Strong Defence sector is the need of the hour

India's defence aftermarket industry is growing significantly, driven by the government's "Make in India" initiative and a focus on Atmanirbhar Bharat (self-reliance), which is reducing import dependency and boosting exports. Defence exports rose to an all-time high of ₹23,622 crore in FY 2024-25, with a target of ₹50,000 crore by 2029. This expansion includes exports of missiles, aircraft, and other platforms, supported by strategic reforms, private sector participation, and investments in defence industrial corridors.

In the first half of 2025, India's defence industry has delivered an outstanding performance, posting an impressive return of 34.82%, outperforming all other sectoral indices. During the same period, the Nifty rose by only 5.49%, while sectors like IT and Pharma struggled with declines of 12.18% and 6.43% respectively.

India's defense aftermarket industry is expanding significantly, driven by government initiatives like "Make in India" and "Atmanirbhar Bharat," which promote domestic production and self-reliance. This growth is evidenced by record defense production and exports, with a strong focus on local manufacturing of weapon systems, ammunition, and components. The industry is also benefiting from policy reforms, the increasing participation of the private sector, and initiatives fostering innovation and technological advancement in areas like AI and cyber warfare, positioning India as a rising global player.

India Aerospace and Defence Market was valued at USD 27.1 Billion in 2024 and is expected to reach USD 54.4 Billion by 2033, at a CAGR of 6.99% during the forecast period 2024 – 2033.

The Aerospace and Defence sector in India involves building aircraft, ships, spacecraft, weapon systems, and defense equipment. Aerospace and defense (A&D) companies sell their products and supporting services and sustainment programs to governments and private companies and other end use industries.

The Aerospace and Defense sector in India is rapidly growing and propelling the growth of the manufacturing sector from the front by manufacturing defense equipment of international quality standards and establishing technologically advanced manufacturing facilities.

Several Indian Aerospace and Defense equipment manufacturing companies have proven themselves capable of providing first-time correct quality comparable to global standards.

In 2025, the Aerospace and Defense sub-sector amassed ₹2,915 Cr in value and 48 deals, vastly outpacing Defense Machinery (₹665 Cr across 10 deals). The outlook for the Aerospace & Defense Sector by 2025 appears robust.

This gap reflects the market’s clear tilt toward aerospace systems, avionics, and dual-use defense technologies.

India is also rapidly advancing its innovation and technology sectors by promoting indigenous Artificial Intelligence (AI) and semiconductor capabilities, fostering a strong startup ecosystem, and integrating technology into governance through initiatives like the Digital India program. The government's strategic vision emphasizes "Make AI in India" and "Make AI Work for India," with significant policy support and funding through schemes like the Research, Development, and Innovation (RDI) Scheme and the Design Linked Incentive (DLI) Scheme. This multi-pronged approach aims to build self-reliance, drive economic growth, and position India as a global leader in technology and innovation, with a particular focus on strategic sectors like AI, semiconductors, and green energy.

Over the past ten years, there has been a concerted push towards indigenisation in the defence sector, supported by policies encouraging innovation and investment in science and technology. This shift is evident in the exponential growth of defence exports, from ₹2,000 crore (US$ 240 million) to ₹16,000 crore (US$ 1.9 billion), demonstrating the strength of India’s domestic capabilities.