India’s defence innovation landscape is at a critical juncture in 2025. Despite initiatives to boost indigenous development, procurement delays remain a major internal threat. These delays drain private investments, slow technology deployment, and weaken strategic readiness. The Ministry of Defence (MoD) faces pressure to accelerate decision-making to sustain a vibrant defence ecosystem.
Current Challenges in Defence Procurement
Delays in moving from Acceptance of Necessity (AoN) to order placement are common. These slowdowns affect especially self-funded research and development (R&D) companies that invest their own capital. Without faster approvals and timely payments, many innovators risk market exit. Delays extend project timelines by months or years, causing huge financial losses across stakeholders.
Financial Impact of Delays
Each day of delay on a ₹100 crore project causes an estimated ₹10 lakh loss. Over 24 months, this sums to over ₹72 crore lost, split among the innovating company, armed forces, economy, and innovation ecosystem. Costs include loan interest, payroll, operational overheads, delayed capability deployment, missed GDP growth, and talent migration. These losses stifle new R&D programmes and reduce India’s defence competitiveness.
Existing Initiatives and Their Limitations
Schemes like Buy Indian
Indigenously Designed, Developed and Manufactured (IDDM), Make-II, and iDEX aim to increase private sector participation. However, their success is hampered by slow execution. Without measurable improvements in procurement speed, the intended boost to indigenous technology remains unrealised.
The SPEED Framework Proposal
SPEED (Savings and Penalties for Early or Delayed Decisions) is a proposed system to track and quantify the costs of procurement delays. It assigns daily financial penalties for delays and rewards for early decisions. A real-time SPEED score would provide transparency and accountability throughout the procurement process. This score could influence officer evaluations and trigger automatic approvals after default periods.
Benefits of SPEED Implementation
Automating delay cost tracking removes subjectivity and gaming. It motivates faster file processing and releases trapped capital for reinvestment in R&D. Quicker procurement accelerates deployment of advanced systems, enhancing armed forces’ capabilities and India’s global defence market presence. The framework encourages a time-conscious culture across government projects involving private investment.
Broader Implications for India’s Economy
Reducing procurement delays can unlock economic benefits. For example, a TERI study estimates that 15% use of Crew Gunnery Simulators could save ₹1,123 crore annually with only ₹61 crore capital investment. SPEED’s principles could be adapted to other sectors to improve project delivery and innovation outcomes nationally.
Institutionalising SPEED for Lasting Impact
For effectiveness, SPEED must be integrated into MoD processes with public dashboards, key performance indicators (KPIs) linked to timelines, and escalation protocols. It transforms procurement from a bureaucratic hurdle into a strategic growth engine. This aligns national security goals with economic and industrial development.
Risks of Inaction
Delays undermine India’s defence self-reliance and increase dependence on foreign suppliers. They risk losing the competitive edge of homegrown innovators operating in high-risk, capital-intensive environments. The cost of delay is more than financial; it threatens national confidence and soldier safety.
Questions for UPSC:
- Critically analyse the impact of procurement delays on India’s defence innovation ecosystem and suggest measures to improve efficiency.
- Explain the role of self-funded research and development in strengthening indigenous defence manufacturing with suitable examples.
- What are the implications of delayed defence procurement on national security and economic growth? How can accountability mechanisms like SPEED enhance decision-making?
- Comment on the importance of public-private partnerships in defence production. How can government policies incentivise faster project approvals and innovation?
