India is setting up two new Defence production units, one for production of Bi-Modular Charge System (BMCS). It is an artillery charging device used for 155 mm Bofors Gun. Bofors Gun really proved useful in Kargil war. This indigenous production of parts will really help. AS we recall, India had lot of problems during Kargil war for sourcing of parts for armoury. The other will be producing new generation carbines.
India has also tested armed version of ALH (Advanced Light Helicopter) 'Dhruv'. It is fitted with indigenously developed "Shakti" engine. (the engine has been developed in collaboration with french major Turbomecca). Recently HAL (Hindustan Aeronauticals Limited) had bagged orders for civilian version of DHRUV. Military version was earlier very difficult to export as it had lot of imported content and was restricted for export to various countries.
Due to local content, we can now export these to more countries.
Every industry to survive needs lots of funds. But to innovate and develop new methods, technologies, it needs incentive. Indian defence industry is not devoid of money but of incentive to develop newer ideas and technologies. Commercialisation of Defence industry wil bring in additional revenue to the industry and make it less dependent on Government for its regular functioning. The government funding then can be utilised for only Research & Development purpose only. Introduction of Intellectual Property Rights for the technologies developed and transfering the benefit of the same to the concerned person/party/entity will be the right step to bring in more talent to this sector.
The other factor involving commercial aspect of defence is more leverage in international relations. Once India starts to ramp up its defence production and start exporting material, more and more countries would be dependent upon India for their defence needs. This situation can then be leverage to exert more influence in non-military aspects in international fora. The eco-political benefits of the same will take some time to be noticed, but then every step towards that is a help.