New Delhi | Nov 20, 2025 | Sky Link Times
India’s defence sector is undergoing a major transformation, with nearly 16,000 Micro, Small and Medium Enterprises (MSMEs) emerging as crucial contributors to strengthening indigenous manufacturing capabilities, according to an official government statement released on Thursday.
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16,000 MSMEs Fueling a New Era of Defence Production
The government highlighted that companies across the spectrum—from drone manufacturers to avionics and advanced electronics developers—are playing an increasingly vital role in shaping India’s defence ecosystem.
“With 16,000 MSMEs emerging as the game-changers, India’s defence industrial foundation is expanding faster than ever,” the statement noted.
This rise reflects India’s broader push toward self-reliance under the Atmanirbhar Bharat initiative.
Record Defence Production: ₹1.54 Lakh Crore in FY25
India achieved its highest-ever defence production of ₹1.54 lakh crore in FY25 and is on track to touch ₹1.75 lakh crore in the current fiscal year.
The long-term target is even more ambitious: ₹3 lakh crore in defence production by 2029, positioning India firmly as a growing global defence manufacturing hub.
The statement also noted a 174% increase in indigenous production compared to FY15, when the value stood at ₹46,429 crore.
Industry Participation Surges With 788 Industrial Licenses
The rapid expansion of the defence sector is supported by strong private and public sector involvement.
788 industrial licenses have been issued to 462 companies, enabling greater participation in defence manufacturing. Public Sector Undertakings (PSUs) accounted for 77% of total production, while the private sector increased its share to 23%, rising by 2% year-on-year.
Exports to Over 100 Countries
India’s defence exports continued to grow, reaching over 100 countries, with FY25 exports rising by ₹2,539 crore (12.04%) compared to the previous year.
This growth is expected to accelerate, supported by the government’s goal of touching ₹50,000 crore in defence exports by 2029.
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Defence Industrial Corridors Attract Massive Investments
Two dedicated Defence Industrial Corridors—located in Uttar Pradesh and Tamil Nadu—have attracted investment commitments worth ₹9,145 crore so far.
Additionally:
289 MoUs have been signed
Projects worth ₹66,423 crore are in the pipeline as of October 2025
These corridors are expected to play a crucial role in strengthening indigenous supply chains and boosting employment.
Policy Reforms Strengthening the Sector
A series of structural reforms has accelerated the growth of India’s defence ecosystem, including:
- Simplified Defence Acquisition Procedures
- Positive indigenization lists promoting domestic procurement
- Liberalized FDI norms
- A ₹1 lakh crore Research, Development & Innovation (RDI) scheme
- Export facilitation measures to enhance global competitiveness
Meanwhile, the defence budget has risen sharply—from ₹2.53 lakh crore in 2013-14 to ₹6.81 lakh crore in 2025-26—reflecting the government’s continued emphasis on strengthening national security infrastructure.
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