The Indian government is reportedly considering a major policy change that would classify the Indian subsidiaries of foreign defence companies as domestic manufacturers. If approved, this move could allow these firms to participate in defence procurement programs reserved for “Indian” companies, potentially transforming the defence manufacturing landscape.
Currently, subsidiaries of global defence companies operating in India face restrictions when bidding for contracts meant for domestic producers. By recognising them as Indian entities, the government aims to increase competition, promote technology transfer, and attract long-term investments from major global defence players.
This proposed change aligns with India’s strategic focus on Aatmanirbhar Bharat in the defence sector, which seeks to reduce import dependency and enhance local production capabilities. The policy could cover multiple procurement categories, including Buy (Indian) and Buy and Make (Indian), providing these subsidiaries equal footing with purely Indian firms.
Experts say the move may accelerate the development of advanced manufacturing facilities in India, stimulate innovation, and strengthen the domestic defence ecosystem. Companies like Airbus, Lockheed Martin, and Saab, which already operate production units in India, stand to benefit significantly from this policy adjustment.
The government is expected to release an official notification soon, finalising the criteria under which foreign-owned subsidiaries will be recognised as Indian manufacturers. If implemented, this could mark a new era for India’s defence industry, combining global expertise with local production.
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