India’s defense manufacturing sector has seen a significant boost from private companies, with the private sector now accounting for nearly a quarter of the country’s defense production, RT reported. In the fiscal year 2025-26, India’s defense output reached an unprecedented $18.64 billion, marking a 15.6% increase from the previous year and more than doubling since 2020-21.
This rapid expansion reflects India’s strategic push to reduce dependency on expensive foreign arms imports, historically dominated by public sector units. Official data shows private firms contributed 24% of total defense manufacturing in FY 2025-26, up from 22% the year before, signaling a growing role in the industry.
India remains the world’s second-largest arms importer between 2021 and 2025, accounting for 8.2% of global imports, with Russia supplying 40% of its weaponry. However, the private sector is increasingly producing a wide range of advanced defense technologies domestically, including drones, autonomous systems, precision electronics, and complex supply chains.
Initiatives like Make-in-India are driving innovation within the military sector. According to former Indian Army vice chief Lt. Gen. Philip Campose, private companies are now being invited to bid on high-profile projects such as the Advanced Medium Combat Aircraft stealth fighter. Additionally, New Delhi is contemplating allowing private firms to enter ballistic missile production.
Highlighting this shift, Adani Defence & Aerospace plans to establish South Asia’s largest private missile manufacturing ecosystem in Madhya Pradesh, strengthening India’s indigenous missile capabilities. Startups like Botlab Dynamics, originating from IIT Delhi, have also expanded into defense technology through their Vyod division. Their Atri Nano Drone, weighing just 250 grams, provides soldiers with real-time battlefield awareness via encrypted video, thermal imaging, and a 2-kilometer operational range.
These drones, already in use by the Indian Navy and Army, can be deployed within seconds and help troops identify threats while minimizing exposure to danger. Behind these sophisticated technologies lies a broad network of small enterprises and specialized manufacturers across India, fueling the country’s defense ecosystem.
Why this matters
The growing involvement of private companies marks a fundamental shift in India’s defense strategy, aiming to decrease reliance on costly foreign imports and foster homegrown innovation. This transformation not only accelerates military modernization but also enhances the resilience of India’s defense supply chain amid regional security challenges.
As private sector participation deepens, it is expected to drive technological advancements and economic growth, positioning India as a significant player in global defense manufacturing.
