Media365
India’s defence production touched a record Rs 1.78 lakh crore in FY2025-26, marking a 110 per cent increase in just five years and signalling the country’s growing ambition to transform itself from one of the world’s largest arms importers into a major defence manufacturing hub.
The latest production figure, announced by the Ministry of Defence on Wednesday, represents a 15.6 per cent increase from Rs 1.54 lakh crore in FY2024-25 and nearly four times the level recorded in FY2013-14. The milestone comes as New Delhi intensifies efforts to strengthen indigenous military capabilities amid rising geopolitical competition and a sustained global rearmament cycle.
The achievement also reflects a broader shift in India’s defence ecosystem, with private industry taking on a larger role alongside state-owned enterprises and domestic manufacturers increasingly targeting export markets.
From defence buyer to defence producer
For decades, India has ranked among the world’s largest importers of military equipment, relying heavily on foreign suppliers for fighter aircraft, submarines, artillery systems and advanced weapons platforms.
That dependence has become a strategic concern as geopolitical tensions have reshaped global supply chains and exposed vulnerabilities in military procurement.
Against that backdrop, successive policy measures under the government’s Aatmanirbhar Bharat initiative have sought to expand domestic design, development and manufacturing capabilities across the defence sector.
The results are becoming increasingly visible. Defence production has risen from Rs 84,643 crore in FY2020-21 to Rs 1.78 lakh crore in FY2025-26, reflecting a rapid expansion in indigenous manufacturing across aerospace, missiles, naval systems, armoured platforms, electronics and ammunition.
Defence Minister Rajnath Singh credited the growth to policy reforms, industry participation and sustained efforts to strengthen domestic capabilities.
“India’s annual defence production has surged to an all-time high of Rs 1.78 lakh crore in FY2025-26,” Singh said in a post on X, describing the milestone as evidence of the country’s expanding defence industrial base.
Private sector gains ground
One of the most notable trends in the latest data is the growing role of private manufacturers.
While Defence Public Sector Undertakings (DPSUs) and other public-sector entities continued to account for around 76 per cent of total production, the private sector increased its share to 24 per cent from 22 per cent a year earlier.
Private companies contributed approximately Rs 42,000 crore in FY2025-26 — the highest level on record — underscoring the gradual diversification of India’s defence manufacturing landscape.
The rise suggests that defence production is no longer driven solely by state-owned enterprises but increasingly supported by a wider network of private companies, MSMEs and start-ups involved in everything from components and electronics to advanced weapons systems and aerospace manufacturing.
Record exports point to growing competitiveness
The expansion in domestic production has been accompanied by a sharp rise in defence exports.
India exported defence equipment worth Rs 38,424 crore in FY2025-26, another record, indicating growing international acceptance of domestically produced military hardware.
For policymakers, exports are emerging as a key measure of success. While domestic procurement can be supported through policy mandates, export growth is often viewed as a stronger indicator of technological capability, product quality and competitiveness in global markets.
The government has set ambitious targets for expanding defence exports, hoping to position India alongside emerging defence manufacturing powers that have successfully leveraged domestic production to build export-oriented industries.
Global rearmament creates opportunity
India’s production milestone comes at a time when military spending is rising across much of the world.
According to data released by the Stockholm International Peace Research Institute (SIPRI) in April, global military expenditure
increased 2.9 per cent to $2.887 trillion in 2025, marking the 11th consecutive year of growth.
India ranked among the world’s five largest military spenders, with defence expenditure rising 8.9 per cent to $92.1 billion amid continued modernisation efforts and security concerns related to China and Pakistan.
The broader trend of global rearmament — driven by the war in Ukraine, strategic competition in the Indo-Pacific and growing geopolitical uncertainty — is creating fresh opportunities for defence manufacturers worldwide.
For India, the challenge is to convert its position as a major defence buyer into a sustainable manufacturing and export advantage.
