The United States has emerged as India's leading defence export destination, with growth potential remaining strong. Exports to the US are dominated by sub-systems and components, with global defence majors such as Boeing and Lockheed Martin sourcing fuselages, wings, and other aircraft and helicopter parts from India as part of their global supply chains and offset commitments.
Key Manufacturing Ventures
The Tata Boeing Aerospace venture in Hyderabad manufactures fuselages and secondary structures for Apache attack helicopters, while the empennage for the C-130 and wings for the F-16 are also produced in India. Beyond the US, exports to France include software and electronic equipment, while Armenia has received ATAGS artillery guns, Pinaka multi-barrel rocket launcher systems, and Swathi weapon-locating radars.
Record Export Growth
India's defence exports have reached an unprecedented Rs 38,424 crore in FY 2025-26, marking a 62.66% increase over the previous year. Defence Public Sector Undertakings (DPSUs) contributed Rs 21,071 crore — a 151% rise — while private firms accounted for Rs 17,353 crore, up 14%. Over the past five years, exports have nearly tripled, with India now supplying arms, sub-systems, complete systems, and critical components to more than 80 countries. The number of exporters has also risen from 128 to 145.
Future Agreements and Initiatives
Looking ahead, the proposed Reciprocal Defence Procurement (RDP) Agreement with the United States could further boost India's export potential. The RDP is a pact under which the United States and a partner country extend defence procurement benefits to each other on a reciprocal basis, waiving domestic sourcing laws or national 'buy' preferences. The aim is to enhance US military readiness and promote interoperability of defence equipment. The US Department of Defense announced plans to sign an RDP with India in October 2023.
Other initiatives such as the Security of Supplies Arrangement (SOSA), the Initiative on Critical and Emerging Technology (iCET), and Transforming the Relationship Utilising Strategic Technologies (TRUST) are expected to deepen industrial collaboration.
Strategic Framework and Reforms
The 10-year defence framework (2025-2035), signed by Defence Minister Rajnath Singh and US Secretary of Defense Pete Hegseth in October last year, is expected to provide a structured environment for cooperation. India's designation as a Strategic Trade Authorisation-1 (STA-1) partner and participation in the Quadrilateral Security Dialogue (Quad), which emphasises supply chain resilience and shared standards, also enhance India's potential to sell defence equipment to the US.
This export performance is supported by reforms such as the Defence Production and Export Promotion Policy (DPEPP), the corporatisation of ordnance factories into DPSUs, expansion of Production Linked Incentive (PLI) schemes for drones and defence components, Positive Indigenisation Lists restricting imports, and a streamlined online export authorisation system. Defence Minister Rajnath Singh has described these measures as part of India's strategic transition from import dependence to export-oriented capability building.
Together, these reforms and partnerships reflect a decisive shift in India's defence ecosystem, positioning the country as a globally competitive exporter while advancing self-reliance and strategic resilience, the importance of which has been felt during the ongoing crisis in West Asia and the closure of the Strait of Hormuz.
