India's defence manufacturing landscape is undergoing one of its most consequential transformations in decades — and Union Defence Minister Rajnath Singh wants every stakeholder to know the scoreboard. On Sunday, 27 September 2026, the Minister posted on X that the domestic defence ecosystem, powered by private industry, over 16,000 MSMEs, and startups alongside the Defence Public Sector Undertakings (DPSUs), is now stronger than at any point in recent memory. Posting in Hindi, Singh declared: 'भारत का डिफेंस मैन्युफैक्चरिंग इकोसिस्टम तेजी से बदल रहा है' — 'India's defence manufacturing ecosystem is changing rapidly.' The Minister highlighted that as a direct result of landmark structural reforms — most notably the corporatisation of the Ordnance Factory Board (OFB) — not a single DPSU is currently running at a loss. All, he said, are moving forward 'with new energy.'

What the OFB Corporatisation actually did

The reform Singh is pointing to was a decisive break from a century-old structure. Effective 1 October 2021, the government dissolved the Ordnance Factory Board and converted its 41 ordnance factories into seven new DPSUs — each a standalone corporate entity with its own board, balance sheet, and mandate. The idea was straightforward but long-overdue: grant public-sector arms producers the autonomy and accountability that only a corporate structure can impose. Legacy bureaucratic inertia, critics had long argued, kept the factories from innovating, pricing competitively, or expanding exports. Corporatisation was the surgical answer.

MSMEs and startups: the new backbone of the supply chain

The numbers Singh cites tell a structural story beyond the DPSUs themselves. The entry of private defence firms and over 16,000 MSMEs and startups into the supply chain signals a deliberate policy of distributed manufacturing — components, sub-systems, and niche technologies flowing upward to both public and private prime contractors. Since 2020, the government has progressively opened more defence production categories to private participation, a policy designed to shrink import dependence while building domestic depth. Startups, in particular, have become a target constituency, with iDEX (Innovations for Defence Excellence) schemes seeding early-stage technology ventures that can graduate into the supply chain.

Why the 'zero-loss DPSU' claim carries weight

Before corporatisation, several ordnance factories operated as cost centres rather than profit centres — they had no real incentive to control overheads or diversify their customer base because losses were absorbed by the government. The transformation into corporate entities changed that calculus. Singh's claim that every DPSU is now profitable — if borne out by annual ministry disclosures — would mark a genuine inflection point. It would suggest the reform didn't just reorganise letterheads; it changed behaviour. The next hard test will come when defence ministry annual reports publish DPSU financials for this fiscal year. India's ambition is not just self-sufficiency but exports — and a profitable, innovative domestic industry is the prerequisite. The Minister's post lands that message squarely.