India’s defence sector surges, hitting record production and export levels

India’s defence manufacturing has accelerated sharply, with output hitting a historic Rs 1.78 lakh crore in 2025-26, up 15.6% from the year before and more than twice the 2020-21 level. Exports have expanded from under a thousand crore in 2013-14 to Rs 38,424 crore, a 56-fold increase, now reaching more than 80 markets and split roughly between public-sector undertakings and private firms. The growth rests on a defence budget that has tripled since 2013-14, with capital spending more than doubling, alongside procurement reforms such as the 2016 and 2020 procedures and the 2025 manual.

Initiatives like iDEX, ADITI, and the Technology Development Fund have drawn hundreds of startups and MSMEs into the supply chain, while DRDO’s technology-transfer framework now involves over 130 partners. The government has set ambitious goals of Rs 3 lakh crore annual production and Rs 50,000 crore in exports by 2029, aiming to boost strategic autonomy and shorten resupply times in prolonged conflicts.