A decade ago, India’s defence ecosystem was largely defined by dependence. Fighter jets, missile systems, surveillance equipment, submarines, and even critical spare parts came overwhelmingly from foreign suppliers. The world’s largest democracy was also one of the world’s biggest arms importer, vulnerable to geopolitical shifts, supply chain disruptions, and diplomatic calculations far beyond its borders.
Today, that equation is beginning to change. As India marks a year since Operation Sindoor, the country’s defence sector is witnessing a major transformation that goes far beyond rising military spending or high-profile weapons deals. According to a recent analysis by Rubix Data sciences reveals that the government’s Atmanirbhar Bharat vision has transformed India’s attempt to shift from being a major defence buyer to becoming a self-reliant manufacturing and export hub.
The numbers now indicate that this change is no longer aspirational policy language. It is increasingly becoming industrial reality.
From Import dependency to domestic capability
According to Rubix Data sciences’ report, India’s defence production has expanded nearly 3.2 times over the past decade, rising from under INR 500 billion in FY2015 to a record INR 1.54 trillion in FY2025. The government is now targeting INR 3 trillion in defence production by FY2029. This growth shows strategic reversal. For years, India depended on imports for nearly 65–70% of its defence requirements. Today, approximately 65% of defence equipment is being produced domestically. The change is particularly visible in procurement patterns. Rubix Data sciences’ report suggests that in FY2025, the Ministry of Defence signed 193 contracts worth INR 2.09 trillion, with 92% of contracts by volume and 81% by value awarded to Indian companies.
This preference for domestic manufacturers has transformed the defence landscape from a state-dominated ecosystem into an industrial network involving public sector undertakings, private firms, MSMEs, and start-ups. The transition is also strategic. The lesson from global conflicts and disrupted supply chains has become increasingly clear, countries that cannot manufacture critical military systems domestically remain vulnerable during crises.
Significance of defence budget
According to Rubix Data sciences report, India’s defence exports have grown 25 times since FY2017 and India is simultaneously modernising conventional warfare capabilities and also investing in emerging domains such as drones, unmanned naval systems, electronic warfare, artificial intelligence, and advanced surveillance technologies.
The country’s military planning increasingly shows long-term geopolitical realities. Rising tensions along the northern borders, competition in the Indo-Pacific, and uncertainty in global supply chains have accelerated the urgency for indigenous production. Projects such as the Tejas Mk-1A fighter aircraft programme, indigenous artillery systems, advanced missile platforms, and submarine manufacturing are no longer isolated defence projects. They are now part of a larger national industrial strategy.
Rise of India’s domestic defence ecosystem
India’s traditional defence backbone continues to rest on Defence Public Sector Undertakings (DPSUs) such as Hindustan Aeronautics Limited, Bharat Electronics Limited, Bharat Dynamics Limited and Mazagon Dock Shipbuilders Limited. These firms remain central to manufacturing aircraft, naval systems, missile platforms, radars, and electronic warfare systems. But the defence ecosystem is no longer limited to public sector giants.
Private participation in defence production has risen from 19% in FY2017 to 23% in FY2025, while private firms accounted for nearly 45% of defence exports in FY2026, reveals Rubix Data Sciences report. Companies such as Larsen & Toubro, Tata Advanced Systems and Bharat Forge are increasingly securing large military contracts and integrating themselves into global supply chains. At the same time, nearly 16,000 MSMEs have entered the defence supply chain ecosystem. Their role is often less visible but critical, manufacturing components, electronics, materials, precision systems, and subsystems that support larger defence platforms.
Defence exports become India’s new strategic signal
Perhaps the clearest evidence of India’s changing defence ambitions is visible in exports. India’s defence exports have grown more than 25 times over the past decade, rising from INR 15 billion in FY2017 to an all-time high of INR 384 billion in FY2026. The government now aims to push exports to INR 500 billion by FY2029. India currently exports defence equipment to more than 80 countries.
The export basket has also become increasingly sophisticated. India is now exporting BrahMos cruise missiles, Akash air-defence systems, artillery guns, naval vessels, radars, armoured vehicles, electronic warfare systems, and surveillance equipment. The BrahMos missile, in particular, has emerged as both a strategic and diplomatic tool. Countries across Southeast Asia, including Vietnam and Indonesia, have shown growing interest in acquiring the supersonic missile system.
Naval systems now account for nearly 55% of India’s defence exports, indicating the country’s growing capabilities in maritime manufacturing. For India, defence exports are no longer just about revenue generation. They are increasingly linked to geopolitical influence, strategic partnerships, and regional positioning. The Atmanirbhar Bharat push in defence has been backed by aggressive policy interventions.
The Defence Acquisition Procedure (DAP) 2020 introduced a strong “Indian First” framework for procurement. Proposed revisions under DAP 2026 aim to further increase indigenous content requirements from 50% to 60% in key categories. The government has also raised the foreign direct investment limit in defence manufacturing to 74% under the automatic route, encouraging global defence companies to establish production partnerships in India. Dedicated Defence Industrial Corridors, Positive Indigenisation Lists covering more than 36,000 items, and production-linked incentives for drone manufacturing are all part of the localisation strategy.
The start-up layer of India’s Defence story
More than 1,000 defence start-ups have collectively attracted nearly USD 2 billion in funding since 2017. Many of these firms are working on technologies linked to drones, AI-powered surveillance, imaging systems, autonomous systems, cybersecurity, and battlefield intelligence. Government programmes such as Innovations for Defence Excellence (iDEX) are encouraging start-ups to solve military-specific operational challenges.
The funding trend also indicates a maturing ecosystem. Though the pace of new start-up creation has slowed, investment is increasingly concentrating in firms with commercially viable and strategically important technologies. For India, the next phase of defence manufacturing may not only be led by traditional heavy industry, but also by technology-driven companies building next-generation warfare systems.
The dependency India still cannot escape
Regardless of the progress, India’s defence self-reliance remains incomplete. The country continues to depend heavily on imports for critical technologies such as jet engines, semiconductors, advanced sensors, and propulsion systems. India’s long-running Kaveri jet engine programme remains one of the clearest examples of the technological gap. Even after decades of development, the engine could not achieve the required thrust levels for operational deployment.
Supply chain disruptions continue to expose these vulnerabilities. Delays in Apache helicopter deliveries and challenges surrounding certain fighter jet negotiations demonstrate how foreign dependence still affects timelines and operational readiness.
India also remains the world’s second-largest arms importer, even as it reduces reliance on any single supplier. Russia’s share in India’s imports has fallen sharply from 70% during 2011–2015 to around 40% during 2021–2025, while France and Israel have expanded their presence.
Atmanirbhar Bharat’s real test begins now
India’s defence transformation has clearly moved beyond slogans. The country has built a stronger industrial base, expanded exports, deepened private participation, and embedded self-reliance into procurement policy. The ecosystem now stretches from large public sector manufacturers to start-ups and MSMEs working on next-generation defence technologies.
However, the hardest phase may still lie ahead. Building missiles, artillery systems, and naval platforms is one milestone. Achieving independence in critical technologies such as engines, semiconductors, propulsion systems, and advanced electronics is another challenge altogether. The success of Atmanirbhar Bharat in defence will ultimately depend not just on assembly or manufacturing numbers, but on whether India can master the technologies that define modern warfare.