Post-Kargil defence reforms and capabilities build-up (Department of Military Affairs, CDS, FDI, defence budget, production/exports)

What happened: governance and industrial capability build-up measures highlighted for post-Kargil reform

India’s post-Kargil defence reforms are presented as an ecosystem shift covering joint defence governance, capital-heavy defence spending, and industrial-policy tools that connect service requirements with domestic industry. The measures highlighted include the Department of Military Affairs under the CDS framework, the CDS role as the single point military adviser, defence sector Foreign Direct Investment liberalisation, indigenisation execution instruments such as the Srijan Defence Portal and Positive Indigenisation Lists, and Defence Industrial Corridors for regional manufacturing ecosystems and testing capacity.

Background and earlier position

The Kargil War is cited as a turning point that exposed coordination and modernisation needs and the need for greater self-reliance in defence. In response, reforms in defence management and procurement governance were pursued to strengthen jointness among the Army, Navy and Air Force. On the industrial side, policy direction moved toward greater private-sector participation and indigenisation under Atmanirbhar Bharat, with co-development and co-production involving foreign Original Equipment Manufacturers.

What changed now

The government backgrounder highlights concrete changes in defence governance and defence-industry execution: establishment of the Department of Military Affairs under the CDS framework; creation of the CDS as a single point military adviser to the Government (General Bipin Rawat as the first CDS in 2020; General N. S. Raja Subramani as the current CDS); liberalised defence sector FDI with the Automatic Route cap at 74% for new defence industrial licences and up to 100% via the Government Route where modern technology is introduced; higher defence allocations including increased capital expenditure for 2026–27 relative to 2014–15; and indigenisation and manufacturing scaling through the Srijan Defence Portal, Positive Indigenisation Lists introduced in 2021, and Defence Industrial Corridors with investment commitments and grounded investments up to April 2026 including support through testing and innovation capacity such as the Defence Technology & Test Centre in Uttar Pradesh.