Sector Snapshot · Aerospace & Defence

India's Defence Manufacturing Build-Out, at a Glance

A fast-read primer on where the sector stands today and where it's headed — the backdrop against which we benchmark every company's cost structure in this category.

US$ 34.7 bn
Production target by FY29
US$ 5.8 bn
Export target by FY29
US$ 12.4 bn
Production value, FY26 (Apr–Dec)
14.7%
Share of central govt. budget going to defence
74%
FDI allowed via automatic route

Production Is Scaling Fast

Domestic production has more than doubled in two years, and the government's FY29 target implies it nearly doubling again.

Defence Production (US$ billion)

FY24 → FY25 → FY29 target

14.8
FY24
17.6
FY25
34.7
FY29F

Who's Producing It — FY25

Share of total production value

DPSUs & other PSUs — 77%
Private companies — 23%

Exports Have Grown 34x in a Decade

From a near-standing start in FY14 to a Rs 30,000+ crore ambition for FY26 — private companies now drive more than 90% of that growth.

Defence Exports (Rs crore)

FY14 → FY25 actual → FY29 target

686
FY14
23,622
FY25
50,000
FY29 target

What's Pushing the Sector Forward

Three reinforcing forces — geopolitical demand, policy design, and capital commitment — are compounding at the same time.

Growth Factors
  • Ongoing territorial tensions with Pakistan and China
  • Push for technological parity with regional rivals
  • Reducing external dependence for procurement
Policy Support
  • FDI via automatic route raised to 74%
  • Defence Production & Export Promotion Policy 2020
  • Import embargo now covers 4,666 items
  • Record budgetary allocation to the sector
Investment
  • Expanding domestic production & distribution capacity
  • Rising R&D spend, incl. DRDO budget up ~8.5% YoY
  • Two dedicated Defence Industrial Corridors (UP, Tamil Nadu)

Recent Developments

A sample of the policy and industry-wide moves shaping the sector through early 2026.

Companies We Benchmark in This Sector

Listed Indian Aerospace & Defence companies in tDoBe's cost-benchmarking coverage.

Hindustan Aeronautics
Bharat Electronics
Bharat Dynamics
Garden Reach Shipbuilders
Data Patterns
Astra Microwave
Zen Technologies
Apollo Micro Systems
Sigma Advanced System
Paras Defence
Mishra Dhatu Nigam
AXISCADES Technologies
Unimech Aerospace
Cyient DLM
Centum Electronics
Avantel
Ideaforge Technology
MTAR Technologies
DCX Systems
NIBE

See How These Companies Compare on Cost

The numbers above set the stage. Our Report translates it into a company-by-company cost benchmark — down to the category — so you can see exactly where a business sits against its peers.

Explore the Aerospace & Defence Report
Compiled from public government and industry sources, February 2026 update · Figures rounded · tDoBe sector snapshot, for informational purposes