India eases defence export rules, opens wider access to global markets

India has significantly eased its defence export regime, expanding access to overseas markets and reducing procedural requirements for domestic manufacturers as the government looks to build on record defence exports. The Department of Defence Production under the Ministry of Defence has revised the Defence Export Standard Operating Procedure (SOP) and simplified the Open General Export Licence (OGEL) framework. The changes are aimed at allowing Indian companies to respond faster to international orders, tenders and business opportunities.

The reforms come as India's defence manufacturing ecosystem continues to expand, with defence production reaching an all-time high of Rs 1.78 lakh crore and exports touching a record Rs 38,424 crore in FY 2025-26.

Fewer approvals for exporters

One of the significant changes is the removal of stakeholder consultation requirements for exports of non-lethal defence items to most destinations. Safeguards will, however, continue for countries considered sensitive. The consultation requirement has also been removed for exports of all defence items intended for international tenders and exhibitions.

The change is expected to make it easier for Indian manufacturers to showcase equipment abroad and participate in international procurement opportunities without having to go through repetitive procedural clearances. The government said the reforms seek to reduce the compliance burden while ensuring that national security considerations continue to be protected.

OGEL gets wider reach

The Open General Export Licence framework has also undergone major changes. OGEL operates as a standing, one-time export authorisation under which eligible exporters can generate authorisations for multiple consignments of specified defence products instead of seeking separate permission for every shipment.

Three existing OGEL SOPs covering major platforms and equipment, parts and components, and intra-company transfer of technology have now been consolidated into a single framework.

The validity of an OGEL has also been increased from two years to three years, reducing the frequency with which exporters need to renew their authorisations.

In another significant change, geographical coverage under the framework has been widened substantially. OGEL, which previously covered 41 countries, will now extend to all countries except negative or sensitive nations and those subject to United Nations Security Council sanctions or arms embargoes.

Long-term contracts get flexibility

The revised system also introduces provisions for Indian companies that have long-term contracts or agreements with foreign original equipment manufacturers.

Eligible Indian companies can be granted an OGEL covering specified products and a particular foreign OEM, with the validity of the authorisation aligned with the duration of the underlying contract or agreement, subject to prescribed conditions.

The range of products eligible under OGEL has also been expanded. The new framework permits civil-end-use exports of specified parts and components of small-calibre arms as well as protective equipment.

The changes could particularly benefit companies that supply components to global defence manufacturers and require repeated exports under long-term supply arrangements.

MSMEs set to benefit

The government expects the simplified framework to benefit Indian defence manufacturers, including micro, small and medium enterprises, by reducing repetitive paperwork and allowing companies to pursue overseas opportunities more quickly.

Smaller manufacturers can often face greater difficulties in navigating multiple approval processes because they have fewer compliance resources than large defence companies. A more streamlined licensing system could consequently make overseas markets more accessible to such firms.

The reforms are also designed to enable Indian companies to participate more effectively in international tenders and exhibitions, where the ability to respond within tight timelines can be critical.

India has been steadily attempting to increase its presence in the international defence market while simultaneously reducing its dependence on imported military equipment. The government has promoted domestic production through its Make in India and Aatmanirbhar Bharat programmes and has sought to establish India as both a major defence manufacturing base and exporter.

With defence exports already at a record level, the latest relaxation of licensing and approval requirements is intended to provide domestic manufacturers with greater flexibility to pursue international contracts while retaining controls over sensitive technologies, equipment and destinations.