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Monograph 05 · Defence Industry

Atmanirbhar Bharat in Defence: Production (₹1.78 Lakh Crore), Private Sector Share (24%), and Export Scaling (₹38,424 Crore)

Defence Observer Strategic Research Centre · 5 Oct 2026 · 24 min read

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Keel laying of the first 44,000-tonne Fleet Support Ship for the Indian Navy at Hindustan Shipyard Limited, Visakhapatnam

Key facts

Production FY 2025–26
₹1.78 lakh crore
Private exports
₹17,353 crore
Export reach
80+ countries
Desk
Defence Industry
Published
5 Oct 2026
Reading time
24 min

Abstract

In FY 2025–26 India's defence production reached ₹1.78 lakh crore, with the private sector at about 24% of output, and exports reached ₹38,424 crore across more than 80 countries, ₹17,353 crore of it from private industry. This study analyses the structural drivers of that expansion.

The industrial base

  • DPSUs: HAL, BEL, BDL, Mazagon Dock, GRSE, Cochin Shipyard and BEML anchor platform integration across aircraft, warships, submarines, missiles and radars.
  • Private primes deliver artillery, armoured vehicles, naval vessels, aerostructures, electronics, small arms and unmanned platforms.
  • MSMEs and startups supply sub-assemblies, sensors, composites and software, with the Uttar Pradesh and Tamil Nadu defence industrial corridors as hubs.

From licensed assembly to indigenous design

Production, private participation and exports all grew in FY 2025–26, with private firms supplying close to half of exports. The Border to Boardroom™ framework traces how operational requirements become this industrial scale.

See the Border to Boardroom™ framework

What the record shows

14 Nov 2024PIB release 2073452 (opens in a new tab)

Official record: The keel of the first of five 44,000-tonne Fleet Support Ships was laid at Hindustan Shipyard Limited, Visakhapatnam.

Defence Observer synthesis: Underway replenishment sets the limit of blue-water presence; five ships let carrier groups stay on station without foreign ports, while generating domestic industrial work.

29 Oct 2024PIB release 2069296 (opens in a new tab)

Official record: The Raksha Mantri reviewed DPSU performance and received dividend cheques totalling ₹1,620 crore.

Defence Observer synthesis: Corporatised DPSUs are expected to deliver surge capacity in shells, propellants and maintenance alongside private industry.

17 Nov 2024PIB release 2074149 (opens in a new tab)

Official record: The Navy took delivery of Yuvan, a 25-tonne bollard-pull tug built by an Indian MSME shipyard.

Defence Observer synthesis: Auxiliary vessels from MSME yards free the major yards for frontline combatants.

Implied priorities

  • Sustain indigenisation under the Defence Acquisition Procedure.
  • Keep capital reserved for domestic industry.
  • Integrate MSMEs into corridors and supply chains, including surge capacity for ammunition and maintenance.

Sources & citation

Cite this paper

Defence Observer Strategic Research Centre (2026). Atmanirbhar Bharat in Defence: Production (₹1.78 Lakh Crore), Private Sector Share (24%), and Export Scaling (₹38,424 Crore). Defence Observer, PRGI Reg. No. DLBIL/26/A7836.