On November 03, Defence Minister Rajnath Singh reiterated India’s target of ₹3 lakh crore in annual defence production and ₹50,000 crore in defence exports by 2029. These targets come into focus at a time when Indian defence manufacturers are finding new international markets. He has announced them twice previously in February and August 2024. At present, India’s defence budget is ₹7.84 lakh crore

Trade data reported by Bloomberg puts India’s exports at least $872 million worth of ammunition and related products to European countries in the four years following Russia's 2022 invasion of Ukraine. This is a rise of over 18 times or 1,600% from $49.2 million in the preceding four-year period. The products included artillery shells, mortar ammunition, small-calibre ammunition, propellants and explosives. 

India has also emerged as the second-largest supplier of these products to 13 Central and Eastern European countries, behind South Korea. European countries have been replenishing their ammunition stocks after supplying weapons to Ukraine. The European Union's ‘ReArm Europe’ programme aims to mobilise up to €800 billion in defence investments, which could create further opportunities for Indian manufacturers. However, sustaining these exports beyond the immediate demand generated by the war will remain important.

The broader challenge for India is the scale of expansion required to meet the 2029 targets. India's defence production reached a record ₹1.78 lakh crore in FY 2025-26, while exports stood at ₹38,424 crore. To achieve this target, defence production needs to increase by 68.5% from its current level, while exports must rise by over 30%. For a three-year period up to FY 2028-29, production would need to grow at an annual rate of nearly 19%. This is higher than the 15.6% growth recorded in FY26. 

India's defence production grew at an average annual rate of 8% between FY17 and FY25. However, achieving the ₹3 lakh crore target by FY29 will require annual growth of nearly 19%, based on the latest production figures — growing at more than double its previous growth rate.

Exports also increased by 62.66% in FY26 over the previous financial year. Maintaining export growth will depend on sustained international demand, manufacturing capacity and the ability to compete with established global suppliers.

India has expanded its manufacturing base across several defence segments — fighter aircraft, helicopters, warships, submarines, missiles, artillery systems, ammunition, radars and electronic equipment. Platforms such as the Tejas fighter aircraft, Akash air defence system, BrahMos missile and Pinaka rocket system reflect the range of products developed or manufactured domestically.

The country also has a large network of defence public sector undertakings (PSUs), private manufacturers and smaller suppliers. Over the past decade, defence production has grown 283.4% — from ₹46,429 crore in FY 2014-15 to ₹1.78 lakh crore in FY26. However, expanding the value of production will require companies to keep increasing output and developing the capacity to manufacture more complex systems.

Defence Public Sector Undertakings and other public sector entities accounted for 76% of production in FY26, while private companies contributed 24%. Their contribution to exports was considerably higher at 45.16%, amounting to ₹17,353 crore. Companies such as Larsen & Toubro, Tata Advanced Systems, Bharat Forge and Adani Defence have established operations across different areas of defence manufacturing.

However, their ability to expand will depend on long-term orders, investment in production facilities, access to technology and a stronger domestic supplier network. Smaller manufacturers and MSMEs will also need to become more deeply integrated into the supply chain. Focusing on Backward integration is key.

India continues to depend on foreign suppliers for critical technologies and components. Domestic production figures do not necessarily indicate complete technological self-reliance. Indian-designed defence platforms continue to depend on imported components, including aircraft engines and advanced radar systems. These dependencies can affect production schedules, increase costs and create vulnerabilities during supply disruptions. The development of indigenous engines, sensors, electronic systems and advanced materials will therefore be important for reducing import dependence. India has taken steps through its Positive Indigenisation Lists, which identify equipment and components to be sourced domestically. However, developing these capabilities requires sustained investment in research, testing and technology development.

India's export ambitions also depend on its ability to expand beyond conventional ammunition and equipment. Indian defence products are currently exported to more than 80 countries. BrahMos, Akash, Pinaka, artillery systems, radars and naval equipment offer opportunities in different international markets. However, India faces competition from established defence exporters such as the United States, Russia, France, Israel and South Korea. Buyers also consider product quality, delivery schedules, maintenance support, financing and technology transfer before entering long-term defence agreements. Building these capabilities over the years will be as important as securing new export orders.

The government has increased the defence research and development allocation and opened 25% of the DRDO's R&D budget to industry, startups and academia. Defence industrial corridors in Uttar Pradesh and Tamil Nadu are also intended to strengthen manufacturing and investment. These initiatives can support the expansion of the domestic industrial base. However, their impact will depend on how effectively research is translated into commercially viable products and how quickly companies can scale up production.

Savio Rodrigues

Savio Rodrigues is a Research Analyst at Escape Velocity MediaWorks Pvt Ltd and writes for Chakra News on Defence, Geopolitics, National Security. He holds a Master’s degree in International Relations from the University of Mumbai.