- India's defence exports hit a record Rs 38,424 crore in FY26, up 62.66% year-on-year
- Domestic defence production reached a new high of Rs 1.78 lakh crore in FY26
- DPSUs contributed 54.84% and private firms 45.16% of total defence exports in FY26
India's push to become a global defence manufacturing powerhouse is beginning to show results.
The country's defence exports touched an all-time high of Rs 38,424 crore in FY2025-26, marking a sharp 62.66 per cent jump from Rs 23,622 crore in the previous financial year, according to data released by the Ministry of Defence. The increase of Rs 14,802 crore is the biggest annual rise recorded so far and reflects growing global demand for Indian-made military equipment and technologies.
The latest milestone comes at a time when India's domestic defence production has also reached a record Rs 1.78 lakh crore in FY26, highlighting the rapid expansion of the country's indigenous defence ecosystem.
According to the Ministry of Defence, Defence Public Sector Undertakings (DPSUs) contributed 54.84 per cent of total exports, while the private sector accounted for 45.16 per cent. Notably, DPSU exports surged 151 per cent year-on-year, while private sector exports grew 14 per cent, underscoring the increasing contribution of both public and private players to India's defence ambitions.
The Ministry said the numbers reflect rising international confidence in Indian defence products and the country's growing integration into global supply chains.
For industry leaders, however, the story goes beyond export numbers.
Amardeep Singh, Founder of Armory, believes the milestone reflects a much deeper transformation underway in India's defence sector.
"The world has changed. Warfare has become faster, more autonomous, more asymmetric, and more technology-led," Singh said.
He pointed to emerging technologies such as drones, cyber systems, AI-enabled surveillance, electronic warfare platforms and unmanned systems as the defining features of modern conflict. According to him, indigenous capability-building is no longer a strategic choice but a national necessity.
Singh said the growth in defence production indicates that India is increasingly building sovereign capabilities across design, engineering, software, sensors, electronics and deployment-ready platforms. He argued that the next phase of Atmanirbhar Bharat will be defined not just by manufacturing more equipment in India, but by developing technologies that are designed, tested and deployed within the country.
A major factor behind this shift has been the growing participation of private industry.
Ankur Shah, Managing Director of Krishna Defence & Allied Industries Limited (KDAIL), said the record production and export numbers demonstrate how India's defence ecosystem has matured beyond simple manufacturing.
"What we are witnessing today is not just growth in manufacturing output, but the emergence of a stronger and more self-reliant industrial base," Shah said.
He noted that defence manufacturing is no longer dominated by a handful of large companies. Instead, startups, MSMEs, private manufacturers, technology providers and research institutions are now playing a larger role in capability development.
According to Shah, this broader participation is accelerating innovation, strengthening domestic supply chains and making India's defence value chain more resilient.
Industry observers say this diversification is helping India move away from its long-standing dependence on imported defence systems. Over the last decade, government reforms, indigenisation drives and procurement policies have encouraged domestic manufacturing while opening the sector to greater private participation.
Sarjan Shah, Managing Director (India & Global Partnerships) at Shield AI, described the Rs 1.78 lakh crore defence production milestone as a "structural shift" in India's defence-industrial identity.
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According to him, private companies are now moving beyond participation and beginning to build real capabilities that support a self-reliant defence and aerospace ecosystem.
Shield AI recently partnered with JSW Defence to localise manufacturing and maintenance capabilities for its V-BAT unmanned aircraft system in Hyderabad. The initiative is backed by a $90 million commitment and is aimed at strengthening India's domestic defence technology ecosystem.
Shah said the company's autonomy software platform, Hivemind, is also being positioned to help Indian teams develop and deploy mission autonomy solutions aligned with national requirements.
He credited the progress to government policy reforms, continued support from the Ministry of Defence and growing confidence among the armed forces in India's domestic manufacturing ecosystem.
According to Bharat Gite, MD and CEO, Taural India, the defence sector successfully demonstrates the growing strength of India's domestic industrial ecosystem.
He said, "Over the years, the focus has evolved from manufacturing capacity to building the capabilities, supply chains and specialised technologies. This is an important shift, as true self-reliance is built not through production alone, but through the ability to design, develop and manufacture critical components domestically."
Significantly, Taural India has specialised capabilities in manufacturing complex aluminium castings to support all three wings of defence: Army vehicles, Maritime and Air Force. The company has contributed to the Sarath Infantry Combat Vehicle (BMP-II), by developing the Cylinder Block Crankcase (CBCC) domestically. As per the company, this helped India break a 34-year import cycle from Russia and achieve an annual savings of Rs 10.5 crore.
The momentum in India's defence production is evident in the numbers.
India's defence exports have nearly tripled over the last five years, rising from just over Rs 12,800 crore in FY22 to Rs 38,424 crore in FY26. The government has repeatedly stated its ambition of transforming India into a global defence manufacturing hub, and recent export growth suggests that objective is gaining traction.
India defence exports have risen from just over Rs 12,800 crore in FY22 to Rs 38,424 crore in FY26.
But industry leaders believe the next challenge lies beyond production volumes.
Amardeep Singh said the focus must now shift from production growth to capability depth. The goal, he argued, should be to build technologies that are sovereign, scalable and capable of addressing real-world battlefield requirements.
Ankur Shah echoed a similar view. He said India's biggest opportunity lies in strengthening indigenous design, engineering excellence, advanced materials and next-generation defence technologies.
"The momentum we see today reinforces the confidence that India is steadily moving from being a buyer of defence technologies to becoming a creator of them," Shah said.
That shift could ultimately define India's position in the global defence market.
For now, the record export figures offer a clear signal: India is no longer just a major buyer of military hardware. It is increasingly emerging as a manufacturer, innovator and exporter of defence technologies to the world.
