New Delhi: India’s defence exports have surged to a record ₹38,424 crore in FY 2025-26, with the United States emerging as the single largest destination, primarily sourcing aircraft sub-systems and components, according to media reports. This growth is underpinned by reforms, industrial partnerships, and new agreements that promise to further expand India’s footprint in the global defence supply chain.
India’s defence export profile has undergone a decisive transformation, with the United States now positioned as the leading market. Exports to the US are dominated by sub-systems and components, reflecting India’s integration into global supply chains of defence majors such as Boeing and Lockheed Martin.
The Tata Boeing Aerospace venture in Hyderabad manufactures fuselages and secondary structures for Apache attack helicopters, while India also produces the empennage for the C-130 transport aircraft and wings for the F-16 fighter jets. These contributions highlight India’s growing role as a reliable supplier of critical aerospace structures.
Beyond the US, India’s exports are diversifying. France has received software and electronic equipment, while Armenia has procured ATAGS artillery guns, Pinaka multi-barrel rocket launcher systems, and Swathi weapon-locating radars. This diversification underscores India’s ability to supply both high-technology components and complete systems to a wide range of partners.
India’s defence exports reached ₹38,424 crore in FY 2025-26, marking a 62.66 per cent increase over the previous year. Defence Public Sector Undertakings contributed ₹21,071 crore, representing a 151 per cent rise, while private firms accounted for ₹17,353 crore, up 14 per cent. Over the past five years, exports have nearly tripled, with India now supplying arms, sub-systems, complete systems, and critical components to more than 80 countries. The number of exporters has also risen from 128 to 145, reflecting the broadening base of industrial participation.
Looking ahead, the proposed Reciprocal Defence Procurement Agreement with the United States could significantly boost India’s export potential. This pact would extend reciprocal procurement benefits, waiving domestic sourcing laws or national ‘buy’ preferences, thereby enhancing US military readiness and promoting interoperability of defence equipment.
The US Department of Defence announced plans to sign such an agreement with India in October 2023, signalling a major step forward in bilateral defence trade. Other initiatives are also set to deepen industrial collaboration. The Security of Supplies Arrangement, the Initiative on Critical and Emerging Technology, and the TRUST framework are designed to strengthen supply chain resilience and technological cooperation.
The 10-year defence framework (2025–2035), signed by Defence Minister Rajnath Singh and US Secretary of Defence Pete Hegseth, provides a structured environment for long-term cooperation. India’s designation as a Strategic Trade Authorisation-1 partner and its participation in the Quadrilateral Security Dialogue further enhance its ability to sell defence equipment to the US and allied nations.
This export performance is supported by a series of reforms. The Defence Production and Export Promotion Policy, corporatisation of ordnance factories into DPSUs, expansion of Production Linked Incentive schemes for drones and defence components, Positive Indigenisation Lists restricting imports, and a streamlined online export authorisation system have all contributed to building an export-oriented ecosystem.
Defence Minister Rajnath Singh has described these measures as part of India’s strategic transition from import dependence to export-oriented capability building.
Together, these reforms and partnerships reflect a decisive shift in India’s defence ecosystem. The country is now positioned as a globally competitive exporter while advancing self-reliance and strategic resilience, a necessity underscored by the ongoing crisis in West Asia and the closure of the Strait of Hormuz. India’s ability to supply critical systems and components to major powers like the US demonstrates its emergence as a trusted partner in global defence supply chains.
