New Delhi: Indian defence exports have reached a record ₹38,424 crore in FY 2025-26, supported by rising international demand for military equipment and ammunition. The ReArm Europe initiative has created new opportunities for Indian defence manufacturers, helping India strengthen its position in the European defence market. India is now targeting ₹50,000 crore in annual defence exports by 2029.
India Becomes The Third-Largest Arms Exporter To Europe
India has rapidly expanded its defence exports over the past few years. According to Defence Secretary Rajesh Kumar Singh, India has become the third-largest arms exporter to Europe, partly due to the growing demand created by the ReArm Europe initiative.
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Indian manufacturers are supplying different types of ammunition, artillery shells and other military products to European countries.
According to a Bloomberg report cited by Financial Express, Indian arms manufacturers exported at least $872 million worth of ammunition to European countries in the four years following Russia’s invasion of Ukraine in 2022.
This represented an increase of around 1,600% compared with the $49.2 million recorded during the four years before the war.
Indian Defence Exports Reach Record ₹38,424 Crore
India’s defence exports reached an all-time high of ₹38,424 crore in FY 2025-26.
According to the Ministry of Defence, this represents a growth of 62.66% compared with ₹23,622 crore in FY 2024-25.
Both private companies and Defence Public Sector Undertakings (DPSUs) contributed significantly to this achievement. The contribution was:
- Private Sector: ₹17,353 crore (45.16%)
- Defence Public Sector Undertakings: ₹21,071 crore (54.84%)
India is now exporting defence equipment to more than 80 countries. The number of registered defence exporters has also increased from 128 to 145.
Defence Production Increases To ₹1.78 Lakh Crore
India’s growing defence manufacturing capacity is another important reason behind the rise in exports. According to the Ministry of Defence, India’s annual defence production reached a record ₹1.78 lakh crore in FY 2025-26.
This represents a 15.6% increase compared with the previous financial year. Defence production has also increased by around 110% since FY 2020-21.
The private sector contributed around 24% of total defence production, while public sector companies contributed the remaining 76%.
This growth shows that Indian manufacturers are becoming more capable of meeting domestic and international defence requirements.
What Is The ReArm Europe Initiative
The ReArm Europe Plan, also known as Readiness 2030, is a European Union initiative introduced in March 2025.
Its main objective is to increase Europe’s defence spending and strengthen its military capabilities.
The European Commission aims to mobilise up to €800 billion in additional defence investment through different financial measures. The initiative focuses on:
- Increasing defence spending by European countries.
- Supporting joint defence procurement.
- Improving military manufacturing capacity.
- Strengthening defence supply chains.
- Developing advanced military technologies.
The Russia-Ukraine war has increased the demand for military equipment and ammunition across Europe. As a result, European countries are looking for reliable international suppliers to strengthen their defence capabilities.
What is the Reason of Indian Defence Exports Growth in Europe
European countries are looking for reliable suppliers of ammunition, military equipment and other defence products. The Russia-Ukraine war has increased the need to rebuild military stockpiles across the continent.
India offers an additional supply option because of its growing defence manufacturing industry and competitive production capabilities. Indian companies are supplying products such as:
- Artillery ammunition and shells.
- Small-calibre and large-calibre ammunition.
- Military equipment and components.
- Propellants and other defence-related products.
Growing demand from European countries could provide more business opportunities for Indian defence manufacturers.
India Plans To Expand Defence Cooperation With Europe
India is also looking beyond direct defence exports to build stronger industrial partnerships with European countries.
The government is exploring opportunities for joint ventures, technology cooperation and participation in European defence procurement.
Partnerships with countries such as France and Belgium could help Indian companies become part of international defence manufacturing and supply chains.
India is also encouraging foreign defence companies to manufacture products in the country. These partnerships could support technology development, create manufacturing opportunities and strengthen India’s position in the global defence industry.
Indian Defence Exports Target: ₹50,000 Crore By 2029
India has set an ambitious target of achieving ₹50,000 crore in annual defence exports by 2029. The government is also targeting ₹3 lakh crore in annual defence production.
The record export performance in FY 2025-26 provides a strong foundation for achieving these goals.
Increasing private sector participation, improving manufacturing capacity and expanding international partnerships will be important for future growth.
The government is also working to simplify defence export procedures and make it easier for Indian companies to enter international markets.
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FAQs
India aims to achieve ₹50,000 crore in annual defence exports by 2029. The government has also set a target of ₹3 lakh crore in annual defence production.
India’s defence exports reached a record ₹38,424 crore in FY 2025-26, registering a 62.66% increase compared with ₹23,622 crore in FY 2024-25.
The ReArm Europe initiative is a European Union defence investment plan introduced in March 2025. It aims to mobilise up to €800 billion in additional defence investment to strengthen Europe’s military capabilities and defence industry.
