Raksha Mantri Undertakes Annual Performance Review of 16 DPSUs for FY 2025-26

What Happened

On September 1, 2026, Raksha Mantri Shri Rajnath Singh chaired the annual performance review of 16 Defence Public Sector Undertakings (DPSUs). The review aimed to assess their financial and operational achievements for FY 2025-26. During the session, the tremendous growth in defence exports and domestic production was highlighted, and four key books regarding self-reliance and modernisation were released.

When & Where

The high-level performance review meeting was held on September 1, 2026, in New Delhi. This central location serves as the strategic and administrative hub for the Ministry of Defence, reflecting the national importance of scaling up domestic defence manufacturing capabilities.

Who Is Involved

• Raksha Mantri (Shri Rajnath Singh): Chaired the review meeting and released the technical and strategic roadmaps.
• 16 DPSUs: The collective entities under review for their annual performance.
• Seven specific DPSUs: Hindustan Aeronautics Limited (HAL), Mazagon Dock Shipbuilders Limited (MDL), Bharat Electronics Limited (BEL), Bharat Dynamics Limited (BDL), Garden Reach Shipbuilders & Engineers Limited (GRSE), BEML, and MIDHANI. Their CMDs presented dividend cheques to the government.
• Students (via DISHA initiative): The target demographic for a new hands-on technology awareness program.

How It Works

• Financial Assessment: The Ministry of Defence evaluates the annual turnover, profitability (Profit After Tax), and export growth of all 16 DPSUs.
• Dividend Presentation: Profitable public enterprises transfer a portion of their profits back to the government as dividends for the equity held by the state.
• Strategic Benchmarking: Roadmaps for major entities like HAL are published to set clear targets for reducing import dependency (Indigenisation) and upgrading technology (Modernisation).
• Outreach and Skill Building: Programmes like DISHA are integrated into the DPSU ecosystem to expose young students to modern defence manufacturing processes, building a future talent pipeline.

Why It Matters

This event is highly relevant to UPSC GS Paper 3 (Economy and Security) and GS Paper 2 (Governance). Financially, the Rs 1.29 lakh crore turnover and Rs 23,136 crore profit demonstrate that public sector enterprises can be highly profitable engines of economic growth. Strategically, the 151.2% jump in exports highlights India's successful transition from a net importer to an exporter of defence equipment, strengthening foreign exchange reserves and diplomatic leverage. Socially, initiatives like DISHA bridge the gap between academic learning and advanced industrial manufacturing.

Historical Background

The journey of India's defence industry has evolved drastically. Post-independence, the Ordnance Factory Board (established much earlier) and PSUs like HAL (nationalised in 1951) dominated the sector but suffered from inefficiencies. In 1962, following the Sino-Indian war, the Department of Defence Production was established to rapidly scale up capabilities. A major shift occurred in 2021 when the archaic Ordnance Factory Board was corporatised into seven new 100% government-owned corporate entities to improve accountability and export potential, taking the total number of primary DPSUs to 16.

Previous Related Events

• October 2021: The Government dissolved the Ordnance Factory Board (OFB) and converted it into 7 new DPSUs to improve efficiency.
• April 2023: The Ministry of Defence announced that India's defence exports reached an all-time high of approximately Rs 16,000 crore for FY 2022-23.
• August 2025: The Defence Acquisition Council (DAC) cleared multiple capital acquisition proposals explicitly mandating procurement under the 'Buy (Indian-IDDM)' category to boost DPSUs.

Static GK Connection

• Article 298: This constitutional provision gives the executive power to the Union and state governments to carry on trade and business, forming the legal foundation for establishing Public Sector Undertakings.
• Dividend Yield and Equity: In economics, the dividend cheques presented by the CMDs represent the return on investment (ROI) the government receives for holding majority equity shares in these statutory corporations.

India & World Comparison

While India has historically been the world's largest or second-largest arms importer (competing closely with Saudi Arabia according to SIPRI data), the 151.2% increase in DPSU exports signals a structural shift. India is now heavily exporting to countries in Southeast Asia, Africa, and the Middle East, positioning itself as a reliable alternative to traditional suppliers like Russia and China for cost-effective defence hardware.

Future Impact

The rapid financial growth of DPSUs sets a strong foundation for India's upcoming target of achieving $5 billion in defence exports. The release of HAL's Modernisation and Indigenisation roadmaps indicates that future fighter jets (like the AMCA) and helicopter platforms will rely almost entirely on domestic supply chains. The DISHA program is expected to produce a specialized workforce tailored to the expanding aerospace and defence manufacturing sectors over the next decade.

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🔑 Key Points for Revision

• The annual performance review of 16 DPSUs took place on September 1, 2026, in New Delhi.
• Total DPSU turnover for FY 2025-26 reached Rs 1.29 lakh crore.
• This turnover represents a 15.4% increase from FY 2024-25.
• Cumulative Profit After Tax (PAT) for DPSUs in FY 2025-26 was Rs 23,136 crore.
• PAT saw a solid growth of 15.6% compared to the previous financial year.
• Defence exports by DPSUs witnessed a massive 151.2% increase over FY 2024-25.
• Seven specific DPSUs (HAL, MDL, BEL, BDL, GRSE, BEML, MIDHANI) presented dividend cheques.
• Four books were released by Raksha Mantri during the event.
• Book 1: 'Aatmanirbhar DPSU - A journey of DPSUs towards Self-Reliance'.
• Book 2: 'DISHA', an initiative for student hands-on awareness of defence tech.
• Book 3: 'Modernisation roadmap of HAL'.
• Book 4: 'Indigenisation Roadmap of HAL'.
• DPSUs function under the Department of Defence Production (Ministry of Defence).
• Article 298 validates the Union's right to engage in business and trade.
• The massive export jump supports India's shift from being the top global arms importer.

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🧠 Concept Link (Static GK Deep Dive)

Core Concept: Defence Public Sector Undertakings (DPSUs)

• Definition: Government-owned corporations operating under the Ministry of Defence that research, develop, and manufacture weapons, aerospace systems, and naval vessels.
• Constitutional / Legal Basis: Derives administrative power from Article 298 of the Constitution; governed under the Companies Act, 2013.
• Scientific / Economic Principle: Import Substitution Industrialization (ISI) — replacing foreign imports with domestic production to save foreign exchange and ensure strategic autonomy.
• How it connects to this event: The review explicitly tracks the financial profitability and export success of 16 such undertakings, proving the success of recent corporatisation.
• Origin & History: Commenced largely post-independence with HAL and BEL to build a sovereign industrial base; accelerated after the 1962 war.
• Key milestone 1: In 2020, the government introduced the FDI limit increase in the defence sector to 74% via the automatic route to aid DPSU joint ventures.
• Key milestone 2: In 2021, the 200-year-old Ordnance Factory Board (OFB) was corporatized into 7 distinct DPSUs to improve profit margins and innovation.
• Related Acts / Schemes / Treaties: Defence Acquisition Procedure (DAP) 2020; Srijan Portal (for indigenisation).
• Nodal Ministry / Body: Department of Defence Production (DDP), Ministry of Defence.
• India-specific relevance: Ensures national security is not held hostage by foreign suppliers during times of war or geopolitical sanctions.
• Global comparison: Similar to state-backed defence giants like China's AVIC or Russia's Rostec, but India is increasingly encouraging private sector competition alongside DPSUs.
• Data point: Reached a cumulative turnover of Rs 1.29 lakh crore and a profit of Rs 23,136 crore in FY 2025-26.
• Common exam angle: Examiners frequently ask to match the name of the DPSU with its manufacturing specialty (e.g., MDL for submarines, HAL for aircraft) or to evaluate the impact of OFB corporatisation.
• Easy memory hook: "HAL flies, MDL sails, BDL shoots" — basic matching of aerospace, maritime, and missile systems.

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❓ Practice MCQs

Q1. What was the total turnover of the 16 Defence Public Sector Undertakings (DPSUs) in the financial year 2025-26? [Easy]

A) Rs 1.15 lakh crore

B) Rs 1.29 lakh crore

C) Rs 2.10 lakh crore

D) Rs 23,136 crore

Answer: B

Explanation: The total turnover of DPSUs in FY 2025-26 stood at Rs 1.29 lakh crore, registering an increase of 15.4% from the previous year.

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Q2. During the DPSU performance review in 2026, which of the following initiatives was launched to provide students with hands-on awareness of defence technologies? [Easy]

A) PRAGATI

B) DRISTI

C) DISHA

D) VIKAS

Answer: C

Explanation: The Raksha Mantri released a book on 'DISHA', an initiative specifically designed for students' hands-on awareness of modern manufacturing and defence technologies.

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Q3. Consider the financial performance of DPSUs in FY 2025-26. Which metric recorded a phenomenal growth of 151.2% over the previous financial year? [Moderate]

A) Total Capital Expenditure

B) Defence Exports

C) Profit After Tax (PAT)

D) Research and Development Budget

Answer: B

Explanation: Remarkably, in 2025-26, DPSUs achieved an increase of 151.2% in exports over the previous financial year.

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Q4. Seven DPSUs presented dividend cheques for the Government's equity during the 2026 performance review. Which of the following was NOT among those seven? [Moderate]

A) Hindustan Aeronautics Limited (HAL)

B) Bharat Electronics Limited (BEL)

C) Defence Research and Development Organisation (DRDO)

D) Mazagon Dock Shipbuilders Limited (MDL)

Answer: C

Explanation: DRDO is an R&D agency, not a corporate DPSU. The seven DPSUs were HAL, MDL, BEL, BDL, GRSE, BEML, and MIDHANI.

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Q5. Two distinct roadmaps were released during the review focusing specifically on the 'Modernisation' and 'Indigenisation' of which major defence entity? [Moderate]

A) Bharat Dynamics Limited (BDL)

B) Hindustan Aeronautics Limited (HAL)

C) Garden Reach Shipbuilders & Engineers (GRSE)

D) Ordnance Factory Board (OFB)

Answer: B

Explanation: The Raksha Mantri released two specific books titled 'Modernisation roadmap of HAL' and 'Indigenisation Roadmap of HAL'.

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Q6. The presentation of "dividend cheques for the Government's equity" by DPSUs is constitutionally and economically tied to the Union government's ability to engage in trade. Which Article of the Indian Constitution provides the executive power of the Union to carry on any trade or business? [Tricky]

A) Article 280

B) Article 292

C) Article 298

D) Article 300A

Answer: C

Explanation: Article 298 grants the executive power of the Union and states to carry on any trade or business and to acquire, hold, and dispose of property.

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Q7. If a candidate is analyzing the Profit After Tax (PAT) of the 16 DPSUs for FY 2025-26, what trend would they observe based on the official review data? [Tricky]

A) A slight decline due to increased import costs of raw materials.

B) A stagnant growth rate compared to the previous year.

C) A robust growth of 15.6%, reaching a cumulative profit of Rs 23,136 crore.

D) An artificial surge caused solely by the privatization of three DPSUs.

Answer: C

Explanation: The DPSUs recorded a cumulative Profit After Tax (PAT) in 2025-26 of Rs 23,136 crore, registering a verified growth of 15.6% over the previous year.

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Q8. Which of the following combinations of books released during the September 2026 review is entirely correct? [Tricky]

A) 'Aatmanirbhar DPSU' and 'Export Roadmap of MDL'

B) 'DISHA' and 'Modernisation roadmap of HAL'

C) 'Indigenisation Roadmap of BEL' and 'DISHA'

D) 'Aatmanirbhar Bharat 2.0' and 'Indigenisation Roadmap of HAL'

Answer: B

Explanation: The exact books released were 'Aatmanirbhar DPSU', 'DISHA', 'Modernisation roadmap of HAL', and 'Indigenisation Roadmap of HAL'. Options mentioning MDL, BEL, or 'Aatmanirbhar Bharat 2.0' are incorrect.

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📜 Previous Year Question Style (PYQ)

PYQ 1:

With reference to India's Defence Public Sector Undertakings (DPSUs) performance in FY 2025-26, consider the following statements:

1. The total turnover of DPSUs exceeded Rs 1.25 lakh crore.
2. The export growth of DPSUs contracted due to global supply chain disruptions.
3. Initiatives like 'DISHA' are launched to integrate student awareness with defence manufacturing.

Which of the above statements is/are correct?

A) 1 and 2 only

B) 2 and 3 only

C) 1 and 3 only

D) 1, 2, and 3

Answer: C

Explanation: Statement 1 is correct (turnover was Rs 1.29 lakh crore). Statement 2 is incorrect because exports saw a massive 151.2% increase, not a contraction. Statement 3 is correct.

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PYQ 2:

Consider the following pairs regarding the books/roadmaps released during the 2026 DPSU review:

1. DISHA — Student awareness on defence technologies
2. Indigenisation Roadmap — Bharat Dynamics Limited (BDL)
3. Aatmanirbhar DPSU — A journey towards Self-Reliance

How many of the above pairs are correctly matched?

A) Only one pair

B) Only two pairs

C) All three pairs

D) None of the pairs

Answer: B

Explanation: Pair 1 is correct. Pair 3 is correct. Pair 2 is incorrectly matched because the Indigenisation Roadmap released was specifically for Hindustan Aeronautics Limited (HAL), not BDL. Therefore, exactly two pairs are correct.

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PYQ 3:

Assertion (A): The cumulative Profit After Tax (PAT) of Defence Public Sector Undertakings (DPSUs) in India witnessed a negative growth in FY 2025-26.

Reason (R): The Government mandated the DPSUs to completely halt exports to focus exclusively on domestic armed forces requirements.

Choose the correct option:

A) Both A and R are true and R is the correct explanation of A.

B) Both A and R are true but R is not the correct explanation of A.

C) A is true but R is false.

D) Both A and R are false.

Answer: D

Explanation: Both statements are false. The PAT of DPSUs witnessed a positive growth of 15.6% (reaching Rs 23,136 crore), and exports achieved a remarkable 151.2% increase, proving that exports were not halted.

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✍️ Mains Answer Pointers

Question 1 (150 words): The recent financial performance of Defence Public Sector Undertakings (DPSUs) highlights a paradigm shift in India's defence manufacturing ecosystem. Discuss the significance of this transition with respect to exports and self-reliance.

India's defence manufacturing has fundamentally shifted from a heavy reliance on imports to an era of profitable domestic production and rising exports. The FY 2025-26 performance review of 16 DPSUs, which recorded a total turnover of Rs 1.29 lakh crore and a cumulative Profit After Tax (PAT) of Rs 23,136 crore, is a testament to this structural transformation.

Economically, the staggering 151.2% surge in defence exports over the previous year demonstrates global confidence in Indian defence hardware and brings in crucial foreign exchange. Strategically, documents like the 'Modernisation roadmap of HAL' and 'Indigenisation Roadmap of HAL' reflect a targeted approach toward Aatmanirbharta (self-reliance), ensuring the armed forces are immune to external geopolitical shocks and supply chain weaponisation. Going forward, sustaining this momentum requires deeper integration of private MSMEs and initiatives like 'DISHA' to cultivate a skilled talent pool capable of supporting next-generation defence technologies.

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Question 2 (250 words): Evaluate the role of Defence Public Sector Undertakings (DPSUs) in achieving 'Aatmanirbhar Bharat' in defence. How do initiatives like corporatisation and student outreach programmes contribute to creating a robust defence industrial base in India?

The quest for strategic autonomy in national security hinges directly on a robust indigenous defence industrial base. For decades, India occupied the vulnerable position of being the world's largest arms importer. However, the recent performance of India's 16 Defence Public Sector Undertakings (DPSUs) indicates a successful pivot toward an 'Aatmanirbhar Bharat' (Self-Reliant India).

Historically, Indian DPSUs and Ordnance Factories struggled with inefficiencies and missed deadlines. The structural corporatisation of the Ordnance Factory Board into seven modern DPSUs in 2021 catalyzed a financial and operational turnaround. This is evident in the FY 2025-26 data, where DPSUs achieved a massive turnover of Rs 1.29 lakh crore (a 15.4% YoY growth) and a net profit of Rs 23,136 crore. Furthermore, achieving a 151.2% increase in exports showcases that Indian platforms are not just substituting imports but are becoming globally competitive.

Achieving long-term self-reliance requires both strategic planning and human capital development. The release of the 'Modernisation' and 'Indigenisation' roadmaps for Hindustan Aeronautics Limited (HAL) ensures systematic reduction of imported components in critical aerospace platforms. Concurrently, the 'DISHA' initiative acts as a vital bridge between the industry and academia. By providing students with hands-on awareness of modern defence technologies and manufacturing processes, the government is securing a future pipeline of engineers and technicians.

To conclude, the financial autonomy and export success of DPSUs, combined with proactive capacity-building frameworks, have laid a resilient foundation. Continued investment in R&D and sustained public-private synergy will be critical in transforming India into a net security provider and a global defence manufacturing hub.

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⚠️ Examiner Trap

• Trap 1: Students often confuse the release of the Indigenisation Roadmap with the DRDO. The correct fact is that the specific Modernisation and Indigenisation roadmaps released in this review belong to Hindustan Aeronautics Limited (HAL), not DRDO.
• Trap 2: A common wrong assumption is that India's defence public sector operates at a massive financial loss. The reality is that the 16 DPSUs recorded a highly profitable cumulative Profit After Tax (PAT) of Rs 23,136 crore in FY 2025-26.
• Trap 3: Many students miss the exact export trajectory when answering questions on this topic, assuming modest single-digit growth. Always remember that DPSUs achieved a massive 151.2% increase in exports in FY 2025-26 compared to the previous year.

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🧭 Exam Tip

• For Prelims: Examiners will target the precise growth figures (151.2% in exports) and the specific names of the initiatives/books launched, particularly 'DISHA' and the focus on 'HAL'. Match-the-following questions linking DPSUs to their sectors are highly probable.
• For Mains (GS 3): Focus on the analytical angle of how corporatisation (post-2021 OFB dissolution) has successfully translated into higher profitability (Rs 23,136 crore PAT) and strategic export autonomy.
• Interview: Be prepared to defend the role of the public sector vs. private sector in defence manufacturing. You can cite these exact FY 2025-26 figures to argue that public sector entities, when given corporate autonomy and specific roadmaps, can be highly competitive and profitable on a global scale.
• Prediction: Expect a direct Prelims question on the objective of the 'DISHA' initiative in the upcoming UPSC or SSC cycle.