Aatmanirbhar Bharat Boost: India's Defence Production Hits Record Rs 1.78 Lakh Crore In FY26; Defence Stocks Rally Up To 14%

India's Defence production touched an all-time high of Rs 1.78 lakh crore in FY2025-26, registering a growth of 15.6 per cent compared to Rs 1.54 lakh crore in FY2024-25. The achievement highlights the continued expansion of the country's indigenous defence manufacturing capabilities under the Government's Aatmanirbhar Bharat initiative.

According to data released by the Ministry of Defence, defence production has grown significantly over the past few years. From Rs 84,643 crore in FY2020-21, defence production has surged by approximately 110 per cent to reach the current record level. Compared to FY2013-14, when indigenous defence production stood at Rs 43,746 crore, the output has increased nearly fourfold.

Defence PSUs Continue To Lead Production

Defence Public Sector Undertakings (DPSUs) and other public sector entities accounted for approximately 76 per cent of total defence production during FY26. The remaining 24 per cent came from private sector companies, marking the highest-ever contribution by private players to India's defence manufacturing ecosystem.

The private sector's contribution increased to around Rs 42,000 crore in FY26, up from a 22 per cent share in FY25. The growing participation of private companies reflects increasing opportunities in domestic defence manufacturing, supported by government policies aimed at boosting indigenous capabilities.

Defence Exports Reach Record Levels

The strong growth in defence production also contributed to India's record defence exports of Rs 38,424 crore during FY2025-26. The increase in exports underscores the improving global competitiveness of Indian defence products and the country's emergence as a significant player in the international defence market.

The government has introduced multiple initiatives over the past few years, including import substitution programs, positive indigenisation lists, simplified procurement procedures and greater private sector participation to strengthen domestic manufacturing capabilities.

Rajnath Singh Highlights Sector Growth

Commenting on the achievement, Defence Minister Rajnath Singh credited the leadership of Prime Minister Narendra Modi and the collective efforts of the Department of Defence Production, public sector enterprises and private industry stakeholders.

"Under the inspiring leadership of PM Shri Narendra Modi, India's defence production is reaching new heights every year. I am delighted to inform everyone that India's annual defence production has surged to an all-time high of Rs 1.78 lakh crore in the Financial Year (FY) 2025-26. This milestone represents an impressive 15.6 Per cent growth over the previous fiscal year's output of Rs 1.54 lakh crore and a staggering 110 Per cent increase since FY 2020-21, when the figure stood at Rs 84,643 crore. Indigenous defence production has increased nearly fourfold from Rs 43,746 crore in FY 2013-14."

"The remarkable rise in India's defence production in recent years is the result of the collective efforts of the Department of Defence Production and all other stakeholders. This upward trajectory is a clear indicator of the country's expanding defence industrial base."

"With sustained policy support, several new initiatives, increased private sector participation, and growing export capabilities, the defence production sector is poised for continued acceleration in the years ahead."
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Defence Stocks Rally Following Record Defence Production

The strong growth in India's defence manufacturing ecosystem has also been reflected in the performance of defence stocks. Over the past five trading sessions, several leading defence companies have delivered strong gains. Data Patterns (India) emerged as the top performer with a rise of 13.61 per cent, followed by Bharat Dynamics, which gained 11.36 per cent. Garden Reach Shipbuilders & Engineers (GRSE) advanced 7.97 per cent, while Bharat Electronics (BEL) and Hindustan Aeronautics (HAL) gained 4.95 per cent and 4.84 per cent, respectively. The rally highlights growing investor confidence in the sector following record defence production, rising exports and continued government focus on defence indigenisation.

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Disclaimer: The article is for informational purposes only and not investment advice.