NEW DELHI: India’s domestic defence production scaled a new high of Rs 1.78 lakh crore in FY 2025-26, registering a 15.6 per cent increase over the previous fiscal, with the private sector’s contribution rising to a record 24 per cent, the defence ministry said in a statement issued on Wednesday.
Defence Public Sector Undertakings (DPSUs) and other public sector entities accounted for around 76 per cent of the total production during FY26, while private industry contributed nearly Rs 42,000 crore, its highest-ever share, up from 22 per cent in the previous financial year.
The increase in domestic manufacturing has coincided with a sharp rise in defence exports, which touched a record Rs 38,424 crore in FY26, compared with just Rs 686 crore in FY14. India currently exports defence equipment to over 80 countries, with the number of defence exporters increasing to 145 from 128 in the previous year.
The BrahMos supersonic cruise missile remains India’s marquee defence export, with the USD 375 million Philippines contract for shore-based anti-ship variants currently under execution. Vietnam has also signed a deal for the missile, while discussions with Indonesia are underway.
Armenia has emerged as another major buyer, procuring Pinaka multi-barrel rocket launchers, Swathi weapon-locating radars, anti-tank munitions and the Akash air defence system in recent years, marking one of India’s significant breakthroughs in a conflict-prone region.
Beyond missiles and artillery, Indian-made ALH Dhruv helicopters have been exported to Mauritius, while Dornier-228 aircraft have been supplied to countries including Mauritius, Seychelles and Guyana for maritime surveillance. Indian shipyards have also delivered offshore patrol vessels and interceptor boats to countries in Africa and Southeast Asia.
However, the rise in production does not fully translate into strategic self-reliance, with India continuing to depend on foreign suppliers for critical technologies such as fighter aircraft engines, advanced sensors, specialised materials and certain electronic systems. According to the Stockholm International Peace Research Institute (SIPRI), India accounted for 8.3 per cent of global arms imports during 2021-25, making it the world’s second-largest arms importer.
The expansion of domestic manufacturing has been supported by measures such as positive indigenisation lists covering over 5,500 defence items, preference for domestic procurement under the Defence Acquisition Procedure (DAP), and initiatives such as iDEX and the SRIJAN portal aimed at increasing participation from private industry, MSMEs and start-ups.
In a separate post on X, Defence Minister Rajnath Singh said the growth reflected the expansion of India’s defence industrial base and credited the efforts of the Department of Defence Production, DPSUs and private industry.
“The upward trajectory is a clear indicator of the country’s expanding defence industrial base,” Singh said, adding that sustained policy support, new initiatives, increased private sector participation and growing export capabilities would further accelerate the sector’s growth.
