The recent escalation in hostilities between India and Pakistan has intensified India’s drive toward self-reliance in defence, with both private and public sector players emerging as pivotal forces in innovation and production. Following the clashes, Indian defence firms have accelerated indigenous projects, with giants like HAL, Tata Advanced Systems, Bharat Dynamics, Bharat Forge, L&T, Paras Defence, and Adani Defence taking the lead.
While established PSUs continue to shoulder major defence production, private players are spearheading cutting-edge equipment such as supplying critical systems like L&T’s K9 Vajra howitzers to Adani-Elbit’s Hermes-900 drones. These are deployed by the defence forces. Emerging firms are filling gaps in surveillance and drone manufacturing.
The spotlight on domestic companies has grown brighter after their decisive role in ‘Operation Sindoor’ and the ensuing four-day engagement. Though India’s response to the Pahalgam attack involved a mix of Russian, French, and Israeli equipment, it was homegrown systems that proved pivotal in live combat, bolstering global confidence in India’s defence capabilities.
“For the first time, a self-reliant Indian defence ecosystem has been able to counter a foreign threat. This achievement should boost confidence among the Indian players, leading to a rise in indigenous procurement,” said Amit Mahajan, director at Paras Defence & Space Technologies. He added that India’s defence requirements are likely to rise, as threats that were once only theoretical have now materialised in varied forms, giving the armed forces a clearer understanding of real-time challenges and what technologies must be developed to counter them.
Manoranjan Sharma, chief Economist at Infomerics Valuation and Ratings, said the India-Pak conflict demonstrated massive might of the Indian military powered by home-grown weapons and cutting-edge domestic technologies.
“The integration of indigenous hi-tech systems into national defence across the spectrum, e.g., drone warfare, layered air defence, electronic warfare, etc. was done in a telling manner- a manner that has been driven home effectively in the Indian sub-continent and globally,” added Sharma.
3x growth in 9 years
India’s defence sector has undergone a transformation in recent years, shifting from heavy reliance on imports to a growing emphasis on making in India and exports. Industry experts believe policy reforms and private sector participation have driven this change, positioning India as an emerging defence production hub. The setting up of two defence industrial corridors in Uttar Pradesh and Tamil Nadu has been a major milestone.
Defence production hit a fresh high in FY24, with the value of indigenous manufacturing rising to `1,27,434 crore. This is a growth of 174% or 2.7x as against `46,429 crore in 2014-15. Exports soared at a much steeper pace to `23,622 crore in FY25, a 34-fold rise from FY14 exports. Notably, 21% of this production comes from private sector. Going forward, India has set a target of `3 lakh crore in domestic production and `50,000 crore in
exports by 2029. Indian defence equipment is exported to over 85 countries.
As per a defence ministry note published in October 2024, India, which relied heavily on foreign countries for its defence needs with 65-70% of them imported equipment, today manufactures 65% of equipment within the country. This transformation has been possible due to its defence industrial base comprising 16 public sector units (DPSUs), over 430 licensed companies, and 16,000 micro, small, and medium enterprises (MSMEs). Ratings agency CareEdge in a recent report said on the back of strong government backing and increasing private sector participation, the defence sector is set to grow at a CAGR of about 20% during FY24-29.
It says these companies are set to further enhance the defence capabilities, reduce import dependency, and elevate its global stature. “The collaboration between government and private sector entities in the sector has driven advancements in arms and ammunition, aerospace, electronics, and naval technologies, aided by policies such as ‘Make in India’ and liberalised FDI norms. These policies have enhanced domestic manufacturing capabilities, attracted overseas investments in innovation and driven growth in military equipment exports,” said CareEdge.
Mega orderbook
Industry experts highlighted that the total order book of top 15 defence firms is likely to have exceeded `4 lakh crore. This, as per them, is expected to rise in the near future. The order book of Hindustan Aeronautics (HAL) alone stands at a `1.84 lakh crore, including manufacturing orders worth `1.02 lakh crore and ROH (repair and overhaul) orders worth `17,500 crore. HAL has signed the biggest deal with the Ministry of Defence (MoD) to supply 156 LCH Prachand helicopters for `62,777 crore.
Bharat Electronics (BEL), which produced a range of products, including radar systems, communication systems, and weapon systems, had an order book of `71,650 crore as of April 1, 2025. This includes an export order book of $359 million (`30,000 cr). Bharat Dynamics (BDL), which manufactures guided missiles and underwater weapons, won orders worth `6,668 crore and its order book as of April 1, 2025 stood at `22,700 crore. Among the private players, Bharat Forge’s defence order book stood at `9,420 crore at the end of the March quarter. New orders worth `6,959 crore were won FY25, and defence business forms 70% of that total.
Mahajan of Paras Defence said their current order book stands at over `900 crore, and they see an opportunity pipeline exceeding `2,000 crore. “We are pursuing developments in anti-drone systems, several of which were in the demonstration phase. We have capacity to finalise and mass-produce them. We possess the capabilities to execute strategic partnerships such as those with CONTROP Precision Technologies, Israel or HevenDrones, ensuring that we can immediately deliver cutting-edge techs from countries like Israel and subsequently indigenise them,” said Mahajan.
In an analysts call recentlyL&T vice-president P Ramakrishnan said that going forward, the defence segment of the company will grow more than its potential -- the way it has been shown in the last 5 years or so. “I think it will become more and more growth oriented with actual orders coming in,” he said.