India’s Defence Production Hits Record Rs 1.54 Lakh Crore as MSMEs Drive Indigenous Growth
India’s defence production hits Rs 1.54 lakh crore, driven by MSMEs and policy reforms.
India’s defence production reached an unprecedented Rs 1.54 lakh crore in the financial year 2024-25, marking a major milestone fueled by transformational reforms and a surge in contributions from micro, small, and medium enterprises (MSMEs). The country’s defence manufacturing has witnessed rapid growth, with production more than tripling from Rs 46,429 crore in 2014-15 to Rs 1.27 lakh crore in 2023-24, and further strides expected to reach Rs 1.75 lakh crore in the current fiscal year.
A total of 16,000 MSMEs have emerged as pivotal players in enhancing India's indigenous defence capabilities, supplying critical components and innovative technologies across a wide range of platforms. The Ministry of Defence’s policy reforms—focused on Atmanirbhar Bharat and easing business procedures—have enabled more private sector participation and fostered a robust defence industrial ecosystem that includes both public sector undertakings (DPSUs) and an expanding private base.
India’s defence budget has nearly tripled over a decade, from Rs 2.53 lakh crore in 2013-14 to Rs 6.81 lakh crore in 2025-26, underpinning modernization and indigenization goals. Streamlined procurement policies, the Defence Acquisition Procedure (DAP), and the Defence Production and Export Promotion Policy (DPEPP) have collectively accelerated indigenous design, development, and manufacturing, reducing dependence on imports and positioning India as a growing global defence manufacturing hub.
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Exports have also surged, reaching Rs 23,622 crore in 2024-25—up over 34-fold from Rs 686 crore in 2013-14—as Indian platforms garner increasing trust internationally. Defence industrial corridors in Tamil Nadu and Uttar Pradesh have attracted significant investments, while the government has issued 788 industrial licenses to 462 companies, reflecting expanding industry participation. Digital initiatives and innovation schemes incentivize R&D and technology transfer, further fueling the sector’s rapid development.
With a record 193 contracts signed during 2024-25 totaling Rs 2.09 lakh crore—over 80% awarded to domestic firms—India is affirming its commitment to building a self-reliant and technology-driven defence ecosystem. These efforts not only strengthen national security but also create vast economic opportunities, cementing India’s emergence as a trusted global player in defence manufacturing and innovation.
