India’s indigenous defence manufacturing has reached record levels, with production hitting Rs. 1,27,434 crore (US$ 14.36 billion) in FY24, driven by the Atmanirbhar Bharat initiative and ongoing policy reforms.
Budget and Policy Support
Defence budget allocations have grown significantly, rising from Rs. 2,53,000 crore (US$ 28.51 billion) in FY14 to Rs. 6,81,000 crore (US$ 76.74 billion) in FY26, underscoring a strong commitment to military capability. Key policy measures include:
- Liberalised FDI norms in defence
- Research, Development and Innovation Scheme with Rs. 1,00,000 crore (US$ 11.27 billion) funding
- Defence Acquisition Procedure 2020 and Defence Procurement Manual 2025 streamlining procurement
- Encouraging collaboration with start-ups, MSMEs, and academia
- Development of Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu
Institutions like the Defence Research and Development Organisation (DRDO) continue to strengthen India’s design and innovation ecosystem.
Exports on the Rise
India’s defence exports rose to Rs. 23,622 crore (US$ 2.66 billion) in FY25, supported by:
- Simplified export rules
- A fully digital authorisation system
- Increased global acceptance of Indian defence platforms
Private sector participation is expanding, with domestic companies securing larger contract awards and contributing significantly to exports.
Future Targets
India aims to achieve defence production of Rs. 3,00,000 crore (US$ 33.81 billion) and exports of Rs. 50,000 crore (US$ 5.63 billion) by 2029. Ongoing reforms, technology integration, and capacity expansion are fostering a modern, self-reliant defence ecosystem, positioning India as a globally competitive hub for defence manufacturing, innovation, and strategic capability.
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