Introduction

India's defence sector has undergone a significant transformation towards self-reliance, technological capability, and global credibility. This shift reflects the nation's commitment to reducing import dependence and building a robust domestic defence industrial base.

Defence Budget and Investment

Budgetary Growth

  • Defence budget: Increased from ₹2.53 lakh crore (2013-14) to ₹7.85 lakh crore (2026-27) — 3.1-fold growth
  • Capital expenditure: Rose from ₹94,587.95 crore (2014-15) to ₹2.19 lakh crore (2026-27) — 2.3-fold growth
  • Higher capital expenditure supports sustained modernisation of Armed Forces

R&D Investment

  • Defence R&D allocation: From ₹13,716.14 crore (2014-15) to ₹29,100.25 crore (2026-27) — 112% growth
  • Since 2022-23, 25% of defence R&D budget opened to industry, start-ups, and academia
  • Defence Testing Portal (DTP): Provides access to 24 DRDO laboratory testing facilities

Indigenous Defence Production

Production Milestones

  • Record defence production of ₹1.78 lakh crore in FY 2025-26
  • Public-sector: 76% of production
  • Private-sector: 24% of production
  • Growth driven by Atmanirbhar Bharat initiative

Future Targets (by 2029)

  • Annual defence production: ₹3 lakh crore
  • Defence exports: ₹50,000 crore

Defence Exports

Export Growth

  • Exports increased from ₹686 crore (2013-14) to ₹38,424 crore (2025-26) — 56-fold growth
  • Exports to 80+ countries
  • Value increased by 5,500%+ over 12 years

Sectoral Contribution (FY 2025-26)

  • Private sector: ₹17,353 crore (45.16%)
  • DPSUs: ₹21,071 crore (54.84%)

Defence Acquisition Reforms

Key Bodies and Procedures

  • Defence Acquisition Council (DAC): Apex procurement body advancing Atmanirbhar Bharat
  • AoN worth over ₹6 lakh crore accorded for DRDO-designed systems

Major Indigenous Acquisitions

  • 97 Tejas Mk-1A fighter aircraft: ₹62,000 crore
  • 156 LCH Prachand helicopters: ₹62,700 crore
  • DAP 2020: Strengthened indigenous procurement and domestic manufacturing
  • DPM 2025: Streamlined ₹1 lakh crore revenue procurement
  • Draft DAP 2026: Aims to raise indigenous content to 60%

Innovation Schemes

iDEX (Innovations for Defence Excellence)

  • Outlay: ₹498.78 crore
  • Engaged 676 start-ups, MSMEs, and innovators
  • 551 design and development contracts as of March 2026

ADITI Scheme

  • Outlay: ₹750 crore (2023-24 to 2025-26)
  • Financial support through Defence Innovation Organisation
  • Accelerates development of critical defence technologies

Technology Development Fund (TDF)

  • Grants up to ₹50 crore for critical technology development
  • 80 projects worth ₹334 crore under implementation (June 2026)
  • Additional ₹500 crore corpus for deep-tech and emerging technologies

Technology Transfer and Industrial Base

DRDO Framework

  • 134 partner companies under Development-cum-Production Partner framework
  • 2,180 technology-transfer agreements signed
  • 2,780+ DRDO IPRs opened for industry use

Indigenisation Initiatives

  • 10 Positive Indigenisation Lists notified (by May 2026)
  • 5,521 items covered to promote domestic sourcing
  • Srijan-DEEP Platform: 41,000+ vendors, 2.7 lakh products

Defence Industrial Corridors

  • Uttar Pradesh: ₹42,057 crore committed, ₹4,409 crore grounded (April 2026)
  • Tamil Nadu: ₹32,699 crore committed, ₹6,446 crore realised
  • BrahMos Facility, Lucknow: Manufacturing advanced missiles

Ease of Doing Business

  • Industrial licence validity extended to 18 years (from 7+3 years)
  • Lifetime validity available under Arms Act
  • Revamped Defence Exim Portal: End-to-end processing, automated verification, real-time tracking
  • FDI limit: 74% (Automatic Route), up to 100% (Government Route)
  • Cumulative FDI inflows: ₹6,670.59 crore (by March 2026)

Operational Capabilities

Ammunition Self-Sufficiency

  • Indian Army achieved 91% self-sufficiency
  • 159 of 175 ammunition variants indigenised

Missile Systems

  • Agni-4 and Agni-5 successfully tested
  • TARA Glide Weapon and RudraM-II air-to-surface missiles demonstrated
  • Kusha Long Range Air Defence Missile
  • VSHORADS (Very Short Range Air Defence System)
  • Hypersonic technology: 12-minute ground test of actively cooled scramjet combustor

Naval Capabilities

  • 12 warships and submarines commissioned (INS Surat, INS Nilgiri, INS Vaghsheer)
  • INS Mahendragiri: Stealth frigate with 75%+ indigenous content
  • SHACHI: First of 11 Next Generation Offshore Patrol Vessels
  • Naval Anti-Ship Missile–Medium Range successfully tested

Conclusion

India's defence transformation reflects a decisive shift towards self-reliance, technological capability, and global credibility. With continued investment and innovation, India is well-positioned to emerge as a technologically advanced defence power by 2047.

Constitutional and Policy Framework

  • Atmanirbhar Bharat Abhiyan: Driving indigenous defence manufacturing
  • Make in India: Foundation for defence industrial growth
  • Defence Research and Development Organisation (DRDO): Core of indigenous technology development
  • Ministry of Defence: Policy formulation and acquisition management