The Ministry of Defence (MoD) has formally outlined a new strategy to encourage joint venture (JV) opportunities for private sector players in India’s growing defence manufacturing landscape. As part of the broader Atmanirbhar Bharat initiative, the ministry aims to promote domestic production of critical defence equipment by enabling collaboration between Indian private firms and foreign original equipment manufacturers (OEMs). The goal is to leverage advanced technologies, facilitate skill development, and reduce import dependency in strategic defense systems.

Under the new policy framework, the government is offering faster approvals, land and infrastructure support, and tax incentives to joint ventures that invest in areas such as aircraft systems, missile technology, radar and surveillance systems, cyber defence, and unmanned platforms. JVs formed under the Make I and Make II categories of the Defence Acquisition Procedure (DAP) will receive priority consideration. Additionally, foreign direct investment (FDI) of up to 74% under the automatic route is permitted for joint ventures engaged in defence production, with up to 100% possible through the government route in select cases.

This policy update underscores the government’s intent to build a self-reliant defence ecosystem while tapping into global expertise. The Ministry is also encouraging joint ventures to establish R&D centers, engage in technology transfer agreements, and participate in export-oriented production. By opening up the sector through transparent, incentive-backed mechanisms, the government expects a significant increase in private participation, strengthening India’s position as both a regional security provider and a global defence manufacturing hub.