Governance of Indian Defence Sector

Last Updated: May 2023 (Governance of Indian Defence Sector)

Governance of Indian Defence Sector

This article deals with ‘Governance of Indian Defence Sector – UPSC.’ This is part of our series on ‘Science and Technology’ which is an important pillar of the GS-3 syllabus. For more articles on Science and technology, you can click here

Indian Defence Apparatus

Legally, the President of India is the Supreme Commander of the Indian Defence Forces. 

Ministry of Defence

  • Ministry of Defence controls the administration of the Indian Armed Forces.
  • It is headquartered at Cabinet Secretariat, Raisina Hill (in New Delhi).
  • Ministry of Defence has the following child agencies. 
    1. Department of Defence
    2. Department of Defence Production
    3. Defence Finance
    4. Department of Defence Research and Development
    5. Department of Ex-Servicemen Welfare
    6. Indian Armed Forces
    7. Inter-Services Organisations

Three services of Indian Armed Forces

Indian Defence System has been divided into 3 services, i.e. Army, Navy and Air Force.

1. Army

  • Indian Army defends the territorial sovereignty of India.
  • India has the third-largest army with 13 lakh active personnel.
  • It has 7 commands (6 operational and 1 training)
    1. Northern Command – Udhampur
    2. Western Command – Chandigarh
    3. Central Command – Lucknow
    4. Eastern Command – Kolkata
    5. South Command – Pune
    6. South – Western Command – Jaipur
    7. Training Command – Shimla

2. Air Force

  • Indian Air Force defends the Indian airspace.
  • There are 1.27 lakh active personnel in Indian Air Force.
  • It has 7 commands (5 operational + 1 training + 1 maintenance)
    1. Eastern Command – Shillong
    2. Western Command – New Delhi
    3. Central Command – Allahabad
    4. Southern Command – Thiruvananthapuram
    5. South – Western Command – Gandhi Nagar
    6. Training Command – Bangalore
    7. Maintenance Command – Nagpur

3. Navy

  • Indian navy protects the territorial waters, coast and Indian geopolitical interests.
  • It has 58,000 active personnel.
  • It has 3 operational commands. 
    1. Eastern Command – Vishakhapatnam
    2. Western Command – Mumbai
    3. Southern Command – Kochi

4. Joint Commands

  • There are two joint commands of the Indian Armed Forces, and these include 
    1. Tri-Service Command is headquartered at Andaman and Nicobar
    2. Strategic Force Command (It looks after India’s nuclear weapons)

Side Topic: DRDO

  • DRDO = Defence Research and Development Organisation. 
  • It was formed in 1958 by the merger of the Directorate of Technical Development and Production & Defence Science Organisation.
  • DRDO is headquartered in New Delhi, India.
  • It works under the administrative control of the Defence Ministry.
  • Its primary function includes developing defence technologies. Earlier, it has spearheaded important projects, including Integrated Guided Missile Program (IGMP). 
  • But DRDO is often criticized for delayed projects and cost overruns.

Defence Acquisition Council

  • It was established in 2001 to tackle corruption and accelerate military weapon procurement.
  • It is headed by Defence Minister.

Defence Expenditure of India

Defence budget for 2023 is  Rs.5.94 lakh crore  constituting around 14% of total government expenditure and 3% of India’s GDP.

Governance of Indian Defence Sector

Side Topic:  SIPRI Report 2023

  • India is the 3rd largest spender on defence globally (behind USA and China).
  • India is the largest importer of arms globally, followed by Saudi Arabia and Australia. 
SIPRI Report 2023 and India

Integrated Theatre Command

  • This term has its origin in ‘theatre warfare’, which means ‘the entire land, sea and air areas are involved directly in the war operations. 
  • Theatre Command refers to the unified command under which all the Army, Navy and Air Force resources are pooled, depending upon the threat perception.
  • The present plan includes bringing all 17 service commands into 5 unified Theatre Commands.
    1. Northern Land Theatre
    2. Western Land Theatre
    3. Eastern Land Theatre
    4. Maritime Theatre Command
    5. Air Defence Command

Need of Integrated Theatre Command

  • Various committees constituted in the wake of the Kargil War opined for the enhanced coordination between armed forces for a prompt and effective military response.
  • It will bring down the cost for procurement as the use of resources can be rationalized, and duplicity in resource procurement can be tackled. 
  • It will help India fight any future war, especially with countries like China using a unified approach. 

Challenges in the creation of Theatre Command

  • There is a lack of consensus over the basic structure of Theatre Command. 
  • The Indian Air Force has already expressed reservation about the idea of the formation of Integrated Theatre Command because it is already short of assets. The formation of Integrated Theatre Command will spread its resources thinly over all the Theatre Commands.
  • There is a feeling that Theatre Command will lead to army superiority over the other forces. 
  • There is concern regarding the method that will be used to integrate the other security forces such as BSF, ITBP, Assam Rifles and CRPF into Theatre Commands. 
  • The Theatre Commands have been based on the idea of conventional security threats. However, in the age of cyber and nuclear warfare, the possibility of conventional attacks is very low. But, Theatre Command can’t tackle such challenges.

Defence Manufacturing

India is the world’s second-largest arms importer, accounting for about  12% of global arms imports. This external dependence on Defence Goods not only poses a security risk but is also a challenge to Aatma Nirbhar Bharat.

Present status of Defence Production and Trade of India

  • Total Defence Manufacturing in India: Rs 80,000 crore (80% – Public and 20% – Private)
  • Import: India is the second-largest importer of defence goods after Saudi Arabia (SIPRI).
  • Indian Exports
    • Indian defence exports increased from 1500 crore in 2016 to 8500 crore in 2020.
    • HAL and Indian Ordnance Factory are included in the Top 100 Defence companies of the world.


  1. Budget 2022: 68% of defence purchases would be made from local producers. 
  2. Positive Indigenization Lists: The government has issued a “positive indigenization list” comprising 209 items. These items can’t be imported, and the government has to procure items listed in it from domestic Industry. 
  3. De-reserve the Defence Manufacturing: Private participants are now eligible to work in defence manufacturing. 
  4. Liberalized FDI Regime: 74% FDI can be done through automatic route, and 100% FDI can be done through approval route.
  5. Defence Offset Policy: If the deal is more than Rs. 2,000 crore, 30% of the deal’s value, has to be invested in the Indian economy.
  6. Defence Procurement Procedure, 2020: The highest priority is given to the Indigenously Designed, Developed and Manufactured in India. 
  7. Defence Corridors has been set up in India.

Defence Industrial Corridors

Two Defence Industrial Corridors are being constructed in

  1. Tamil Nadu
  2. Uttar Pradesh
Defence Industrial Corridors

Benefits of Defence Industrial Corridors in India

  • It will boost the Make in India project.
  • It will provide employment opportunities.
  • It will help India become self-reliant (Atma Nirbhar) in defence manufacturing.
  • It will help save a large amount of foreign reserves and earn foreign currency by selling defence equipment to other countries.
  • It will also help in attracting FDI in India.

Defence FDI Reform

Under the present rules, 100 % FDI in the defence sector is allowed. 

FDI in defence is good?

  • Public sector companies have consistently failed to meet the requirements of the armed forces. 
  • Superior management culture of the private sector will come in India.
  • It will help India in saving foreign reserves.
  • It will help Indian companies to set up a base in the defence sector. E.g., Boeing’s contract with Tata will help Tata to develop expertise in the defence sector.
  • It will help in the generation of jobs.

FDI in Defence is not a good model for India

  • Foreign subsidiaries will always put pressure on India for repeat orders. 
  • Would dependence on a Lockheed Martin (India) or a Bharat Boeing differ from relying on U.S. principles?
  • FDI will not ensure that R&D will happen in India. It just means that the Indian subsidiary of that company will produce hardware in India. In strategic sectors like defence, it is important to achieve the ability to create our fighters & tanks.  
  • It will increase the danger of creating a powerful lobby of the armament industry which will aim to protect its interest in future even by promoting insurgencies and terrorism in India.
  • A better option is to invest in HAL, DRDO etc. If ISRO can perform well with the provision of autonomy and financial resources, other PSUs can perform as well.

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