India is cementing its position as a global defense powerhouse, with exports hitting a historic high of $2.55 billion in FY24—a 32.5% increase from $1.92 billion in the previous fiscal year, according to a recent Nuvama report. Over the past decade, the country’s defense exports have expanded 31 times, reflecting a remarkable growth trajectory that underscores its emergence as a key player in the international arms market.
Looking ahead, the Indian government has set an ambitious target of $6 billion in defense exports by FY29, doubling down on its commitment to bolstering the sector. For FY25 alone, exports are projected to reach $2.46 billion, solidifying India’s reputation as a dependable and cost-effective supplier in the global defense supply chain.
One of the main drivers of this growth is the escalating demand from Europe. European countries, facing production constraints and labor shortages, are increasingly turning to India to meet their defense requirements. The first wave of European defense contracts is expected to arrive as early as the first half of FY26, opening up new opportunities for Indian manufacturers.
Domestically, the Indian government is ramping up efforts to further strengthen the sector. A colossal defense procurement program, valued at $18 billion, is planned by March 2025. This initiative aims to address delays in order placements seen in FY25, while boosting Indian defense stocks and enhancing the nation’s military capabilities.
Shifting global dynamics are also creating strategic opportunities for India. The United States’ decision to reduce military aid to Ukraine has underscored NATO’s heavy reliance on American defense funding, which has accounted for nearly 70% of NATO’s total defense expenditure over the past decade. In response, European nations are under pressure to invest in their own military systems, a transition expected to drive demand for Indian defense products.
India’s meteoric rise in defense manufacturing and exports is set to transform its role in the global arms market. With a rapidly growing portfolio of products and an expanding international client base, the nation is poised to redefine the geopolitical defense landscape in the coming years.
