India’s defence production has reached a historic peak of ₹1.78 lakh crore in FY 2025‑26, marking a 15.6 per cent rise from the previous year and more than doubling output since FY 2020‑21. This milestone reflects the expanding role of the private sector, record exports, and sustained policy support under the Aatmanirbhar Bharat initiative.
India’s annual defence production has surged to an unprecedented ₹1.78 lakh crore in FY 2025‑26. This represents a 15.6 per cent increase over the previous year’s output of ₹1.54 lakh crore, and a remarkable 110 per cent growth compared to FY 2020‑21 when production stood at ₹84,643 crore. The achievement underscores the rapid expansion of India’s indigenous defence manufacturing base.
The growth trajectory is even more striking when viewed over the past decade. Indigenous defence production has risen nearly fourfold from ₹43,746 crore in FY 2013‑14, reflecting the cumulative impact of sustained investment, policy reforms, and industrial participation.
This expansion has been driven by the government’s push for self‑reliance in defence under the Aatmanirbhar Bharat initiative, spearheaded by Prime Minister Narendra Modi.
Defence Public Sector Undertakings and other PSUs accounted for approximately 76 per cent of total production, while the private sector contributed 24 per cent. The private sector’s share, valued at around ₹42,000 crore, is at its highest ever, up from 22 per cent in FY 2024‑25.
This reflects the growing role of private industry in India’s defence ecosystem, with firms increasingly involved in manufacturing advanced systems such as drones, missiles, and electronic warfare equipment.
The surge in production has directly contributed to record defence exports, which reached ₹38,424 crore in FY 2025‑26. Indian‑made systems are now exported to more than 80 countries, demonstrating global confidence in the reliability and cost‑effectiveness of India’s defence products. This export success strengthens India’s position as a rising defence supplier in the international market.
Defence Minister Rajnath Singh credited the inspiring leadership of Prime Minister Modi for this achievement, highlighting the collective efforts of the Department of Defence Production, PSUs, and private industry. He emphasised that the upward trajectory is a clear indicator of India’s expanding defence industrial base and its ability to meet both domestic and international demand.
Policy support has been central to this success. Measures such as the Defence Acquisition Procedure 2020, Positive Indigenisation Lists, and liberalised FDI norms have streamlined procurement, encouraged innovation, and created predictable demand for domestic manufacturers. Initiatives like Innovations for Defence Excellence (iDEX) have further enabled start‑ups and smaller firms to contribute to defence technology development.
The government has also increased the defence budget significantly, with FY 2026‑27 allocations rising to ₹7.85 lakh crore, up 15.3 per cent from the previous year. This sustained financial commitment ensures continued acceleration in defence production and modernisation.
India’s defence production milestone is not just about numbers; it represents a strategic shift towards autonomy, resilience, and global competitiveness.
By reducing dependence on imports, India has enhanced its sovereignty in defence decision‑making and secured its supply chains against external disruptions. The export achievements simultaneously position India as a responsible contributor to global security.
Agencies
