India’s defence manufacturing sector is expanding rapidly, creating opportunities not only for major defence companies but also for specialised suppliers in electronics, RF, control systems, precision engineering, power systems and aerospace manufacturing.
India’s defence manufacturing landscape is entering a new phase. Domestic defence production reached a record ₹1.78 lakh crore in FY2025–26, representing growth of 15.6% over the previous year. The private sector contributed approximately 24% of total production, while defence exports reached ₹38,424 crore.
But the significance of this growth extends beyond the headline numbers. Modern defence and aerospace platforms depend on extensive networks of specialist suppliers producing electronics, RF systems, motors, actuators, sensors, power systems, PCBs, mechanical assemblies and precision-machined components.
The C295 aircraft programme provides a useful example. Tata Advanced Systems and Airbus have established a Final Assembly Line in Vadodara for 40 aircraft being manufactured in India. The programme is expected to involve approximately 13,000 detail parts and 37 India-based suppliers, while covering more than 85% of the structural and final assembly work for these aircraft in India.
For smaller and mid-sized engineering companies, this expanding ecosystem creates an opportunity to participate without necessarily developing complete defence platforms. Companies with strong capabilities in particular technologies can become specialised subsystem, component or engineering partners.
However, aerospace and defence manufacturing requires more than developing a successful prototype. Suppliers must demonstrate repeatability, traceability, documentation, testing, qualification and consistent manufacturing quality.
India’s growing defence exports create an additional opportunity. Products are now reaching more than 80 countries, while the private sector accounted for over 45% of defence exports in FY2025–26.
The next stage of India's defence-manufacturing growth will therefore depend on the depth of its supplier ecosystem. Building strong capabilities across specialised technologies, qualification and repeatable manufacturing will be essential as India moves toward greater domestic production and participation in global defence supply chains.