Critically assess the challenges and limitations associated with technology transfer in defense acquisitions. What measures can India adopt to enhance its capabilities in indigenous defense production?

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Introduction

Technology Transfer (ToT) is often projected as a pathway to build domestic capability through defence imports.
However, in practice, ToT has delivered limited strategic autonomy due to structural and contractual constraints.

Challenges and Limitations of Technology Transfer

Transfer often limited to assembly and licensed production, not core design know-how.
Critical technologies such as engine design, source codes, and advanced materials are rarely shared.
Stringent Intellectual Property Rights and end-user restrictions constrain absorption.
High costs of ToT inflate procurement budgets without proportional capability gains.
Inadequate domestic industrial ecosystem to absorb and upgrade transferred technology.
Dependence on foreign OEMs for spares, upgrades, and maintenance persists.
Bureaucratic delays and fragmented coordination between DRDO, DPSUs, and private players.
Geopolitical pressures and sanctions risks affecting continuity of cooperation.

Structural Concerns

Low private sector participation in high-end R&D.
Limited synergy between academia, industry, and armed forces.
Insufficient long-term funding for indigenous design and prototyping.

Measures to Enhance Indigenous Defence Production

Shift from “buyer–seller” model to co-development and co-design partnerships.
Prioritise indigenous R&D funding in critical areas like aero-engines, semiconductors, and propulsion systems.
Strengthen defence innovation ecosystem through iDEX and start-up integration.
Promote competition by expanding role of private sector alongside DPSUs.
Ensure stable, long-term procurement commitments to incentivise domestic industry.
Develop skilled human capital through specialised defence technology institutions.
Enhance export promotion to achieve economies of scale.
Streamline procurement processes to reduce time and cost overruns.

Conclusion

Technology transfer alone cannot guarantee self-reliance unless supported by strong domestic absorptive capacity.
India must transition from licensed production to indigenous design leadership to achieve genuine strategic autonomy in defence manufacturing.

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