India's Defence Export Story

India's defence exports hit ₹38,424 crore in FY26. That is a 62% jump from last year. 25 times what they were in FY17. The government is aiming for ₹50,000 crore by FY29.

The numbers land differently depending on how you look at them.

What India actually sells

BrahMos supersonic cruise missiles. Akash air defence systems. Naval vessels. Swathi radars. Artillery systems. These are proper platforms, not just components or spare parts. When a country buys a BrahMos from India, it is buying a working weapon system with genuine capability.

Over 80 countries now buy Indian defence equipment. The buyers are mostly in Southeast Asia, the Middle East, and Africa. Traditional buyers of Russian gear looking for alternatives. Small navies that cannot afford Western systems. Countries that do not want their defence procurement tied to political conditionality.

This is where India's historical non-alignment and its current positioning pay off. India can sell to almost anyone without the baggage that comes with American or European arms deals.

The production side

Defence production hit ₹1.54 lakh crore in FY25, more than triple what it was a decade ago. The target is ₹3 lakh crore by FY29. Aggressive but grounded in the current trajectory.

The procurement shift is the bigger story. In FY25, the Ministry of Defence signed 193 contracts worth ₹2.09 lakh crore. Of these, 92% by volume and 81% by value went to Indian firms. Ten years ago those numbers were nearly reversed. About 65% of India's defence equipment is now made domestically. A decade ago, import dependence was 65-70%.

The composition has changed too. Private industry now accounts for 45% of defence exports, up from almost nothing a decade ago. DPSUs still lead at 55% but the gap is narrowing. Private companies bring different efficiencies: faster supply chains, better cost control, more aggressive marketing abroad. Bharat Forge makes artillery systems. Tata Advanced Systems makes aerospace components. L&T builds naval platforms. The list goes on.

What the export number actually means

₹38,424 crore is real money. It is about \$4.6 billion. For context, the global arms trade is roughly \$100 billion annually. India's share is around 4-5% of the global export market now. Not dominant. Respectable for a country that barely exported anything a decade ago.

The government target of ₹50,000 crore by FY29 is achievable at current growth rates. Whether the growth sustains past that depends on repeat orders, not first-time buyers.

I am more interested in the repeat customer rate than the headline number. A country importing a BrahMos battery and coming back for another one three years later tells you more than the initial deal ever could. The data on this is not public. I wish it was.

The import side

India remains the world's second-largest arms importer. That number gets lost in all the export celebration.

Russia's share of India's defence imports dropped from 70% (2011-2015) to 40% (2021-2025). France now accounts for 29%. Israel 15%. This is not a story of India reducing import dependence. It is a story of India diversifying its supplier base for geopolitical reasons.

The gap between exports (₹38,424 crore) and imports remains enormous. India still spends far more on buying weapons than selling them. That is not surprising for a country with two nuclear-armed neighbours and contested borders, but it puts the export narrative in perspective.

What the policy machine did

The structural changes are real. 75% of the capital acquisition budget is earmarked for domestic industry. Two Defence Industrial Corridors are operational in UP and Tamil Nadu. 430 iDEX contracts signed with over 600 startups and MSMEs. The negative import lists forced the military to buy Indian even when it wanted foreign gear.

These policies worked because they removed the option to import. When the army cannot buy foreign rifles, it figures out how to make Indian ones work. That is not elegant. It is effective.

The defence budget has tripled since FY14 to ₹7.85 lakh crore in FY27. That is 2% of GDP and roughly 15% of the Union Budget. The capital outlay component, which buys actual equipment rather than salaries and pensions, is ₹2.19 lakh crore and growing. That is the number that matters for the manufacturing ecosystem.

Where it gets complicated

Private companies are still cautious about capacity investment without multi-year order books. The MoD's procurement cycles are slow and unpredictable. A company that builds a factory to make artillery barrels needs assurance that orders will arrive for more than one batch.

Export customers also want maintenance and spares support for the life of the equipment. That means India needs a sustained presence in the countries it sells to. Not just sales teams in hotels. Technical teams, supply chains, training programmes. The ecosystem that supports a sale is harder to build than the sale itself.

The BrahMos success is instructive. India and Russia co-developed it. Having a partner with established export networks and credibility helped open doors. Pure Indian platforms like Akash do not have that advantage. They are winning on price and reliability, not brand.

What I think

The export story is genuine. The numbers are not manufactured. 25x growth in nine years is real growth by any measure.

The question is whether this is a structural shift or a policy-driven spike. My reading is that enough has changed on the manufacturing side that the trend has durability. Private sector participation, the startup ecosystem, the negative import lists, the diversification of import sources: these are not reversible by a change in government or a budget cut.

India will not become a top-tier arms exporter in this decade. It does not have to be. Becoming a meaningful mid-tier exporter with a distinctive niche in missiles, naval systems, and artillery is both realistic and strategically useful. Every BrahMos battery sold to a Southeast Asian navy is a relationship that deepens over decades.

The real payoff is not the export revenue. It is the domestic industrial base that exports force you to build. You cannot sell weapons abroad that your own military does not trust. Export credibility forces quality. That discipline is the most durable benefit of the whole exercise.