Bharat Dynamics Ltd shares declined 4% on Monday, July 13, following reports that the Centre is preparing to allow private companies to manufacture missiles, marking one of the most significant reforms in India's defence manufacturing policy. The proposed move is being viewed as a major transformation in India's defence industrial landscape, as missile production has largely remained the domain of state-owned defence companies. While private firms already manufacture aircraft components, drones, artillery systems and naval platforms, missile manufacturing has so far remained largely restricted to the public sector. At present, Bharat Dynamics enjoys a dominant position in India's missile manufacturing ecosystem, but rising demand for advanced missile systems has outpaced its production capacity, prompting the government to widen private sector participation.
The Defence Ministry is expected to issue a Request for Proposal (RFP) inviting private Indian companies to manufacture the Astra Mark 2 beyond-visual-range (BVR) air-to-air missile. According to Hindustan Times, several major defence companies, including Adani Defence, Bharat Forge, Tata Group, Mahindra Group, and ICOMM, are likely to compete for the opportunity. The decision comes amid increasing demand from India's armed forces and friendly partner nations, which state-run Bharat Dynamics Ltd is currently unable to fulfil entirely due to capacity constraints. Designed and developed by DRDO, the Astra Mark 2 is an advanced air-to-air missile with an estimated operational range of 180-200 kilometres. The missile was developed to counter threats such as China's PL-15E long-range air-to-air missile, which has been supplied to Pakistan before Operation Sindoor.
The Astra Mark 2 is expected to be integrated with fighter platforms including the Tejas Mark 1A, MiG-29, Su-30 MKI and Rafale Marine aircraft. As reported by Hindustan Times, the missile was developed to counter threats such as China's PL-15E long-range air-to-air missile, which has been supplied to Pakistan ahead of Operation Sindoor last year. The government's decision has been influenced by operational experiences from Operation Sindoor, which highlighted the increasing importance of precision-guided stand-off weapons. The Centre is now focusing on rapidly expanding India's missile and rocket capabilities to enhance strategic deterrence while simultaneously strengthening the country's missile defence network.
According to Hindustan Times, the Pralay tactical ballistic missile could become the next major missile system to be opened for private sector participation in both development and manufacturing. The Pralay missile has an approximate range of 500 kilometres and is a two-stage weapon capable of travelling at speeds around six times the speed of sound. It is a key component of India's Integrated Rocket Forces concept, which also includes systems such as the Long-Range Land Attack Cruise Missile (LRLACM), the next-generation BrahMos missile and the extended-range Pinaka rocket system. The move to involve private companies in missile manufacturing is expected to increase production capacity, encourage innovation, reduce dependence on state-run facilities and strengthen India's position as a defence exporter.
In addition to domestic demand, the Astra Mark 2 has also attracted international interest, with Indonesia reportedly exploring the possibility of procuring the missile. The proposed policy opening reflects India's broader strategy to strengthen its defence manufacturing capabilities while addressing capacity constraints in the public sector. The government also plans to approve the procurement of five additional S-400 systems from Russia to further strengthen protection against incoming missile threats, with the fifth S-400 air defence system expected to arrive in India in November. The recent Iran-US conflict has also highlighted the destructive impact missiles can have on critical infrastructure, reinforcing the importance of strengthening India's missile defence architecture.
