India's Private Sector Poised to Transform Defence Manufacturing Landscape
Corporate India gets a call of duty and it's raring to go
The Economic Times
Image: The Economic Times
India's private sector is set to play a pivotal role in defence manufacturing, with companies like Tata Advanced Systems, Larsen & Toubro, and Bharat Forge shortlisted for the Advanced Multirole Combat Aircraft (AMCA) programme. This shift marks a significant departure from the historical dominance of public sector undertakings in India's defence sector.
- 01The Indian government will soon issue tenders to Tata Advanced Systems, Larsen & Toubro, and Bharat Forge for the AMCA programme, aiming to reduce reliance on public sector units.
- 02Defence Minister Rajnath Singh emphasized that private industry should account for at least 50% of India's defence manufacturing capacity, up from 23%.
- 03India's defence production reached a record ₹1.54 lakh crore (approximately $18.5 billion USD) in FY 2024-25, with private sector contributions rising to 23%.
- 04The emergence of startups and SMEs in defence, such as Nibe Defence, signifies a growing innovation ecosystem, with 16,000 MSMEs contributing to indigenous capabilities.
- 05Defence exports from India hit ₹38,424 crore (around $4.6 billion USD) in FY 2025-26, with private firms increasingly targeting overseas markets.
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India's defence manufacturing landscape is undergoing a significant transformation as private sector companies prepare to take on roles traditionally held by public sector undertakings. The government plans to issue tenders to Tata Advanced Systems Limited (TASL), Larsen & Toubro (L&T), and Bharat Forge for the Advanced Multirole Combat Aircraft (AMCA) programme, marking a historic shift in India's military-industrial complex. Defence Minister Rajnath Singh stated that private firms should eventually contribute at least 50% of the country’s defence manufacturing capacity, up from the current 23%. The private sector's involvement is expected to enhance efficiency, innovation, and risk management in defence production. In FY 2024-25, India recorded its highest-ever defence production at ₹1.54 lakh crore (approximately $18.5 billion USD), with private companies increasing their share. Additionally, the rise of startups and SMEs, such as Nibe Defence, is reshaping the sector, contributing to indigenous capabilities and boosting defence exports, which reached ₹38,424 crore (around $4.6 billion USD) in FY 2025-26. This shift not only strengthens India's defence capabilities but also positions the country as a competitive player in the global defence market.
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The shift towards private sector involvement in defence manufacturing is expected to enhance India's self-reliance in military capabilities.
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