What Happened
- India's defence exports touched an all-time high of ₹38,424 crore in FY 2025-26, a 62.6% jump over the previous year's ₹23,622 crore.
- The Defence Minister announced the milestone, describing it as reflecting growing global trust in India's indigenous defence capabilities and advanced manufacturing strength.
- Defence Public Sector Undertakings (DPSUs) contributed ₹21,071 crore (54.84%), while the private sector contributed ₹17,353 crore (45.16%).
- DPSUs' exports surged 151% year-on-year, while private sector exports grew 14%.
- India now exports defence equipment to more than 80 countries, up from around 84 in FY 2023-24.
- This record places India on track toward its ambitious ₹50,000 crore defence export target by 2029.
Static Topic Bridges
Make in India and the Indigenisation Drive in Defence
The 'Make in India' initiative in defence, launched in 2014, aims to transform India into a global defence manufacturing hub by reducing import dependence and building an indigenous industrial base. The Defence Acquisition Procedure (DAP) 2020 superseded the Defence Procurement Procedure 2016 and introduced mandatory indigenisation clauses, prioritising categories such as 'Buy Indian-Indigenously Designed, Developed and Manufactured' (IDDM) for procurement. The government also announced a 'negative import list' for defence — now covering over 400 items — meaning these can only be sourced domestically, pushing manufacturers to invest in domestic production for both home use and export.
- Defence Production Policy 2018 (DPrP-2018) set targets of ₹1.75 lakh crore in production and ₹35,000 crore in exports by 2025.
- Two Defence Industrial Corridors (DICs) established in Uttar Pradesh (6 nodes) and Tamil Nadu (5 nodes) to attract investment.
- By early 2025, MoUs worth ₹53,439 crore had been signed under the corridors; over ₹8,658 crore already invested.
- iDEX (Innovations for Defence Excellence), launched April 2018, had signed 430 contracts with startups/MSMEs as of February 2025, with grants up to ₹1.5 crore per innovator.
Connection to this news: The record export figure directly validates the Make in India push — DPSUs' 151% export surge shows that state enterprises have successfully commercialised domestic platforms for international markets, while private sector participation demonstrates the maturation of India's defence industrial base.
Defence Exports and India's Foreign Policy
Defence exports are not merely an economic metric; they function as a strategic instrument, deepening bilateral ties and creating long-term technology and supply dependencies with partner nations. Countries buying defence equipment from India signal strategic trust and create a foundation for defence cooperation agreements, joint exercises, and broader diplomatic alignment. India's ability to sell to 80+ countries across Africa, Southeast Asia, and the Middle East diversifies its partnerships and reduces dependence on any single security patron.
- Key export items include: BrahMos supersonic cruise missiles (Philippines), Dornier 228 aircraft, Advanced Light Helicopters (ALH), artillery systems, and ammunition.
- India is part of the Missile Technology Control Regime (MTCR), the Wassenaar Arrangement, and the Australia Group — memberships that enhance credibility for sensitive technology exports.
- India signed the Defence Technology and Industrial Initiative (DTII) with the US in 2015; the India-US Major Defence Partnership (2016) enabled technology transfers.
- India's defence exports are regulated by the Directorate General of Foreign Trade (DGFT) and the Department of Defence Production (DDP).
Connection to this news: The 62.6% growth reflects how India's defence diplomacy, combining strategic partnerships with competitive pricing for platforms like the BrahMos, is translating into real export orders with geopolitical consequences.
India's Defence Production and the 'Atmanirbhar Bharat' Framework
Atmanirbhar Bharat ('Self-Reliant India'), announced in 2020, identified defence as a critical sector for self-sufficiency. The policy set a revenue target of ₹1.75 lakh crore for the defence manufacturing sector by 2025. In FY 2024-25, defence production reached ₹1.51 lakh crore — an 18% increase year-on-year — reflecting continued momentum. The shift from an import-heavy posture (India was historically among the world's top three defence importers) to an export-oriented one is a defining structural change.
- India's defence import bill was approximately $14 billion annually at peak; indigenisation targets aim to bring this down by 50% by 2029.
- The Department of Defence Production (DDP) under the Ministry of Defence is the nodal body for production and export facilitation.
- In FY 2024-25, DDP granted 1,762 export authorisations — up 16.92% from the previous year; registered exporters grew 17.4%.
- India's defence budget for FY 2025-26 is ₹6.81 lakh crore, with capital expenditure at ₹1.8 lakh crore for new acquisitions.
Connection to this news: The record exports in FY 2025-26 reflect the payoff of Atmanirbhar Bharat's defence component — domestic production reaching scale now creates exportable surplus, with the DPSU export surge of 151% being particularly emblematic of state enterprise transformation.
Key Facts & Data
- FY 2025-26 defence exports: ₹38,424 crore (all-time high)
- Year-on-year growth: 62.6% (₹14,802 crore increase over FY 2024-25's ₹23,622 crore)
- DPSU share: ₹21,071 crore (54.84%); Private sector: ₹17,353 crore (45.16%)
- DPSU export growth: 151% year-on-year; Private sector growth: 14% year-on-year
- Export destinations: 80+ countries
- Government long-term target: ₹50,000 crore in defence exports by 2029
- Defence production in FY 2024-25: ₹1.51 lakh crore (18% growth over previous year)
- iDEX contracts signed (as of Feb 2025): 430, involving 619 startups and MSMEs
- Negative import list items: 400+ (items reserved for domestic procurement only)