Finance Minister Nirmala Sitharaman recently unveiled a new initiative aimed at enhancing deep tech integration within the defense sector. According to an ICRA report, private sector firms in India are projected to secure defense contracts worth ₹60,000 crore in FY 2024-2025, accounting for approximately 22 percent of the industry's total value.

India, recognized as one of the world's leading military powers, is now exceptionally well-

positioned for Indigenous arms production, supported by an expanding defense budget. The private sector is increasingly playing a significant role in this domain. As of 2023, the defense sector has engaged 393 startups, MSMEs, and individual innovators, resulting in the signing of 270 contracts.

According to IBEF data, the government has already earmarked funds to promote indigenous design and manufacturing and procurement from indigenous sources. For FY24, the fund allocation ratio stands at 67.75:32.25 between Domestic and Foreign procurement in the Capital Acquisition Budget of the Ministry of Defense (MoD). In addition, the MoD has also directed spending of Rs. 1,500 crore ($ 181.1 million) towards procurement from startups.

On the other hand, the growing role of exports in India's defense portfolio can’t be neglected anymore. India recently signed a defense contract with the Philippines in January 2022, valued at $375 million—the largest in Indian history. The contract involves the supply of shore-based anti-ship variants of the BrahMos missile system. India recorded its highest ever defense exports, reaching $2.5 billion (Rs 20,915 crore) in the fiscal year 2023-24. As India looks forward to boosting all aspects of defense and manufacturing, private companies in the industry are expected to have great opportunities. We think it’s an ideal time to publish our yearly special issue, shedding light on the defense industry.