Defence Self-Sufficiency: Record Production and Exports

November 20, 2025

Main point

India’s defence production reached an all-time high of Rs 1.54 lakh crore in the financial year 2024-25.
India’s indigenous defence production reached a record Rs 1,27,434 crore in FY 2023-24, showing a growth of 174% compared to Rs 46,429 crore in 2014-15.
Around 16,000 MSMEs are playing a key role in the country’s defence self-reliance by strengthening indigenous defence capabilities.
788 defence industrial licenses have been issued to 462 companies.
India’s defence exports reached a record Rs 23,622 crore in the 2024-25 financial year, down from Rs 1,000 crore in 2014.

Introduction

India’s indigenous defence production has reached a record Rs 1,27,434 crore in FY 2023-24, reflecting a significant increase of 174% compared to Rs 46,429 crore in 2014-15. This historic achievement is a result of Prime Minister Shri Narendra Modi’s Atmanirbhar Bharat policy and strong policy initiatives promoting self-reliance in the defence sector. The financial allocation, policy reforms and industrial cooperation made by the government to boost defence production over the past decade have strengthened the country’s military industrial infrastructure. The defence budget has also registered a steady increase from Rs 2.53 lakh crore in 2013-14 to an estimated Rs 6.81 lakh crore in 2025-26. This increase highlights the government’s firm commitment to strengthening national security and defence infrastructure. With the aim of reducing dependence on other countries, both the public and private sectors have made remarkable progress. This increase is a direct result of far-reaching policy reforms undertaken in the last decade, improvements in ease of doing business and a strategic approach focused on indigenisation. India currently exports defence equipment to more than 100 countries, including the US, France and Armenia. Defence Public Sector Undertakings (DPSUs) and other PSUs contribute about 77% to the total defence production, while the contribution of the private sector has reached 23% — an increase from 21% in FY 2023-24 recorded in 2024-25. This figure clearly reflects the rapidly growing role of the private sector in India’s defence ecosystem. India has also made remarkable progress in the export sector and recorded an increase of Rs 2,539 crore (12.04%) over FY 2023-24. The government has set an ambitious target of defence manufacturing of Rs 3 lakh crore and defence exports of Rs 50,000 crore by 2029. Through these important activities, India is not only giving a new direction to its economic growth but also strengthening its position as a global defence manufacturing hub. India’s defence manufacturing sector is poised to reach new heights of accelerating, innovation and self-reliance in the coming years.

Challenges to Policy Reforms
Prior to the policy reforms initiated in the last decade under the leadership of Prime Minister Shri Narendra Modi, India’s defence sector faced many structural challenges. Defence procurement processes were extremely slow, causing serious problems with the required capabilities. The excessive import dependence not only increased pressure on the country’s foreign exchange reserves but also highlighted India’s strategic weaknesses at a time of global instability. Prior to this, private sector participation was negligible due to restrictive policies, dominance of defence PSUs, and limited access to cutting-edge technology. As a result, the level of defence exports remained very low. It was only 686 crore in the financial year 2013-14, making India known as a predominantly importing rather than a producer in the global defence market. To address these challenges, the Ministry of Defence formulated the Draft Defence Production and Export Promotion Policy (DPEPP), which aims to encourage research and development, promote innovation and intellectual property creation, strengthen industry-academic collaboration, support micro, small and medium enterprises (MSMEs) and set ambitious targets in defence exports. The policy paves the way for establishing India as a leading global defence manufacturer by coordinating production, technology and market access.

Objectives of reforms

The Government has initiated several reforms to build a self-reliant and globally competitive defence industry, taking forward the vision of Atmanirbhar Bharat. Their main objectives are as follows:

Expedite the procurement processes through a streamlined Defence Acquisition Process (DAP) so that the acquisition can get early approval by the Defence Acquisition Council (DAC) if necessary approvals are obtained.
Defence production in the country has been encouraged through a positive indigenisation list. Also, the FDI norms have been liberalized under the automatic route up to 74% and the government approval route up to 100%. In addition, collaboration between DPSUs, private sector, MSMEs and startups is being strengthened through the Rs 1 lakh crore Research, Development and Innovation (RDI) scheme, giving a new impetus to defence technology and self-reliance.
Boosting defence exports with simplified licensing, including platforms such as bulletproof jackets, Dornier aircraft, Chetak helicopters, high-speed interceptor boats and lightweight torpedoes.

The year 2025 has been declared as the ‘Year of Reforms‘. These activities aim to transform the armed forces into a technologically advanced, combat-ready force capable of multi-domain integrated operation. At the same time, the defence production is to be increased to Rs 3 lakh crore and the export target of Rs 50,000 crore by 2029 is to be achieved.

Defence Acquisition Process (DAP) Reforms

The Government of India has made several historic reforms to transform the defence procurement ecosystem, furthering the vision of a self-reliant country. Both frameworks such as the Defence Acquisition Process (DAP) 2020 and the Defence Procurement Manual (DPM) 2025 are working together as the backbone of this change, ensuring speed, transparency, innovation and self-reliance in both capital and revenue procurement.

DAP 2020: Strategic Roadmap for Self-Reliance Acquisition

The Defence Acquisition Process (DAP) 2020 is a transformative policy framework that serves as a comprehensive rule book and strategic roadmap for modernising the acquisition process while encouraging the growth of a globally competitive domestic defence industry. The policy is designed to address long-standing challenges such as delay and heavy dependence on imports and focuses on clarity, transparency and indigenous innovation at every stage of acquisition.

Key features that redefine acquisition include:

India First Approach: This policy gives top priority to the category ‘{Indian-Buy IDDM (Designed, Developed and Manufactured)‘ category indigenously, promotes indigenouslydesigned, developed and manufactured systems, thereby making the country self-reliant.
Speed with transparency: The simplified approval process and digital integration have accelerated procurement deadlines, increasing accountability.
Future technology: DAP 2020 includes provisions dedicated to achieving cutting-edge technologies such as AI, robotics, cyber, space and advanced warfare systems to enable multi-domain operations.
Industry as a Partner: It promotes a collaborative ecosystem involving private sector companies, start-ups and MSMEs through activities like Innovation for Defence Excellence (IDEX) and Easy Licensing Criteria.
Ease of approval: Process bottlenecks have been removed through a well-organized framework and robust acquisition wing, ensuring timely decision-making.

DPM 2025: Streamlining revenue procurement

The Defence Procurement Manual (DPM) 2025 was launched by Raksha Mantri Shri Rajnath Singh in October 2025 on the basis of the DAP framework, which is an important milestone towards simplifying procedures and establishing uniformity in functioning. The manual will help the armed forces to ensure timely availability of equipment and services worth about Rs. 1 lakh crore required for operational readiness. Effective November 1, 2025, DPM 2025 incorporates a number of industry-friendly reforms aimed at strengthening fairness, transparency, accountability and active participation of domestic enterprises in the defence procurement process.

Highlights include: With the aim of strengthening ease of doing business, processes have been standardized across all armed forces and Ministry of Defence organizations to minimize unnecessary delays. Along with this, defence industry and academia collaboration have been promoted to encourage innovation and indigenisation. Several industry-friendly provisions have been included under the policy reforms, including a low expired compensation rate (0.1% per week) for indigenisation projects, guaranteed orders for five years for indigenous products and the remolition of the requirement of an old ‘no objection certificate’ from the pre-ordnance manufacturing board. Along with this, digital integration and transparency have been strengthened, resulting in significant improvements in the e-procurement system and data-driven monitoring. This has ensured transparency, accountability and efficiency in procurement processes.

An integrated procurement framework for the future

DAP 2020 and DPM 2025 together represent an integrated, visionary procurement framework that aligns India’s defence procurement process with the dual goals of operational readiness and industrial self-sufficiency. The integration of capital and revenue acquisition ensures a fast supply of critical systems to the armed forces as well as empowers Indian industry to enhance innovation, manufacturing and exports.

This broad procurement ecosystem marks a decisive shift towards making India a global hub for defence production and innovation, which accelerates the realization of Aatmanirbhar Bharat in the strategic sector.

Boosting domestic defence production

From dependence to dominance:

The country recorded an all-time high defence production of Rs 1.54 lakh crore in the financial year 2024-25, which is a testament to the strength of Atmanirbhar Bharat. India is on track to achieve the target of Rs 1.75 lakh crore in defence production in the current financial year, while it aims to reach Rs 3 lakh crore by 2029, enabling the country to establish itself as a global defence manufacturing hub.

Defence Industrial Corridor – New Pathways of Development:

The two corridors, the Uttar Pradesh Defence Industrial Corridor (UPDIC) and the Tamil Nadu Defence Industrial Corridor (TNDIC), are the lifeline of this change. The two corridors have combined attracted investment of over Rs 9,145 crore and signed 289 MoUs, opening up potential opportunities of Rs 66,423 crore by October 2025.

Expansion of the defense ecosystem:

The Defence Research and Development Organisation has become a precursor to India’s defence revolution today. Raksha Mantri Shri Rajnath Singh has approved a special fund of Rs 500 crore to encourage deep-tech and state-of-the-art projects under the Technology Development Fund (TDF) scheme, Technology Transfer Programme and 15 Defence Industry-Academic Centres of Excellence (DIA-COE). The initiative is strengthening the defence innovation ecosystem by establishing direct collaboration between academia, startups and industries. The restructuring of the ordnance factories and the formation of seven new defence companies is a historic step towards increasing functional autonomy, improving efficiency and strengthening self-reliance. The private sector in the country has no longer been a silent spectator of the defence industry, but has become an active participant. Large-to-emerging companies are playing a leading role in sectors such as drones, avionics and state-of-the-art electronics, while around 16,000 MSMEs are emerging as game-changers in the country’s defence innovation landscape.

Opening New Horizons – Investment Opportunities:

India has emerged as one of the most attractive destinations for defence investment. With 788 industrial licenses issued to 462 companies, Indian industry’s participation in defence manufacturing is growing at a rapid pace. The Department of Defence Production has streamlined the sector through a fully digital portal for export authorities, resulting in 1,762 approvals in FY 2024-25 as against 1,507 in FY 2023-24, showing a year-on-year growth of 16.92% and a growth of 17.4% in the number of exporters. With liberalized foreign direct investment norms, PLI scheme and modern defence corridors, India offers an attractive opportunity for domestic innovators and global investors.

The Ministry of Defence signed a record 193 contracts worth Rs 2,09,050 crore in 2024-25, the highest ever in a single financial year. Out of these, 177 contracts worth Rs 1,68,922 crore were awarded to the domestic industry, marking a decisive shift towards Indian manufacturers and a strong indigenous defence ecosystem. The emphasis on local procurement has also boosted job creation and technological innovation across the sector.

Defence Acquisitions: Accelerating Self-Reliance

Under the Atmanirbhar Bharat initiative, India’s defence acquisition landscape has seen an unprecedented transformation. Record-level budget allocation, simplification of procedures and a renewed focused approach on indigenisation across the three services have resulted in significant progress in the defence sector. About 65% of India’s defence equipment is being manufactured in the country today. This is a major shift from a time when 65–70% of equipment used to depend on imports. This change reflects India’s strong upsurk in defence self-reliance and technological capability. India’s policy now focuses on not only strengthening the national industry, but also reducing dependence on imports and further strengthening the operational capability of the armed forces.

Growing acquisition budget and decadal growth

The Defence Acquisition Council (DAC) headed by the Defence Minister has approved a record volume of indigenous procurement in recent years. Modernization and indigenisation of the armed forces remains a key priority of the government. In the Union Budget 2024-25, Rs 1.72 lakh crore has been allocated in capital items for defence services, showing an increase of 20.33% from the actual expenditure of FY 2022-23 and 9.40% as compared to the revised estimates of FY 2023-24.

In March 2025, the DAC approved eight capital acquisition proposals worth over Rs 54,000 crore, including 1,350 HP engines for T-90 tanks and indigenously developed Varunastra torpedoes and airborne early warning and control (AEW&C) systems.

In July 2025, the DAC approved 10 capital acquisition proposals worth about Rs 1.05 lakh crore, including armoured recovery vehicles, electronic warfare systems, integrated common inventory management system for the three services, surface-to-air missiles, moored mines, mine counter major vessels, super rapid gun mounts and submersible autonomous vessels. All approved equipment is indigenous under the procurement (Indian-IDDM) category, with emphasis on indigenously designed, developed and manufactured systems.

In August 2025, the Defence Acquisition Council (DAC) approved proposals worth Rs 67,000 crore to enhance the operational capabilities of the armed forces. Key approvals included thermal imager-based night sights for the Army, compact autonomous surface craft, BrahMos fire control system and the Barak-1 upgrade for the Navy, and the mountain radar as well as the capable/spider upgrade for the Air Force. The DAC has also approved maintenance assistance for indigenous Medium Altitude Long Endurance (MALE) RPA and C-17, C-130J and S-400 systems for the three services.

Continuing this momentum, the DAC approved procurement proposals worth about Rs 79,000 crore for the Army, Navy and Air Force in October 2025, which underpinned the Government’s continued commitment to achieve capacity enhancement and self-reliance in all sectors of national defence. The Advanced Light Weight Torpedo (ALWT) developed for the Navy by DRDO’s Naval Science and Technology Laboratory is a major indigenous feature. Other approvals include the Army’s NAG Missile System (Tracked) Mk-II (NAMIS), Ground Based Mobile ELINT System (GBMES) and High Mobility Vehicles (HMV); Landing Platform Docks and 30 mm Naval Surface Gun for the Navy; and the Supporting Long Range Target Saturation/Desastration System for the Air Force.

Defence Export Promotion: India’s Growing Reputation

The new story of exports: figures that speak out

Defence exports that were once a drop are now a steady stream: India’s defence exports are touching unprecedented heights. India’s defence exports reached a record Rs 23,622 crore in FY2024-25, showing a growth of 12.04% from Rs 21,083 crore in FY2023-24. In this remarkable achievement, the private sector contributed Rs 15,233 crore and the defence public sector undertakings Rs 8,389 crore. In the previous period, these figures were Rs 15,209 crore and Rs 5,874 crore respectively, making it clear that DPSU exports in particular have recorded an impressive growth of 42.85%. During the financial year 2024-25, India has exported a wide range of products including ammunition, weapons, sub-systems, complete systems and critical components to about 80 countries. This is not only a testament to India’s production capacity but also symbolizes India’s emergence as a reliable partner in the global defence supply chain.

Fast, Simple and Digital Policies: New Doors of Progress

The government has actively simplified the export route, standard operating procedures for export of war material inventory items have been rationalized and a fully online portal now processes export authorities digitally, reducing time and paperwork for exporters. Open Common Export License (OGEL) and a digital authorisation system have made regular exports even easier.

Defence exports as diplomacy

Exports are not just a bridge of commerce, but a bridge of trust: these build trust, mutual partnership and long-term partnership. India’s growing export basket being supplied to friendly countries is not just a group of products, but also a symbol of the broad framework of defence cooperation, logistics support, training and after-sales services. The ever-growing list of importers clearly reflects growing global confidence in Indian defence forums, systems and technologies. India’s defence exports have now become a symbol of a common journey of common security and mutual progress, not just exchange of deals.

Successful indigenous platform and export basket

India’s defence exports today are not only extensive but also highly practical. This diversity from bulletproof jackets, patrol boats and helicopters to radar systems and light torpedoes clearly demonstrates the depth and maturity of India’s defence manufacturing sector. While fighter aircraft programmes like Tejas are on the way to operational maturity and export prospects, India’s real strength today lies in the wide range of proven and operational systems and components.

Conclusion

India’s strategic cooperation and bold policy initiatives are not mere reforms; they are laying the solid foundation for a new era of defence self-sufficiency and technological sovereignty. The continued increase in domestic production and exports, as well as the rapid integration of cutting-edge technologies into the industrial ecosystem, underline India’s progress in this direction. Today, India’s dream of emerging as a global defence manufacturing hub is not a distant aspiration, but a reality.

India has recorded the highest ever growth in terms of the value of indigenous defence production, which reflects the remarkable success of government programmes such as the Atmanirbhar Bharat Abhiyan, positive indigenisation lists and strategic partnerships with the private sector. The emphasis on Make in India, as well as the creation of a robust R&D framework and a dynamic start-up ecosystem, have further accelerated this transformation.

Every move from the establishment of defence industrial corridors to the expansion of export facilities reflects India’s unwavering commitment to strengthen indigenous capabilities by reducing dependence on imports. All these programmes are working together to create a robust, technology-driven defence ecosystem that not only strengthens national security but also establishes India as a reliable and leading global partner in defence manufacturing and innovation.

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