Private Sector Powers India’s Defence Revolution, Set to Contribute 23.5% in FY25

India’s defence industry is undergoing a major transformation — and this time, the private sector is taking the lead. For the first time, private companies are expected to contribute nearly 23.5% of the country’s defence production in FY25, marking a historic shift from decades of public sector dominance.

A New Era in Defence Manufacturing

For years, government-owned firms controlled India’s defence production, but that’s changing rapidly. The private sector, including major companies such as the Tata Group, Larsen & Toubro, Bharat Forge, Mahindra, and over 600 startups, is stepping up significantly.

This marks a major milestone in India’s journey towards self-reliance and reduced import dependence.

With the government actively promoting ‘Make in India’ and offering policy incentives, private companies are not only participating but also playing a key role in strengthening India’s military-industrial base.

Startup Participation on the Rise

One of the most remarkable aspects of this shift is the surge in startup involvement. Between FY23 and FY25, the number of indigenised defence items has doubled to nearly 14,000, thanks to the growing participation of startups and private players.

Startups are now crucial drivers of innovation in India’s defence sector, bringing in fresh technology and rapid execution capabilities.

What’s Fueling This Growth?

• Rising defence expenditure from the government

• Strong push for self-reliance in defence production

• Ease of entry and incentives for private and new-age players

• Strategic partnerships between established firms and startups

A Major Leap for India’s Defence Future

This evolving landscape signals a decisive shift in India’s military-industrial complex. With private players contributing nearly a quarter of the total defence output, India is not only strengthening its domestic capabilities but also setting the stage for becoming a global defence manufacturing hub.

The future of India’s defence sector looks more dynamic, self-sustaining, and innovation-driven than ever before.

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