively ban imports of specified defence items, compelling domestic sourcing from both public and private sectors. Two Defence Industrial Corridors — in Uttar Pradesh and Tamil Nadu — were established to create dedicated manufacturing ecosystems, while the iDEX (Innovations for Defence Excellence) scheme provides challenge-based grants to startups and MSMEs for cutting-edge defence technology development.
India's defence production ecosystem operates through a layered institutional structure. At the apex, the Defence Acquisition Council (DAC), chaired by the Defence Minister, accords Acceptance of Necessity (AoN) — the first formal step in procurement — to capital acquisition proposals. Below this, the Defence Procurement Manual (DPM) 2025 operationalises vendor development norms, particularly for private-sector and MSME participation. The Chief of Defence Staff (CDS), as Permanent Chairman of the Chiefs of Staff Committee and Principal Military Advisor to the Defence Minister on tri-service matters, plays a coordinating role in modernisation planning — though the CDS does not exercise military command over the three Service Chiefs.
The budget architecture for defence indigenisation has two distinct streams. The capital expenditure budget funds long-term acquisitions of platforms and equipment; a reservation of 75% of this budget for domestic procurement creates a guaranteed demand signal for Indian industry. …
What are the duties of the Chief of Defence Staff (CDS) as Head of the Department of Military Affairs?
1.Permanent Chairman of Chiefs of Staff Committee
2.Exercise military command over the three Service Chiefs
3.Principal Military Advisor to Defence Minister on all tri-service matters
Select the correct answer using the code given below:
Which of the following activities constitute real sector in the economy?
1.Farmers harvesting their crops
2.Textile mills converting raw cotton into fabrics
3.A commercial bank lending money to a trading company
4.A corporate body issuing Rupee Denominated Bonds overseas
Select the correct answer using the code given below:
With reference to the Chief of Defence Staff (CDS), which of the following statements is/are correct?
1.The CDS serves as Permanent Chairman of the Chiefs of Staff Committee.
2.The CDS exercises military command over the three Service Chiefs.
3.The CDS is the Principal Military Advisor to the Defence Minister on all tri-service matters.
Select the correct answer using the code given below:
Consider the following pairs relating to India's defence procurement framework:
Instrument | Primary Purpose
1.Positive Indigenisation List | Progressively banning import of specified defence items
2.Acceptance of Necessity (AoN) | Final contract signing stage in defence procurement
3.iDEX | Challenge-based grants to startups for defence technology
4.DAP 2020 | Placed 'Atmanirbhar' category at top of procurement preference
How many of the above pairs are correctly matched?
With reference to India's defence budget architecture, consider the following statements:
1.The capital expenditure component of the defence budget is primarily used for long-term acquisition of platforms and equipment.
2.At least 75% of the capital procurement budget is reserved for domestic procurement to promote indigenisation.
3.The revenue expenditure route in defence procurement is used exclusively for salaries and pensions of defence personnel.
Which of the statements given above is/are correct?
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