India Defence Production Surges to All-Time High

India Defence Production Surges to All-Time High

Why in News?

Recently, India’s defence production reached an all-time high of ₹1.78 lakh crore in FY 2025-26, rising 15.6% year-on-year and more than doubling in five years.

Highlights of India’s Defence Production

• India’s defence production reached an all-time high of ₹1.78 lakh crore in FY 2025–26, marking the highest annual output ever achieved by the country.
  • This represents a 15.6% increase over ₹1.54 lakh crore in FY 2024–25, highlighting sustained manufacturing expansion across the defence sector.
• The growth trajectory has been remarkable. Defence production stood at ₹84,643 crore in FY 2020–21 and has now crossed ₹1.78 lakh crore, meaning output has increased by over 110% in just five years.  
• Looking at a longer timeline, defence production has risen from ₹43,746 crore in FY 2013–14 to ₹1.78 lakh crore in FY 2025–26. This nearly four-fold increase reflects the transformation of India into a major defence manufacturing hub. 
• FY 2024–25 marked the first time India’s defence production exceeded ₹1.5 lakh crore, reaching ₹1,50,590 crore. The following year added another ₹27,000 crore-plus in output, pushing production to a new benchmark. 
• India’s indigenous defence production reached ₹1,27,434 crore in FY 2023–24, compared with ₹46,429 crore in FY 2014–15, reflecting a 174% increase in domestically produced defence equipment and systems.
• The production surge is supported by a broad manufacturing base involving 462 companies holding 788 industrial licences, indicating a deep and expanding defence industrial network contributing to output growth. 
• In FY 2024–25, the private sector contributed 23% of total defence production, up from 21% a year earlier, while public-sector entities accounted for the remaining share. 
• India has transitioned from an arms importer to a manufacturer of advanced military technology.
  • The government is funding massive indigenous projects, including orders for 97 Light Combat Aircraft (LCA) Tejas Mk-1A jets, 156 Light Combat Helicopters (LCH) Prachand, and 26 Rafale Marine aircraft.
    • Akash Missile Systems, Weapon Locating Radars, and Software Defined Radios (SDR).
    • Dhanush and ATAGS artillery gun systems, alongside the Arjun Main Battle Tank.
    • Indigenous aircraft carriers, destroyers, submarines, and fast patrol vessels built in Indian shipyards.

Policy Reforms and Initiatives Driving Defence Self-Reliance

• Budgetary Support: The government has raised the defence budget to a record ₹7.85 lakh crore, ensuring sustained capital acquisition for domestic manufacturing.
  • The allocation for the Defence Research and Development Organisation (DRDO) has been increased to ₹29,100.25 crore to foster local technology and innovation.
• Defence Acquisition Procedure (DAP) 2020: DAP 2020 placed Indigenously Designed, Developed and Manufactured (IDDM) equipment at the highest procurement priority.
  • It streamlined acquisition procedures and reduced dependence on imports by favouring domestic defence manufacturers.
  • Specific reservations for procurement orders (up to ₹100 crore/year) are dedicated to domestic MSMEs under the Defence Acquisition Procedure.
• Positive Indigenisation Lists: The government notified multiple Positive Indigenisation Lists (PILs) covering over 5,500 defence items, including major platforms, weapons, components and subsystems that must be sourced domestically instead of being imported.
• SRIJAN Indigenisation Portal: The SRIJAN portal was launched to connect industry with defence requirements.
  • More than 14,000 items have been identified for indigenisation, enabling Indian firms to replace imported defence components and technologies.
• Liberalised FDI Regime: India increased Foreign Direct Investment (FDI) limits to 74% through the automatic route and up to 100% through the government route in specific cases.
  • This reform attracted technology transfer and advanced manufacturing capabilities. 
• iDEX Innovation Framework: The Innovations for Defence Excellence (iDEX) initiative supports startups developing AI, drones, robotics, cyber-security and advanced military technologies, bringing private innovation into national defence production.
  • It offers funding and incubation support for innovators via the Defence Innovation Organisation (DIO).
• R&D Sector Opening: A major reform earmarked 25% of the Defence R&D budget for industry, startups and academia.
  • This expanded participation beyond government laboratories and accelerated indigenous technology development.
• Defence Industrial Corridors: The Uttar Pradesh and Tamil Nadu Defence Industrial Corridors were established to create manufacturing clusters, attract investment, strengthen supply chains and promote indigenous production ecosystems. 
• Technology Development Fund (TDF): Executed by the DRDO, this fund provides grants of up to ₹50 crore to MSMEs and startups to develop critical defence technologies.
• MSME-Centric Defence Ecosystem: Over 16,000 MSMEs now participate in defence manufacturing, supplying components, electronics, precision engineering products and subsystems, making them crucial pillars of self-reliance.
  • India has identified over 36,000 items for indigenous development. MSMEs provide the precision engineering and sub-assemblies that were previously sourced from foreign vendors.
• Year of Reforms: The Ministry of Defence designated 2025 as the “Year of Reforms”, targeting ₹3 lakh crore defence production and ₹50,000 crore exports by 2029, supported by procurement, innovation and indigenisation reforms. 

Significance of India’s Expanding Defence Manufacturing Base

• National Security: A stronger domestic defence industry enhances strategic autonomy by reducing dependence on foreign suppliers during crises, conflicts, or sanctions.
  • India’s indigenous defence production reached record high, reflecting growing capacity to meet military requirements from domestic sources.
• Operational Readiness: Domestic manufacturing enables faster availability of critical military platforms and ammunition.
  • Indigenous systems such as Tejas, Akash, Pinaka, Agni-V, INS Arihant and INS Vikrant have strengthened India’s deterrence, air defence, maritime security and combat readiness, reducing procurement delays associated with imports. 
• Employment Generation: The sector’s growth has stimulated employment through a network of over 16,000 MSMEs engaged in manufacturing components, subsystems, electronics and support services.
  • The expansion of defence production generates high-skilled jobs in engineering, research, design, testing and advanced manufacturing. 
• Geopolitical Influence: Defence exports have transformed India from a major importer into an emerging supplier of military equipment.
  • Indian defence products now reach over 80 countries, strengthening strategic partnerships, defence diplomacy and India’s influence across Asia, Africa, Latin America and the Indo-Pacific region. 
• Defence Exports: India’s defence exports reached a record ₹23,622 crore in FY 2024–25, growing 12.04% year-on-year and rising nearly 34-fold compared to FY 2013–14.
  • Export authorisations increased to 1,762, while the number of exporters grew by 17.4%, indicating rising global acceptance of Indian defence products.

FAQs:

Q1. What is India’s latest defence production record?
India achieved its highest-ever defence production of ₹1.78 lakh crore in FY 2025–26, surpassing the previous record of ₹1.54 lakh crore.

Q2. Why has defence production reached ₹1.78 lakh crore?
Growth was driven by indigenisation, domestic manufacturing expansion, modernization projects, and increased participation of private industry and startups. 

Q3. How does this benefit India’s defence sector?
It strengthens self-reliance, strategic autonomy, military readiness, supply-chain resilience, and indigenous technological capabilities, while reducing dependence on imports.

Q4. What role does Make in India play in defence manufacturing?
Make in India promotes domestic production, indigenisation, private-sector participation, and technology development, helping build a robust defence-industrial ecosystem.

Q5. How much has India’s defence production grown in recent years?
Defence production rose from ₹84,643 crore in FY 2020–21 to ₹1.78 lakh crore in FY 2025–26, growing by over 110% in five years.