Defence industry of India

The defence industrial sector of India is strategically important in India. India has one of the world's largest military forces with a strength of over 1.44 million active personnel. The country has the world's largest volunteer military of over 5.1 million personnel. The total defence budget sanctioned for the financial year 2025 is ₹6.81 lakh crore (US$81 billion). India's defence spending is between 1.9% to 2% of the country's gross domestic product. The country has the largest annual defence budget behind USA (US$732 billion) and China (US$261 billion). India's defence budget is projected to increase to US$415.9 billion between 2025 and 2029.

India is the world's largest defence importer, as of 2023, making up 9.8% of global arms imports. India has a domestic defence industry of which 60% is government owned. The public sector includes NTRO, CSIR, PRL, DRDO and its 50 labs, 4 defence shipyards, 12 defence public sector undertakings (PSUs). India has a new defence procurement, acquisition and manufacturing policy to reduce imports and enhance domestic manufacturing. As a result of the Make in India policy, private sector defence companies, including large, medium and small companies, have experienced significant growth and increased procurement orders. India's defence industry has, at times, been scrutinized for controversies and corruption.

"Defence Production Policy of 2018" (DPrP-2018) has a goal of becoming among the top 5 global producers of the aerospace and defence manufacturing with an annual export target of US$5 billion by 2025. 12% of worldwide arms exports (by value) reach India. India domestically produces only 70% to 75% of defence products it uses, and the rest are imported. In the 2024–2025 financial year, India's defence exports were valued at ₹23,622 crore (US$2.8 billion). USA is the largest importer of Indian made materials, alloys, steel, components and sub-systems. Armenia is the 2nd largest importer of Indian made finished weapon systems and equipment, and France is a large importer of electronics and software.

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