Policy Update
Riddhi Suthar
Background
India’s defence indigenisation drive received a significant boost with the establishment of a radar manufacturing facility in Tamil Nadu through the joint venture ELTX Systems Pvt. Ltd., formed between DCX Systems and Israel Aerospace Industries (through its subsidiary ELTA Systems). Radar systems are critical components of modern warfare, air defence operations, enabling surveillance, target acquisition, early warning and missile guidance.
The joint venture reflects a shared commitment to localising critical capabilities, deepening industrial cooperation and supporting India’s ambition to become a global hub for advanced defence manufacturing. Construction of the facility is expected to be completed by April 2027, with production planned to commence shortly thereafter. Once operational, it will enhance capabilities in surveillance and threat detection.
Israel has become one of India’s leading defence technology partners. The Tamil Nadu facility represents a shift from a traditional buyer-seller relationship toward joint production and technology collaboration. The project is also expected to create opportunities for collaboration with startups and academic institutions involved in defence innovation.
From a policy standpoint, the project represents India’s larger shift from licensed manufacture to co-development and co-manufacturing of sophisticated defence technologies. It enhances current procurement frameworks, such as the Defence Production and Export Promotion Policy (DPEPP) 2020 and the Defence Acquisition Procedure (DAP) 2020.
Tamil Nadu’s importance in this initiative extends beyond its role as the host state. As one of India’s leading industrial and manufacturing hubs, with a well-developed defence-industrial ecosystem, skilled workforce, advanced electronics sector, and strategic maritime location along the Indian Ocean, the state is increasingly central to the country’s defence production ambitions. The establishment of radar manufacturing facilities in Tamil Nadu therefore carries implications not only for regional economic development but also for strengthening India’s national defence industrial base, enhancing supply-chain resilience, and advancing the objectives of self-reliance under the Atmanirbhar Bharat framework.
Functioning
Technology Collaboration and Transfer: The project is being implemented through ELTX Systems Pvt. Ltd., a joint venture between DCX Systems (India) and ELTA Systems. ELTA has extensive experience in developing airborne Early Warning and Control (AEW&C) radars, Fire-control radars, multi-mission surveillance radars, ground-based air defence radars and Maritime surveillance radars. India has already procured several ELTA radar systems, including the EL/M-2084 Multi-Mission Radar and Phalcon AWACS radar systems. The collaboration enables transfer of manufacturing processes, training of Indian engineers and technicians, establishment of quality assurance and testing standards, and Integration of Indian suppliers into global defence supply chains.
Domestic manufacturing and localisation: The facility will undertake manufacturing of radar subassemblies, System integration, calibration and testing, maintenance, repair, and overhaul (MRO) services. Production inside India is expected to reduce dependence on imported radar systems. According to the Ministry of Defence, domestic defence production reached approximately ₹1.46 lakh crore (US$17–18 billion) in FY 2024–25, while the government has set a target of ₹3 lakh crore in defence production by 2029.
Supply chain development and MSME participation: One of the most significant aspects of the project is the integration of Indian Micro, Small, and Medium Enterprises (MSMEs). India currently has more than 16,000 registered MSMEs participating in defence manufacturing. Over 430 industrial licenses issued to private defence firms. The Tamil Nadu facility is expected to source a growing proportion of printed circuit boards, RF modules, antennas, and communication interface components from domestic suppliers.
Skill development and human capital formation: Advanced radar manufacturing requires expertise in Electronics engineering, Signal processing, Artificial intelligence-assisted target detection, Electromagnetic systems and Software integration. This project is expected to train hundreds of Indian engineers and technicians, facilitate joint technical workshops with Israeli experts and support industry-academia partnerships.
Defence procurement linkages and operational utility: Locally produced radar systems can reduce procurement lead times, improve spare parts availability, lower lifecycle maintenance costs and enhance operational readiness during emergencies. India exported defence equipment worth approximately ₹23,600 crore (US$2.8 billion) in FY 2024–25, and thegovernment aims to increase exports to ₹50,000 crore by 2029. Radar systems represent a high-value segment within this export strategy.
Performance
Defence production increased by nearly 15% between FY 2023–24 and FY 2024–25, reflecting the impact of indigenisation measures, increased domestic procurement, and greater private-sector participation. This growth is particularly significant considering that defence production stood at only ₹46,429 crore in FY 2014–15, implying an increase of over 170% in a decade. A major indicator of policy success has been defence exports. Exports increased by approximately 12% in FY 2024–25 and by more than 62% in FY 2025–26, demonstrating growing international acceptance of Indian defence products.
The government has set a target of ₹50,000 crore in defence exports by 2029, and the current trajectory suggests considerable progress toward this goal. India’s defence industrial ecosystem has expanded significantly under the Aatmanirbhar Bharat and Make in India initiatives. According to Ministry of Defence data, the ecosystem presently comprises 16 Defence Public Sector Undertakings (DPSUs) and 46 DRDO laboratories and establishments, making it one of the largest defence manufacturing networks in the developing world.
Table 1: Growth in India’s Defence Production and Defence Exports (FY 2023–24 to FY 2025–26)
| Year | Defence Production | Defence Exports |
| FY 2023-24 | ₹ 1.27 Lakh Crore | ₹ 21,083 Crores |
| FY 2024-25 | ₹ 1.46 Lakh Crore | ₹ 23,622 Crores |
| FY 2025-26 | ₹ 1.50- 1.54 Lakh Crore | ₹ 38,424 Crores |
Source: Ministry of Defence (MoD), Government of India; Press Information Bureau (PIB), various releases on defence production and exports (2024–2026); compiled by the author.
By 2025, the Government of India had issued 788 industrial licences to 462 companies,facilitating greater private participation in defence manufacturing. Simultaneously, innovation programmes such as iDEX (Innovations for Defence Excellence) have supported 619 startups and MSMEs, encouraging indigenous development of advanced defence technologies.
As the facility is still under construction, its direct outputs cannot yet be measured through production, exports, or employment figures. Therefore, the project should presently be evaluated as a capacity-building initiative. Its true impact will become measurable only after production begins and data on the extent of indigenisation, employment generation, defence procurement contracts, and export orders become available.
Impact
The establishment of the India–Israel radar manufacturing facility at Shoolagiri in Hosur must be understood within the broader context of the Tamil Nadu Defence Industrial Corridor (TNDIC), which was launched by the Government of India in 2018. The choice of Shoolagiri in Hosur for the radar facility is strategically significant. The region already hosts several defence and aerospace firms, allowing the radar facility to benefit from existing vendor networks and specialised human capital.
Hosur has emerged as one of South India’s fastest-growing manufacturing clusters because of Proximity to Bengaluru, which is India’s leading aerospace and defence technology hub and better road connectivity because of the Chennai–Bengaluru Industrial Corridor, along with the presence of suppliers capable of supporting high-technology defence production.
The corridor connects Chennai, Hosur, Salem, Coimbatore, and Tiruchirappalli, bringing together aerospace, electronics, metallurgy, and precision engineering capabilities. The radar project demonstrates how defence corridors can attract foreign technology partnerships and create regional industrial clusters.
The radar facility can therefore serve as a platform for knowledge transfer and workforce upskilling in defence electronics. However, the extent of access to core technologies and intellectual property will determine the depth of this impact. The India–Israel radar manufacturing initiative represents a significant outcome of India’s broader defence indigenisation policies, particularly Aatmanirbhar Bharat, Make in India, and the Defence Production and Export Promotion Policy (DPEPP) 2020.
For Tamil Nadu, the radar manufacturing initiative is expected to strengthen the state’s position as a leading defence and aerospace hub by attracting investment, generating high-skilled employment, fostering technology transfer, and creating opportunities for local suppliers and MSMEs. The project is also likely to enhance research and development linkages between industry and academic institutions, deepen integration into global defence value chains, and contribute to the state’s broader industrial growth and economic competitiveness.
Emerging Issues
Defence joint ventures frequently supply manufacturing expertise but limit access to vital technology, source codes, radar algorithms, and intellectual property. This may create long-term dependence on foreign partners. India’s defence electronics sector remains dependent on global supply chains, and geopolitical disruptions could affect production and maintenance.
Radar systems are highly sensitive strategic assets vulnerable to cyberattacks, espionage, and intellectual property theft. Complex procurement procedures and lengthy testing processes can delay production schedules, technology induction, and industrial planning. A substantial share of sophisticated radar components, including semiconductors, sensors, and RF modules, may continue to be imported, limiting the extent of indigenisation.
Way Forward
The greater emphasis must be placed on skill development, cybersecurity preparedness, and fostering innovation-driven defence enterprises. Industries should also increase investment in indigenous R&D capabilities. Collaboration between established defence manufacturers, startups, research institutions, and academic organisations should be expanded to accelerate the development of indigenous technologies.
Participation in government-supported innovation initiatives such as Innovations for Defence Excellence (iDEX), the Technology Development Fund (TDF), and various defence innovation challenges should be actively encouraged. Furthermore, as India seeks to achieve its defence export targets, private companies must adopt export-oriented production strategies and ensure compliance with international quality, safety, and certification standards.
However, achieving true self-reliance requires moving beyond manufacturing and assemblytowards indigenous design, innovation, and ownership of critical technologies. The long-term success of the initiative will depend on the depth of technology transfer, increased domestic value addition and localisation of critical components.
References
Indian Defence News. (2026, May). India–Israel radar manufacturing plant to boost defence indigenisation.
Construction World. (2026, May). IAI and DCX Systems break ground on radar facility in Tamil Nadu. https://www.constructionworld.in/policy-updates-and-economic-news/iai-and-dcx-systems-break-ground-on-radar-facility-in-tamil-nadu/91220
Defence Research and Development Organisation. (n.d.). Defence Industry Academia Centres of Excellence (DIA-CoEs). https://drdo.gov.in/drdo/en/offerings/schemes-and-services/dia-coes/Academia
Defence Research and Development Organisation. (n.d.). Technology Development Fund (TDF). https://tdf.drdo.gov.in
DD News. (2025). Defence Minister Rajnath Singh launches the Defence Procurement Manual 2025 to boost operational readiness. https://ddnews.gov.in/en/defence-minister-rajnath-singh-launches-defence-procurement-manual-2025-to-boost-operational-readiness/
Economic Times. (2025, March). Defence production hit Rs 1.27 lakh crore in FY 2023–24; exports crossed Rs 21,000 crore. https://economictimes.indiatimes.com/news/defence/defence-production-hit-rs-1-27-lakh-crore-in-fy-2023-24-exports-cross-rs-21000-crore/articleshow/119470110.cms
IDRW. (2026, May). DCX Systems and Israel’s IAI begin construction of an advanced radar manufacturing facility in Tamil Nadu. https://idrw.org/dcx-systems-and-israels-iai-begin-construction-of-advanced-radar-manufacturing-facility-in-tamil-nadu/
Innovations for Defence Excellence. (n.d.). Official portal. https://idex.gov.in
Ministry of Defence. (2020). Defence Production and Export Promotion Policy (DPEPP) 2020. Government of India. https://www.mod.gov.in/sites/default/files/DPEPP2020.pdf
Ministry of Defence. (2025). Defence Procurement Manual 2025 (Vol. I). Government of India. https://mod.gov.in/sites/default/files/DPM-2025%20VOLUME-I.pdf
Press Information Bureau. (2025). India’s defence production reaches record high [Press release]. Government of India. https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/nov/doc20251120699601.pdf
Press Information Bureau. (2025). Press release PRID 2273824. Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2273824®=48&lang=1
The Times of India. (2025, May). India’s defence exports surge to a record high of Rs 23,622 crore in FY25. https://timesofindia.indiatimes.com/business/india-business/indias-defence-exports-surge-to-record-high-of-rs-23622-crore-in-fy25-34-fold-increase-from-2013-14/articleshow/121159405.cms
Business Standard. (2025, June 12). India’s defence industrial ecosystem remains in the state’s hands. https://www.business-standard.com/blueprint-defence-magazine/news/india-s-defence-industrial-ecosystem-remains-in-the-state-s-hands-125061201289_1.html
About the Contributor
Riddhi Suthar is a researcher and policy enthusiast with interests in public policy, governance, international relations, maritime affairs, and strategic studies. Their work focuses on evidence-based policy analysis, geopolitical developments, and emerging global challenges, with particular attention to India’s strategic and developmental priorities. She is engaged in analytical writing, policy research, and academic discussions related to governance, security, and international affairs.Acknowledgement
The author extends sincere gratitude to the IMPRI team for their expert guidance and constructive feedback throughout the process.
Reviewed by Sneha Sharma and Harshini
Disclaimer
All views expressed in the article belong solely to the author and not necessarily to the organisation.
