India's concerted push for indigenisation in defence manufacturing has resulted in significant growth over the last decade. Defence production has surged 2.6 times, rising from Rs 46,429 crore in FY15 to Rs 1.27 lakh crore in FY24, according to official data. The government has set a target of Rs 1.6 lakh crore for the current fiscal year and aims to achieve Rs 3 lakh crore in defence production by 2029.

The pace of growth in defence production has accelerated in recent years, particularly after the pandemic. Between 2019-20 and 2023-24, the sector registered a compounded annual growth rate (CAGR) of 12 percent, compared to 11.2 percent during the first term of the current government. This momentum reflects the success of India’s efforts to achieve self-reliance in defence equipment manufacturing.

Prime Minister Narendra Modi underscored the importance of indigenisation during the commissioning of three major naval combatants on January 15. These warships, including INS Surat and INS Nilgiri, were developed with significant contributions from indigenous sources. For instance, INS Surat boasts three-quarters of its components sourced domestically, while INS Nilgiri was designed by the Indian Navy’s Warship Design Bureau.

India’s rise as a defence manufacturer is further evident in its export achievements. Defence exports have expanded dramatically from Rs 1,900 crore in FY15 to Rs 21,083 crore in FY24, marking a 33 percent increase over the previous year. Over the past two decades, exports have grown 21 times, from Rs 4,312 crore during 2004-05 to 2013-14, to Rs 88,319 crore between 2014-15 and 2023-24.

Despite these advancements, public sector undertakings (PSUs) continue to dominate the defence production landscape. The share of PSUs in total production increased from 54.6 percent in 2016-17 to 58.4 percent in 2023-24. However, private sector participation has remained largely stagnant, accounting for 19-21 percent of total production over the same period. The share of new defence PSUs has also declined, dropping from 20 percent to 15.3 percent since 2016-17.

India’s growing defence manufacturing capabilities not only meet the country’s strategic needs but also enhance its stature as a significant exporter of military equipment. With the government’s focus on modernisation, innovation, and domestic production, India is making rapid strides toward self-reliance in this crucial sector.