India’s Defence Exports

Posted 17 May 2025

Updated 23 May 2025

4 min read

Why in the News?

India's defence exports have surged to a record high of ₹23,622 crore (approx. US$ 2.76 billion) in the Financial Year (FY) 2024-25.

Sector Contribution: The private sector and Defence Public Sector Undertakings (DPSUs) have contributed Rs 15,233 crore (64.5%) and Rs 8,389 crore, respectively in defence exports of 2024-25.
- DPSUs have shown a significant increase of 42.85% in their exports in the FY 2024-25.
Trend: In the past 10 years, from 2015 to 2025, India has cumulatively exported defence goods and equipment worth ₹1,09,997 crore.
Target: India aims to increase its defence exports to ₹50,000 crore by 2029.
Export Destinations: India now exports defence equipment to over 100 countries, with the USA, France, and Armenia emerging as the top buyers in 2023-24.
Export Portfolio: Include missile systems like the Akash Surface-to-Air Missile (SAM), Advanced Towed Artillery Gun Systems (ATAGS), naval platforms such as fast attack craft and offshore patrol vessels, as well as aerospace assets like the Light Combat Aircraft (LCA) Tejas and Advanced Light Helicopters (ALH Dhruv).

Innovations for Defence Excellence (iDEX): Launched in 2018, By engaging MSMEs, startups, individual innovators, R&D institutes, and academia, iDEX has provided grants of up to ₹1.5 crore for developing innovative technologies.
Defence Industrial Corridors (DICs): Two DICs have been set up in Uttar Pradesh and Tamil Nadu to boost defence manufacturing.
Ease of Doing Business in the Defence Sector:
- Simplification of industrial licensing procedure by removal of parts and components from license regime, reducing items requiring license and extending licence validity to 15 years.
- Simplification of SOP for grant of Export Authorisation and introduction of an end-to-end digital export authorisation system.
Liberalised FDI Policy: Foreign Direct Investment (FDI) in the defence sector was liberalised in 2020 to attract foreign investment, allowing up to 74% FDI through the automatic route and above 74% through the government route.
- Since April 2000, the total FDI in defence industries stands at Rs 5,516.16 crore.
Technology Development Fund (TDF): Executed by DRDO, it aims to provide grant in aid to Indian industries, including MSMEs and Start-ups.
SRIJAN Portal: A one-stop shop online portal that provides access to vendors to take up items that can be taken up for indigenization.

Import Reliance: Indian industry is reliant on imports for critical components for defence equipment such as engines, avionics, and sensors.
Lack of R&D: There is a considerable gap in R&D for advanced technologies, including AI-driven systems, hypersonic missiles, and stealth technologies.
Competition from global players: India's defence exports encounter stiff competition from established global players like the United States, Russia, and France.
- Challenges include overcoming quality perceptions and addressing technological gaps in advanced platforms such as stealth fighters and high-end UAVs.
Bureaucratic hurdles: Regulatory hurdles, including bureaucratic gaps in procurement and project approvals, continue to impede progress.

Promoting export of complete defence systems/platforms: Countries from the African continent, South-East Asia, and the Latin American region are some of the markets for the export of complete defence systems/platforms.
- To promote exports to such nations, there may be a requirement to provide/ increase the line of credit – a financing mechanism from the EXIM bank to promote exports to such countries.
Forging long-term partnerships with upcoming defence hubs: These are countries that have shown a strong growth in their defence industry over the past few decades and now are focusing on developing indigenous capabilities, such as Australia, UAE, Saudi Arabia, South Korea, etc.
- Ministry of Defence in conjunction with domestic defence industry should identify such opportunities in these countries and assist the Indian companies to forge partnerships for joint manufacturing.
Enlarge export horizon: Indian defence manufacturers may be required to expand their presence through foreign offices in key countries, thereby increasing Indian footprint.
Focus on supplying components/sub-systems: Advanced defence equipment manufacturing nations establish their supply chains in countries with lower costs of manufacturing.
- Smaller manufacturers should thus aim to enhance their capabilities to become part of global supply chains and fulfil the offset obligations of major manufacturers.