Growth in Defence Exports
The Indian government announced that defence exports in the financial year 2025-26 increased by more than 60% compared to the previous year. This surge was largely driven by Defence Public-Sector Units (DPSUs), which saw a growth of over 150%.
- This growth is seen as a vote of confidence in India’s capability to enhance its value chain in defence manufacturing.
- The increase comes at a crucial time when global defence budgets are rising.
Global Demand and Strategic Importance
There is a rising demand for affordable and accessible defence platforms as recent conflicts have shown rapid usage of weapons and strain on supply chains.
- Countries are moving towards stockpiling and are keen on developing integrated supply chains with trusted partners.
Challenges and Strategic Contracts
Despite the commendable performance of DPSUs, a significant part of the export growth was due to specific, non-replicable contracts, particularly with Armenia.
- Armenia imported $2 billion worth of Akash missiles, rocket launchers, and howitzers due to its geopolitical tensions with Azerbaijan and its desire to diversify from Russia.
- This highlights how defence exports align with geopolitical relationships.
The Role of the Private Sector
The private sector should be recognized as the engine of growth in defence exports, akin to countries like the Republic of Korea.
- Successful exporters like Korea have seen growth through public-private partnerships.
- India needs to increase trust in the private sector and integrate innovative startups into the supply chain, which is currently dominated by DPSUs.
Goals of Defence-Production Policy
The defence-production strategy should aim to:
- Create a large-scale defence-industrial sector within India, as recent history shows it is key to national power.
- Integrate domestic production with global markets, enhancing geopolitical leverage.
