India Reaches New Defence Manufacturing Milestone
India has achieved a major milestone in defence manufacturing, with annual defence production reaching an all-time high of ₹1.78 lakh crore in the 2025-26 financial year.
The latest figure represents a significant expansion of India's domestic defence industrial base and comes amid sustained government efforts to increase indigenous manufacturing and reduce dependence on imported military equipment.
Defence Minister Rajnath Singh described the growth as a sign of the country's expanding defence manufacturing capabilities. He credited policy support, new initiatives, greater private-sector participation and growing export opportunities for the sector's momentum.
Production Rises 15.6% in One Year
India's defence production stood at ₹1.54 lakh crore in 2024-25. The increase to ₹1.78 lakh crore in 2025-26 represents year-on-year growth of 15.6%.
The longer-term change is even more significant. Defence production has risen by 110% from ₹84,643 crore in 2020-21.
Compared with 2013-14, when indigenous defence production was ₹43,746 crore, the latest figure is nearly four times higher.
Private Sector's Role Continues to Grow
Public-sector organisations continue to account for the majority of India's defence production.
Defence Public Sector Undertakings and other public-sector units contributed approximately 76% of total production in 2025-26. However, the private sector's role has expanded steadily.
Its share increased from 22% in 2024-25 to 24% in 2025-26, with private-sector defence production reaching an estimated ₹42,000 crore. That represents the sector's highest contribution so far.
The increase reflects the growing involvement of private companies, MSMEs and startups in India's defence manufacturing ecosystem.
Defence Exports Also Hit a Record
The expansion of domestic manufacturing has been accompanied by strong growth in defence exports.
India's defence exports reached ₹38,424 crore in 2025-26, marking another all-time high.
The rise indicates that Indian defence manufacturers are increasingly looking beyond the domestic market and competing for opportunities in international markets.
Push for Greater Self-Reliance
The government's defence manufacturing strategy is closely linked to its Aatmanirbhar Bharat initiative.
The objective is to build domestic capacity for producing military equipment, weapons and related technologies while reducing reliance on foreign suppliers.
Measures have included domestic procurement preferences, positive indigenisation lists, support for industry and initiatives designed to connect established defence companies with MSMEs and startups.
Indigenisation Remains a Major Priority
Increasing production is only one part of India's defence self-reliance strategy.
The government has also been pushing to replace imported defence items with domestically manufactured alternatives. Thousands of defence products have been identified for indigenisation, while domestic orders have created opportunities for smaller manufacturers and technology companies.
This process is intended to strengthen the broader defence ecosystem rather than relying solely on large public-sector manufacturers.
Government Sets Higher Production Targets
The ₹1.78 lakh crore milestone is not being treated as the final target.
Rajnath Singh has previously said India aims to increase defence production to ₹3 lakh crore by 2029, while defence exports are targeted at ₹50,000 crore.
Achieving those targets will require continued investment in manufacturing capacity, research and development, advanced technologies and export capabilities.
India's Changing Position in Global Defence Manufacturing
The growth of domestic defence production has implications beyond the value of goods manufactured each year.
A stronger domestic industrial base can help India meet more of its military requirements internally while also creating opportunities to export defence equipment to other countries.
The combination of higher production, greater private-sector participation, increasing exports and continued indigenisation could strengthen India's position in the global defence manufacturing ecosystem.
The ₹1.78 lakh crore milestone therefore represents not only a record in annual output but also another significant step in India's longer-term effort to build a more self-reliant defence industry.
