Key Details
The Ministry of Defence’s twelve-year review tracks the expansion of defence spending, domestic manufacturing, exports, research investments, and procurement reforms under the Atmanirbhar Bharat and Make in India initiatives.
Indicator | 2014 Position | Latest Position |
|---|---|---|
Defence Budget | ₹2.53 lakh crore (FY2013–14) | ₹7.85 lakh crore (FY2026–27) |
Capital Expenditure | ₹94,588 crore (FY2014–15) | ₹2.19 lakh crore (FY2026–27) |
Defence Production | ₹84,643 crore (FY2020–21) | ₹1.78 lakh crore (FY2025–26) |
Defence Exports | ₹686 crore (FY2013–14) | ₹38,424 crore (FY2025–26) |
Export Destinations | Limited | 80+ countries |
Exporting Firms | Limited | 145 firms |
Key Reform Milestones
Defence exports increased by more than 5,500% between FY2013–14 and FY2025–26.
Domestic defence production reached ₹1.78 lakh crore in FY2025–26, growing 15.6% over the previous year.
Private industry contributed 24% of total defence production.
R&D allocation increased to ₹29,100 crore in FY2026–27.
25% of defence R&D funding has been earmarked for industry, startups and academia.
676 startups have participated through the iDEX innovation ecosystem.
5,012 items have been covered under Positive Indigenisation Lists to reduce import dependence.
Uttar Pradesh and Tamil Nadu Defence Corridors together attracted over ₹74,000 crore in investment commitments.
Summary
Defence Manufacturing and Exports Have Expanded Significantly
The review highlights a major expansion in India’s defence industrial base over the last decade. Domestic defence production reached ₹1.78 lakh crore in FY2025–26, more than doubling from FY2020–21 levels, while defence exports rose from ₹686 crore in FY2013–14 to ₹38,424 crore in FY2025–26, making India an exporter of military equipment to more than 80 countries. The growth reflects a sustained push towards indigenous manufacturing under Atmanirbhar Bharat and Make in India.
Procurement Reforms Have Increased Domestic Participation
The Ministry attributes much of this growth to reforms in defence acquisition and procurement. Measures introduced through the Defence Procurement Procedure (2016), Defence Acquisition Procedure (2020) and subsequent reforms have prioritised domestic sourcing and simplified procurement processes. The government’s Positive Indigenisation Lists, covering 5,012 items, have progressively restricted imports and encouraged local production by public and private firms.
Defence Innovation Ecosystem Is Expanding
The report highlights growing participation from startups, MSMEs and academic institutions. Through iDEX, 676 startups have engaged with defence innovation programmes, while the ADITI scheme and Technology Development Fund (TDF) have expanded funding support for emerging technologies. Defence R&D spending has increased to ₹29,100 crore, with a dedicated share reserved for non-government innovators.
Industrial Corridors and Strategic Partnerships Support Growth
The review also points to the emergence of defence manufacturing clusters in Uttar Pradesh and Tamil Nadu, alongside deeper international defence partnerships with countries including the United States, France, Japan, Russia, Australia and the UAE. These partnerships increasingly combine defence procurement with technology cooperation, co-development and industrial collaboration.
What is a Positive Indigenisation List?
A Positive Indigenisation List is a Ministry of Defence notification that identifies military equipment, components and systems that must be procured from domestic sources after a specified date. The objective is to reduce import dependence, encourage local manufacturing, strengthen domestic supply chains and expand India’s defence industrial capabilities.
Policy Relevance
Strengthens defence self-reliance: Expanding domestic manufacturing reduces dependence on foreign suppliers for critical military equipment.
Supports high-technology industries: Increased R&D spending and startup participation can accelerate innovation in areas such as aerospace, advanced materials, electronics and defence systems.
Boosts manufacturing and exports: Rising defence exports create new opportunities for Indian firms in global markets.
Encourages private-sector participation: Procurement reforms and indigenisation policies are expanding opportunities beyond traditional defence public sector enterprises.
Strengthens strategic autonomy: Greater domestic production capacity can improve resilience during geopolitical disruptions and supply-chain shocks.
Relevant Question for Stakeholders: How can India sustain growth in defence manufacturing and exports while ensuring that domestic innovation, private-sector participation and technology development continue to move up the value chain?
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