India’s defence production hit a record Rs 1.54 lakh crore in 2024-25, a massive increase driven by ‘Atmanirbharta’ reforms. Defence exports also reached a new high of Rs 23,622 crore, with the government aiming for further growth.
India recorded its highest-ever defence production of Rs 1.54 lakh crore in 2024-25, with manufacturing in the country rising leaps and bounds over the past years, thanks to the right policies and Atmanirbharta reforms in place.
According to the central government, the country’s indigenous defence production hit a record Rs 127,434 crore in 2023-24, a 174 per cent surge from Rs 46,429 crore in 2014-15. India is on track to achieve a target of Rs 1.75 lakh crore in defence production in the current fiscal year.
Drivers of Indigenous Growth
As many as 16,000 MSMEs have emerged as the game-changers, strengthening indigenous defence capabilities in India. The upward trajectory in defence production is the result of continued government support over the past decade in the form of huge allocation and policy level support extended to India s military industrial base, the government said.
The rise in the defence budget, from Rs 2.53 lakh crore in 2013-14 to Rs 6.81 lakh crore in 2025-26, underlines the government’s determination to strengthen country’s military infrastructure. In order to reduce dependency on foreign countries, both public and private segments of the industry have demonstrated consistent year-on-year growth, attributed to far-reaching policy reforms, enhanced ease of doing business, and a strategic focus on indigenisation over the past decade.
Expanding Global Footprint
India now exports to over 100 nations, including to United States, France and Armenia. “Exports are more than commerce: they build trust, interoperability and long-term partnerships. India s expanding export basket, supplied to friendly countries, is an instrument of outreach, seen in defence cooperation, logistics support, training and spares packages that accompany sales. The widening list of importers signals growing global confidence in Indian platforms.”
Public-Private Sector Contribution
Defence Public Sector Undertakings (DPSUs) and other PSUs accounted for approximately 77 per cent of total production, while the private sector contributed 23 per cent. The share of the private sector, which increased from 21 per cent in 2023-24 to 23 per cent in 2024-25, reflects the sector’s growing role in the defence ecosystem of the country. As a result, exports too saw a growth of Rs 2,539 crore or 12.04 per cent over the exports figures of 2023-24.
Future Targets and Ambitions
The government aims to achieve defence manufacturing worth Rs 3 lakh crore and Rs 50,000 crore in defence exports by 2029, reinforcing India’s role as a global defence manufacturing hub while boosting economic growth. According to the central government under the ‘Security’ segment, 788 industrial licenses have been issued to 462 companies.
Coming to India s defence exports, they reached a record Rs 23,622 crore in 2024 25 from less than Rs 1,000 crore a decade ago – in 2014.
A Decade of Transformative Reforms
Prior to the policy reforms initiated under the government of Prime Minister Narendra Modi during the last decade, India’s defence sector faced significant bottlenecks. “Procurement processes were slow, resulting in critical capability gaps. Dependence on imports was high, straining foreign exchange reserves and exposing vulnerabilities during global disruptions. Earlier, private sector participation was limited due to restrictive policies, dominance of defence PSUs, and lack of technology access,” the government has asserted. Defence exports were not that high, valued at only Rs 686 crore in 2013 14, positioning India primarily as an importer rather than a producer in the global defence market.
To meet these challenges, the Ministry of Defence’s draft Defence Production and Export Promotion Policy (DPEPP) sets the compass for making India a top global defence manufacturer by encouraging R&D, rewarding innovation and IP creation, promoting industry-academia linkages, supporting MSMEs and setting export ambitions. “The policy stitches together production, technology, and market access into one roadmap,” the statement from the central government read.
Key Pillars of ‘Aatmanirbhar Bharat’
Anchored in the vision of Aatmanirbhar Bharat, the government launched a series of reforms to build a self-reliant, globally competitive defence industry. The key objectives include Faster procurement through streamlined Defence Acquisition Procedures (DAP), followed by DAC (Defence Acquisition Council), giving nod for acquisitions. Promoting indigenous production via Positive Indigenisation Lists, liberalised FDI norms for automatic route up to 74 per cent and up to 100 per cent through the government route, and the Rs 1 lakh crore Research, Development and Innovation (RDI) Scheme, fostering collaboration among DPSUs, private companies, MSMEs, and startups.
The government also focused on boosting defence exports with simplified licensing, covering platforms such as bulletproof jackets, Dornier aircraft, Chetak Helicopters, and fast interceptor boats, and lightweight torpedoes.
Strategic Initiatives Driving Growth
India has undertaken a series of landmark reforms to transform the defence procurement ecosystem. The twin frameworks, the Defence Acquisition Procedure (DAP) 2020 and the Defence Procurement Manual (DPM) 2025, together form the backbone of this transformation, ensuring speed, transparency, innovation, and self-reliance across both capital and revenue procurements.
Further, initiatives such as dedicated Defence Industrial Corridors are the new growth arteries for India’s defence manufacturing ecosystem. Two corridors, Uttar Pradesh Defence Industrial Corridor (UPDIC) and Tamil Nadu Defence Industrial Corridor (TNDIC), are the lifelines of this transformation. Together, they have attracted investments worth over Rs 9,145 crore, with 289 MoUs signed, unlocking Rs 66,423 crore in potential opportunities, as of October 2025.
Attracting Investment and Easing Business
India has emerged as one of the most attractive destinations for defence investment. With 788 industrial licenses issued to 462 companies, the participation of Indian industry in defence manufacturing is growing rapidly. The Department of Defence Production has streamlined business through a fully digital portal for export authorisations, leading to 1,762 approvals in FY 2024 25, compared to 1,507 in 2023-24, marking a 16.92 per cent year-on-year growth and a 17.4 per cent increase in the number of exporters. Combined with liberalized FDI norms, the PLI scheme, and modern defence corridors, India offers a compelling opportunity for both domestic innovators and global investors.
In 2024-25, the Ministry of Defence signed a record 193 contracts valued at Rs 209,050 crore, marking the highest ever in a single financial year. Of these, 177 contracts, worth Rs 168,922 crore, were awarded to the domestic industry, reflecting a decisive shift toward Indian manufacturers and a strengthened indigenous defence ecosystem.
“From the establishment of Defence Industrial Corridors to the expansion of export facilitation, every measure underscore India s commitment to reducing import dependency and promoting indigenous capabilities. Together, these efforts are shaping a resilient, technology-driven defence ecosystem that not only strengthens national security but also positions India as a trusted global partner in defence manufacturing and innovation,” the statement concluded. (ANI)
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