India’s defence technology sector witnessed unprecedented growth in 2025, marking a new era of self-reliance, digital modernization, and global export leadership. Backed by bold policy reforms and cutting-edge innovation, India has now emerged as a top-five exporter of indigenous defence technology, ranging from autonomous drones and AI command systems to next-gen battlefield equipment.

According to the Ministry of Defence, India’s defence production crossed ₹1.25 lakh crore in FY 2024–25, with exports alone accounting for ₹25,000 crore—a record high. This achievement reflects the successful implementation of the Atmanirbhar Bharat in Defence initiative and deep collaborations between DRDO, private startups, MSMEs, and global partners.

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Indigenous Innovation at the Forefront

2025 saw the successful deployment of Swarm Class-3 drones, loitering munitions, and unmanned ground vehicles (UGVs) developed entirely by Indian firms such as IdeaForge, NewSpace Research, Sagar Defence, and Tonbo Imaging.

In a key breakthrough, the Indian Army began using AI-assisted battlefield management systems that integrate satellite imaging, troop tracking, and decision-making inputs in real time. These systems have already been tested along the Line of Control (LoC) and northeastern borders.

The Indian Air Force inducted its first home-built High-Altitude Long Endurance (HALE) drone—‘Garuda-MKII’—with a range of 2,000 km, designed by HAL in collaboration with private firms under the SPV model.

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Global Partnerships and Exports

India signed defence export deals with over 12 countries, including agreements with Vietnam, the UAE, Armenia, Brazil, and the Philippines for drones, radar systems, and naval surveillance equipment.

The Bharat Forge-Tata Defence JV successfully exported 155mm howitzers to Africa, while BEL delivered AI-powered radar systems to ASEAN nations. India’s rising credibility as a reliable, cost-effective defence partner is reshaping its strategic diplomacy.

India also joined the Global AI Defence Alliance (GAIDA) alongside Israel, France, and the UK to collaborate on ethical AI frameworks and interoperability in hybrid warfare.

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Defence Startups and MSME Surge

Defence innovation is no longer limited to large PSUs. Over 400 startups and MSMEs are now part of India’s defence production ecosystem. Through the Innovations for Defence Excellence (iDEX) platform, ₹1,500 crore in funding was allocated in 2025 alone for rapid prototyping, wargaming software, drone swarms, and electronic warfare systems.

The Defence Testing Infrastructure Scheme (DTIS) has also expanded across states like Telangana, Gujarat, and Tamil Nadu, enabling early-stage firms to test weapons systems without bureaucratic delays.

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Challenges and Road Ahead

Despite the surge, experts caution that India must maintain IP security, manage ethical concerns around autonomous weapons, and boost critical component manufacturing, especially semiconductors and high-end avionics, which are still imported in large volumes.

Plans for India’s first military-grade semiconductor fab in Karnataka are underway, while DRDO is investing in quantum encryption and directed energy weapons research for the post-2030 battlefield.

India has also initiated talks to co-develop a 6th-generation fighter aircraft with a European consortium, moving beyond the AMCA project.

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Conclusion

India’s defence tech sector in 2025 is no longer playing catch-up—it is driving the future of warfare innovation. By combining indigenous talent, global partnerships, and smart policy, India is poised to redefine its defence posture—not just for self-protection, but as a technological leader on the world stage.