India’s defence production reached a record ₹1.78 lakh crore in the financial year 2025-26, registering growth of 15.6 per cent over the previous year and extending the expansion of the country’s domestic military manufacturing base. The previous fiscal year’s output was valued at ₹1,54,071 crore.
The latest figure represents an increase of about 110 per cent compared with 2020-21, when defence production stood at ₹84,643 crore. It is also nearly four times the level recorded in 2013-14, demonstrating the scale at which public and private manufacturers have added capacity over the past decade.
Defence public sector undertakings and other public sector enterprises accounted for around 76 per cent of total production during 2025-26. The private sector contributed the remaining 24 per cent, reflecting a gradual widening of the industrial base beyond traditional government-owned manufacturers.
Defence Minister Rajnath Singh described the record as an important milestone in the country’s push for self-reliance. The increase has been supported by higher domestic procurement, positive indigenisation lists, changes in acquisition procedures and a policy effort to involve private companies, start-ups and micro, small and medium enterprises in defence supply chains.
India’s defence manufacturing ecosystem now includes 16 defence public sector undertakings, about 500 licensed companies and nearly 17,000 MSMEs. The number of defence industrial licences has risen from 258 in 2015 to 834 by March 2026, indicating broader commercial participation in equipment, components, electronics and specialised services.
Production growth is increasingly linked with exports. Defence exports rose to a record ₹38,424 crore in 2025-26, up from ₹23,622 crore in the previous financial year. Indian defence products are now supplied to more than 80 countries, while the exporter base has expanded to 145 firms.
The government has set a target of ₹3 lakh crore in annual defence production and ₹50,000 crore in exports by 2029. Reaching those levels will require sustained orders, faster product development, testing infrastructure, reliable supply chains and the ability of Indian manufacturers to compete on cost, quality and delivery timelines.
Policy measures have sought to create predictable demand for indigenous products. Positive indigenisation lists identify equipment and components intended to be sourced domestically within specified timelines, while the Srijan platform connects requirements of defence establishments with Indian industry. Procurement reforms and innovation programmes have also opened opportunities for new companies developing drones, electronics, artificial intelligence systems, communications equipment and other emerging technologies.
The public sector remains the dominant producer, but the growing private share is important because modern defence platforms depend on a wide network of specialised suppliers. Greater participation can add competition, diversify production capacity and reduce dependence on imported subsystems, provided quality assurance and certification keep pace with the expansion.
The record output is an industrial achievement rather than a measure of operational capability by itself. Its strategic value will depend on how efficiently production is translated into reliable equipment for the armed forces and sustainable export orders. The latest figures nevertheless show that defence manufacturing has become a larger and more diversified component of India’s industrial economy.
