India's defence exports have grown over 50-fold in a decade; assess the structural reforms behind this and the challenges that remain.

India's defence exports leapt from ₹686 crore in FY 2013-14 to a record ₹38,424 crore in FY 2025-26, reaching 80+ countries [1]. This near-56-fold rise, riding an all-time-high production of ₹1.78 lakh crore, reflects deliberate structural reform under Atmanirbhar Bharat—though the base remains modest and gaps persist.

Structural reforms driving the surge

• Procurement priority to indigenous design: DAP 2020 (replacing DPP 2016) placed Buy (Indian-IDDM) at the top of the acquisition hierarchy [2].
• Import-substitution architecture: five Positive Indigenisation Lists each by DMA and DDP; the fifth notified 346 items for DPSUs (2024) [3], with 3,000+ items already indigenised via the SRIJAN portal [1].
• Base restructuring: corporatisation of the OFB (2021) into seven DPSUs improved accountability [2].
• Innovation funnel: iDEX (2018) has signed 430 contracts with start-ups/MSMEs; private-sector output touched a record ~₹42,000 crore [1].
• Liberalised capital: 74% FDI via automatic route widened the manufacturing base [2].

Challenges that remain

• Private share still only 24%—the "private-led boom" is overstated; production stays DPSU-dominated [1].
• Exports skew to components and sub-systems, not big-ticket platforms.
• PIL's negative-list approach risks crowding out best-in-class technology [3].
• Persistent R&D and design gaps and dependence on imported critical sub-systems.

Sustained reform—deeper private participation, robust R&D funding, and export credit—can carry India toward its ₹50,000 crore export target by 2029 [1], converting arithmetic growth into genuine strategic self-reliance.