The top private and state-owned defence companies are looking at a ₹15 trillion revenue opportunity over the next five fiscal years, according to brokerage Dam Capital on 27 April, as rising government capital expenditure and an export push combine to reshape the country's arms sector into a global supplier.
The windfall is being spread across five big firms, Hindustan Aeronautics, Bharat Electronics, Bharat Dynamics, Mazagon Dock Shipbuilders, and Larsen & Toubro's Precision Engineering & Systems division, with exports projected to be over ₹72,000 crore for the period, according to industry projections and company disclosures. Defence exports already hit ₹38,424 crore in FY26, as per defence ministry data, and the government has set a target of ₹50,000 crore by FY29 at a compounded annual growth rate of 9%.
The exports are being driven by two key points: increasing localized production of light to heavy artillery, and the latter leading to exports of India-made defence equipment to regions such as West Asia, central and south-east Asia, and Africa as well.
This is a change for the country. For decades, India was among the world's largest arms importers; it is now courting buyers across West Asia, Southeast Asia, Central Asia, and Africa with domestically produced systems ranging from surface-to-air missiles to self-propelled artillery. Bharat Dynamics, one of the more export-oriented state firms, derived 38% of its ₹3,345 crore FY25 revenue from overseas sales alone.
“There is a lot of interest in our products, like the Akash Weapon Systems, from potential buyers in the international defence market. In order to further consolidate our order book of ₹22,814 crore, Bharat Dynamics is aggressively pursuing exports. The Centre is putting restrictions on imports and giving impetus to reduce foreign exchange, thus enhancing indigenization for self-reliance,” said A. Madhavarao, chairman and managing director of Bharat Dynamics.
- The defence sector eyes ₹15 trillion revenue across the next five fiscals.
- Bharat Dynamics leads exports at 38% revenue share; HAL trails at 1%.
- Government targets ₹50,000 crore in defence exports by FY29 at 20% compound average growth rate.
- Private players like L&T are set to rapidly expand alongside dominant public sector undertakings.
- Geopolitical tensions and indigenisation policy are turbocharging India's global arms ambitions.
Uneven export picture
Still, the companies are taking uneven bites of the export opportunity. Hindustan Aeronautics, India's largest defence public-sector undertaking (PSU) with ₹37,729 crore in FY25 revenue, earned a mere 1.06% of that from exports. Mazagon Dock Shipbuilders was in a worse state, earning just 0.53% of operating income. As brokerage Dam Capital said in a report on 27 April, private players are set to close that gap fast.
L&T too has got in on the act. Arun T. Ramchandani, senior vice-president and head of Larsen & Toubro's Precision Engineering and Systems (PES) division, said that the company’s defence exports are set to hit nearly 5% last fiscal—a period when it was expected to hit around ₹9,400 crore ($1 billion) in annual revenue.
“The sweeping push to localize production of a wide range of defence equipment has seen us build a lot of our own defence production capabilities. We have a partnership with South Korea’s Hanhwa Aerospace to build Howitzers (self-propelled tanks with machine guns) locally. Based on this partnership, we’re building and supplying the K-9 Vajra tank to the Indian Army, from India itself. For now, we’re building about 60% of these artillery by value locally, and the eventual goal is to enhance it,” Ramchandani said.
Mazagon Dock Shipbuilders had yet to announce its FY26 earnings at the time of publishing. HAL and BDL have not yet announced their fiscal 2026 earnings dates.
Queries sent to HAL and MDSL on their limited focus on exports did not immediately receive responses until press time.
Geopolitical dividend
Nevertheless, other PSUs remain bullish.
Manoj Jain, chairman and managing director of Bharat Electronics, said at the company’s earnings last quarter that the entity’s annualized defence exports crossed $100 million for the first time earlier last fiscal.
“Our products continued to find increased acceptance in France, the US, Spain, Israel, China, Mauritius, Sri Lanka, Asean, the UK, and Sweden, among other nations. This is a clear indication of our growing acceptance in the global market. Some of the major products and systems exported include TR modules, micro modules, radar warning receiver, missile approach warning system, and more,” Jain added.
Industry consultants, on this note, said that exports could give India significant influence geopolitically.
“Despite the US being the outsized giant in the room, India’s scope for exports in the defence and aerospace industry is massive,” said Chaitanya Giri, fellow at Centre for Security, Strategy & Technology at think-tank, Observer Research Foundation.
He said that India's growing export success stems from commercialising DRDO-developed technologies through private channels and selling them to markets such as Armenia and Southeast Asia. State-controlled defence exports would provide a stronger boost to India's defence sector overall, an advantage that purely private conglomerates such as L&T, Tata, Adani, or Mahindra may not be positioned to capitalise on fully.