India's Defence Sector Transformation: Growth and Strategic Shifts
India's defence production reached INR 1.54 trillion in FY2025, a 3.2-fold increase since FY2015, while defence exports surged to INR 384 billion in FY2026. The shift towards local manufacturing and technology integration positions India as a significant player in global defence markets.
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India's defence production hit a record INR 1.54 trillion in FY2025, with exports increasing 63% year-on-year to INR 384 billion in FY2026. The Defence Acquisition Council approved procurement proposals worth USD 71 billion in FY2026, reflecting a shift towards technology transfer and domestic manufacturing.
Defence budget allocations have surged to INR 7.85 trillion for FY2027, representing 14.67% of the Union Budget. India aims for INR 500 billion in defence exports by FY2029, with private sector involvement rising from 19% in FY2017 to 23% in FY2025.
The Advanced Towed Artillery Gun System exemplifies domestic production success. The emergence of drones and AI systems showcases the modernisation of India's defence capabilities. Continued investments in Defence Industrial Corridors and evolving Free Trade Agreements could further enhance India's manufacturing ecosystem.
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