India’s Defence Industry Surges as Production and Exports Reach Record Levels

India’s defence industry is witnessing strong growth, with domestic defence production and exports reaching record levels as the country continues to strengthen its indigenous military manufacturing capabilities. Defence production touched an all-time high of ₹1.78 lakh crore in financial year 2025-26, according to the Ministry of Defence.

The latest production figure represents a significant increase from previous years and reflects the government’s continued focus on domestic defence manufacturing under initiatives such as Make in India and Aatmanirbhar Bharat. The Ministry of Defence said India is increasingly producing defence equipment within the country, with nearly 65 per cent of defence equipment now manufactured domestically.

India’s defence exports have also recorded substantial growth. Defence exports reached ₹38,424 crore in FY 2025–26, compared with ₹686 crore in FY 2013–14. Indian defence products are now being exported to more than 80 countries, highlighting the expansion of the country’s defence manufacturing base in international markets.

The private sector is becoming an increasingly important part of this growth. According to recent Ministry of Defence figures, private companies contributed around 24 per cent of total defence production, or approximately ₹42,000 crore, during FY 2025–26. This represents an increase from the previous financial year and reflects the expanding participation of private defence manufacturers, MSMEs and startups.

The government has also been pushing the indigenisation of defence equipment and components. Through the Srijan Defence Portal and Positive Indigenisation Lists, domestic companies are being encouraged to develop products that were previously sourced from overseas. More than 15,700 defence items have been indigenised during the last five years, according to the Ministry of Defence.

The emphasis on domestic manufacturing is also visible in recent military procurement decisions. In September 2026, the Defence Acquisition Council approved major military equipment procurements worth about $11.6 billion, with approximately 98 per cent of the procurement planned from Indian industry. The approvals cover requirements of the Indian Army, Navy and Air Force and include helicopters, reconnaissance vehicles, naval surveillance systems and electronic warfare equipment.

The government has set an ambitious target of increasing annual defence production to ₹3 lakh crore and defence exports to ₹50,000 crore by 2029. Minister of State for Defence Sanjay Seth has said that India’s growing reliance on indigenous defence systems is part of a broader effort to strengthen national defence capabilities and self-reliance.

The expansion of India’s defence industry is therefore being driven by a combination of higher domestic production, growing exports, increased private-sector participation and policies aimed at reducing dependence on imported defence equipment. At the same time, some areas of defence manufacturing continue to rely on imported components and technologies, meaning that further indigenisation remains an important part of the sector’s development.

With defence production and exports at record levels, India is seeking to strengthen its position as a major defence manufacturing hub while expanding the role of domestic companies in meeting the requirements of the Indian Armed Forces and international customers.