India Defence Minister Rajnath Singh.
India’s Defence Exports in FY 2025-26: India is stepping up its efforts to become a major global defence manufacturing power, with Defence Minister Rajnath Singh calling for greater private sector participation, increased investment in research and development (R&D), and the ability to rapidly expand production during military emergencies. The government’s priorities reflect a broader strategic ambition: reducing dependence on foreign military equipment while strengthening India’s ability to design, develop and manufacture advanced defence technologies at home.
Addressing the eighth annual session of the Society of Indian Defence Manufacturers (SIDM) in New Delhi on 9 October 2026, Singh presented the SIDM Champion Awards 2026 and urged the domestic defence industry to play a larger role in securing the country’s strategic autonomy. The event, held under the theme ‘Sovereign Capabilities, Contested Frontiers: Accelerating India’s Strategic Autonomy in an Era of Disruption’, brought together government officials, military representatives and industry leaders.
A total of 15 awards were presented to organisations for achievements in indigenous technology development, product innovation, design, import substitution, manufacturing excellence and exports.
The minister’s message was clear: India’s defence ambitions will depend not only on government policies and military spending, but also on the ability of domestic companies to innovate, invest and deliver equipment at the scale and speed required by the armed forces.
Record defence exports signal a shift in India’s ambitions
One of the most significant developments highlighted at the event was India’s growing defence export performance. According to Singh, defence exports reached a record ₹38,424 crore in the financial year 2025–26, representing growth of more than 60 per cent compared with the previous financial year.
The government has set a target of increasing defence exports to ₹50,000 crore by 2029.
The figures reflect India’s ambition to move beyond its traditional position as a major importer of military equipment and establish itself as a credible supplier of defence products to international markets. Export growth can help domestic manufacturers expand their customer base, increase production volumes and generate revenue that can be reinvested in technology and product development.
However, becoming a major defence exporter requires more than competitive prices. Indian manufacturers must also demonstrate reliability, consistent quality, technological sophistication and the ability to provide long-term maintenance and support.
Sustaining export growth will therefore depend on whether Indian companies can develop products that meet international requirements while maintaining the production capacity needed to serve both domestic and overseas customers.
Why the private sector matters
A central theme of Singh’s address was the need to expand private sector participation in defence manufacturing. He recalled his earlier call for increasing the private sector’s share of India’s total defence production from approximately 24 per cent to 50 per cent.
The minister said private industry had expanded its contribution significantly over the past 12 years and urged manufacturers to establish clear milestones to help achieve the government’s objective.
Greater private sector involvement could bring additional investment, specialised expertise, competition and faster product development into the defence ecosystem. Private companies can also work with startups, smaller manufacturers and research institutions to develop technologies that may be difficult to produce through conventional procurement arrangements alone.
The objective is not simply to increase the number of private companies supplying equipment. It is to build a stronger industrial network capable of manufacturing complex systems, developing critical components and supporting the armed forces throughout the life cycle of their equipment.
Singh assured industry representatives that the government would continue supporting the sector while maintaining regulatory, safety, quality and accountability standards.
This balance will be important. Defence manufacturing involves sensitive technologies, stringent performance requirements and substantial public expenditure. Encouraging investment while ensuring that equipment meets operational needs remains a central challenge for policymakers.
Arun Ramchandani, Presiden, Society of Indian Defence Manufacturers.
Research and development must become a strategic priority
The minister also stressed that manufacturers must treat research and development expenditure as a long-term investment rather than a routine business cost.
Modern warfare increasingly relies on sophisticated technologies, including drones, missiles, air defence systems, advanced software and secure communications. These capabilities are evolving rapidly, creating pressure on countries to develop new systems, improve existing equipment and respond to emerging threats.
For India, stronger domestic R&D could reduce dependence on foreign technologies and help manufacturers develop products suited to the requirements of the country’s armed forces.
Investment in research can also improve the competitiveness of Indian companies in international markets. Manufacturers that develop proprietary technologies and advanced products may be better positioned to secure export contracts than those that rely primarily on assembling imported components.
However, defence innovation often requires considerable funding, specialised infrastructure and years of testing before a product becomes operational. Companies must therefore be prepared to commit resources over extended periods, while the government and research institutions can help create an environment in which promising technologies move more quickly from development to deployment.
Singh’s remarks underline a broader policy challenge: ensuring that India’s expanding manufacturing base is matched by comparable progress in technological capability.
Operation Sindoor highlights the need for production readiness
Another important issue raised by the defence minister was the ability of Indian manufacturers to increase output rapidly during a crisis.
Referring to Operation Sindoor, Singh emphasised that domestic manufacturing facilities must be prepared to scale up production when operational requirements change. This capacity to expand output quickly is often described as surge capacity.
In practical terms, surge capacity means having the factories, skilled workers, suppliers, raw materials, production processes and logistical arrangements needed to increase manufacturing at short notice.
This is particularly important for equipment such as drones, missiles and air defence systems, where consumption and replacement requirements can rise sharply during periods of conflict.
A country may possess advanced defence technology but still face operational difficulties if it cannot manufacture sufficient quantities of equipment when needed. Production readiness is therefore an essential part of military preparedness, alongside research, testing and the development of sophisticated weapons systems.
For Indian industry, the challenge will be to create flexible production facilities without allowing substantial investments in unused capacity to undermine commercial viability. Closer coordination between manufacturers, the government and the armed forces could help companies plan for both routine demand and emergencies.
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Policy reforms aim to strengthen domestic industry
The government has introduced several policy initiatives intended to expand the capabilities of India’s private defence sector. Singh referred to measures including the Defence Acquisition Procedure, the Defence Procurement Manual, Positive Indigenisation Lists, the SRIJAN portal and Innovations for Defence Excellence (iDEX).
Together, these initiatives are intended to support domestic procurement, encourage the development of indigenous products, identify opportunities to replace imported components and promote innovation.
The Positive Indigenisation Lists identify equipment and items for which domestic manufacturing is being encouraged or, where applicable, required under specified procurement conditions. The SRIJAN portal helps identify items that can be indigenised, while iDEX supports innovation by connecting the defence establishment with startups and other technology developers.
These mechanisms are particularly relevant to micro, small and medium enterprises (MSMEs), which often supply specialised components and services to larger manufacturers but may lack the resources to independently develop complex defence systems.
Established in 2017, SIDM provides a common platform for large companies, MSMEs, startups, academia and foreign original equipment manufacturers. It also facilitates dialogue between industry and policymakers, helping identify obstacles to investment, production and technological development.
The effectiveness of these initiatives will ultimately depend on implementation, procurement timelines, access to finance and the ability of smaller businesses to become reliable suppliers.
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From self-reliance to global competitiveness
India’s defence manufacturing strategy is increasingly focused on combining domestic production with technological independence and export growth. The record exports reported for 2025–26 provide an encouraging indicator of the industry’s expanding reach, while the target of ₹50,000 crore by 2029 sets a further benchmark for growth.
Yet the next stage will require more than increasing production figures. Indian manufacturers must strengthen their research capabilities, develop advanced technologies, improve manufacturing quality and establish supply chains that can withstand disruptions.
The government, meanwhile, will need to ensure that policy support translates into predictable procurement opportunities and that promising innovations can progress from the laboratory to operational use.
The SIDM Champion Awards recognise organisations that have contributed to indigenous manufacturing, innovation and exports. But the larger challenge is to turn individual achievements into sustained industrial progress across the sector.
As geopolitical competition intensifies and military technologies continue to evolve, India’s ability to manufacture essential defence equipment at home will become increasingly important. Greater private sector participation, sustained R&D investment and stronger surge capacity could help the country reduce external dependencies while building a more competitive defence industry.
The ultimate test will be whether India can consistently design, produce and deliver advanced military equipment that meets the needs of its armed forces and earns the confidence of international customers.
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