India Defence: What’s Contributing to Surge in Defence Exports?
India acknowledged as the world’s second largest importer of arms by the SIPRI in multiple reports since past many decades is also showing a contra indicator of surge in defence exports.
India’s Ministry of Defence in several reports recently has highlighted that defence exports have touched an all-time high from ₹686 crore in 2013–14 to a record ₹38,424 crore in 2025–26, with exports reaching over 80 countries in a release in June this year.
Year on year the rise recorded in April this year is Rs 38,424 crore in the Financial Year (FY) 2025-26, from Rs 14,802 crore (62.66%) over the previous fiscal year’s figure of Rs 23,622 crore says another Report with Defence Public Sector Undertakings (DPSUs) and the private sector contributing 54.84% and 45.16% respectively, attributed by the Ministry of Defence personally to Prime Minister Narendra Modi.
During this period indigenous defence production rose from ₹46,429 crore in 2014–15 to ₹1.78 lakh crore in 2025–26 leveraging the strength of indigenisation and modernisation, defence diplomacy also scaled new heights. The defence exporter base has also expanded to 145 firms, as more Indian industry players step into this lucrative domain.
Ministry of Defence sees this as a demonstration of increasing global confidence in Indian defence systems and technologies and has now set a target of ₹50,000 crore in defence exports by 2029.
So, what is behind this surge in arms exports as it is a steady uptrend and not an annual uptick. Here is a look -
Multiple factors are contributing to the same the least surprising one being the end of a possible chimera of global peace where regions which had enjoyed the dividend such as Europe and ASEAN are now rearming for war which is a natural constant in global affairs. Globalisation has also meant spread of violence and absence of the same can be inured only for short periods in the unaffected. With the Indian government timing the initiative for exports the accretion follows this trend.
Ironically the China factor may be contributing to the surge not just in India’s increasing defence industrial production to deter the threat from the Northern rival but also arms exports as countries in the Indo-Pacific are looking for rearmament of niche capabilities such as cruise missiles as an A2AD option for defence of the island territories in Southeast Asia. Thus apart from the Philippines' which has procured of BrahMos missiles linked to tensions in the South China Sea and is reportedly negotiating an additional purchase worth $700-800 million as per the Reuters to it strengthen coastal defence capabilities. Vietnam and Indonesia are following suit with Malaysia considering the same.
In the wider spectrum, end of the global peace dividend has caused expanding arms exports not just for India but globally. European military spending has risen sharply as European imports of major weapons systems than tripled between 2021 and 2025 with NATO members attempting to reach a goal of defence budget marker of three percent of the GDP. SIPRI reports European military expenditure increased by 14% in 2025. "ReArm Europe" is a significant factor for export of ammunition. India reportedly emerged as the third-largest arms exporter to Europe during this rearmament cycle.
A shift in Indian government policy attributed by the Ministry of Defence personally to Prime Minister Narendra Modi is also furthering increase in defence production and exports. While in the past the Indian government considered arms exports against the philosophy of universal peace now New Delhi is following a more pragmatic trend of major exporting nations which see capacity building as enhancing deterrence thus discouraging conflicts.
Defence exports are also a part of the overall increase in defence cooperation which includes training, maintenance, logistics support and military diplomacy and a geopolitical tool that deepen long-term strategic relationships. Moreover, India has tasked the vast array of Defence Attache’s spread over 44 countries and accreditation in over 90 to promote Indian defence industry which is also providing an impetus.
Diversification of suppliers is another factor as countries view defence procurement from India as a way to reduce dependence on the US, China or Russia where there could be a sudden drop in supplies due to geopolitical shifts or a fall in defence production. India has been a victim of this trend with the contract for five S 400 air and missile defence system is yet to be completed by Russia due to the War in Ukraine.
Recent conflicts have highlighted the effectiveness of precision missiles as affordable strategic assets as long range strike systems and for coastal defence. The BrahMos which saw extensive employment during the Indo Pakistan skirmish in May 2025 has seen a surge in demand after its operational use.
Indian systems particularly missiles are seen as less expensive than Western systems and more reliable than the Chinese thus providing a viable alternative from upfront acquisition costs to lower lifecycle and competitive maintenance. The BrahMos, Pinaka multiple launch rocket system and Akash missiles form a part of this trend
The Indian government has over the years simplified defence exports by streamlining export authorization processes, introducing simplified Standard Operating Procedures and faster clearances possibly even speedier than procurement by the Indian armed forces. As per a report export authorizations reached 1,762 in FY 2024-25 compared to 241 in 2015-16.
Compared with many Western suppliers, India is often perceived as a less restrictive defence supplier with limited end user restrictions, fewer intrusive monitoring and greater operational autonomy. Thus, India has been able to provide assured supplies to countries in conflict zones such as Armenia which is also making a transition away from Russian supplied arms systems.
Expansion of the defence industry in India particularly the private sectors is a major factor as well. 16,000 MSMEs have been integrated into defence supply chains and 788 industrial licences issued to 462 companies.
Almost all Indian business conglomerates many of them having limited or no footprint in the industrial sector have joined the defence industry boom. While Indian DPSUs have large capacities, there is relatively limited flexibility in exports given that these can be directly linked to the Government, whereas private sector has limited inhibitions and can plug into the global defence export chain even where this may seem controversial.
Contra Indicators – Continued Arms Imports
As per the SIPRI Arms Transfer Report of 2025 published in March this year, India continues to be the world’s second largest recipient of major arms in 2021–25 with an 8.2 per cent share of total global arms imports second only to Ukraine. The report however marks that Indian arms imports fell by 4.0 per cent between 2016–20 and 2021–25 due to growing focus on indigenous procurements.
As SIPRI measures arms transfers in TIV rather than US dollars, so a precise annual dollar value for India's 2025 arms imports is not available. At the same time, India’s planned procurement of large platforms and systems such as the Rafale combat aircraft from France and submarines from Germany, Predator drones from the United States and S 400 air and missile defence systems from Russia indicate that a surge in exports does not imply a reduction in arms imports.
This highlights the fact that exports will be mainly of systems requiring lower technology or which are jointly produced such as the Indo Russian BrahMos missile system while India will continue to be dependent on high technology large platforms from combat aircraft to warships and drones.
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