With bold targets for global dominance by 2029, India’s defence sector hits record highs with ₹1.27 trillion production, soaring exports, and major local contracts. MoD acknowledges.
India’s defence production touched an all-time high of ₹1.27 trillion in the financial year 2023–24, marking a 174 per cent rise since 2014–15, according to official data from the Ministry of Defence (MoD). The MoD has attributed the increase to the government’s continued emphasis on self-reliance through its ‘Make in India’ initiative.
Defence exports also soared to a record ₹210.83 billion, a sharp rise from ₹6.86 billion in 2013–14, representing a 30-fold growth over the past decade. The country now exports military hardware to over 100 nations, with the United States, France and Armenia among its top buyers.
Furthermore, in its efforts to modernise the Armed Forces, the MoD signed 193 contracts worth ₹2.09 trillion in 2024–25. Of these, 177 contracts—accounting for 92%—were awarded to the domestic industry, totalling ₹1.68 trillion.
Major defence deals and approvals
MoD’s recent procurement deals included the acquisition of 156 Light Combat Helicopters (LCH) Prachand from Hindustan Aeronautics Limited (HAL), valued at ₹627 billion. Of these, 66 will be delivered to the Indian Air Force and 90 to the Indian Army, with deliveries starting from the third year. The helicopters, designed for high-altitude warfare, are over 65% indigenous and are expected to create more than 8500 jobs.
In artillery, the Cabinet Committee on Security approved the procurement of 307 advanced towed artillery gun systems (ATAGS) along with 327 gun towing vehicles at a cost of ₹70 billion.
Developed by DRDO in partnership with Indian private firms, the artillery system has a range of over 40 kilometres and is designed for precision and mobility.
Additionally, India signed its first wet lease contract for a KC-135 flight refuelling aircraft to enhance aerial refuelling capabilities for both Air Force and Navy pilots.
Shift towards self-reliance
As of February 2025, over 14,000 items have been indigenised under the SRIJAN initiative, while more than 3000 have been developed through the positive indigenisation lists (PILs). These lists prohibit future imports of specific components, encouraging domestic production.
Currently, 65% of India’s defence equipment is manufactured domestically, a dramatic turnaround from a decade ago when imports accounted for up to 70%. India’s defence industrial base comprises 16 public sector undertakings, over 430 licensed companies, and approximately 16,000 micro, small, and medium-sized enterprises (MSMEs). The private sector now contributes 21% to the total production value.
The government has set ambitious targets of ₹3 trillion in defence production and ₹500 billion in exports by 2029.
Innovations and startup engagement
The Innovations for Defence Excellence (iDEX) programme has signed 430 contracts and engaged over 600 startups and MSMEs. With a budget of almost ₹4.5 billion for FY 2025–26, the scheme offers grants of up to ₹250 million under its ADITI sub-scheme, supporting emerging technologies such as artificial intelligence, quantum communication, and autonomous weapons.
To date, defence forces have approved procurement worth ₹24 billion from iDEX-supported startups, with another ₹15 billion in the pipeline for development.
Defence industrial corridors and investment
Two Defence Industrial Corridors—located in Uttar Pradesh and Tamil Nadu—have attracted investments of over ₹86.58 billion, with 253 memoranda of understanding signed. The combined investment potential across these corridors exceeds ₹530 billion.
In a further push for domestic manufacturing, 75% of the capital procurement budget—amounting to ₹1.11 trillion—has been earmarked for purchases from Indian suppliers in the current fiscal year.
Regulatory reforms and foreign investment
In recent years, the government has undertaken major reforms to attract investment and ease regulatory hurdles. Foreign Direct Investment (FDI) in the defence sector has been liberalised to allow up to 74% under the automatic route. Since April 2000, cumulative FDI inflows into the sector have reached ₹55.16 billion.
Other initiatives include streamlining licensing requirements, extending licence validity from three to 15 years, and digitising the defence export approval process. More than 1500 authorisations were issued in the last financial year under the updated system.
Defence innovation showcased at Aero India 2025
The Aero India 2025 event showcased India’s defence innovation under the ‘SAMARTHYA’ theme. Thirty-three major indigenised items were displayed, including naval anti-ship missiles, high-temperature alloys, and electronic warfare systems. The exhibition highlighted India’s capabilities in next-generation surveillance, AI-powered platforms, and quantum-secure communications.
Driven by strategic policy interventions and a focus on indigenisation, the country is rapidly moving towards self-sufficiency while enhancing its global export profile.
With production and export targets set for 2029, and a robust ecosystem supporting innovation and investment, the MoD has highlighted that India is positioning itself as a key player in the international defence market.
