Registering a year-on-year growth of 62.66%, India’s defence exports reached the ₹38,424 crore mark in the Financial Year (FY) 2025-26. The state-owned Defence Public Sector Undertakings (DPSUs), often criticised for underperformance, witnessed their exports grow by a phenomenal 151%, while the private sector’s exports increased by a modest 14%. This upsurge is truly impressive, as just a decade ago, in FY 2014-15, defence exports stood at a measly ₹884 crore.
The Ministry of Defence (MoD) deserves some credit for the steps it has taken in recent years to encourage defence exports, beginning with the notification of the Munitions List (Category 6 of the SCOMET list) in 2017. Since then, a standard operating procedure for exporting defence products has been laid down, and a fully end-to-end online portal has been set up to process export authorisations digitally. This has cut down time and paperwork for exporters. Open General Export Licences (OGEL) have also helped expedite routine exports.
From a local perspective, this upward trend is very promising, but viewed in a wider global context, defence exports have a long way to go before India becomes a major weapon exporter or a ‘global defence manufacturing hub’, which are the government’s stated objectives. This note of caution is not to pooh-pooh the industry’s achievements or capabilities, but to suggest that a reality check is required to avoid getting trapped in complacency.
India does not currently figure on the list of 25 leading exporters of arms compiled by Stockholm International Peace Research Institute every year; the last time it did was four years ago, when it ranked 23rd with a market share of 0.2%, alongside Czechia and Jordan. That India lost even this tenuous ranking despite rising exports indicates that making a mark in the global defence exports market is very challenging. Exactly how challenging it is can be gauged by the fact that, with all its technological advancement and geopolitical clout, China is currently only the fifth largest exporter with a market share of just 5.6%, as against the USA’s 42%.
The minister of state for defence said in August 2021 that the major defence exports included Weapon Simulators, Tear Gas Launcher, Torpedo Loading Mechanism, Alarm Monitoring & Control, Night Vision Monocular & Binocular, Light Weight Torpedo & Fire Control Systems, Armoured Protection Vehicle, Weapons Locating Radar, HF Radio and Coastal Radar System
According to a November 2025 Press Information Bureau release, the top three destinations for India’s defence exports in FY 2023-24 were the USA, France, and Armenia. Exports to the USA and France seemed to have picked up due to the MoD putting pressure on companies like Boeing and Dassault to discharge their offset obligations in respect of the previously concluded contracts, which, according to a study by Delhi-based MP-Institute of Defence Studies and Analyses, are mostly discharged by the foreign companies by importing eligible defence products from the Indian companies.
While the status of the ongoing offset contracts is not known, hopefully, there will be no stagnation or decline in exports once the offset contracts are fully discharged because, by that time, the Indian companies would have integrated with the global supply chains and found their own feet in the defence exports market. This, then, is not the real challenge.
The real challenge is on account of some other, less talked about, factors: the nature of India’s export portfolio, dependence on foreign sources for critical components and sub-systems, reputational damage caused by malfunctioning of indigenously built systems, limited sphere of influence to develop a strong clientele, and last but not least, a disjointed defence export policy.
Replying to a question in Lok Sabha, the minister of state for defence stated in August 2021 that the major defence exports included Weapon Simulators, Tear Gas Launcher, Torpedo Loading Mechanism, Alarm Monitoring & Control, Night Vision Monocular & Binocular, Light Weight Torpedo & Fire Control Systems, Armoured Protection Vehicle, Weapons Locating Radar, HF Radio, and Coastal Radar System. The minister also added, for good measure, that most of the defence exports included parts and components, but what he did not say was that these parts and components are comparatively low-value items.
What India needs to focus on is exporting high-value equipment, weapon systems and platforms. True, some fully assembled weapon systems, such as the BRAHMOS supersonic cruise missile and Akash air defence missiles, artillery guns, Dornier-228 aircraft, Pinaka rockets, bullet proof jackets, patrol boats, and helicopters, have also been, or are being, exported, but the countries buying them are not major buyers of arms and, therefore, the demand for these products cannot be substantial. Low volume of exports, or low value of exported products, can impact the growth of India’s exports.
Some of the potentially exportable platforms like the Advanced Light Helicopter, Light Combat Helicopter and K-9 Self-Propelled Howitzer, are dependent to varying degrees on imported components, sub-systems and technology. The Light Combat Aircraft, for example, is powered by General Electric GE-404IN after-burner engines. The delay of more than a year in the supply of these engines has disrupted Hindustan Aeronautics Limited’s production plans and adversely impacted the operational efficiency of the Indian Air Force. This can be a matter of concern for potential customers.
The export potential of a platform is also highly sensitive to the reputational damage caused by the malfunctioning of the platform. A case in point is the Advanced Light Helicopter (ALH) Dhruv, a multi-role, multi-mission utility helicopter developed by HAL. Ecuador had imported seven of these helicopters but terminated its contract with HAL in October 2015 after four of them crashed.
Ten years later, in January 2025, the entire fleet of 330 helicopters was again grounded by the armed forces after an ALH operated by the Coast Guard crashed in Gujarat. Shortly after the partial resumption of the operation of the Army and Air Force versions, a technical snag was reported in September 2025, prompting the Indian Army to order a ‘one-time check’. Though HAL described it as a routine maintenance matter, not a systemic flaw, such incidents have affected India’s reputation as a potential exporter of reliable state-of-the-art platforms.
Practically all the leading weapon exporters, except for the USA, have one thing in common: they all have one, or in some cases two or three, major buyers. According to SIPRI’s latest report, India, Egypt and Greece accounted for 45% of exports from France, the second largest arms exporter. Of this, India’s share was 24%. Similarly, 74% of Russia’s exports were to India, China and Belarus, with India accounting for 48%. Nearly 61% of China’s exports were to just one country: Pakistan. India will need to develop a major client, or a major market such as Africa, in the coming years to become a major player in the export market.
What is important is to have a strategy to boost exports. The leading arms exporting countries acquired that status by selling combat aircraft and helicopters, major warships, missiles, tanks, fire support vehicles, other armoured vehicles and artillery. The Indian industry can realise its potential by manufacturing Brand India products to draw the international customers’ attention
Lastly, India’s defence export policy constitutes a series of pronouncements of intent and disjointed steps taken from time to time, rather than a cogent roadmap based on an assessment of the Indian defence industry’s current capabilities and its potential. What is equally important is to have a strategy to boost exports. The leading arms exporting countries have acquired that status by selling combat aircraft and helicopters, major warships, surface-to-air missiles, tanks, fire support vehicles, other armoured vehicles, and artillery. The Indian industry is strong in some of these areas and, with the government’s backing, it could realise its potential by manufacturing Brand India products to draw the international customers’ attention.
It is instructive that, as recently as March 2026, the Standing Committee on Defence has advised the MoD to “facilitate ease of doing business to promote exports, and the DPSUs should explore new global markets, invest in R&D and innovations along with designing newer and advanced competitive products.” These are policy matters. MoD will do well to heed this advice and double down on its efforts to make India a leading arms exporter; giving a final touch to the Defence Production & Export Promotion Policy (DPEPP), which continues to be in the form of a draft almost six years after it was circulated in 2020 for comments, might be a good starting point.
–The writer is a former Financial Advisor (Acquisition), Ministry of Defence. The views expressed are personal and do not necessarily reflect the views of Raksha Anirveda
