The defence sector has been the hottest pick in the last few years. And PM Narendra Modi’s aim to be “Aatmanir” in the research & production of weapons has been a key factor in improving the domestic defence industry. The defence industry has been one of the best-performing sectors in the stock market in terms of returns as well as revenue growth.

The Russia-Ukraine war exposed how difficult it becomes to acquire intermediate goods and weapons during a war. And self-reliance in production is the only long-term possible solution to ensure security of country’s border and growth.

Targets & Accomplishments

The Indian defence industry has been through major reforms in the NDA regime and analysts still expect there is a lot of potential left in the sector.

India aims to become the Top 5 producers of defence and aerospace manufacturing globally by aiming to achieve a $5 Billion export target annually by 2025 as per the Defence Production Policy.

Measures such as simplification for procurement procedure of defence products, provision for funding of up to 70 percent of development cost by the government, and an increase in foreign direct investment (FDI) limit to 74 percent through the automatic route are expected to further boost investments in the sector.

The government has set a target of Rs 1.75 lakh crore of defence production by 2025, which includes the export of Rs 35,000 crore.

The Budget outlay for FY23 has been fixed at Rs 5.3 trillion, a 10 percent increase over last year.

Ministry of Defence has set a target of achieving a turnover of US$25 Mn in aerospace and defence Manufacturing by 2025, which includes US $5 Bn exports.

Total 595 Industrial Licences have been issued to 366 defence companies till October 2022.

The procurement of defence equipment of Rs. 76,390 (US$ 9.84 billion) crore has been approved by the Ministry of Defence from domestic industries in June 2022.


To actualize the goal of complete self-reliance, the Government aims to Invest in Research & Development, Human Capital, and in the acquisition of modern weapons along with technical know-how.

To fund the above endeavors’, the government aims to become an export-surplus country in the defense industry, which will create long-term self-sustainability in Security and safety.

Therefore, a special emphasis on the defence sector is expected in the upcoming budget announcements.