## Introduction
The Indian government is revising its **Defence Acquisition Procedure (DAP)** as part of its push for the *Atmanirbhar Bharat* (self-reliant India) initiative. However, a major obstacle remains: determining what legally constitutes an “Indian” defence company.
## Defining an Indian Firm
The dilemma stems from the complexity of ownership and control structures. Many defence firms operating in India have mixed shareholding, with both domestic and foreign investors. The DAP emphasizes Indian ownership and control, but these terms are not always straightforward.
Government policy currently defines an Indian company as one incorporated under the **Companies Act (2013)** and controlled by Indian citizens. Yet, in sectors involving high technology and foreign partnerships, ownership may be spread among multiple entities, both foreign and domestic.
## Strategic Importance of Classification
The classification of a company as “Indian” or “foreign” directly affects its eligibility for defence contracts, especially in categories reserved for Indian vendors. Companies seeking to qualify under the “Make in India” procurement category must demonstrate not only Indian registration but also effective control and majority ownership by Indian nationals.
Foreign direct investment (FDI) of up to 74 percent is allowed under the automatic route in defence manufacturing. Beyond that, government approval is required. This threshold further blurs the definition of what counts as Indian-made, particularly when advanced foreign technology or components are integral to production.
## Balancing Self-Reliance and Global Partnerships
India’s defence modernization requires access to global technologies and supply chains, making purely local development difficult. To ensure balance, policymakers are exploring nuanced criteria that consider effective control, domestic manufacturing presence, and local value addition—rather than merely focusing on ownership percentages.
This ongoing debate underscores India’s broader challenge: fostering self-reliance while maintaining productive international defence collaborations.
> “Defining what constitutes an ‘Indian company’ is essential for aligning defence procurement with national strategic goals,” notes a senior defence analyst.
## Conclusion
The government’s final stance on the definition of an Indian firm will shape the future of India’s defence ecosystem. A clear and balanced policy could enable both greater self-sufficiency and global competitiveness.
***
**Author’s Summary:** India’s effort to define what qualifies as an “Indian” defence firm is central to reconciling national control with foreign collaboration under the Atmanirbhar Bharat framework.
more
Times Now on MSN — 2025-11-30