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The government has approved the transfer of DRDO-developed technologies

ICICIdirect Research 26 Aug 2026 DISCLAIMER

News: The government has approved the transfer of DRDO-developed technologies for all conventional missile systems to Indian defence companies for indigenous production, subject to required qualifications, certifications and regulatory approvals. The move will allow private players to participate in missile production alongside DPSUs and is expected to accelerate the transition of missile programmes from development to serial production. Astra and Pralay are among the initial systems likely to see greater private-sector participation, while the government may also bring additional private players into existing programmes to accelerate production. The initiative is aimed at expanding domestic manufacturing capacity, reducing import dependence and increasing indigenous value addition across the missile ecosystem.

View: The policy shift is structurally positive for the entire domestic missile ecosystem, as it expands the addressable market beyond the traditional DRDO-DPSU production model and could accelerate production of key systems such as Astra and Pralay. Solar Industries are likely to be the key listed beneficiaries at the complete weapon-system level, given their capabilities across missile/weapon-system manufacturing and integration. At the next level, L&T and Bharat Forge/Kalyani Strategic Systems could participate in system-level programmes, while Astra Microwave, Data Patterns, Centum Electronics, Paras Defence and Apollo Micro Systems can benefit from higher localisation of radar, seekers, guidance, control electronics and other critical subsystems, with scope for some players to move towards higher-value system integration. Overall, wider private participation should create a multiplier effect across the missile supply chain, benefiting both large listed defence companies and the MSME ecosystem as production volumes increase.

Impact: Positive

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