India's defense sector is undergoing a significant transformation, shifting from being one of the world's largest importers of military equipment to a rising hub for indigenous defense manufacturing and exports. This evolution is propelled by the "Make in India" initiative, strategic policy interventions, and a surge in private sector participation, all contributing to a robust and self-reliant defense industry.
The "Make in India" initiative, launched in 2014, has been a catalyst for this transformation. By encouraging domestic production, fostering technological innovation, and promoting private sector involvement, the initiative has spurred unprecedented growth in India's defense sector. Defense production reached a record ₹1.27 lakh crore in FY 2023-24, marking a 174% increase from ₹46,429 crore in 2014-15.
This growth is not limited to production alone. India's defense exports have also witnessed a remarkable surge, reaching an all-time high of ₹23,622 crore in FY 2024-25. This marks a 34-fold increase compared to the ₹686 crore in FY 2013-14. The government has set an ambitious target of achieving ₹50,000 crore in defense exports by 2029, further solidifying India's position as a key player in the global arms market. India is currently exporting to around 80 countries.
Several strategic policy interventions have fueled this momentum. The government has implemented measures to improve the ease of doing business in the defense manufacturing sector, encouraging private participation and streamlining procurement processes through the Defense Acquisition Procedure (DAP) 2020. Amendments to policies have also encouraged deeper strategic partnerships between Indian and foreign companies, particularly in the development of advanced systems.
The rise of private players and DefenceTech start-ups has injected new dynamism into the Indian defense industry. Private sector companies are actively involved in manufacturing a wide array of defense equipment, ranging from small arms and ammunition to UAVs, missile systems, and electronic warfare systems. They are also spearheading innovation in areas such as artificial intelligence, drones, and cyber warfare technologies. For example, Larsen & Toubro (L&T) is expanding its defense business, aiming to transform it into a multi-billion dollar segment.
To further enhance the Indian defense sector's manufacturing capacity, two Defense Industrial Corridors have been established—one in Uttar Pradesh and another in Tamil Nadu. These corridors aim to boost indigenous production of defense and aerospace items, foster collaboration between the government and private players, generate employment, and promote R&D.
The Indian government's commitment to strengthening its military infrastructure is reflected in the surge in the defense budget, from ₹2.53 lakh crore in 2013-14 to ₹6.81 lakh crore in 2025-26. This increased budget allocation supports the modernization of the armed forces and the indigenous production of advanced military platforms, including warships, fighter jets, artillery systems, and cutting-edge weaponry.
Initiatives like iDEX (Innovations for Defence Excellence) and SRIJAN (import substitution) are playing a crucial role in fostering innovation and self-reliance in the defense sector. iDEX, launched in April 2018, has created a thriving ecosystem for innovation and technology development in defense and aerospace, engaging MSMEs, startups, and individual innovators. The SRIJAN initiative focuses on indigenizing defense items, with over 14,000 items indigenized.
India's transformation from a buyer to a builder in the defense sector is a testament to its commitment to self-reliance and its growing technological prowess. By leveraging its domestic capabilities, fostering innovation, and promoting private sector participation, India is not only strengthening its national security but also positioning itself as a reliable exporter of defense equipment and a key player in the global defense market.
