India's Defence Production Hits Record High of Rs 1.78 Lakh Crore in FY26

NEW DELHI: India's defence production touched an all-time high of Rs 1.78 lakh crore in the financial year 2025-26, registering a 15.6% increase from Rs 1.54 lakh crore in the previous fiscal and more than doubling from Rs 84,643 crore recorded in 2020-21, the government said on Tuesday.

According to data released by the ministry of defence, indigenous defence production has nearly quadrupled over the last decade, rising from Rs 43,746 crore in 2013-14 to the current record level, underscoring New Delhi's push for self-reliance under the Aatmanirbhar Bharat initiative.

The surge in domestic manufacturing comes months after the Union Budget 2026 allocated a record Rs 7.85 lakh crore for defence, including Rs 2.19 lakh crore earmarked for military modernisation and capital acquisitions across the Army, Navy and Air Force.

Government figures show Defence Public Sector Undertakings (DPSUs) and other public sector units accounted for around 76% of total defence production during FY 2025-26, while the private sector contributed 24%, up from 22% in the previous year. Private sector production reached an all-time high of around Rs 42,000 crore, reflecting its growing role in India's defence industrial ecosystem.

The ministry said the expansion in domestic manufacturing also helped India achieve record defence exports worth Rs 38,424 crore during FY 2025-26.

In a post on X, defence minister Rajnath Singh attributed the achievement to the government's focus on indigenous manufacturing and credited Prime Minister Narendra Modi's leadership for the growth. Singh said the rise in production reflected the expansion of India's defence industrial base and praised the efforts of the Department of Defence Production, public sector units and private industry for reaching the milestone. He added that with continued policy support, increasing private-sector participation and growing export opportunities, the sector is expected to maintain its growth trajectory in the coming years.

Modernisation pipeline worth lakhs of crores

The production milestone comes as India prepares to undertake some of its biggest defence acquisition programmes in decades. Among the largest projects under consideration is a proposed Rs 3.25 lakh crore deal for 114 Rafale fighter jets, which would become India's largest-ever defence procurement programme if approved.

The proposal envisages large-scale manufacturing in India with progressively increasing indigenous content.

At the same time, New Delhi continues to hold discussions with Russia regarding the fifth-generation Su-57 fighter while maintaining its long-term focus on indigenous platforms such as the LCA Tejas Mk1A and the Advanced Medium Combat Aircraft (AMCA).

The Indian Air Force is also preparing for large-scale induction of 97 additional Tejas Mk1A fighters, while Hindustan Aeronautics Limited has expanded production capacity to increase annual output.

Project 75(I) and naval expansion

India's maritime modernisation plans are also gathering momentum with the proposed Project 75(I) submarine programme.

The government is expected to move ahead with an estimated $8 billion deal with Germany's ThyssenKrupp Marine Systems and Mazagon Dock Shipbuilders Ltd to build six next-generation conventional submarines in India.

The project, which focuses on air-independent propulsion-equipped submarines, is aimed at strengthening India's undersea capabilities amid increasing Chinese and Pakistani naval activity in the Indian Ocean region.

In parallel, the Indian Navy is preparing to induct the country's first weaponised unmanned fast interceptor crafts developed by Pune-based Sagar Defence Engineering, marking a significant step towards autonomous maritime warfare and network-centric operations.

Push for indigenous systems

The defence ministry has also accelerated procurement of indigenous weapons, drones, missiles, helicopters and air-defence systems.

Recent approvals by the Defence Acquisition Council include acquisitions worth more than Rs 3.84 lakh crore covering missiles, electronic warfare systems, drones, artillery, armoured vehicles and air-defence platforms.

The government has also prioritised procurement of 156 Light Combat Helicopter Prachand platforms for the Army and Air Force, expansion of drone fleets, counter-drone systems and a range of naval platforms.

India's missile manufacturing ecosystem has also expanded with the BrahMos Integration and Testing Facility in Lucknow commencing dispatches, while ammunition indigenisation programmes worth nearly Rs 15,900 crore are expected to significantly reduce import dependence by 2027-28.

According to official figures, 193 defence contracts worth over Rs 2.09 lakh crore were signed during 2024-25, with 92% awarded to domestic industry, reflecting the government's broader push to strengthen indigenous manufacturing capabilities.

The record production figures, coupled with rising exports, growing private-sector participation and an expanding procurement pipeline, indicate that India's defence industrial base is entering its most ambitious phase of growth since independence.