India’s defence sector has seen a significant shift towards greater self-reliance over the past decade, marked by soaring budgets, increased indigenous production, and a surge in exports, driven by reforms and strategic policy changes.
India’s defence sector has moved steadily towards greater self-sufficiency over the past decade, with the government casting the shift as central to national security and long-term industrial growth. A Press Information Bureau release says the change has been driven by higher spending, procurement reforms and a deliberate push to expand domestic manufacturing under the Atmanirbhar Bharat programme.
Official figures show the scale of that shift. According to the PIB release, the defence budget has risen from ₹2.53 lakh crore in 2013-14 to ₹7.85 lakh crore in 2026-27, while capital spending has climbed from ₹94,587.95 crore in 2014-15 to ₹2.19 lakh crore in 2026-27. Janes separately reported that defence production reached ₹1.78 lakh crore in 2025-26, underscoring the extent to which indigenous output has become more important to India’s military build-up.
Exports have also accelerated sharply. The government says defence shipments rose from ₹686 crore in 2013-14 to ₹38,424 crore in 2025-26, with sales reaching more than 80 countries. Business Standard reported that the latest jump was helped by a stronger role for both state-owned firms and private industry, while a separate report noted that the private sector accounted for ₹17,353 crore, or 45.16%, of exports in 2025-26, with defence public sector undertakings contributing the remainder.
The policy framework behind the expansion has been rebuilt as well. The Defence Acquisition Procedure 2020 widened opportunities for Indian firms in design and production, while the Defence Procurement Manual 2025 is said to have streamlined revenue purchases and supported faster approvals. The government has also opened 25% of the defence research and development budget to industry, start-ups and academia, and the Innovations for Defence Excellence scheme has drawn hundreds of participants into development work. The PIB release says that, as of March 2026, iDEX had engaged 676 start-ups, MSMEs and innovators, resulting in 551 design and development contracts.
India is also trying to deepen the supply chain behind its armed forces. The government says positive indigenisation lists have covered 5,521 items, while the Srijan platform now lists more than 41,000 vendors and 2.7 lakh products. Industrial corridors in Uttar Pradesh and Tamil Nadu have attracted tens of thousands of crore rupees in commitments, and the policy environment for foreign capital has also been loosened, with defence FDI now allowed up to 74% under the automatic route and up to 100% with government approval. Together, the changes point to a defence industry that is becoming larger, more local and more export-focused as India looks ahead to 2047.
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