India’s defence manufacturing sector is entering an important phase, with renewed emphasis on indigenous technology, research and development (R&D), private sector participation and the ability to scale up production when national security demands it. Hon’ble Defence Minister Shri Rajnath Singh has called on Indian defence manufacturers to strengthen these capabilities as the country looks to expand its role in the global defence market.
Speaking at the Society of Indian Defence Manufacturers (SIDM) Champion Awards 2026 in New Delhi on October 9, the Minister highlighted the importance of developing and controlling the technologies and equipment required by the armed forces. His remarks came as India’s defence exports reached a record ₹38,424 crores in the financial year 2025-26, according to the Ministry of Defence. The government has set a target of ₹50,000 crores in defence exports by 2029.
The announcement raises a broader question for the industry: can India build on its export growth by expanding domestic technological capabilities, improving manufacturing readiness and encouraging more private investment?
Defence Manufacturing: Why the Focus Is Shifting to Indigenous Capabilities
A country’s defence industrial strength depends on more than its ability to procure military equipment. The capacity to design, develop, manufacture and maintain critical technologies can also influence operational preparedness and the ability to respond to changing security requirements.
At the SIDM event, Singh stressed that national security increasingly depends on India’s ability to develop and control the technologies and equipment needed by its armed forces.
The emphasis on indigenous capabilities covers several areas, including product design, advanced electronics, drones, missiles, air defence systems, software and communications technologies. These capabilities are becoming increasingly important as military operations rely on a wider range of connected and rapidly evolving technologies.
Building these capabilities at home can also create opportunities for Indian manufacturers, engineering companies, research institutions, startups and component suppliers. However, converting that potential into sustained industrial growth requires investment, technical expertise, quality standards and reliable production systems.
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India’s Defence Exports Reach ₹38,424 Crore
According to the Ministry of Defence, India’s defence exports reached ₹38,424 crores in FY 2025-26, registering growth of more than 60% over the previous financial year. The milestone reflects the growing role of Indian companies in supplying defence-related products and equipment to international markets. It also provides a significant backdrop to the government’s target of increasing defence exports to ₹50,000 crores by 2029.
Achieving that target will require manufacturers to compete on product quality, reliability, technology and delivery capabilities, alongside pricing. Export growth also depends on meeting the technical and regulatory requirements of overseas customers and building confidence in the long-term support of supplied equipment.
The export figure is an important measure of the industry’s progress, but it does not by itself indicate how much domestic manufacturing capacity, research investment or technological independence has increased. Those areas will also matter as India seeks to strengthen its defence industrial base.
Can Private Industry Power India’s Defence Ambitions?
One of the key messages at the SIDM Champion Awards 2026 was the need for greater private sector participation in defence production.
Singh recalled his earlier call to increase the private sector’s share of India’s total defence production from approximately 24% to 50%. He said the private sector’s contribution had grown significantly over the preceding 12 years and urged industry leaders to establish progressive milestones towards that objective.
A larger private sector role could broaden the pool of manufacturers, engineering capabilities and technologies available to the defence ecosystem. It could also create more opportunities for micro, small and medium enterprises (MSMEs) and startups to supply components, develop specialized products and collaborate with larger defence companies.
For this expansion to be sustainable, companies need clarity on procurement requirements, opportunities to demonstrate their products, access to testing facilities and predictable pathways from development to production. Quality assurance, safety and accountability remain essential, particularly where equipment is intended for military use.
The government has meanwhile stated that it will continue supporting the industry’s growth while maintaining the required standards of regulation, safety, quality and accountability.
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R&D Investment Could Shape the Next Defence Breakthrough
Research and development is another priority highlighted by the Defence Minister. He urged manufacturers to view R&D expenditure as an investment in operational preparedness, competitiveness and national security.
The argument is particularly relevant as military technologies continue to evolve. Drones, missiles, air defence systems and advanced software and communications technologies require continuous development, testing and improvement.
Sustained investment in R&D can help Indian manufacturers develop proprietary technologies, enhance product performance and reduce dependence on imported systems wherever domestic alternatives are viable. It can also enable companies to move beyond producing existing equipment and focus on creating advanced solutions that address emerging defence requirements.
However, research investment does not automatically translate into commercially successful or operationally effective equipment. New systems must undergo rigorous testing, meet military specifications and demonstrate reliability under demanding conditions. Collaboration among industry, academia, research organizations and the armed forces can help bridge the gap between an initial concept and a deployable product.
Can India Scale Up Defence Production When It Matters?
The ability to expand manufacturing quickly during periods of heightened operational demand was another issue raised at the event.
Referring to Operation Sindoor, the Defence Minister highlighted the importance of ensuring that domestic manufacturing facilities can rapidly increase production when required. He called on the industry to develop innovative ways to expand capacity and respond to changing operational needs.
This presents a challenge beyond installing additional machinery or increasing factory space. Manufacturers also need dependable supply chains, access to specialized components, trained workers, testing infrastructure and production processes that can maintain quality as output rises.
Smaller suppliers are part of this equation. A delay in a critical component can affect the output of an entire production line, making supply-chain resilience an important consideration for the wider defence ecosystem.
Building surge capacity therefore involves preparing production systems before an emergency occurs. Manufacturers must balance the cost of maintaining spare capacity against the need to respond quickly when demand changes.
Policy Support for India’s Defence Industry
The Ministry of Defence identified several policy initiatives intended to expand the capabilities of India’s private defence industry. These include the Defence Acquisition Procedure, Defence Procurement Manual, Positive Indigenization Lists, the SRIJAN portal and Innovations for Defence Excellence (iDEX).
Together, these initiatives form part of the policy framework through which the government seeks to encourage domestic manufacturing, identify opportunities for import substitution and support innovation. Their practical impact depends on how effectively companies can participate, develop viable products and move from development to procurement and production.
Established in 2017, the Society of Indian Defence Manufacturers provides a platform representing large enterprises, MSMEs, startups, academia and foreign original equipment manufacturers. Its role includes facilitating dialogue between industry and policymakers on the development of India’s defence industrial ecosystem.
At the 8th SIDM Annual Session, a total of 15 Champion Awards recognized organizations for achievements in indigenous technology development, product innovation, design, import substitution, manufacturing excellence and exports.
What Comes Next for Defence Manufacturing in India?
India’s defence industrial ambitions now involve several connected objectives: expanding exports, strengthening indigenous technology, increasing private sector participation and ensuring manufacturers can meet changing operational requirements.
Progress will depend on whether these priorities translate into sustained R&D investment, commercially viable products, dependable supply chains and production capacity that can be expanded without compromising quality.
The ₹50,000 crore defence export target provides a clear benchmark for the industry’s export ambitions. Yet the wider measure of progress will also include the technologies Indian companies can develop, the systems they can manufacture reliably and the role domestic suppliers can play across the defence value chain.
The SIDM Champion Awards 2026 brought these priorities into focus. The next phase of India’s defence manufacturing journey will depend on how industry and government translate them into practical capabilities, competitive products and measurable industrial outcomes.
Source: Ministry of Defence, Press Information Bureau (PIB), Government of India.
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