India’s defence sector is experiencing robust growth, underpinned by an aggressive push for indigenisation, a record order pipeline, and comprehensive government support.

According to a recent report by Nirmal Bang, the sector’s outlook remains highly positive, with the government’s focused approach on boosting domestic defence production and reducing reliance on imports serving as key catalysts for sustained expansion.

Annual defence production in India has already surpassed ₹1.27 trillion and is projected to reach ₹1.75 trillion by the end of FY25. The government has set an ambitious target to achieve ₹3 trillion in defence output by 2029, a milestone that would further cement India’s status as a major global hub for defence manufacturing.

This growth trajectory is supported by a record-breaking procurement cycle: in FY24-25, the Ministry of Defence signed 193 contracts valued at over ₹2.1 trillion—nearly double the previous record. Notably, 92% of these contracts (177 out of 193) were awarded to domestic companies, amounting to ₹1.6 trillion and representing 81% of the total contract value. This demonstrates a clear and sustained policy emphasis on fostering home-grown defence capabilities.

The Defence Acquisition Council (DAC) has also played a pivotal role, approving eight major capital acquisition proposals worth approximately ₹540 billion in FY25. These initiatives are integral to the broader agenda of modernising and upgrading the armed forces.

Among the highlighted projects, the Army will acquire a new 1,350-horsepower engine to replace the current 1,000-horsepower engine in its T-90 tanks, enhancing operational performance. For the Navy, the approval of indigenously developed Varunastra torpedoes marks a significant advancement in underwater warfare technology, strengthening India’s anti-submarine capabilities.

Looking ahead, the Ministry of Defence is expected to maintain its focus on enhancing the Indian Air Force’s fleet and capabilities, with consistent investments in indigenisation, strategic acquisitions, and expanding production capacity.

The sector’s growth is further supported by rising capital allocations in the Union Budget, with the 2024-25 defence budget reaching ₹6.22 lakh crore—a 2.5-fold increase over the past decade. Capital expenditure, which is crucial for modernisation, has grown at an average annual rate of 11% over the last five years, with a significant portion directed towards domestic procurement.

In summary, India’s defence sector is on a strong upward trajectory, driven by record orders, a robust policy framework favouring indigenisation, and substantial government investment. These factors collectively position India to become a leading global defence manufacturing hub in the years ahead.

ANI