India’s defence industry is expanding beyond a predominantly domestic procurement-driven model, with rising production, private-sector participation and exports creating a broader manufacturing opportunity. Defense production reached a record ₹1.78 lakh crore in FY2025-26, up 15.6% from the revised ₹1.54 lakh crore in the previous year and more than double the FY2020-21 level of ₹84,643 crore. The FY2026-27 defence allocation has also risen to ₹7.85 lakh crore, including ₹2.19 lakh crore in capital expenditure. Of the ₹1.85 lakh crore set aside for capital acquisition, ₹1.39 lakh crore, or 75%, is earmarked for procurement from domestic industry.
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