The Indian Defence Sector Is Booming, Sees Record Orders, Strong Growth Outlook

India’s defence sector is set to grow steadily, supported by aggressive indigenisation efforts, a solid order pipeline, and expanding opportunities, according to a recent report by Nirmal Bang. The report highlights the government’s determined approach to strengthen domestic defence manufacturing and reduce reliance on imports. “We maintain a positive outlook on the defence sector, highlighting the ongoing efforts towards indigenisation, a strong order pipeline, and significant growth potential,” the report stated.

With India’s annual defence production already surpassing ₹1.27 trillion, the target is to reach ₹1.75 trillion by the end of FY25 and ₹3 trillion by 2029.



Record Contracts Signed In FY25 The Ministry of Defence set a new benchmark by signing 193 contracts in FY25, with a total value exceeding ₹2.1 trillion—the highest-ever figure. This is nearly double the previous record.

Of these, 177 contracts, or 92% of the total, were awarded to domestic companies. The cumulative value of these domestic contracts stands at around ₹1.6 trillion, making up 81% of the total deal value.

The report points to this as evidence of the government’s strong commitment to fostering indigenous defence capabilities. Major Approvals by Defence Acquisition Council In FY25, the Defence Acquisition Council (DAC) cleared eight capital acquisition proposals worth ₹540 billion. These approvals form part of a broader modernisation plan aimed at enhancing the capabilities of the armed forces.

Among the key projects, the Indian Army will receive a new 1,350-horsepower engine to replace the older 1,000-horsepower unit in its T-90 tanks. This upgrade is expected to significantly boost performance and efficiency. Indigenous Naval Advancements For the Indian Navy, the DAC approved the procurement of Varunastra Torpedoes, developed indigenously by the Naval Science & Technological Laboratory.

These advanced anti-submarine torpedoes are designed for ship-based deployment and will play a key role in enhancing India’s underwater defence capabilities. Focus on Air Force Modernisation The report also forecasts continued focus on strengthening the Indian Air Force (IAF) fleet through strategic acquisitions and indigenised production. With consistent government initiatives, increased manufacturing capacity, and a strong policy framework, the sector is well-positioned for robust expansion.

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