India's defence manufacturing sector has achieved an unprecedented milestone, with domestic production climbing to a record Rs 1.8 trillion (Rs 1.8 lakh crore) in fiscal year 2026. This significant growth, highlighted in a report released Wednesday by Emkay Global Financial Services, signals the nation's strategic move towards greater self-reliance and global expansion in defence equipment and systems.
This impressive output marks a 15.6 percent year-on-year increase, representing an approximate 18 percent Compound Annual Growth Rate since FY21. The surge is attributed to several key factors: a structural evolution in government procurement policies, increased involvement from the private sector, enhanced indigenous design capabilities, and a robust pipeline of major defence programmes.
Complementing this domestic success, defence exports experienced a 63 percent jump, reaching approximately Rs 380 billion. This reinforces India's burgeoning status as a global supplier, exporting defence products to over 80 countries, with the United States, France, and Armenia emerging as prominent buyers. The government has articulated ambitious targets for FY29, aiming for Rs 3 trillion in defence production and Rs 500 billion in exports.
The national indigenisation drive continues to broaden opportunities for local manufacturers. Five positive indigenisation lists have identified 5,012 critical items, with 3,025 already successfully indigenised. Furthermore, the Srijan portal has facilitated the indigenisation of over 13,900 out of 38,000 identified items. For FY27, 75 percent of the nearly Rs 1.4 trillion modernisation budget has been specifically allocated for domestic industry. The private sector's contribution to overall defence production grew from 22 percent in FY25 to 24 percent in FY26, amounting to around Rs 420 billion.
This expanding role is transforming private companies' engagement across the defence value chain. Indian firms are evolving beyond the traditional Build-to-Print model, now embracing Build-to-Specification, Build-to-Design, and Build-to-Requirements capabilities. Many private players are also developing Lead System Integrator expertise. With a defence capital outlay of approximately Rs 1.9 trillion for FY27, a 24
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đŸ“° Source: Mangalorean News