India's defence production jump 110% in 5 years: How did New Delhi do this?

India's defence production has more than doubled in five years, reaching a record Rs 1.78 lakh crore in FY2025-26 from Rs 84,643 crore in FY2020-21. The milestone marks one of the fastest expansions of the country's defence-industrial base since independence and reflects a deliberate policy shift aimed at reducing import dependence and building domestic military manufacturing capabilities.

The headline figure is striking. But the bigger question is: what enabled India to achieve a 110 per cent increase in defence production in just five years?

The answer lies in a combination of policy reforms, rising private-sector participation, growing exports, indigenous weapons programmes and a global geopolitical environment that has pushed countries to strengthen domestic defence capabilities.

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From import dependence to self-reliance

For decades, India was among the world's largest importers of military hardware, relying heavily on foreign suppliers for fighter aircraft, submarines, artillery systems and advanced weaponry.

That dependence increasingly came to be viewed as a strategic vulnerability.

Over the past decade, the government has sought to reverse this trend through its Aatmanirbhar Bharat initiative, encouraging domestic design, development and manufacturing of defence equipment.

The results are becoming visible.

Indigenous defence production has nearly quadrupled from Rs 43,746 crore in FY2013-14 to Rs 1.78 lakh crore in FY2025-26, according to Defence Ministry data.

Prime Minister Narendra Modi on Wednesday highlighted India's progress in building indigenous capabilities across air, land and sea domains, saying the country has strengthened defence technologies and laid the foundation for greater self-reliance in national security.

Policy reforms created the foundation

A major factor behind the production surge has been a series of policy reforms aimed at boosting domestic manufacturing.

The government introduced positive indigenisation lists that restrict imports of hundreds of defence items and reserve procurement opportunities for domestic manufacturers.

Defence acquisition procedures were also simplified to encourage local sourcing and speed up procurement.

Foreign direct investment limits in the defence sector were liberalised, while dedicated initiatives such as Innovations for Defence Excellence (iDEX) sought to promote start-ups and indigenous technology development.

Together, these measures created stronger incentives for companies to invest in local production capacity.

Private sector emerges as a growth engine

One of the most significant changes has been the expanding role of private industry.

While Defence Public Sector Undertakings (DPSUs) and other public-sector entities still account for about 76 per cent of total production, private firms have steadily increased their presence.

The private sector's contribution rose to a record Rs 42,000 crore in FY2025-26, accounting for 24 per cent of total production compared with 22 per cent a year earlier.

The shift reflects the emergence of a broader defence manufacturing ecosystem involving large industrial groups, specialised defence firms, MSMEs and technology start-ups.

Industry executives said the production milestone reflects years of policy support under initiatives such as Make in India and defence indigenisation. Lakshay Talwar, CEO of CST Cybr & Defence Group, said rising private-sector participation and investments in critical technologies have helped build sovereign capabilities across multiple domains.

He added that greater visibility on long-term military requirements and faster certification processes would further strengthen India's ambition to build a globally competitive defence manufacturing base.

Indigenous platforms move from drawing board to production

Another key driver has been the growing maturity of India's indigenous weapons programmes.

Among the most visible examples is the Tejas light combat aircraft programme, developed by Hindustan Aeronautics Limited (HAL). Once viewed as a long-gestation project, Tejas has evolved into a symbol of India's aerospace ambitions, with Tejas Mk-1A production underway and work progressing on the more advanced Mk-2 variant.

Similarly, the Akash missile system has emerged as a central component of India's air-defence architecture. The next-generation Akash-NG programme is expected to enhance the system's range, mobility and operational effectiveness.

India has also expanded domestic production across missiles, naval warships, armoured vehicles, ammunition, radars and electronic warfare systems, helping increase the overall value of indigenous output.

Defence exports gain momentum

The rise in production has been accompanied by a sharp increase in defence exports.

India's defence exports reached a record Rs 38,424 crore in FY2025-26, providing manufacturers with access to markets beyond domestic military procurement.

Export growth is particularly significant because it serves as a test of international competitiveness.

Countries purchasing Indian defence equipment are increasingly evaluating domestically developed systems on performance, cost and reliability rather than government procurement mandates.

The export push is helping Indian manufacturers achieve larger production runs, improve economies of scale and invest more heavily in research and development.

Global military spending boom creates opportunity

India's defence manufacturing expansion is taking place against the backdrop of a global military spending surge.

According to data released by the Stockholm International Peace Research Institute (SIPRI), global military expenditure rose 2.9 per cent to $2.887 trillion in 2025, marking the 11th consecutive year of growth.

India itself ranked among the world's top five military spenders, with expenditure rising 8.9 per cent to $92.1 billion amid continuing security concerns related to China and Pakistan.

The broader trend of military modernisation across Europe, the Indo-Pacific and other regions is creating new opportunities for defence exporters and manufacturing hubs.

For India, the challenge is to convert its position as one of the world's largest defence buyers into a sustainable manufacturing and export advantage.

What comes next?

The production milestone represents significant progress, but analysts caution that major challenges remain.

India continues to depend on foreign suppliers for several advanced technologies, including aero engines, certain propulsion systems, advanced sensors and specialised electronics.

The next phase of growth will depend on increasing investments in research and development, strengthening domestic supply chains and developing higher-value technologies that can compete globally.

Industry leaders say the transformation extends beyond rising production figures. Sunil Kalidindi, Chief Executive Officer and Executive Director of Sigma Advanced Systems Limited, said India's defence manufacturing ecosystem is increasingly being recognised by global original equipment manufacturers (OEMs) for higher-value and safety-critical work, reflecting years of investment in engineering capabilities and quality standards.

"India is moving from buyer to builder to partner, and the best years of Indian defence manufacturing are ahead of us," Kalidindi said.

Still, the latest numbers suggest that India's defence sector is undergoing a structural transformation.

What began as an effort to reduce import dependence is increasingly evolving into a broader industrial strategy aimed at making India a major defence manufacturing and export hub in a world where military spending is rising and strategic self-reliance is becoming a priority for governments worldwide.