The national defense industry is an integrated part of the strategic planning of the management of national resources for the benefit of national defense and security. The capability of the defense industry can contribute to the macro economy in providing employment and saving foreign exchange. Propellant Industry PT. Dahana (Persero) is an industry that produces or produces propellant which is processed by PT. Pindad (Persero) to produce munitions in order to support TNI operations. This research discussed about “How is the policy of developing the propellant industry of PT. Dahana (Persero) to support TNI operations”. This research used qualitative method. The results of the study indicate that the ability of the defense industry is currently constrained by the condition of human resources and technology that have not been able to support the effectiveness of the production of the defense industry. Furthermore, the government has carried out various optimizations of industrial capabilities by mastering technology obtained from internal and external sources. The propellant of PT. Dahana (Persero) has been used by the TNI and commercial industry.