India has posted its highest-ever defence production of ₹1.54 lakh crore in FY 2024–25, marking a significant milestone in the country’s ongoing push toward self-reliance in the defence sector. The government said the rise is anchored by record indigenous manufacturing worth ₹1,27,434 crore in FY24 — a 174 per cent jump from ₹46,429 crore in FY15. Defence exports, once negligible, have also reached unprecedented levels. From under ₹1,000 crore in 2014, exports climbed to ₹23,622 crore in FY25, registering 12 per cent year-on-year growth as India now supplies platforms, ammunition, and systems to 80–100 countries, including technologically advanced nations such as the US and France, and strategic partners like Armenia.

The government attributed the momentum to a fully digital export authorisation system, simplified licensing, and Open General Export Licences. Defence PSUs recorded a 42.85 per cent rise in export volumes during FY25, pointing to growing acceptance of Indian defence products in global markets. The Ministry of Defence noted that India’s defence budget has nearly tripled in a decade — from ₹2.53 lakh crore in FY14 to ₹6.81 lakh crore in FY26 — reflecting sustained modernisation and a shift toward local manufacturing.

Officials highlighted the combined performance of the public and private sectors, liberalised FDI norms, and an accelerated indigenisation drive. Public sector entities still account for about 77 per cent of total output, though the private sector’s share has risen from 21 per cent in FY24 to 23 per cent in FY25. A network of nearly 16,000 MSMEs has become a critical contributor, supplying drones, avionics, components, and advanced electronics.

Before 2014, India faced delays, restrictive procurement rules, and heavy dependence on imports. With exports at only ₹686 crore in FY14, the country was seen largely as a buyer rather than a producer. The Defence Production and Export Promotion Policy (DPEPP) marked a major shift, supported by indigenisation lists, liberal FDI rules of up to 74 per cent automatic and 100 per cent via approval, and stronger R&D provisions. The ₹1 lakh crore Research, Development and Innovation (RDI) Scheme has deepened collaboration among DPSUs, private firms, MSMEs, and start-ups.

Recent institutional reforms — including the Defence Acquisition Procedure (DAP) 2020 and Defence Procurement Manual (DPM) 2025 — have streamlined procurement, improved transparency, and accelerated decision-making. DAP 2020 prioritises the Buy (Indian–IDDM) category, enabling adoption of indigenous systems and opening scope for emerging technologies such as robotics, AI-enabled solutions, cyber platforms, advanced sensors, and space-linked assets. DPM 2025 simplifies revenue procurement norms, reduces liquidated damages for indigenisation, removes outdated NOC requirements, and enables digital workflows.

The impact of reforms is reflected in acquisition approvals: the Defence Acquisition Council has cleared record numbers of indigenous proposals over the past two years, including MALE drones, torpedoes, radars, missile systems, naval guns, and underwater autonomous platforms. In FY25 alone, the Ministry of Defence signed 193 contracts worth ₹2,09,050 crore — the highest in any financial year — with 177 awarded to domestic industry.

Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu continue to act as growth hubs, attracting ₹9,145 crore in actual investments and 289 MoUs cumulatively worth ₹66,423 crore. The corridors are emerging as clusters for manufacturing, testing, and co-development.

DRDO has expanded its role from research to strategic enablement through technology transfers, industry–academia linkages via 15 Centres of Excellence, and deep-tech funding under the ₹500 crore Technology Development Fund. The restructuring of the Ordnance Factory Board into seven specialised defence companies has also enhanced production autonomy and efficiency.

India’s rising defence exports have become instruments of strategic engagement, supported by logistics partnerships, training programmes, co-development initiatives, and supply of systems ranging from bulletproof gear and radars to torpedoes, Dornier aircraft, and Chetak helicopters. The government has set long-term objectives of achieving ₹3 lakh crore in defence manufacturing and ₹50,000 crore in exports by 2029.

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