India Defense Market

India Defense Market Size and Share:

The India defense market size was valued at USD 17.30 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 29.80 Billion by 2033, exhibiting a CAGR of 5.60% during 2025-2033. North India currently dominates the market, holding a significant market share in 2024. The market is driven by increased government spending on modernizing defense capabilities, technological advancements, and a growing emphasis on self-reliance. Strategic partnerships with global defense firms, coupled with a strong focus on research and development, are further propelling the India defense market share.

Rising tensions along India's borders with China and Pakistan, including disputes over the Line of Control (LoC) and Line of Actual Control (LAC), are fueling increased defense spending to ensure national security, thus driving the market growth. Internal security challenges, such as terrorism, insurgency, and cyber threats, are also pushing the need for advanced defense technologies, surveillance, and intelligence systems. India’s aspiration to become self-reliant in defense manufacturing under the 'Make in India' and 'Atmanirbhar Bharat' initiatives is driving indigenous production, fostering partnerships with domestic and global defense players. Additionally, modernization programs for the Army, Navy, and Air Force are accelerating procurement of advanced weapon systems, aircraft, naval vessels, and ground vehicles. For instance, in May 2025, the BrahMos Aerospace plant in Lucknow was inaugurated by Rajnath Singh. This facility will increase Uttar Pradesh's defense manufacturing. It will yield the variation known as BRAHMOS-NG. Startups and enterprises will benefit from the Defense Technologies & Test Center. It will speed up the creation of new products. India's defense capabilities are strengthened by the BrahMos missile system. The new version will be more adaptable and smaller.

Technological advancements in areas such as unmanned systems, cyber defense, space security, and artificial intelligence are further reshaping defense strategies and investments. For instance, in May 2025, in their bilateral relationship, India and Belgium entered a new phase characterized by cooperation in scientific innovation and defense production. A series of crucial talks in 2025 that resulted in defense cooperation agreements, manufacturing joint ventures, and expanded scientific collaborations in astronomy and space sciences highlighted the two nations' growing convergence. These changes coincide with larger initiatives by both governments to fortify industrial relationships, expand economic links, and ensure robust supply chains. The liberalization of foreign direct investment (FDI) policies, increasing defense exports, and the focus on strengthening India’s maritime presence in the Indian Ocean Region (IOR) also contribute to market growth.

India Defense Market Trends:

Geopolitical Tensions and Security Challenges

India faces persistent security challenges from neighboring countries, particularly Pakistan and China, due to unresolved border disputes along the Line of Control (LoC) and Line of Actual Control (LAC). Additionally, internal threats such as terrorism, insurgencies, and cyberattacks necessitate constant vigilance and modernization of defense capabilities. These threats require India to maintain a robust, well-equipped military force with advanced technologies, precision weaponry, and rapid response capabilities. The evolving regional security dynamics and the need to safeguard national interests in the Indian Ocean Region (IOR) further drive defense investments, making security preparedness a key factor in India defense market growth. For instance, in May 2025, India launched Operation Sindoor, a huge military counterattack targeting terror bases deep within Pakistan and Pakistan-occupied Kashmir (POK), in revenge for the barbaric deaths of Indian civilians in Pahalgam on April 22. By accomplishing several tactical and strategic goals, the operation changed the paradigm for regional security and sent a powerful message against terrorism.

Indigenous Manufacturing and Policy Reforms

India’s government is actively promoting indigenous defense manufacturing under the ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives. These policies aim to reduce dependency on imports by encouraging domestic production, fostering public-private partnerships, and liberalizing foreign direct investment (FDI) in the defense sector. For instance, the Make in India campaign helped propel India's defense output to ₹1.27 lakh crore in FY 2023–24, a 174% increase from 2014–15. Defense corridors, incentives, and technology transfer agreements are creating a favorable environment for global and local defense players. The government’s emphasis on defense exports further supports the growth of the industry. According to the India defense market forecast, these reforms are not only strengthening India’s defense industrial base but also generating employment, enhancing innovation, and positioning India as a global defense manufacturing hub.

Technological Advancements and Emerging Threats

Emerging technologies like artificial intelligence (AI), unmanned systems, cyber defense, electronic warfare, and space-based capabilities are reshaping modern warfare. India is investing heavily in these domains to prepare for next-generation threats, including cyberattacks, space security breaches, and hybrid warfare tactics. The integration of cutting-edge technologies into defense platforms enhances precision, situational awareness, and operational effectiveness. Public and private sector collaborations in defense technology innovation, along with growing investments in R&D and dual-use technologies, are key drivers. The focus on futuristic warfare capabilities ensures India remains prepared for evolving battlefields, thus driving continuous investments in advanced defense technologies and systems. For instance, in February 2025, Mahindra Group joined forces with US-based Anduril Industries to create autonomous and counter-drone systems, which encompass Autonomous Underwater Vehicles for security and surveillance operations. In line with recent bilateral defense cooperation initiatives between the US and India, this partnership seeks to improve defense capabilities using cutting-edge technologies.

India Defense Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the India defense market, along with forecasts at the country and regional levels from 2025-2033. The market has been categorized based on type and armed forces.

Analysis by Type:

• Fixed-Wing Aircraft
• Rotorcraft
• Ground Vehicles
• Naval Vessels
• C4ISR
• Weapons and Ammunition
• Protection and Training Equipment
• Unmanned Systems

Ground vehicles stands as the largest type in 2024, holding around 27.6% of the market due to the country’s need to secure its extensive land borders, manage insurgencies, and maintain armored superiority. Demand for armored personnel carriers, tanks, infantry fighting vehicles, and tactical trucks remains strong, driven by modernization programs and evolving combat requirements. Indigenous programs such as the Arjun Main Battle Tank and wheeled armored vehicles under the Make in India initiative enhance domestic capabilities. Additionally, collaborations with global defense companies to upgrade and produce advanced vehicles with enhanced mobility, firepower, and survivability are further boosting the growth of the ground vehicle segment in India.

Analysis by Armed Forces:

• Army
• Navy
• Air Force

India army leads the market with around 53.8% of market share in 2024 due to its critical role in securing India's extensive and sensitive land borders with Pakistan, China, and other neighboring countries. Persistent border tensions, insurgencies, and counterterrorism operations require continuous investments in modernizing infantry, artillery, armored vehicles, and surveillance systems. Additionally, the need for enhanced mobility, night-fighting capabilities, and next-generation weapon systems further drives procurement. The government's focus on indigenous production under 'Make in India' and increasing defense budgets contributes to the army's significant share, supporting upgrades and expansions to maintain combat readiness and operational superiority.

Regional Analysis:

• North India
• West and Central India 
• South India 
• East and Northeast India

North India is a key defense market due to its proximity to the Line of Actual Control (LAC) with China and the Line of Control (LoC) with Pakistan. Persistent border tensions, including conflicts in Jammu & Kashmir and Ladakh, demand heavy investments in troop deployments, surveillance, and border security infrastructure. The region also witnesses frequent insurgencies and infiltration attempts, necessitating advanced combat systems, UAVs, and communication networks. Strategic locations like Punjab and Haryana also house major army commands and airbases, driving procurement of advanced weaponry, armored vehicles, and aerial defense systems. Counterterrorism and high-altitude warfare capabilities are further driving defense modernization, positively impacting the India defense market outlook.

Competitive Landscape:

The India defense market is highly competitive, featuring a mix of domestic and international players. State-owned companies like Bharat Electronics Limited (BEL), Hindustan Aeronautics Limited (HAL), and Bharat Dynamics Limited (BDL) dominate key segments, while private firms such as Larsen & Toubro and Tata Advanced Systems are gaining prominence under defense privatization. Global defense giants like Lockheed Martin, Boeing, Airbus, and Rafael actively collaborate through joint ventures and technology transfers. The government's focus on indigenous production, policy reforms like FDI liberalization, and defense exports are reshaping the market dynamics, fostering increased competition and innovation in advanced defense technologies and systems.

The report provides a comprehensive analysis of the competitive landscape in the India defense market with detailed profiles of all major companies.

Latest News and Developments:

• May 2025: The Indian National Space Promotion and Authorization Centre (IN-SPACe) announced plans to launch 52 satellites over 2025-2030 to strengthen India’s space-based defense surveillance capabilities. The private sector is expected to supply as many as half of the 52 satellites, with the rest being provided by ISRO.
• April 2025: Israel Aerospace Industries (IAI) and Bengaluru-based DCX Systems Ltd. announced the formation of a new joint venture called ELTX. This strategic alliance seeks to provide state-of-the-art defense technologies, with an emphasis on the development and manufacturing of sophisticated airborne radars and ground systems for the Indian defense industry.
• March 2025: At a total cost of about INR 6,900 crore, the Ministry of Defence (MoD) inked agreements with Bharat Forge Limited and Tata Advanced Systems Limited to purchase 155mm/52 Calibre Advanced Towed Artillery Gun Systems (ATAGS) and High Mobility Vehicle 6x6 Gun Towing Vehicles. The smaller caliber and antiquated firearms will be replaced with the modern ATAGS.
• February 2025: The US and India announced the launch of the Autonomous Systems Industry Alliance (ASIA), a bilateral initiative aimed at co-developing and co-producing maritime drones and counter-drone systems. This alliance seeks to enhance defense cooperation across air, land, sea, space, and cyberspace domains.
• February 2025: Thales and Bharat Dynamics Limited (BDL) announced the formalization of an initial delivery of Laser Beam Riding Man Portable Air Defense systems (LBRM) to strengthen India's air defense capabilities. With this agreement, India will receive its first shipment of High Velocity Missiles (STARStreak) and launchers later this year, marking the country's first introduction to this most recent VSHORAD capability.

India Defense Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the India defense market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the India defense market.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the India defense industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.