Defence production rises nearly four-fold to ₹1.78 lakh crore, says Rajnath Singh
The value of India's defence production was reported to have risen nearly four-fold over the past decade, from around ₹46,000 crore in 2014-15 to a record ₹1.78 lakh crore in 2025-26
The growth was attributed to the "Aatmanirbhar Bharat" (self-reliant India) and "Make in India" initiatives over the preceding 12 years
Defence Public Sector Undertakings (DPSUs) and other public-sector entities accounted for roughly 76% of total production, with the private sector contributing around 24%
Defence exports were reported to have grown from ₹686 crore in 2013-14 to an all-time high of ₹38,424 crore in 2025-26, with 145 defence exporters now shipping to more than 80 countries
The remarks were made through an Akashvani (All India Radio) broadcast to soldiers on the eve of the 80th Independence Day
Aatmanirbhar Bharat in Defence — Indigenisation Framework
Aatmanirbhar Bharat Abhiyan, announced in May 2020, extended self-reliance goals to the defence sector through instruments such as "Positive Indigenisation Lists" — schedules of platforms, weapons, and equipment that can only be procured from domestic sources beyond a notified timeline. The Department of Defence Production has issued multiple such Positive Indigenisation Lists (PILs) since August 2020, each barring import of listed items after a specified date.
Key Details
- Ministry of Defence has notified several Positive Indigenisation Lists (PIL) for both DPSUs and the armed forces since 2020, together covering thousands of items/sub-systems
- Defence Acquisition Procedure (DAP) 2020 introduced procurement categories that prioritise indigenous content — "Buy (Indian-IDDM)" (Indigenously Designed, Developed and Manufactured) ranks highest in preference order, followed by "Buy (Indian)"
- FDI in defence manufacturing was liberalised in 2020 — up to 74% under automatic route and up to 100% via government route (subject to access to modern technology)
- Defence corridors (Uttar Pradesh and Tamil Nadu Defence Industrial Corridors) were set up to cluster manufacturing investment
The reported near-four-fold rise in production value is presented as the outcome of this indigenisation architecture — Positive Indigenisation Lists creating guaranteed domestic demand, liberalised FDI drawing private capital, and preferential procurement categories under DAP 2020 shifting orders toward Indian-origin platforms.
Defence Public Sector Undertakings (DPSUs) — Structure and Reform
DPSUs are companies wholly or majority-owned by the Ministry of Defence, historically the dominant producers of India's military hardware. The most significant recent structural reform was the 2021 corporatisation of the Ordnance Factory Board (OFB), which converted 41 ordnance factories into seven new DPSUs.
Key Details
- India currently has DPSUs including Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), Bharat Dynamics Limited (BDL), Mazagon Dock Shipbuilders Limited (MDL), Garden Reach Shipbuilders & Engineers (GRSE), and the seven successor companies to OFB (e.g., Munitions India Limited, Armoured Vehicles Nigam Limited)
- OFB corporatisation (October 2021) aimed to bring functional autonomy, efficiency, and accountability comparable to existing DPSUs
- DPSUs collectively continue to dominate output (~76% of production value per the reported figures), even as private-sector participation is being actively expanded through indigenisation lists and Make in India incentives
The 76:24 public-private production split cited in this announcement illustrates that despite policy emphasis on private industry, DPSUs (including OFB's corporatised successors) remain the backbone of India's defence manufacturing base.
Defence Exports and the Strategic Rationale for Self-Reliance
Rising defence exports (from ₹686 crore in 2013-14 to a reported ₹38,424 crore in 2025-26) are tracked as a complementary indicator to indigenisation, since a domestic industrial base capable of exporting is also less import-dependent for the armed forces' own requirements. The Ministry of Defence has set formal export targets as part of its Defence Production and Export Promotion Policy.
Key Details
- Defence Production and Export Promotion Policy (DPEPP) 2020 set a target of ₹1.75 lakh crore in aggregate defence production (including ₹35,000 crore from exports) — targets used as a benchmark against which annual figures like those cited here are measured
- Defence exports are licensed under the Foreign Trade (Development and Regulation) Act and require an export authorisation/licence from the Department of Defence Production
- India's Strategic Partnership (SP) model (introduced 2017 under DPP) enables select private Indian companies to build platforms (submarines, fighter aircraft, helicopters) in partnership with foreign original equipment manufacturers, feeding both domestic production and export capacity
The export growth figures cited alongside the production figures are used to argue that India's defence-industrial base has crossed from import-substitution toward becoming a net contributor to global defence supply chains, a stated objective of DPEPP 2020.
- Defence production value: ~₹46,000 crore (2014-15) → ₹1.78 lakh crore (2025-26), nearly four-fold increase
- Public sector (DPSUs and others) share of production: ~76%; private sector share: ~24%
- Defence exports: ₹686 crore (2013-14) → ₹38,424 crore (2025-26), an all-time high
- Number of defence exporters: 145, exporting to 80+ countries
- DPEPP 2020 target: ₹1.75 lakh crore aggregate defence production by 2025, including ₹35,000 crore from exports
- FDI limits in defence manufacturing: up to 74% (automatic route), up to 100% (government route)