Friday, 20 Jun, 2025
The government aims to nearly quadruple India's annual defence output to ₹3 lakh crore by 2028-2029, while more than doubling defence exports from the current ₹21,083 crore to ₹50,000 crore. Image Source: IANS
Strategic policies have been crucial in accelerating this progress, promoting private sector involvement, fostering technological innovation, and advancing the creation of sophisticated military platforms.
India's defence sector has experienced rapid growth since the launch of the "Make in India" initiative, achieving a record ₹1.27 lakh crore in defence production during FY 2023-24. Once heavily reliant on foreign suppliers, India is now emerging as a formidable force in indigenous defence manufacturing, strengthening its military capabilities with homegrown technologies. This transformation signals the country's strong push for self-reliance, ensuring not only the fulfilment of its security requirements but also the development of a thriving defence industry that drives economic growth.
Strategic policies have been crucial in accelerating this progress, promoting private sector involvement, fostering technological innovation, and advancing the creation of sophisticated military platforms. The significant increase in the defence budget rising from ₹2.53 lakh crore in 2013-14 to ₹6.81 lakh crore in 2025-26 underscores the nation's unwavering commitment to bolstering its military infrastructure.
A key example of this shift is the recent approval by the Cabinet Committee on Security (CCS) for the procurement of the Advanced Towed Artillery Gun System (ATAGS), a major enhancement to the Indian Army's firepower. The deal involves the purchase of 307 units of 155mm/52 caliber guns and 327 High Mobility 6x6 Gun Towing Vehicles, set to equip 15 artillery regiments under the Buy Indian–Indigenously Designed, Developed, and Manufactured (IDDM) category, at an estimated cost of ₹7,000 crore. Developed by DRDO in collaboration with Bharat Forge and Tata Advanced Systems, the ATAGS is an advanced artillery system with a range exceeding 40 km, featuring cutting-edge fire control, precision targeting, automated loading, and recoil management, all rigorously tested by the Indian Army across diverse terrains.
India’s Defence production
Source: Department of Defence Production, Ministry of Defence
With state-of-the-art warships, fighter jets, artillery systems, and other advanced weaponry now being manufactured domestically, India is increasingly asserting itself as a major player in the global defence manufacturing arena. In the financial year 2023-24, approximately 79.2 percent of India's total defence production value came from Defence Public Sector Undertakings (DPSUs) and other public sector units (PSUs), while the private sector contributed the remaining 20.8 percent. This data highlights a steady increase in defence output from both the private sector and DPSUs/PSUs, with the sector as a whole being praised by Defence Minister Rajnath Singh for achieving record production levels.
Looking ahead, the government aims to nearly quadruple India's annual defence output to ₹3 lakh crore by 2028-2029, while more than doubling defence exports from the current ₹21,083 crore to ₹50,000 crore. For the fiscal year 2024-2025, the target for total defence output is ₹1.75 lakh crore, including ₹35,000 crore in exports.
In terms of defence exports, India surpassed the ₹21,000 crore mark for the first time in 2023-24. The Ministry of Defence has set an ambitious target of raising this figure to ₹50,000 crore within the next five years. Key exports over the past five years include advanced weapon simulators, torpedo loading mechanisms, night vision devices, armored protection vehicles, and coastal surveillance radar, among others. Currently, India exports defence equipment to over 100 countries, though the identities of these nations are not disclosed for strategic reasons. More than 100 Indian firms are actively involved in the export of defence products, with sophisticated systems like the 155 mm Advanced Towed Artillery Guns and Brahmos Missiles among the items being sold abroad.
India’s Defence Exports
Source: Department of Defence Production, Ministry of Defence
Apart from this, the Government of India has taken a number of steps to provide a boost to the indigenous defence production. Launched in April 2018, the Innovations for Defence Excellence (iDEX) initiative has fostered a dynamic ecosystem for innovation and technology development in India’s defence and aerospace sectors. By collaborating with MSMEs, startups, individual innovators, research institutions, and academia, iDEX has provided grants of up to ₹1.5 crore to support the creation of cutting-edge technologies. To further boost self-reliance in defence technology, the government has allocated ₹449.62 crore to iDEX for the 2025-26 financial year, including funding for its sub-scheme, Acing Development of Innovative Technologies with iDEX (ADITI).
As of February 2025, iDEX has launched 549 problem statements, engaged 619 startups and MSMEs, and signed 430 contracts. The primary goals of the initiative are to accelerate the development of indigenous, innovative technologies tailored to the needs of India’s Defence and Aerospace sectors; promote a culture of collaboration with innovative startups to co-create solutions; and foster an environment of technology co-creation and co-innovation within these critical industries.
The newly introduced ADITI scheme is designed to back the development of critical and strategic technologies, including satellite communication, advanced cyber technologies, autonomous weapons, semiconductors, artificial intelligence, quantum technology, nuclear technologies, and underwater surveillance systems. Innovators can receive grants of up to ₹25 crore under this initiative.
Further solidifying its support for startups and MSMEs, the Ministry of Defence has approved the procurement of 43 items, valued at over ₹2,400 crore, from iDEX-backed startups and MSMEs for the Armed Forces as of February 2025. In addition, projects exceeding ₹1,500 crore have been greenlit for development.
The Department of Defence Production (DDP) and the Department of Military Affairs (DMA) have released five Positive Indigenisation Lists (PILs) covering a range of items, including LRUs, assemblies, sub-assemblies, sub-systems, spares, components, and high-end materials. These lists establish clear timelines for when procurement will be restricted to domestic manufacturers. As of February 2025, more than 3,000 of the over 5,500 listed items have been successfully indigenised. Notable technologies that have been developed domestically include artillery guns, assault rifles, corvettes, sonar systems, transport aircraft, light combat helicopters (LCHs), radars, wheeled armoured platforms, rockets, bombs, armoured command post vehicles, and armoured dozers.
To enhance defence manufacturing, two Defence Industrial Corridors (DICs) have been established in Uttar Pradesh and Tamil Nadu, offering incentives to companies investing in the sector. Investments exceeding ₹8,658 crore have already been made across the six nodes in Uttar Pradesh—Agra, Aligarh, Chitrakoot, Jhansi, Kanpur, and Lucknow and the five nodes in Tamil Nadu—Chennai, Coimbatore, Hosur, Salem, and Tiruchirappalli. As of February 2025, 253 Memorandums of Understanding (MoUs) have been signed, promising a potential investment of ₹53,439 crore.
As part of the Make in India initiative, India has developed major defence platforms including the Dhanush Artillery Gun System, Advanced Towed Artillery Gun System (ATAGS), the Arjun Main Battle Tank (MBT), Light Combat Aircraft (LCA) Tejas, submarines, frigates, corvettes, and the recently commissioned INS Vikrant, showcasing the growing strength and capabilities of the nation’s defence sector.
The integration of Industry 4.0 technologies is transforming India’s defence manufacturing, enhancing precision engineering and boosting operational efficiency. Automation and robotics are reducing human error, while smart factories enable real-time monitoring and predictive maintenance. With support from policies like the Defence Production and Export Promotion Policy (DPEPP), India’s domestic defence industry is now capable of producing advanced weaponry, aerospace components, and military-grade electronics that meet global standards.
One of the most groundbreaking developments in defence manufacturing is additive manufacturing (3D printing), which significantly reduces lead times for producing critical components such as missile casings, UAV parts, and protective gear. This technology facilitates rapid prototyping and design adjustments, enabling India to respond quickly to evolving security threats and reducing dependence on traditional, lengthy manufacturing processes.
India’s advances in cutting-edge manufacturing are also opening up new opportunities for defence exports. By producing top-tier military equipment that meets international standards, India is strengthening its position in global defence markets. The government's goal of achieving $5 billion in defence exports by 2025 is further supported by the adoption of smart manufacturing practices, positioning India as a reliable defence supplier for allied nations.
