10. India’s Defence Exports: Achieving Record Growth and Self-Reliance

The Indian defence sector has reached a historic milestone, with exports surging to an all-time high of ₹38,424 crore in the financial year 2025-26. This represents a remarkable 62.66% growth over the previous fiscal year, reflecting India’s transition from a leading arms importer to an emerging global manufacturing hub. Driven by both Defence Public Sector Undertakings (DPSUs) and the private sector, this surge underscores the success of the \'Aatmanirbhar Bharat\' initiative and the increasing global trust in indigenous Indian defence technologies. Core Summary of the Achievement • Historic Export Figure: India’s defence exports reached ₹38,424 crore in FY 2025-26, an increase of ₹14,802 crore from the ₹23,622 crore recorded in the previous year. • Diversified Contribution: DPSUs accounted for 54.84% (₹21,071 crore) of the exports, while the private sector contributed 45.16% (₹17,353 crore), showcasing a collaborative ecosystem. • Exponential 5-Year Growth: The current export figures indicate a nearly threefold increase in defence exports over the last five years, highlighting a sustained upward trajectory. • Global Footprint: India now exports defence equipment to more than 80 countries, indicating high global acceptance for Indianmade systems, sub-systems, and advanced manufacturing capabilities. • Policy Streamlining: The Ministry of Defence has facilitated this growth by revamping online portals, simplifying Standard Operating Procedures (SOPs), and streamlining regulatory processes for faster authorizations. • Rise in Exporters: The number of defence exporters increased to 145 in the current fiscal from 128 in the previous year, marking a 13.3% rise and deepening the industrial base. Key Definitions • DPSUs (Defence Public Sector Undertakings): Government-owned entities involved in the production of defence equipment (e.g., HAL, BEL, Mazagon Dock). • AoN (Acceptance of Necessity): The first step in the defence procurement process where the government formally acknowledges the requirement for a specific equipment or technology. • Capital Outlay: Funds allocated specifically for the purchase of new hardware, weapons, and infrastructure, as opposed to revenue expenditure (salaries/maintenance). Constitutional & Legal Framework • Article 51A (h): Encourages the development of scientific temper and the spirit of inquiry, which serves as the fundamental basis for indigenous R&D and self-reliance in high-technology sectors. • Defence Acquisition Procedure (DAP) 2020: The primary legal framework governing the procurement of defence equipment, which prioritizes \'Buy (Indian-IDDM)\' to promote indigenous design and manufacturing. • Seventh Schedule (Union List): Defence (Entry 1) and Arms/Ammunition (Entry 5) fall under the exclusive domain of the Central Government, providing the legal basis for Union-led export policies. • FDI in Defence: The government allows up to 74% FDI under the automatic route and 100% via the government route in the defence sector to attract global technology and investment. Important Keypoints & Statistics • DPSU Performance: DPSU exports saw a massive surge of 151% compared to the previous year, whereas private firm exports grew by 14%. • Procurement Momentum: In FY 2025-26, AoN was accorded for 109 proposals worth ₹6.81 lakh crore, nearly doubling from the previous year’s approved proposals. • Budgetary Utilization: The Defence Ministry fully utilized its capital outlay of ₹1.86 lakh crore for FY 2025-26, ensuring that sanctioned funds were translated into actual procurement and manufacturing. • Self-Reliance (Aatmanirbharta): The milestone showcases India as a successful global partner for complex systems, reducing strategic dependency on foreign nations. Conclusion The unprecedented growth in defence exports signifies a paradigm shift in India’s strategic and economic positioning. By fostering a robust partnership between the public and private sectors and simplifying bureaucratic hurdles, India has moved closer to its goal of being among the top global defence exporters. This \'Made in India\' momentum not only strengthens the national economy through foreign exchange earnings but also enhances India’s strategic influence as a reliable security partner in the Global South. UPSC Relevance • GS Paper III (Internal Security & Economy): Highly relevant for topics like \'Indigenization of Technology,\' \'Defence Procurement,\' and \'Aatmanirbhar Bharat.\' • GS Paper II (International Relations): Important for \'Defence Diplomacy\' and India’s role as a net security provider in the Indo-Pacific and beyond.