India’s push for self-reliance in defence has entered a new phase, with indigenous manufacturing and exports posting their highest figures so far. Defence production reached ₹1,27,434 crore in 2023-24 — a sharp jump from ₹46,429 crore in 2014-15 — driven by a decade of reforms aimed at reducing import dependence and strengthening local industry. The steady rise in the defence budget, which now stands at ₹6.81 lakh crore for 2025-26 compared to ₹2.53 lakh crore in 2013-14, reflects the government’s long-term strategy of building a technologically advanced and globally competitive military ecosystem.
The formation of seven new defence companies from the erstwhile Ordnance Factories, DRDO’s innovation grants, and the active participation of more than 16,000 MSMEs have further diversified the sector. Now, both public and private sectors are driving year-on-year growth, with the private sector’s production share rising from 21% to 23% in the past year– a clear sign of the blossoming defence ecosystem. Today, at least 65% of defence equipment is manufactured domestically, a striking turnaround from the earlier dominance of imported systems.
Driving Modernisation and Export Expansion
This era of accelerated production is paralleled by vibrant export growth. Once confined to a minor role, India’s defence exports have surged, now crossing ₹23,622 crore in FY 2024-25—an impressive 12.04% year-on-year increase and a testament to the sector’s global competitiveness. These exports now reach over 100 nations, ranging from strategic platforms and sub-systems to vital components, with private industry contributing the lion’s share at ₹15,233 crore. The Defence Public Sector Undertakings themselves registered a 42.85% growth in exports, with products like bulletproof jackets, patrol boats, helicopters, radars, and lightweight torpedoes cementing India’s status as a reliable partner in the world’s defence supply chain.
Strategic reforms have been central to this progress. The government’s simplification of licensing, the introduction of an end-to-end digital portal for export authorisations, and the rationalisation of procedures have unlocked new avenues for fast, efficient trade. Through these measures, India’s defence diplomacy has also grown in stature, as exported platforms come paired with training, logistics, and support packages that build trust and foster long-term international partnerships.
Enabling an Innovative and Integrated Future
At the heart of these achievements are reforms focused on ease of doing business, research and development, and the encouragement of industry-academia collaboration. Initiatives such as the ₹1 lakh crore Research, Development and Innovation (RDI) Scheme, the extension of liberalised FDI norms, and support for MSMEs and start-ups are nurturing a fertile environment for technological advances and product innovation. The government’s ambition is clear: to further expand annual defence manufacturing to ₹3 lakh crore and defence exports to ₹50,000 crore by 2029. With new investment opportunities arising from 788 industrial licenses issued to 462 companies, and a record 193 contracts signed in 2024-25, of which 177 went to the domestic industry, the sector’s momentum is unmistakable.