KUALA LUMPUR, Jan 21 — Defence Minister Datuk Seri Mohamed Khaled Nordin today said the success of the National Defence Industry Policy (DIPN) would hinge on three main strategic drivers — sustained budgetary support, stronger institutional leadership and the development of new strategic technologies to drive innovation and self-reliance.

In his speech at the policy’s launch, Khaled said the DIPN would not move beyond paper commitments unless it was backed by clear implementation funding, empowered coordinating bodies and a national push to develop emerging defence technologies.

He said consistent and targeted budget allocations were critical to ensure the policy translated into real industrial capacity, rather than remaining aspirational.

“Large allocations to the Defence Ministry each year would be a loss if they are not fully leveraged to develop a self-reliant, sustainable and resilient domestic defence industry,” he said, stressing that the DIPN was designed to ensure defence spending contributed to long-term national capability.

Khaled said one of the key pillars of the policy was the empowerment of the Defence Industry Council (Majlis Industri Pertahanan), which would serve as the central coordinating body to align procurement, industrial development and national defence needs.

He said a stronger council was necessary to provide strategic direction, ensure coherence across agencies and prevent fragmented decision-making that had previously limited the development of the defence industry.

“This is about building an ecosystem that is complete, comprehensive and mutually reinforcing,” he said, adding that institutional strength was essential given the scale of defence procurement, policy complexity and public funds involved.

Khaled said the third major driver of the DIPN was the establishment and mobilisation of a national strategic technology force, aimed at positioning innovation as the backbone of Malaysia’s defence industry.

He said the policy placed strong emphasis on research and development, technology transfer and industrial collaboration, particularly through the Industrial Collaboration Programme (ICP), to ensure local companies gained meaningful technological capability rather than symbolic partnerships.

Under the revised approach, ICP initiatives would be channelled only to companies with the capacity to absorb, develop and commercialise transferred technologies, with funding support also extended through the Defence Science and Technology Research Institute (STRIDE).

Khaled said the government was also introducing clearer procurement conditions to support local industry development, including a minimum 30 per cent local content requirement for defence acquisitions and stricter rules on maintenance, repair and overhaul (MRO) activities.

Under the new framework, MRO services would be carried out by local companies, except during warranty periods, with contracts subject to termination if companies failed to demonstrate innovation, cost efficiency and increased local content.

As part of efforts to support innovation and implementation, Khaled also announced the launch of a Defence Industry Portal, which will facilitate applications for ICP participation, research and development funding, and technology offerings relevant to the defence sector.

He said the DIPN was not intended to enable Malaysia to produce complex defence platforms overnight, but to progressively build domestic capability in components, systems and services that would allow local companies to participate meaningfully in regional and global defence supply chains.

Khaled also announced several national defence projects under the policy, including plans to develop a local defence satellite capability, laser defence systems, land vehicle chassis manufacturing, weapons systems assembly and production, passive radar technology, loitering munition systems and defence simulators.

He said these initiatives were part of a long-term strategy to reduce reliance on foreign suppliers and ensure more secure and reliable access to defence capabilities amid an increasingly uncertain global security environment.

“The world today is facing a security reality that is complex, fragile and unpredictable. We don’t have intentions to produce weapons or defence tools like our own plane in the blink of an eye but rather we want to develop components and our own services so that local companies can join the supply chain in a significant manner,” he said, adding that Malaysia could no longer depend entirely on external parties to guarantee its defence needs.

Khaled said the DIPN marked the beginning of a sustained national effort to strengthen sovereignty, security and industrial resilience, calling on all stakeholders to support its implementation as a strategic investment in the country’s future.