India is building a robust defence innovation ecosystem, with procurement from startups and MSMEs totaling over ₹2,400 crore and projects worth more than ₹1,500 crore sanctioned for emerging technologies; the IDEX program has engaged 676 startups/innovators and signed 551 contracts by March 2026, while defence startups surpass 2,000 focused on drones, AI, cybersecurity, robotics and quantum tech.

This ecosystem now spans PSUs, private industry, and more than 17,000 MSMEs, underpinned by DRDO collaboration, positioning India as a regional and global defence partner.

The Ordnance Factory Board has been corporatised, leading to improved productivity and profitability across its factories.

Recent procurement and naval modernization efforts include mobile electronic systems for the Army and commissioning of advanced ships, alongside expanding domestic shipbuilding under indigenous programmes.

Under the Defence Acquisition Procedure, about 75% of the modernisation budget is earmarked for Indian industry, reinforcing Buy Indian-Indigenously Designed, Developed and Manufactured policies.

There is a strong push for domestic sourcing with indigenisation lists covering thousands of items to accelerate localisation and expand the domestic defence supply chain.

Reforms are shifting policy from import dependence to indigenous production, featuring the Defence EXIM Portal, online approvals, Open General Export Licence, Green Channel, and self-certification to streamline processes.

Other reforms include simplified quality certification and streamlined procurement/export processes to reduce paperwork and broaden global market access for Indian defense industry.

Five Positive Indigenisation Lists cover 509 items, with plans for additional lists, and Defence PSUs contributing large item baskets to boost indigenous procurement.

Defence production hit a record ₹1.78 lakh crore in FY2025-26, with exports above ₹38,000 crore; targets remain ₹2 lakh crore in production and ₹3 lakh crore in exports by 2029, including ₹50,000 crore in exports.

Defence industrial corridors in Uttar Pradesh and Tamil Nadu are drawing proposals around ₹70,000 crore, with around ₹10,000 crore already invested, aiming to create jobs and strengthen advanced manufacturing.

Defence leadership is stressing renewed push for manufacturing, innovation and self-reliance, highlighting Operation Sindoor and Made-in-India systems like Akash, BrahMos, drones and radars as proof of indigenous capability.