3 days ago

India’s Defence Production Hits Record as Government Pushes for Original R&D

India’s defence manufacturing sector is undergoing a significant transformation, with domestic defence production reaching a record ₹1.78 lakh crore in FY 2025-26, as the government intensifies its push to build an indigenous and globally competitive aerospace and defence industrial base.

Addressing the ASSOCHAM National Conference on “Aerospace and Defence Manufacturing – Advancing India’s Leadership in Global Market” in New Delhi on Tuesday, Sanjeev Kumar, Secretary, Department of Defence Production, urged entrepreneurs and industry leaders to move beyond manufacturing based on existing technologies and invest more aggressively in original research and development.

Kumar described indigenous R&D as not merely a technological exercise but a strategic asset that can determine long-term competitiveness in international markets. The emphasis comes as India seeks to transition from being a major defence equipment buyer to a manufacturer capable of developing and exporting sophisticated systems.

The ₹1.78 lakh crore production figure represents a 15.6% increase over ₹1.54 lakh crore in FY 2024-25 and is more than double the ₹84,643 crore recorded in FY 2020-21. Government data also shows that the private sector accounted for approximately 24% of defence production in FY 2025-26, its highest share so far.

The transformation is also visible in India’s defence exports, which reached a record ₹38,424 crore in FY 2025-26, with Indian defence products now reaching more than 80 countries. The government has set an ambition of taking annual defence production to ₹3 lakh crore and exports to ₹50,000 crore by 2029.

The conference comes at a crucial stage in this transition, with policymakers and industry examining how India can convert rising domestic manufacturing capacity into sustainable global market share. ASSOCHAM National Council on Defence and Aerospace Chairman Rajiv Gupta said India’s ability to capitalise on emerging opportunities would be central to its growth in the global defence market.

For industry, the next challenge is therefore not simply producing more, but developing technologies that can compete internationally. This places greater importance on original intellectual property, advanced manufacturing, private-sector R&D, startups and stronger links between industry, academia and research institutions.

The government has already expanded opportunities for industry and startups to participate in defence R&D. A quarter of the defence R&D budget has been opened to industry, startups and academia since FY 2022-23, while specialised testing infrastructure is being made accessible to domestic manufacturers through the Defence Testing Portal.

The message emerging from New Delhi is increasingly clear: India’s next phase of defence manufacturing will be measured not only by how much the country produces, but by what it invents, owns and exports.