Defence Exports Surge

From being the largest arms importer globally just a decade ago, India has now emerged as one of the fastest-growing defence exporters. This transition, writes Sujeet Kumar (Rajya Sabha MP from Odisha and a practising advocate) “is the outcome of a deliberate statecraft of industrial policy, procurement reform, and strategic autonomy that has quietly redefined the country’s role in the global military-industrial complex.”

The jump in exports: In 2020-21, India’s defence exports stood at Rs 8,434 crore. Four years later, in 2024–25, they reached an all-time high of Rs 23,622 crore (roughly $2.8 billion). For context, “that’s a nearly threefold increase in four years and a thirty-four-fold jump from the Rs 686 crore exported in 2013-14. This is not only a numerical feat but a structural one: India now exports defence products to over 80 countries,  including radar systems, artillery guns, missiles, offshore patrol vessels, bulletproof jackets, and electronic warfare equipment. More than the quantity, it’s the direction of movement that matters, i.e. from dependence to contribution."

Exports were from private sector: Crucially, “this is not a success owned by the public sector alone. In 2024–25, around Rs 15,233 crore worth of exports were from private sector companies, while public sector undertakings (PSUs) contributed Rs 8,389 crore. This is the clearest signal, yet, about the government’s long-standing ambition to build a dual-track defence manufacturing ecosystem; one where PSUs scale up, but private industry too innovate and compete.”

Strong political intent, institutional reform, and market signalling

This surge in exports  writes Kumar “lies in a combination of very strong political intent, institutional reform, and market signalling.”

The Defence Production and Export Promotion Policy (DPEPP), released in 2020, laid out ambitious targets to become ‘Atmanirbhar’ (self-reliance). The DPEPP “has had a measurable effect; it is not only setting benchmarks but reorganising the procedural architecture…..Similarly, the role of defence attachés was redefined – as not ceremonial observers but facilitators of Indian defence sales.

Reforms

Parallelly, writes Kumar “reforms were introduced in procurement policies. Over 75 per cent of India’s capital defence procurement budget is now earmarked  for domestic manufacturers. This move has created demand stability, enabling firms to build economies of scale. Moreover, Foreign Direct Investment (FDI) limits in the defence sector were raised to 74% through the automatic route, “sending a clear signal – India was no longer just a buyer’s market, it was open to co-development, co-production, and eventually, co-exports."

Structural overhauling of PSUs: In addition, notes Kumar "the government undertook one of the most significant defence-sector structural overhauls in decades by corporatising the Ordnance Factory Board. In place of a monolithic bureaucracy now stand serves PSUs, each with defined business verticals, from ammunition and explosives to armoured vehicles and weapons platforms. This not only brought accountability and professional management into the system but also allowed these companies to function with the autonomy required in a competitive global market.”

Private sector’s role: Equally, the “private sector’s role has been nurtured with a mix of strategic handholding and competitive opportunity. The Innovations for Defence Excellence (iDEX) programme, which is designed to fund startups and Micro, Small, and Medium Enterprises (MSMEs) with grants to develop niche defence technologies, has led to over  430 contracts  being signed as of 2025. This has allowed non-traditional actors to enter a previously closed-off ecosystem and accelerated innovation in critical domains such as munitions, anti-drone systems, and next-generation protective gear.”

Defence Industrial Corridors: The Government of India has also established  two Defence Industrial Corridors  (DICs) in the country; one in the State of Uttar Pradesh and the other in Tamil Nadu. “These corridors, backed by state and central incentives, have turned previously under-utilised regions into growing defence manufacturing clusters."

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