India's Defence Sector Transformation and Achievements

India's defence sector has undergone significant transformation over the past decade, emerging as a stronger, more self-reliant, and globally credible force. Guided by the Atmanirbhar Bharat initiative, sustained reforms, investment, and indigenous innovation have substantially strengthened defence capabilities while significantly expanding the domestic defence industrial base.

Defence Investment and Budget Growth

The defence budget has shown remarkable growth, increasing 3.1-fold from ₹2.53 lakh crore in 2013–14 to ₹7.85 lakh crore in 2026–27. Capital expenditure specifically grew 2.3-fold from ₹94,587.95 crore in 2014–15 to ₹2.19 lakh crore in 2026–27, enabling sustained modernization of military capabilities.

Defence Production and Export Performance

Defence production reached a record ₹1.78 lakh crore in 2025–26, with 76% coming from public-sector entities and 24% from the private sector. Defence exports demonstrated extraordinary growth, increasing 56-fold from ₹686 crore in FY2013–14 to ₹38,424 crore in FY2025–26. Exports now reach over 80 countries, representing a growth of over 5,500% in twelve years. The private sector contributed ₹17,353 crore (45.16%) of defence exports in FY2025–26, while Defence Public Sector Undertakings contributed ₹21,071 crore (54.84%). The government has set ambitious targets of ₹3 lakh crore in annual defence production and ₹50,000 crore in exports by 2029.

Research and Development Initiatives

Defence R&D allocation increased by over 112% from ₹13,716.14 crore in 2014–15 to ₹29,100.25 crore in 2026–27. Since 2022–23, 25% of the defence R&D budget has been opened to industry, start-ups, and academia. Testing facilities across 24 DRDO laboratories are accessible through the Defence Testing Portal (DTP), a digital platform that allows domestic manufacturers, startups, and industries to request paid access to specialized government testing infrastructure.

Acquisition Reforms and Indigenous Procurement

The Defence Acquisition Council (DAC) has driven indigenous acquisitions through Acceptance of Necessity (AoN) for over ₹6 lakh crore of DRDO-designed, Indian industry-manufactured systems. Major indigenous acquisitions include 97 Tejas Mk-1A fighter jets worth ₹62,000 crore and 156 LCH Prachand helicopters worth ₹62,700 crore. The Defence Acquisition Procedure (DAP) 2020 strengthened indigenous procurement and domestic manufacturing, while Defence Procurement Procedure (DPP) 2016 streamlined acquisitions. Defence Procurement Manual (DPM) 2025 streamlined nearly ₹1 lakh crore in revenue procurement with faster approvals and relaxed penalties for indigenous projects. Draft DAP 2026 proposes simpler acquisition categories, stronger support for indigenous design and development, and indigenous content requirements of up to 60%.

Innovation and Technology Development

The Innovations for Defence Excellence (iDEX) scheme with a ₹498.78 crore outlay engaged 676 startups, MSMEs, and innovators, resulting in 551 design and development contracts as of March 2026. The ADITI Scheme approved with a ₹750 crore outlay (2023–24 to 2025–26) provides financial support through the Defence Innovation Organisation to accelerate innovative defence technologies. The Technology Development Fund provides grants of up to ₹50 crore for critical defence technology development, with 80 projects worth ₹334 crore under implementation as of June 2026, plus an additional ₹500 crore corpus sanctioned for deep technology and emerging technologies.

Technology Transfer and Industrial Participation

DRDO's Development cum Production Partner framework transferred technologies to 134 partner companies, with 2,180 technology transfer agreements signed and over 2,780 IPRs opened for industry use as of March 2026. Ten Positive Indigenisation lists (five each of DMA & DDP) covering 5,521 items were notified by May 2026. The Srijan Defence Equipment Empowerment Platform (DEEP) digital repository listed over 41,000 vendors and 2.7 lakh products by May 2026, strengthening domestic supply chains.

Industrial Corridors and Infrastructure Development

The Uttar Pradesh Defence Industrial Corridor attracted ₹42,057 crore in investment commitments with ₹4,409 crore grounded by April 2026. The Tamil Nadu Defence Industrial Corridor attracted ₹32,699 crore with ₹6,446 crore realised. The BrahMos Integration & Testing Facility in Lucknow has begun manufacturing missiles.

Ease of Doing Business and Foreign Investment

Industrial licence validity was extended from 7 (+3) years to 15 (+3, up to 18) years, with lifetime validity now granted under the Arms Act. The revamped Defence Exim Portal enables end-to-end application processing, automated company verification, simplified registration, real-time tracking, and secure payment integration. The FDI limit in the defence sector was increased to 74% under the Automatic Route and up to 100% via the Government Route, attracting ₹6,670.59 crore in inflows by March 2026.

Operational Achievements and Indigenous Capabilities

The Indian Army achieved approximately 91% self-sufficiency by indigenising 159 out of 175 ammunition variants. India successfully tested the Agni-4 Intermediate Range Ballistic Missile and Agni-5 Long Range Surface-to-Surface Ballistic Missile, validating operational and technical parameters. The TARA Glide Weapon and RudraM-II air-to-surface missile demonstrated indigenous precision-strike capabilities. DRDO advanced multiple indigenous systems including the Kusha Long Range Air Defence Missile and Very Short-Range Air Defence System (VSHORADS), and successfully tested an integrated air-defence system combining missile interceptors, short-range weapons, and laser technologies. A 12-minute ground test of an actively cooled scramjet combustor was conducted, supporting hypersonic missile development.

Maritime Defence Advancements

The Indian Navy commissioned 12 warships and submarines including INS Surat, INS Nilgiri, and INS Vaghsheer. INS Mahendragiri stealth frigate entered service with over 75% indigenous content. SHACHI, the first of 11 Next Generation Offshore Patrol Vessels, was launched. INS Dunagiri, INS Sanshodhak, and INS Agray were commissioned, completing the indigenous Sandhayak-class survey fleet. DRDO successfully tested the Naval Anti-Ship Missile–Medium Range and demonstrated multi-layered Ballistic Missile Defence capability.