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India’s defence sector has achieved a historic milestone in the financial year 2025-26, with defence exports reaching an all-time high of ?38,424 crore. This represents a staggering 62.66% increase over the previous fiscal year (?23,622 crore). This surge is a testament to India's transition from being one of the world's largest arms importers to an emerging global exporter, driven by the vision of Atmanirbhar Bharat (Self-Reliant India).

Key Highlights of FY 2025-26

The growth in exports is characterized by a robust partnership between the public and private sectors:

• Sectoral Contribution: Defence Public Sector Undertakings (DPSUs) contributed 54.84% (?21,071 crore), while the private sector accounted for 45.16% (?17,353 crore).
• Surging Growth: DPSU exports skyrocketed by 151%, while private firms maintained steady growth with a 14% increase.
• Global Footprint: India now exports defence equipment to more than 80 countries. The number of active exporters has grown to 145, reflecting a more competitive and wider industrial base.
• Budgetary Support: The defence budget has grown significantly to ?6.81 lakh crore in 2025-26, providing the necessary capital for modernization and indigenous production.

Major Exported Products and Destinations

India's export basket has expanded from components to full-scale advanced platforms:

• Key Products: BrahMos Supersonic Cruise Missiles, Akash Surface-to-Air Missile systems, Pinaka Multi-Barrel Rocket Launchers, Advanced Towed Artillery Gun System (ATAGS), Dornier-228 aircraft, and Zen Anti-Drone Systems.
• Top Buyers:
  • Components/Sub-systems: United States, France, and Israel (primarily for aero-structures and electronics).
  • Indigenous Weapon Systems:Armenia (Akash, Pinaka, ATAGS) and the Philippines (BrahMos).
  • Others: UAE, South Korea, Italy, and various nations across Africa and Southeast Asia.

The Strategic Imperative for Indigenisation

The push for domestic manufacturing is rooted in the need for Strategic Autonomy:

• National Security: Reducing dependence on foreign OEMs ensures that supply chains are not disrupted during geopolitical crises or through technology denials (sanctions).
• Economic Efficiency: Indigenous production conserves foreign exchange and creates a "waste-to-wealth" cycle within the domestic economy.
• Tailored Technology: Platforms can be customized for India’s unique terrains—ranging from high-altitude Himalayan regions to tropical maritime zones.
• Technological Sovereignty: Owning the Intellectual Property (IP) allows India to upgrade and modify systems without seeking external permissions.

Key Reforms Driving the Transformation

The Government of India has introduced several structural reforms to facilitate this growth:

• DAP 2020 & IDDM: The Defence Acquisition Procedure (DAP) 2020 prioritizes the Indian-IDDM (Indigenously Designed, Developed, and Manufactured) category as the highest preference for procurement.
• Simplified ‘Make’ Procedures:
  • Make-I: Government-funded (up to 70%) development of complex systems.
  • Make-II: Industry-funded prototypes with simplified paperwork and fast-track approvals.
• FDI Liberalization: Automatic route for Foreign Direct Investment increased to 74%, and up to 100% via government approval for niche technologies.
• Innovation Ecosystems:
  • iDEX (Innovations for Defence Excellence): Grants for startups and MSMEs.
  • Technology Development Fund (TDF): Funding up to ?10 crore for R&D in critical technologies.
• Defence Industrial Corridors (DICs): Established in Uttar Pradesh and Tamil Nadu, these hubs have attracted over ?9,145 crore in investment and signed nearly 290 MoUs to build a localized supply chain.

Roadmap to 2029: The Global Hub Vision

The Ministry of Defence has set ambitious targets for the near future:

• Production Target: Reach ?3 lakh crore in annual domestic defence production by 2029.
• Export Target: Aim for ?50,000 crore in annual exports by 2029.
• MSME Integration: Engaging over 16,000 MSMEs to ensure a resilient and tiered manufacturing ecosystem.