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Day 53 – Q 3.What is transfer of technology (ToT)? How is it different from indigenisation? Illustrate.

3. What is transfer of technology (ToT)? How is it different from indigenisation? Illustrate. 

प्रौद्योगिकी का हस्तांतरण (टीओटी) क्या है? यह स्वदेशीकरण से कैसे अलग है? उदाहरण देकर स्पष्ट करें।


Technology Transfer represents the transfer of machinery, equipment and technological know-how either directly in the form of FDI or through spillover effect from the industry attracting FDI.

Some examples of TOT

  • Boeing and Tata Advanced Systems have a joint venture company, Tata Boeing Aerospace (TBAL). it is being described as the sole global producer of fuselages for AH-64 Apache helicopter delivered by Boeing to its global customers including the U.S. Army. The facility will also produce secondary structures and vertical spar boxes of this multi-role combat helicopter.
  • To make anti-tank guided missiles, Kalyani Rafael Advanced Systems (KRAS), a joint venture between Kalyani Strategic Systems Ltd. and Rafael Advanced Defense Systems Ltd. of Israel.
  • Dassault Aviation and Anil D. Ambani’s Reliance Group laid the foundation stone of the Dassault Reliance Aerospace Limited (DRAL) manufacturing facility in Mihan, Nagpur. the facility will manufacture several components of the offset obligation connected to the purchase of 36 Rafale Fighters from France, signed between the two Governments in September 2016.


Technology transfer has immense benefits

  • New products – Public benefits from the new manufactured goods that get to the market e.g. new age and modern technologies like Artificial Intelligence, Cloud computing etc. are getting developed in countries like India because of its IT industry.
  • Employment – Availability of the jobs which results from the improvement and sale of the products so formed.
  • New markets – Markets of developed countries are already saturated, technology transfer helps exploring new markets and making market for new products.
  • Revenue – The technology owner gets due reward in form of revenue which can be further utilized for improving existing technology or inventing newer ones.
  • Strengthens industry – By identifying new business opportunities which contributes to enhancing the know-how and competitiveness of the technology providers. E.g. Technology transfer for defense equipment has helped promote indigenization and Make in India.
  • Improved productivity – Allows for efficient use and enhanced outcomes from the given resources and factors of production e.g. HYV rice in green revolution
  • Enhanced efficiency – New technology provides for efficient use using the same resources e.g. Israeli water management in agriculture.
  • Joint Working between to sides may ensure cooperation in other areas like trade, people to people contacts etc.
  • Dealing with global common threats like E-bola, climate change requires all countries to be equipped technologically. Here technology transfer can be an important tool. 

Difference between Indigenization and ToT

It is the capability of developing and producing any defence equipment within the country for the dual purpose of achieving self-reliance and reducing the burden of imports.

A significant beginning in defence indigenization was made in 1983, when the government sanctioned the Integrated Guided Missile Development Programme (IGMDP) to develop five missile systems:

  • Prithvi (surface-to-surface); Akash (surface-to-air); Trishul (the naval version of Prithvi); Nag (anti-tank); Agni Ballistic missiles with different ranges, i.e. Agni (1,2,3,4,5).
  • INS Vikrant, also known as Indigenous Aircraft Carrier 1 (IAC-1), is the first aircraft carrier to be built in India for the Navy.
  • Long-range artillery gun “Dhanush”: first indigenous long-range artillery gun. 
  • Arihant: first indigenous nuclear submarine was developed in association with BARC and DRDO.
  • Supersonic Cruise Missile BRAHMOS: is a Joint Venture between India and the Russian federation.
  • Arjun Tank is a third generation main battle tank developed by DRDO.

ToT is a mean to achieve indigenization of technology. However indigenization requires not a clause in a technology transfer contract, but the recipient taking determined measures to ensure acquisition and absorption of technology. 

India has been singularly poor at that. Further, domestic manufacturing has not in itself enabled it either. India has a long history of licensed manufacture of defence hardware, from the heydays of the self-reliance credo, the import substitution drives, and the famous “be Indian, buy Indian” slogan. 

In aircraft, for example, the famous Gnat fighter, the MiG series, the Jaguar, and various French helicopters were made here. In each case, the degree of indigenization kept rising, sometimes reaching 90 per cent by value, but critical components or materials continued to be imported. India never achieved the stated goal of acquiring the capability to make the next upgrade or new model on its own. True indigenization cannot happen only with technology transfer, without developing domestic manufacturing.  


Technology transfer and its licensing have played a crucial role in all round development and the advent of the technology which in results help in the development of the economy of the country. Hence forth helps in creating the wealth to the country.

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