India Achieves Record Rs 1.54 Lakh Crore in Defense Production: A Milestone in Self-Reliance

Minister of State for Defence Sanjay Seth at the India pavilion at the Dubai Airshow 2025.

New Delhi:

India has achieved its highest-ever defence production of Rs 1.54 lakh crore in 2024-25, with manufacturing experiencing remarkable growth due to effective policies and Atmanirbharta reforms.

According to government data, indigenous defence production reached a record Rs 127,434 crore in 2023-24, representing a 174 percent increase from Rs 46,429 crore in 2014-15. The country is now positioned to meet its target of Rs 1.75 lakh crore in defence production for the current fiscal year.

Approximately 16,000 MSMEs have emerged as pivotal contributors, strengthening India's indigenous defence capabilities.

This upward trajectory in defence production results from consistent government support over the past decade, including substantial budget allocations and policy support for India's military industrial base. The defence budget has grown significantly from Rs 2.53 lakh crore in 2013-14 to Rs 6.81 lakh crore in 2025-26, demonstrating the government's commitment to enhancing military infrastructure.

To reduce foreign dependency, both public and private industry segments have shown steady year-on-year growth, attributed to comprehensive policy reforms, improved ease of doing business, and a strategic focus on indigenisation throughout the past decade.

India now exports defence products to over 100 nations, including the United States, France, and Armenia. "Exports are more than commerce: they build trust, interoperability and long-term partnerships. India's expanding export basket, supplied to friendly countries, is an instrument of outreach, seen in defence cooperation, logistics support, training and spares packages that accompany sales. The widening list of importers signals growing global confidence in Indian platforms."

Defence Public Sector Undertakings (DPSUs) and other PSUs contributed approximately 77 percent of total production, while the private sector accounted for 23 percent.

The private sector's share increased from 21 percent in 2023-24 to 23 percent in 2024-25, reflecting its growing importance in the country's defence ecosystem.

Consequently, exports grew by Rs 2,539 crore, representing a 12.04 percent increase over 2023-24 figures.

The government aims to achieve defence manufacturing worth Rs 3 lakh crore and defence exports of Rs 50,000 crore by 2029, reinforcing India's position as a global defence manufacturing hub while stimulating economic growth.

According to the government, 788 industrial licenses have been issued to 462 companies under the 'Security' segment.

India's defence exports reached a record Rs 23,622 crore in 2024-25, compared to less than Rs 1,000 crore a decade ago in 2014.

Before the policy reforms initiated under Prime Minister Narendra Modi's government over the last decade, India's defence sector faced significant challenges.

"Procurement processes were slow, resulting in critical capability gaps. Dependence on imports was high, straining foreign exchange reserves and exposing vulnerabilities during global disruptions. Earlier, private sector participation was limited due to restrictive policies, dominance of defence PSUs, and lack of technology access," the government has stated.

Defence exports were minimal, valued at only Rs 686 crore in 2013-14, positioning India primarily as an importer rather than a producer in the global defence market. To address these challenges, the Ministry of Defence's draft Defence Production and Export Promotion Policy (DPEPP) provides direction for making India a leading global defence manufacturer by encouraging R&D, rewarding innovation and IP creation, promoting industry-academia linkages, supporting MSMEs, and setting export targets.

"The policy stitches together production, technology, and market access into one roadmap," according to the government statement.

Grounded in the vision of Aatmanirbhar Bharat, the government implemented a series of reforms to build a self-reliant, globally competitive defence industry. Key objectives include faster procurement through streamlined Defence Acquisition Procedures (DAP), followed by Defence Acquisition Council (DAC) approvals for acquisitions.

These reforms promote indigenous production through Positive Indigenisation Lists, liberalized FDI norms allowing automatic route up to 74 percent and up to 100 percent through the government route, and the Rs 1 lakh crore Research, Development and Innovation (RDI) Scheme, fostering collaboration among DPSUs, private companies, MSMEs, and startups.

The government has also focused on enhancing defence exports with simplified licensing, covering platforms such as bulletproof jackets, Dornier aircraft, Chetak Helicopters, fast interceptor boats, and lightweight torpedoes.

India has implemented landmark reforms to transform the defence procurement ecosystem. The Defence Acquisition Procedure (DAP) 2020 and the Defence Procurement Manual (DPM) 2025 form the foundation of this transformation, ensuring speed, transparency, innovation, and self-reliance across both capital and revenue procurements.

Additionally, initiatives like dedicated Defence Industrial Corridors serve as growth centers for India's defence manufacturing ecosystem.

Two corridors, the Uttar Pradesh Defence Industrial Corridor (UPDIC) and Tamil Nadu Defence Industrial Corridor (TNDIC), are driving this transformation. Together, they have attracted investments exceeding Rs 9,145 crore, with 289 MoUs signed, unlocking Rs 66,423 crore in potential opportunities as of October 2025.

India has emerged as one of the most attractive destinations for defence investment. With 788 industrial licenses issued to 462 companies, Indian industry participation in defence manufacturing is growing rapidly. The Department of Defence Production has streamlined business through a fully digital portal for export authorizations, resulting in 1,762 approvals in FY 2024-25, compared to 1,507 in 2023-24, marking a 16.92 percent year-on-year growth and a 17.4 percent increase in the number of exporters. Combined with liberalized FDI norms, the PLI scheme, and modern defence corridors, India offers compelling opportunities for both domestic innovators and global investors.

In 2024-25, the Ministry of Defence signed a record 193 contracts valued at Rs 209,050 crore, the highest ever in a single financial year. Of these, 177 contracts worth Rs 168,922 crore were awarded to domestic industry, reflecting a decisive shift toward Indian manufacturers and a strengthened indigenous defence ecosystem.

"From the establishment of Defence Industrial Corridors to the expansion of export facilitation, every measure underscores India's commitment to reducing import dependency and promoting indigenous capabilities. Together, these efforts are shaping a resilient, technology-driven defence ecosystem that not only strengthens national security but also positions India as a trusted global partner in defence manufacturing and innovation," the statement concluded.