Analysis of India’s Defence Sector Production and Exports (2014-2025)
Defence Export by India: India has experienced a significant surge in its defence sector production and exports over the last decade, largely driven by the “Make in India” and “Atmanirbhar Bharat” (self-reliant India) initiatives.
I. Defence Production Growth:
Significant Increase: India’s defence production reached ₹1.27 lakh crore (approx. US$ 15.2 billion) in FY 2023-24. This marks an impressive 174% increase from ₹46,429 crore in 2014-15.
Target: India aims to achieve ₹3 lakh crore in defence production by 2029.
Reduced Import Dependency: Approximately 65% of defence equipment is now manufactured domestically, a significant reversal from the earlier 65-70% import dependency a decade ago.
Industrial Base: India’s defence industrial base is robust, comprising 16 Defence Public Sector Undertakings (DPSUs), over 430 licensed companies, and approximately 16,000 Micro, Small, and Medium Enterprises (MSMEs).
Private Sector Contribution: The private sector plays a crucial role, contributing around 21% to the total defence production.
II. Defence Exports Growth
Remarkable Surge: Defence exports have seen an extraordinary increase, growing 30 to 34 times over the last decade.
From ₹686 crore in FY 2013-14 to ₹21,083 crore in FY 2023-24.
Further increasing to ₹23,622 crore in FY 2024-25.
Decadal Growth (2014-2024): Total defence exports during this decade amounted to ₹88,319 crore, a 21-fold increase compared to the ₹4,312 crore in the preceding decade (2004-2014).
Year-on-Year Growth: Defence exports grew by 32.5% year-on-year, rising from ₹15,920 crore in FY 2022-23 to ₹21,083 crore in FY 2023-24. In FY 2024-25, a growth of 12.04% was registered over FY 2023-24.
Export Destinations: India now exports defence equipment to over 100 countries, with the USA, France, and Armenia being among the top buyers in FY 2023-24.
Export Portfolio: The export portfolio has diversified to include a wide range of items such as bulletproof jackets, Dornier (Do-228) aircraft, Chetak helicopters, fast interceptor boats, radars, lightweight torpedoes, missile systems (like Akash SAM), Advanced Towed Artillery Gun Systems (ATAGS), and naval platforms.
Private Sector vs. DPSUs in Exports (FY 2024-25):
Private sector: ₹15,233 crore (64.5%)
DPSUs: ₹8,389 crore (35.5%), showing a significant increase of 42.85% in their exports in FY 2024-25.
Export Authorizations: The number of export authorizations issued has also seen a rise, with 1,762 authorizations in FY 2024-25, a 16.92% increase from the previous year.
Future Target: The government aims to achieve ₹50,000 crore in defence exports by 2029.
III. Key Drivers of Growth
“Make in India” and “Atmanirbhar Bharat” Initiatives: These government policies have been central to promoting self-reliance and domestic manufacturing in the defence sector.
Policy Reforms:
Increased Budget Allocation:
The defence budget has significantly increased from ₹2.53 lakh crore in 2013-14 to ₹6.81 lakh crore in 2025-26, with a substantial portion allocated for domestic procurement (75% of the modernization budget for FY24).
Liberalized FDI Policy:
Foreign Direct Investment (FDI) in defence was liberalized in 2020, allowing up to 74% through the automatic route and 100% via government approval, attracting foreign investment.
Positive Indigenisation Lists (PILs):
These lists mandate that certain defence items must be sourced domestically, further boosting indigenous production.
Innovations for Defence Excellence (iDEX):
This initiative promotes innovation and R&D in the defence sector, involving startups and MSMEs.
Production-Linked Incentive (PLI) Schemes:
These schemes incentivize manufacturing in various sectors, including defence, to enhance global competitiveness and reduce import dependency.
Increased Private Sector Participation:
The government has actively encouraged private sector involvement, leading to innovation and increased efficiency.
Focus on Indigenous R&D: Organizations like DRDO (Defence Research and Development Organisation) are crucial in driving technological innovation and transfer, leading to the development of cutting-edge military platforms.
Expanding Global Footprint:
India’s growing capability and competitive pricing have made its defence products more attractive to other nations.
Defence Industrial Corridors:
Establishment of dedicated defence industrial corridors in states like Uttar Pradesh and Tamil Nadu is further boosting indigenous production and attracting investment.
In summary, India’s defence sector has undergone a remarkable transformation in the last decade, shifting from a primarily import-dependent nation to a significant player in global defence production and exports. This has been a conscious and strategic effort by the government, supported by a robust industrial base and increasing private sector participation.