India's defence production soars to record $17.25 billion, exports surge

India's Defence Production Soars to Record $17.25 Billion, Exports Surge Amid Self-Reliance Push

NEW DELHI, Aug 11, 2025 (Reuters) - India's defence manufacturing reached an all-time high of 1.51 trillion rupees ($17.25 billion) in the 2024-25 fiscal year, marking an 18% jump from the previous year's 1.27 trillion rupees, Defence Minister Rajnath Singh said on Saturday, underscoring the country's growing self-reliance in military manufacturing.

The milestone, driven by the government's "Make in India" and "Aatmanirbhar Bharat" initiatives, reflects a 90% surge in production since 2019-20, when output stood at 790.71 billion rupees. Singh attributed the growth to policy reforms, eased business regulations, and a focus on indigenisation, which have bolstered both public and private sector contributions.

Defence exports also hit a record 240 billion rupees in 2024-25, up 14% from 210.83 billion rupees the previous year, with Indian military hardware now reaching over 90 countries. The surge follows the success of Operation Sindoor, a precision strike on terror sites in Pakistan, which showcased the reliability of domestically developed systems like the Akash missile and Pinaka rocket launchers, boosting global interest, according to Defence Research and Development Organisation (DRDO) Chairman Samir Kamat.

Public sector units accounted for 77% of total production, while the private sector's share rose to 23% from 21% a year earlier, with private firms posting a 28% growth in output compared to the public sector's 16%. The government aims to further reduce import dependence, targeting defence exports of 500 billion rupees by 2028-29, Kamat said.

The defence ministry's efforts include raising the foreign direct investment limit to 74% from 49% in 2020, spurring domestic manufacturing. A joint report by the Confederation of Indian Industry and KPMG projects defence spending could reach 32 trillion rupees by 2047, driven by modernisation and investments in AI, drones, and cyber defence.

India, one of the world's largest arms importers, plans to spend $130 billion on capital procurement by 2029. The push for self-reliance has drawn global attention, with countries in Africa, Southeast Asia, and Europe exploring Indian systems for their cost-effectiveness and battle-tested performance, Kamat noted.

Analysts say India's defence sector is poised for sustained growth, supported by strategic foresight and increasing private participation. However, challenges remain, including the need to overhaul aging platforms and navigate global trade tensions, such as recent U.S. tariff hikes, which India’s defence ministry has denied impacting U.S. arms deals.

"This is a transformative phase for India's defence ecosystem," Singh said in a statement, calling the production and export figures a "landmark" in the country's journey toward becoming a global defence manufacturing hub.