With soaring domestic production, rapidly increasing exports, and ambitious partnerships with global leaders, India’s defense manufacturing sector is undergoing a dramatic transformation.
The sector’s momentum, highlighted by recent military operations and major deals, signals a new era where Indian firms are poised to compete on the global stage—but significant hurdles remain.
India’s indigenous defence manufacturing ecosystem has gained unprecedented confidence, as demonstrated by Operation Sindoor and the subsequent capital expenditure announcements by leading firms like Bharat Forge.
The sector’s increasing technological prowess and export aspirations are highlighted by Bharat Forge’s new manufacturing facility and exports of cutting-edge artillery systems. With firms like Tata Advanced Systems, L&T, and Adani Group growing their portfolios and landing significant contracts, the private sector—once a minor player—now propels innovation and provides state-of-the-art systems for contemporary warfare.
A landmark development is Tata Advanced Systems’ agreement with Dassault Aviation to manufacture Rafale fighter jet fuselages in Hyderabad. This marks the first time Rafale fuselages will be produced outside France, positioning India as a key player in the global aerospace supply chain and boosting its technological capabilities. Such collaborators.
There are observable outcomes from India’s drive for independence through programs like Make in India and Atmanirbhar Bharat. Indigenous defence production grew by 174% from FY15 to FY24, reaching over ₹1.27 lakh crore, while defence exports soared 34-fold in a decade to ₹23,662 crore in FY25.
The government’s target of ₹50,000 crore in exports by 2029 reflects rising confidence in the sector’s global competitiveness. Private firms now account for about 65% of defence exports, supplying advanced products to nearly 100 countries.
The government has played a pivotal role in this growth, revising procurement policies to favour private sector participation,
A key component of this evolution is research and development, which is spearheaded by DRDO and aided by new industry-academia partnerships. Though both government and private R&D spending must increase significantly to close critical technology gaps and keep up with the evolving nature of warfare, the creation of 15 Centers of Excellence at prestigious institutions and the Technology Development Fund have encouraged partnerships for indigenous technology development.
Despite these advances, complete indigenisation remains elusive. India continues to depend on imports for critical technologies and components, such as propulsion systems and rare earth minerals, due to global supply chain realities and limited willingness of foreign
likely remain imported, as seen in the GE-HAL jet engine partnership.
Indian defense PSUs like Bharat Electronics and Hindustan Aeronautics have become well-known worldwide and are now ranked in the top 100 arms manufacturers. With major private conglomerates expanding, it is anticipated that India will attain 80–85% indigenization by 2035.
The sector’s monopsony (the government is the main buyer), erratic order flows, delayed export licensing, a lack of skilled labor, and the requirement for strong cybersecurity frameworks all present major barriers to growing and maintaining global competitiveness, though.
With the help of expanding export markets, policy support, and technological advancements, India’s defense companies are quickly catching up to the world’s titans. Although they are becoming more and more regarded as reliable players—both as
