India’s Defence Exports Jump 25-Fold Since FY17, But Import Dependence Persists

India’s defence exports have increased more than 25 times since FY2017, reflecting a broader shift towards indigenous manufacturing and reduced import dependence, according to a report by Rubix Data Sciences.

The report said defence exports reached an all-time high of ₹384bn in FY2026, up from ₹15bn in FY2017, marking a 63% rise over the previous year. The government has set a target of ₹500bn in defence exports by FY2029.

India currently exports defence equipment to more than 80 countries, including missiles, artillery systems, naval vessels, radars and drones. According to the report, exports are increasingly being driven by high-value platforms and advanced systems rather than smaller components.

Domestic Production Expands

The Rubix report highlighted a steady rise in domestic defence manufacturing under initiatives such as Make in India and Atmanirbhar Bharat. Defence production reached a record ₹1.54trn in FY2025, nearly 3.2 times the FY2015 level. The government is targeting ₹3trn in production by FY2029.

India’s defence budget has also nearly tripled from ₹2.53trn in FY2014 to ₹7.85trn in FY2027, accounting for about 14.7% of the Union Budget.

The report noted that around 65% of defence equipment is now produced domestically, reversing the earlier dependence on imports for nearly 65–70% of military hardware. Procurement trends have also shifted towards local firms. In FY2025, the Ministry of Defence signed 193 contracts worth ₹2.09 trillion, with 92% of contracts by volume awarded to domestic companies.

Private Sector participation

The share of the private sector in defence production has increased from 19% in FY2017 to 23% in FY2025, and it accounted for a 45% share in defence exports in FY2026, highlighting its growing contribution

The report also pointed to the growing role of start-ups and MSMEs. More than 1,000 defence start-ups are now operating in India, while around 16,000 MSMEs are part of the defence supply chain. Defence and aerospace start-ups have collectively attracted nearly $2 billion in funding since 2017.

Despite the growth in domestic production, India remains the world’s second-largest arms importer, accounting for 8.2% of global imports between 2021 and 2025.