On 17 September 2025, the government made a bold move: India exempted customs duty on defence imports. For defence watchers like me, this is more than a financial tweak; it is a game-changer that could reshape procurement speed and costs.
For decades, customs duties added layers of expense and slowed urgent acquisitions. Now, by waiving duties on 18 critical categories, including military aircraft, missiles, drones, and naval underwater vessels, India is signalling that readiness will take priority over red tape.
India Exempted Customs Duty on Defence Imports: Why it Matters
For years, defence procurement in India has struggled under the weight of two competing goals:
- Acquiring what the armed forces urgently need.
- Building what we want to manufacture at home.
The latest reform is a customs duty exemption on defence imports, a move that cuts through this bottleneck.
It ensures:
- Lower procurement costs for high-value imports like missile systems and military aircraft in India.
- Fast-tracked urgent operational requirement imports India, where delays directly impact national security.
- Alignment with the Defence Acquisition Procedure (DAP) 2020, which emphasises efficiency and accountability.
18 Defence Equipment Categories Covered
The government exempts duty on defence equipment across 18 categories that directly impact combat capability:
- Military aircraft imports from India and spare parts
- Missiles and missile launchers
- Drone battery imports in India and propulsion systems
- Import duty exemption on Underwater vessels
- Naval propulsion and communication modules
- Radar, fire-control, and electronic warfare equipment
- Engines for aircraft and combat vehicles
These exemptions also benefit foreign defence equipment imports into India from trusted partners like France, the US, and Israel.
Related: Ghatak UCAV – India’s Stealth Combat Drone
Defence Budget 2025–26: Getting More for Every Rupee
With the defence budget India 2025–26 crossing ₹6.2 lakh crore, every rupee saved on imports can be reinvested into domestic capability.
Savings from waived duties can be redirected towards:
- Indigenous R&D in DRDO labs
- Private sector partnerships under the Make in India defence initiative
- Expanding defence manufacturing hubs in India
This is where the true value lies: cheaper imports today, stronger indigenous production tomorrow.
Before vs After Customs Duty Exemption
| Category | Before (With Duty) | After (Exempted) |
|---|---|---|
| Military Aircraft Imports India | Higher procurement cost | Reduced cost, faster delivery |
| Missile Imports India | Duty inflated costs | Cost relief for urgent acquisitions |
| Drone Battery Imports India | Expensive due to duty | Affordable, boosts UAV projects |
| Underwater Vessels & Propulsion | High import bills | Lower cost, accelerates Navy modernisation |
Balancing Make in India and Atmanirbhar Bharat
Some critics may fear that exemptions undermine the Atmanirbhar Bharat defence policy. In reality, this is a bridge strategy:
- Indigenous projects like the Tejas fighter jet, Arjun tank, and Project Kusha air defence system are progressing, but gaps remain.
- Technologies such as long-range missile imports, drone propulsion, and naval underwater vessels still need foreign inputs.
- Defence modernisation in India 2025 cannot stall while waiting for domestic production.
This is not dependence. It is about balancing operational readiness with long-term self-reliance.
Also Read: Project Kusha – India’s New Air Defence Shield
Explore: Tejas Mk2 Prototype Delays Explained
Strategic Timing in the Indo-Pacific
The decision comes at a time when India vs China military competition is intensifying, and Pakistan is modernising its arsenal. In such a climate, procurement speed matters as much as capability.
- No customs duty on missiles and drone imports means faster induction of deterrent systems.
- Military aircraft imports into India will move ahead without unnecessary cost burdens.
- The Navy’s underwater vessels import duty exemption in India ensures fleet modernisation remains on track.
This also sends a signal to global defence partners that India is serious about faster, smoother collaboration.
My Perspective as a Defence Enthusiast
From my lens as a defence follower, this move reflects two truths:
- The armed forces cannot wait. Soldiers need advanced systems today, not years later.
- Self-reliance takes time. Developing a sixth-generation fighter aircraft, India or the Kaveri Derivative Engine with afterburner demands years of investment.
By exempting customs duty now, India is ensuring operational readiness while giving the domestic industry the breathing space it needs to innovate.
FAQs
Q1. Why did India exempt customs duty on defence imports?
To reduce costs, fast-track procurement, and strengthen defence modernisation, India 2025.
Q2. Does this affect the Make in India defence initiative?
No. It bridges the gap until domestic production scales up, supporting the Atmanirbhar Bharat defence policy.
Q3. Which items benefit the most?
Missiles, military aircraft imports, drone battery imports in India, and underwater vessels are the top beneficiaries.
Q4. How does this impact the defence budget of India 2025–26?
It reduces import expenses and frees funds for indigenous R&D and defence manufacturing hubs in India.
Final Word
The decision that India exempts customs duty on defence imports is not just about cutting costs. It is about speed, strength, and strategy. It ensures our armed forces get what they need today while laying the foundation for tomorrow’s self-reliant ecosystem.
For me, this is India correcting its course: staying combat-ready in the present, while fuelling Atmanirbhar Bharat for the future.