Blitz India Business
NEW DELHI: India’s defence exports rose almost 63 per cent last financial year. Split the total between state-owned and private suppliers and the more consequential number appears: the private sector is now within ten percentage points of parity.
Defence production reached a record ₹1.78 lakh crore in 2025-26, up 15.6 per cent from ₹1.54 lakh crore the year before and 110 per cent above the ₹84,643 crore recorded in 2020-21. Exports touched ₹38,424 crore, an increase of ₹14,802 crore or 62.66 per cent on the previous year. Of those exports, defence public sector undertakings accounted for 54.84 per cent and private firms 45.16 per cent. The government’s stated targets for 2029 are ₹3 lakh crore of production and ₹50,000 crore of exports — which, against last year’s actuals, implies the export target is closer than the production one.
Capability travels before hardware does: the India-United States naval ordnance disposal exercise beginning today at Kochi is the kind of exchange that precedes procurement conversations.
A state-owned exporter proves a country can build. A private exporter proves it can compete on price and delivery.
At a Glance
• Defence production, FY26: ₹1.78 lakh crore — a record
• Growth: 15.6 per cent on FY25’s ₹1.54 lakh crore
• Against FY21: up 110 per cent from ₹84,643 crore
• Defence exports, FY26: ₹38,424 crore
• Increase: ₹14,802 crore, or 62.66 per cent
• Public sector share of exports: 54.84 per cent
• Private sector share: 45.16 per cent
• 2029 targets: ₹3 lakh crore production, ₹50,000 crore exports
• Today: India-US naval ordnance disposal exercise opens at Kochi, to August 14
The ownership split is the number an analyst should carry forward. Defence public sector undertakings export what a state builds: platforms, systems and sub-systems with long development cycles, often supported by government-to-government arrangements. Private firms export something structurally different — components, sub-assemblies, forgings, avionics parts and increasingly complete sub-systems — usually into global supply chains rather than to foreign ministries of defence. At 45.16 per cent of the total, private participation has moved from marginal to material, and the significance is less about the share than about what the share implies. Winning a place on an international prime contractor’s supply chain requires price and delivery performance benchmarked against global suppliers, not a domestic preference. Every rupee of that 45 per cent is therefore evidence of competitiveness rather than of policy.
Two things follow for anyone modelling the sector. First, the growth rates on either side of the split are likely to diverge: state-sector exports move in steps as individual contracts land, while private-sector supply-chain revenue compounds more smoothly with volume, which makes the private line the better indicator of underlying capability and the state line the noisier one. Second, the gap between an export order and an export capability is filled by exercises, standards and interoperability work that never appear in a revenue table — which is the practical reason the India-United States naval explosive ordnance disposal exercise beginning at Southern Naval Command in Kochi today, and running to August 14, belongs in a business briefing at all. The constructive priority from here is the supplier tiers: certification support, testing infrastructure and working capital for the small and medium firms two levels below the prime contractor, which is where the ₹50,000 crore target will be won or missed.