India has achieved a historic milestone in its defence production sector, with domestic output hitting Rs. 1,46,000 crore (US$ 17.09 billion) in the financial year 2024–25. This substantial growth marks a turning point in India's journey toward self-reliance in defence manufacturing, as highlighted by Union Minister of Defence Mr. Rajnath Singh at the Confederation of Indian Industry (CII) Annual Summit 2025.

Alongside this massive boost in production, defence exports have surged to Rs. 24,000 crore (US$ 2.81 billion), demonstrating the growing global trust in Indian-made military hardware and technologies. This leap in exports is particularly noteworthy considering the country exported less than Rs. 1,000 crore (US$ 117.1 million) a decade ago. The jump to Rs. 23,500 crore (US$ 2.75 billion) last year—and further growth this year—highlights the tangible success of the Make in India initiative.

The Make in India campaign, launched to promote indigenous manufacturing across sectors, has played a pivotal role in transforming India's defence landscape. It has not only reduced dependence on foreign imports but also strengthened national security by enabling self-sufficiency. According to Mr. Singh, the numbers reflect a robust trajectory where Indian defence manufacturing is now being recognised globally for its cost-effective and quality-driven solutions.

Focus Shifts Towards Advanced Defence Capabilities

India's defence industry is no longer confined to traditional platforms such as fighter jets, missiles, and tanks. There is now a significant push toward emerging domains including:

• Cyber Warfare: Defence establishments are integrating cyber-resilient systems to counter digital threats.

• Space-Based Capabilities: Strategic investments are being made to enhance satellite-based surveillance and defence communication.

• Artificial Intelligence (AI): AI is being deployed in autonomous systems, predictive analytics, and battlefield simulations, underlining the shift toward futuristic warfare capabilities.

These developments underscore India’s ambition to position itself as a global defence innovation hub, where the public and private sectors collaborate to deliver cutting-edge defence technologies.

Budget Allocation and Strategic Investment in 2025–26

Under the Union Budget 2025–26, the Defence Ministry has been allocated Rs. 6,81,000 crore (US$ 79.82 billion), marking a 9.5% increase from last year’s allocation of Rs. 6,22,000 crore (US$ 72.82 billion). This represents 13.45% of the total union budget and approximately 1.9% of India’s projected GDP for the year.

This budget increase reflects the government’s commitment to modernise the armed forces, with special emphasis on:

• Promoting deeper private sector involvement in defence projects.

• Boosting Research and Development (R&D) with dedicated funding.

• Creating defence corridors and industrial clusters to attract foreign and domestic investment.

By opening the sector to increased private participation, India is also encouraging startups and MSMEs to enter the defence value chain, thus generating employment and accelerating technological innovation.

India's Growing Credibility in Global Defence Market

With defence exports now crossing Rs. 24,000 crore, India is gaining recognition as a reliable and strategic arms supplier. Indian-manufactured defence equipment is now being exported to countries in Asia, Africa, and Latin America, including components for fighter aircraft, helicopters, naval systems, surveillance platforms, and small arms.

This newfound global presence signifies that Indian defence products meet international quality and performance standards, making them competitive against traditional exporters like the US, Russia, and France.

The export momentum is being further catalysed by government initiatives such as:

• Simplified export procedures and licensing policies.

• Incentives under the Defence Production and Export Promotion Policy (DPEPP) 2020.

• Partnerships with foreign OEMs (Original Equipment Manufacturers) under strategic collaborations.

Transformation Through Technology and Innovation

Mr. Rajnath Singh emphasised that India’s defence strategy is being reshaped by technological advancements and a visionary policy framework. New-age innovations being adopted include:

• AI-driven decision-making systems for faster and more accurate battlefield responses.

• Hypersonic weapons and next-gen missile systems under indigenous development.

• Swarm drone technologies and robotic combat systems for tactical edge in modern warfare.

Institutes like DRDO (Defence Research and Development Organisation), along with premier academic institutions and private players, are playing a central role in converting R&D into deployable technologies.

Public-Private Collaboration and Indigenous Procurement

The Defence Minister reiterated the need for a collaborative defence ecosystem, where both public and private stakeholders work synergistically. The government’s policies are increasingly leaning towards indigenisation of procurement, where Indian-designed and Indian-made equipment is prioritised for acquisition by the Armed Forces.

Recent reforms to achieve this goal include:

• Introduction of Positive Indigenisation Lists, banning import of certain defence items that can be produced domestically.

• Revamp of the Defence Acquisition Procedure (DAP) to simplify procurement and ensure transparency.

• Support for Startups under the Innovations for Defence Excellence (iDEX) initiative.

These measures ensure that India’s defence forces are equipped with world-class technology, while also developing a robust domestic industrial base.

Conclusion

The year 2025 stands as a watershed moment in India’s defence manufacturing journey. With domestic production touching Rs. 1.46 lakh crore and exports surpassing Rs. 24,000 crore, India is no longer just a defence consumer but an emerging global defence exporter.

Driven by initiatives like Make in India, increased budgetary allocations, and a clear strategic vision, the country is now focusing on cutting-edge technologies such as AI, cyber warfare, and space defence capabilities. The Defence Ministry’s push for private sector engagement and R&D investment further ensures that India remains on a strong trajectory toward self-reliance and global leadership in defence.

As India prepares to face the evolving threats of the future, its defence ecosystem—powered by indigenous innovation, budgetary strength, and international credibility—is rising to meet the challenge, heralding a new era of strategic autonomy and military preparedness.

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