Defending the World

India plans to spend $ 130 bn on military modernization in the next 5 years, as achieving self- reliance in defence production is a key target for the Government of India. The Government has opened up the Defence industry for private sector participation to provide impetus to indigenous manufacturing. The opening up of the industry also paves the way for foreign original equipment manufacturers to enter into strategic partnerships with Indian companies.

A Defence export strategy has been formulated with a view of facilitating Defence Public Sector Enterprises (DPSUs) and private defence players in exploring business opportunities abroad. Domestically produced defence platforms, equipment, and spares worth $ 317 mn were exported to over 28 countries in 2015-16.

100% FDI is allowed in defence industry; wherein 49% is allowed under automatic route and beyond 49% through Government route.

For further details, please refer FDI Policy

  • 2.3 %

    GDP spent on defence

  • 15 %

    Share in global arms import

  • $62.8 bn

    Union budget 2018-19

  • 309 mn

    Exports (2016)


Second largest armed forces in the world


Ongoing DRDO projects in India of worth $ 7.3 bn


30% offset requirement for procurement of equipment in excess of $ 307.69 mn

Industry Scenario

5.3% increase in defence allocation was recorded in budget 2017-18 compared to budget 2016-17.

The allocation towards defence in budget 2017-18 stood at $ 41 bn with $ 13.3 bn (or 31.7% of the total budget) reserved for capital expenditure.

The total budget sanctioned for the Indian military for the financial year 2018-19 is $ 62.8 bn; accounting for 12.1% of the total Union Government expenditure for 2018-19.

India’s share in global military expenditure stood at 3.3% in 2016.

Service/ department-wise allocation as a percentage of total defence estimates 2017-18 (BE):

  • Army: 55.9%
  • Navy: 14.6%
  • Airforce: 22.5%
  • DGOF (Directorate General of Ordnance Factories): 0.8%
  • DGQA (Director General of Quality Assurance): 0.5%
  • R&D: 5.7%

Growth Drivers

  • Defence exports strategy

    Liberalised process of issuing clearances
  • Online NOCs

    Started in November 2014 for industry friendliness
  • Shore Based Test Facility (SBTF)

    Improved test facilities leading to more local manufacturing
  • Indigenously Designed, Developed & Manufactured (IDDM)

    Focus – Buy and make IDDM, Indian over global
  • Modernization programmes

    $ 0.7 bn allocation for modernisation
  • Open

    Defence IPR Policy for Jointly Developed…

    IPR guidelines for softwares and programs developed for the…

  • Open

    Defence Offset Guideline

    The objective is to leverage capital acquisitions to develop…

  • Open

    Procedures for the Grant of Industrial L…

    Streamlining the Procedure for Grant of Industrial Licenses:…

  • Open

    Scheme for Promotion of MSMEs in Defence…

    A Scheme aimed to promote MSMEs in defence has been accorded…

  • Open

    Updated Defence Procurement Procedure 20…

    DPP is an opportunity to improve efficiency of the procureme…

Investible Projects

Investment Opportunities in Defence Manufacturing

  • Projects


  • Opportunity

    $549.9 mn

  • Promoters


  • District


  • Private Projects


  • Govt. Projects



$282.26 mn

Infrared Imaging Search & Track System

State (s) Delhi

$175 mn

On Board Oxygen Generation System for fighter aircraft

State (s) Delhi

$38.39 mn

Wing Drop Tanks for Mirage 2000 aircraft

State (s) Delhi

$27.15 mn

Inflatable Decoy

State (s) Delhi

Major Investors

Data on Map

  • Defence business in India
  • Defence sector in India
  • Defence investment in India
  • Defence projects in India
  • Indian defence market

Latest in Defence Manufacturing


Asked Questions

  • What is the defence sector overview in recent times?

    The Achievement report of the defence sector covering policy initiatives, R&D and other important areas can be accessed on the link.

  • Is there funding provided by the government for certain categories?

    Yes, projects under 'Make-I' sub-category involves Government funding of 90%, released in a phased manner and based on the progress of the scheme, as per terms agreed between MoD and the vendor.

  • Are the any incentives for MSMEs under DPP?

    DPP 2016 provides great impetus to the MSMEs with certain categories of 'Make' products earmarked exclusively for MSMEs.

  • How are the capital acquisition schemes classified under DPP?

    Capital Acquisition schemes are broadly classified as 'Buy', 'Buy and Make' and 'Make'. In decreasing order of priority the procurement of defence equipment, under this procedure are categorised as follows:
    1) Buy (Indian - IDDM).
    2) Buy (Indian).
    3) Buy and Make (Indian).
    4) Buy and Make.
    5) Buy (Global).

  • What is the Defence Procurement Procedure (DPP) 2016?

    The DPP is formulated to ensure timely procurement of military equipment, systems and platforms as required by the Armed Forces in terms of performance capabilities and quality standards, through optimum utilisation of allocated budgetary resources. It is worthwhile to mention that the document is not merely a procurement procedure but also an opportunity to improve efficiency of the procurement process to realize the vision of 'Make in India' in the defence sector.

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