Defence & Aerospace – India building its own fighter jets, missiles and satellites instead of importing them.
- $18.5bn defence production, FY26 (a record, up 15.6% on the year)
- $4bn defence exports (up 62.7%, and 45% of it from private firms)
- ~65% of equipment made in India (about two-thirds was imported a decade ago)
- 300+ space startups (up from 54 in 2020)
A decade ago India imported roughly two-thirds of its military equipment. Today about 65% is made at home, and in July a privately built Indian rocket reached orbit for the first time.
India now builds artillery, radars, missiles, naval vessels and drones at home. Production reached a record ₹1.78 lakh crore in FY26, up 15.6% on the year, and exports went to more than 80 countries. Private firms make about a quarter of what is produced but 45% of what is sold abroad.
Aerospace is anchored in Bengaluru, where ISRO’s headquarters sit beside HAL and the DRDO labs. On 18 July 2026 Skyroot’s Vikram-1 became the first privately built Indian rocket to reach orbit, from ISRO’s own spaceport. Most production is still public-sector, and the top-end systems are still imported.
The signal to watch: Grounded investment, not pledged. The two defence corridors have drawn about $8bn in commitments; roughly $1.2bn had actually landed by April 2026.
Where we would take your group
- ISRO headquarters, Bengaluru. The space agency sits alongside HAL and DRDO’s aeronautics labs. Aero India flies from Yelahanka.
- Hyderabad, Telangana. Defence PSUs, DRDO laboratories and 1,500+ aerospace and defence MSMEs. Skyroot is based here.
- Chennai, Tamil Nadu. A node on the Tamil Nadu defence corridor, with about $3.6bn committed and roughly $0.7bn actually invested.
Questions for the debrief
- India makes about 65% of what it uses but still imports its top-end systems. Which layers of a defence industrial base actually have to be domestic, and which can be bought?
- Private firms make a quarter of production but 45% of exports. What does that gap tell you about where they compete best?
- Skyroot’s founders came from ISRO, and Vikram-1 launched from ISRO’s spaceport. Is that a break from the state, or the state’s next phase?
