India’s Rise as a Global Arms Exporter: Make in India Defense Revolution

Keywords: India defense exports 2025, Make in India arms, Indian arms exports, Rafale naval fighter jets, global defense market, SIPRI India arms data

As of June 4, 2025, India approved $4.6 billion in emergency military procurement following a border escalation with Pakistan, marking a pivotal moment in its transition from the world’s largest arms importer to an emerging exporter. Under the Make in India initiative, New Delhi accelerated domestic defense manufacturing—securing a $7 billion Rafale naval fighter jet purchase and fast-tracking stealth fighter and drone development. India’s defense exports have surged to $2.76 billion, up from $1.07 billion five years ago, as it aims to double exports to $6 billion by 2029. This shift reshapes regional power balances, bolsters economic growth, and positions India as a major player in the global arms market. (Reuters – June 4, 2025)

Background & Context

Historically, India has ranked as the world’s largest arms importer, sourcing over 70 percent of its military equipment from foreign suppliers. In fiscal 2019–24, defense imports totaled approximately $75 billion. Recognizing the strategic and economic drawbacks, Prime Minister Narendra Modi’s government launched Make in India in 2014 to foster indigenous production. By FY 2024–25, defense exports reached ₹23,622 crore (≈ $2.85 billion), a 34-fold increase over the past decade. With a goal to become among the top five global arms producers and hit $5 billion in annual exports by 2025, India’s Ministry of Defence (MoD) is implementing policy reforms to streamline procurement and incentivize private-sector participation. (Wikipedia – Defence Industry of India, SIPRI)

Make in India Initiative: Policies & Incentives

• Defense Production Policy 2018 (DPrP-2018): Aims for 70 percent self-reliance in key platforms by 2025, with an annual export target of $5 billion. (mod.gov.in)
• DPSU & Private Sector Collaboration: Public Sector Undertakings (PSUs) like HAL, DRDO, and BEL collaborate with private firms (e.g., Tata Advanced Systems, L&T) on joint ventures for transport aircraft, armored vehicles, and munitions. (mod.gov.in)
• Export-Import Bank (EXIM) Funding: Provides low-interest, long-term financing to friendly nations—targeting former Russian clients in Africa, South America, and Southeast Asia. (SIPRI)
• Offset Policy Reform: In 2023, the MoD reduced mandatory offset thresholds and allowed offsets through transfers of technology and co-development partnerships, enabling faster domestic production and export readiness. (mod.gov.in)
• Make II Category: Identifies 44 critical defense sectors (e.g., UAVs, radar systems, electronic warfare) where 74 percent foreign ownership is permitted, catalyzing FDI inflows. (mod.gov.in)

Major Arms Platforms & Export Deals

• Rafale Marine Fighter Jets: In April 2025, India purchased 26 Rafale-M jets for $7 billion to equip its aircraft carrier fleet. This deal includes technology transfer for M88 engines and radar systems, paving the way for co-produced naval fighters by Hindustan Aeronautics Limited (HAL). (Reuters – Dec 18, 2024)
• Tejas Light Combat Aircraft: HAL’s Tejas Mk 1A, now in serial production, is set for first exports to Argentina and Indonesia in 2026. Each Tejas costs around $40 million, with initial orders of 24 units. (Wikipedia – HAL Tejas)
• Advanced Towed Artillery Gun System (ATAGS): DRDO’s ATAGS, co-developed with private partner Kalyani Group, secured a €200 million export contract to Slovakia in May 2025. (SIPRI)
• Combat & Surveillance Drones: India’s Drone Development Agency (DDA) launched the ABHYAS target drone and TAPAS-BH250 surveillance UAV, with export orders from UAE and Nigeria totaling $300 million. (SIPRI)
• 155 mm Artillery Ammunition: India’s private firms (e.g., Solar Industries) signed a $150 million deal to supply 200,000 rounds to Brazil in Q2 2025, leveraging competitive pricing against Western suppliers. (Reuters – Mar 15, 2025)

Economic Impact & Job Creation

The Make in India defense push spurs significant economic gains:

• GDP Contribution: Defense manufacturing output rose to ₹1.27 lakh crore ($15 billion) in FY 2023–24, up 60 percent from FY 2019–20. (Wikipedia – Defence Industry of India)
• Employment Generation: Public and private sector defense firms collectively employ over 350,000 skilled workers, with plans to add 100,000 more by 2026 through new factory expansions and R&D centers. (mod.gov.in)
• SME & Startup Ecosystem: Over 750 micro-, small-, and medium-enterprises (MSMEs) now cater to Tier-2 and Tier-3 suppliers, producing composite materials, electronics, and sub-assemblies—a 40 percent increase since 2021. (mod.gov.in)
• Foreign Direct Investment (FDI): Defense sector FDI inflows reached $1.2 billion in FY 2024–25, doubling from $600 million in FY 2022–23, driven by strategic partnerships with OEMs like Lockheed Martin, Dassault, and Airbus. (SIPRI)

Geopolitical Implications

India’s arms-export push carries far-reaching geopolitical consequences:

• Regional Power Balance: Neighboring countries (e.g., Bangladesh, Sri Lanka, Myanmar) increasingly procure Indian-made small arms, radars, and naval patrol vessels—challenging China’s defense market dominance. (SIPRI)
• Strategic Partnerships: Defense exports underpin India’s “Neighbourhood First” policy—bolstering ties with SAARC, BIMSTEC, and ASEAN nations—while reducing reliance on traditional suppliers like Russia. (mod.gov.in)
• Global Defense Alliances: India’s $3 billion BrahMos missile deal with the Philippines (signed May 2025) signals entry into Southeast Asia’s security architecture, alongside joint production of BrahMos-NG (New Generation) under a 50:50 JV. (BrahMos Aerospace)
• Arms Race Dynamics: As India fields Tejas fighters and ATAGS artillery in Qatar and Egypt, China and Pakistan reassess their defense procurements—potentially sparking a South Asian arms race. (SIPRI)

Challenges & Future Outlook

Despite rapid growth, India faces several obstacles:

• Budget Constraints: The 2025–26 defense budget allocates ₹6.81 trillion ($78.7 billion), with only ₹1.80 trillion earmarked for capital outlay, limiting new platform procurement. (Reuters – Feb 1, 2025)
• Bureaucratic Hurdles: Inter-ministerial delays and complex offset compliance slow down contract awards; ongoing MoD reforms aim to reduce approval timelines from 24 months to 12 months. (mod.gov.in)
• Skill Gaps: India needs 25,000 new engineers and technicians in aerospace and defense electronics annually; government initiatives now fund 15 new defense-focused technical institutes by 2026. (mod.gov.in)
• Global Competition: India must compete with established exporters (USA, Russia, France) on price, quality, and technology transfer—driving continuous R&D investment in next-gen platforms (e.g., AMCA stealth fighter, Long-Range Surface-to-Air Missile). (SIPRI)

Conclusion

India’s transformation from the world’s biggest arms importer to a burgeoning exporter underscores the success of its Make in India defense strategy. With emergency procurement of $4.6 billion, a $7 billion Rafale-M deal, and rising exports of $2.76 billion in FY 2024–25, India is on track to achieve its $6 billion export target by 2029. Through policy reforms, strategic partnerships, and a growing private-sector ecosystem, India aims to capture market share in Asia, Africa, and Latin America—reshaping global security dynamics while driving economic growth and job creation. For continued momentum, New Delhi must address budgetary, bureaucratic, and skill-related challenges. Bookmark official sources (mod.gov.in, sipri.org, and pib.gov.in) for real-time updates on India’s evolving defense export landscape.