India Sets ₹3 Lakh Crore Annual Defence Production Target, Eyes ₹50,000 Crore Exports by 2029

India is stepping up its efforts to build a stronger and more self-reliant defence manufacturing ecosystem, with the government setting an ambitious target of achieving ₹3 lakh crore in annual defence production and ₹50,000 crore in defence exports by 2029.

The targets come as India’s domestic defence production has reached a record ₹1.78 lakh crore in the financial year 2025-26, reflecting the rapid expansion of the country’s indigenous defence industrial base. According to government data, the latest production figure represents a 15.6 per cent increase over the ₹1.54 lakh crore recorded in FY 2024-25 and a 110 per cent rise compared with ₹84,643 crore in FY 2020-21.

The government’s latest push is aimed at taking this growth further by increasing manufacturing capacity, encouraging greater participation from private industry and strengthening India’s position as a global supplier of defence equipment. The ₹3 lakh crore production target represents a significant increase from the current record level and is expected to require continued investment in advanced manufacturing, research and development, supply-chain capabilities and indigenous technologies.

India’s defence exports have also registered substantial growth alongside domestic production. Defence exports reached a record ₹38,424 crore in FY 2025–26, compared with only ₹686 crore in FY 2013–14. Indian defence products are now being exported to more than 80 countries, demonstrating the expanding international footprint of the country’s defence industry.

The government has increasingly focused on reducing dependence on imported military equipment through the Aatmanirbhar Bharat initiative and a range of defence-sector reforms. These measures have encouraged domestic manufacturing and created greater opportunities for Indian companies, Defence Public Sector Undertakings, startups and micro, small and medium enterprises to participate in defence production.

The private sector is also playing a growing role in this transformation. During FY 2025–26, the private sector accounted for around 24 per cent of total defence production, up from 22 per cent in the previous financial year. Its contribution stood at approximately ₹42,000 crore, marking its highest-ever share in India’s defence production.

The government’s export ambitions are closely linked to this expanding industrial ecosystem. Increasing defence exports can help Indian manufacturers achieve greater economies of scale while strengthening the country’s position in international defence markets. Products and systems developed domestically for the Indian armed forces can also create opportunities for overseas sales when they meet international operational and quality requirements.

The production target is expected to support growth across several areas of India’s defence and aerospace industry, including missiles, aircraft, naval platforms, electronic warfare systems, unmanned systems, artillery, armoured vehicles and advanced electronics. Building capacity across these segments could further strengthen the domestic supply chain and reduce vulnerabilities associated with dependence on overseas suppliers.

The government is also increasing support for defence research and innovation. According to the Ministry of Defence, the defence research and development allocation has risen significantly, while a portion of the R&D budget has been opened to industry, startups and academia to encourage wider participation in developing indigenous technologies.

The latest targets therefore represent more than a numerical increase in defence production. They form part of a broader strategy to transform India into a major defence manufacturing hub capable of meeting a larger share of its own military requirements while competing in international markets.

With defence production already at a record ₹1.78 lakh crore and exports reaching ₹38,424 crore, the government now faces the challenge of sustaining this momentum and translating policy support into increased manufacturing capacity, advanced technology and globally competitive defence products. Achieving ₹3 lakh crore in annual production and ₹50,000 crore in exports by 2029 would mark another major milestone in India’s drive towards greater defence self-reliance and a stronger global defence-industrial presence.