Rubix Data Sciences has released its latest Rubix Industry Insights: Defence report, highlighting a major transformation in India’s defence sector over the past decade, driven by rising domestic production, expanding exports, and increasing self-reliance in military manufacturing. According to the report, India’s domestic defence production reached a record INR 1.54 trillion in FY2025, representing more than threefold growth from FY2015 levels. The government has set an ambitious target of INR 3 trillion in defence production by FY2029, supported by sustained policy initiatives and increased localisation.
India’s defence budget has also expanded significantly, tripling since FY2014 to reach INR 7.85 trillion in FY2027. The allocation now represents the largest share among all Union Ministries, accounting for nearly 14.7% of the Union Budget.
The report attributes much of this growth to the government’s increasing focus on domestic procurement. During FY2025, the Ministry of Defence signed 193 contracts valued at INR 2.09 trillion, with 92% of contracts by volume and 81% by value awarded to Indian companies. Around 65% of defence equipment used in India is now manufactured domestically, marking a major shift from the 65–70% import dependence seen a decade ago.
India’s defence exports have also witnessed exceptional growth. Exports reached an all-time high of INR 384 billion in FY2026, recording a 63% increase over the previous year and a 25-fold rise since FY2017. The government is targeting defence exports of INR 500 billion by FY2029.
Indian defence products are now being supplied to more than 80 countries and include systems such as BrahMos missiles, Akash air defence systems, naval platforms, Swathi radar systems, and artillery equipment.
The report also noted changes in India’s defence import landscape. While India remains the world’s second-largest arms importer, sourcing patterns are shifting. Russia’s share in India’s defence imports has declined from 70% during 2011–2015 to 40% during 2021–2025. France has emerged as the second-largest supplier with a 29% share, followed by Israel at 15%.
Private sector participation in the defence ecosystem has also strengthened steadily. Private companies accounted for 23% of total production in FY2025, up from 19% in FY2017, and contributed nearly 45% of total defence exports in FY2026. Additionally, around 16,000 MSMEs and more than 1,000 defence start-ups are now active within the sector.
Commenting on the findings, Mohan Ramaswamy, Co-founder and CEO of Rubix Data Sciences, said India’s defence ecosystem is becoming more resilient as domestic manufacturing capacity expands and supply chain capabilities deepen. He added that strengthening indigenous production capabilities will remain critical for long-term national security and strategic independence.
The report also highlighted key challenges, including continued dependence on imported technologies such as jet engines and advanced sensors, lower R&D intensity, and exposure to global supply chain disruptions. However, ongoing policy support through initiatives such as DAP 2020, Defence Industrial Corridors, the iDEX programme, and the Positive Indigenisation List is expected to continue driving long-term sector growth.
