India’s defence industry is witnessing significant expansion as the country’s domestic defence production and exports continue to reach record levels. According to data from the Ministry of Defence, India’s defence production rose to an all-time high of ₹1.78 lakh crore in the financial year 2025-26, marking a 15.6 per cent increase over the ₹1.54 lakh crore recorded in 2024-25. The latest figure also represents more than double the production recorded in FY 2020-21.
The growth is being supported by a wider domestic manufacturing ecosystem, increased participation from private companies and a continued focus on indigenous development. The government has been encouraging domestic design and manufacturing through initiatives aimed at reducing dependence on imported defence equipment and strengthening India’s defence industrial base.
Defence exports have also recorded strong growth. India’s defence exports reached ₹38,424 crore in FY 2025-26, compared with just ₹686 crore in FY 2013–14. Indian defence products are now being exported to more than 80 countries, reflecting the expansion of the country’s presence in the international defence market.
The private sector is playing an increasingly important role in this transformation. Private companies accounted for around 24 per cent of India’s total defence production in FY 2025-26, contributing approximately ₹42,000 crore. This represents an increase from their share in the previous financial year and highlights the expanding role of private manufacturers, MSMEs and defence technology companies.
India’s defence manufacturing ecosystem is also being strengthened through platforms such as Srijan, which connects defence organisations with domestic industry for the indigenisation of equipment and components. More than 15,700 defence items have been indigenised during the last five years, while the government has continued to expand Positive Indigenisation Lists covering equipment, components and other strategically important items.
The push for greater indigenous production is also reflected in recent 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 Army, Navy and Air Force, including helicopters, reconnaissance vehicles, naval surveillance systems and electronic warfare equipment.
The government has set an objective of increasing annual defence production to ₹3 lakh crore and defence exports to ₹50,000 crore by 2029. With domestic production already at ₹1.78 lakh crore, the coming years are expected to see continued investment in manufacturing capacity, defence technology, research and development, and private-sector participation.
The Ministry of Defence has also been emphasising the performance of Defence Public Sector Undertakings while encouraging them to improve indigenous manufacturing, exports, supply chains and advanced technology development. Defence Minister Rajnath Singh reviewed the performance of 16 DPSUs in September 2026 and called for greater self-reliance, timely delivery, global-standard quality and stronger export capabilities.
The latest production and export figures indicate that India’s defence industry is expanding beyond traditional government-owned manufacturing. With private companies, MSMEs, startups and established defence manufacturers becoming increasingly involved in the supply chain, the sector is developing a broader industrial base focused on domestic requirements as well as international markets.