India’s Defence Manufacturing Prowess

India's defence production, which stood at INR 74,054 crore in 2016-17, has almost doubled to touch INR 1,46,000 crore in 2024-25. Of the total production, nearly INR 32,000 crore (or 22 percent) was contributed by the private sector.

Along with boosting production, the Indian defence industry has also ventured into the international market. Defence exports, which stood at a paltry INR 1,522 crore in 2016-17, have multiplied 16 times to reach INR 23,622 crore in 2024-25.

Oover 100 Indian companies are now exporting to over 100 plus countries today. India’s defence exports basket now consists of a wide range of weapons and platforms, including the Brahmos, Pinaka rocket launcher, Dornier aircraft, armoured vehicles, offshore patrol vessels, artillery guns and munitions, among others.

For the first time in India’s independent history, during Operation Sindoor, made-in-India defence equipment played a pivotal role in both offensive and defensive missions. While lethal weapons such as Brahmos and Sky Striker decimated Pakistani terror and military targets, defensive systems such as Integrated Air Combat and Control System (IACCS), Akashteer, Akash, and the Drone-Detect, Deter and Destroy (D4) system demonstrated their prowess in shielding India’s land and skies from the barrage of Pakistani missile and drone attacks.

Despite the size, scope and breadth of its production, the domestic industry in the past had to operate under the shadow of foreign-made weapons. To be sure, imported equipment—whether the Rafale, its associated weapons package (Meteor and SCALP missiles and HAMMER munitions) or the S-400 missile defence system—played an important role in Operation Sindoor, but the indigenous weapons and systems stole the show.

India is also modernising its defence force, with an ever-increasing focus on indigenous development and production. The regular improvements in the defence acquisition manual, the Defence Minister’s recent approval of the execution model for the Advanced Medium Combat Aircraft (AMCA) prototype, and initiatives like the DRDO-BEL project to develop a mobile air defence systems akin to the S-400, in addition to numerous other projects in development and/or production, are among the key steps in the right direction.

These steps, however, need to be backed by adequate resources and a strong political commitment, which can act as a catalyst for major armament programmes. For far too long, India’s defence indigenisation has been hampered by the lack of resources, particularly for research and development (R&D). India’s R&D budget, as accounted for by the DRDO, amounts to less than 4 percent of the MoD’s budget, which itself represents less than two percent of the country’s estimated gross domestic product (GDP) in 2025-26. A minuscule R&D budget in a modest defence budget means important projects are under-resourced.

To provide a ballast to India’s indigenisation process, there is a need for greater political commitment to domestic R&D projects, particularly those that are vital for self-reliance in critical defence technologies. The Make in India initiative undoubtedly represents a higher political commitment to the defence indigenisation process. This needs to be institutionalised. For that, the government, in consultation with various stakeholders, could identify a select list of major R&D programmes which can be monitored and steered by the leadership at the prime ministerial level. Some of the programmes that merit inclusion in the list include the AMCA, a next-generation aeroengine to power stealth aircraft, hypersonic missiles, long-range air-to-air missiles, and long-range combat and surveillance drones.