From buyer to big exporter: India rewrites its defence paradigm

How the government is easing the rules of overseas military sales through a simplified and expanded Open General Export Licence frameworkIndia is no longer just trying to make more defence equipment; it is trying to make it easier for the world to buy it. With defence exports hitting a record Rs 38,424 crore in 2025-26, the government is now easing the rules of overseas sales, particularly through a simplified and expanded Open General Export Licence (OGEL) framework.By reducing approvals, extending OGEL validity and widening its reach, India is seeking to help its defence companies respond faster to global tenders and compete with established international manufacturers. The bigger challenge, however, is turning this export surge into a durable global business built on competitive products, quality, reliability and long-term customer support.For decades, India was among the world’s biggest defence importers. That picture is changing. Defence exports hit a record Rs 38,424 crore in 2025-26, up 62.66 per cent from the previous fiscal. In 2013-14, defence exports were just Rs 686 crore. Indian defence products now reach more than 80 countries, signalling a gradual shift in the country’s position from a major buyer of military equipment to an emerging supplier in the global defence market.Officials believe a foreign military is not an easy customer. “Unlike many domestic government purchases, an international defence contract involves competition with established manufacturers from the US, Europe, Russia, Israel, South Korea and elsewhere. Price matters, but so do reliability, technology, delivery schedules, maintenance and the ability to provide support years after the initial sale,” said a key ministry of defence (MoD) official responsible for monitoring defence production. The official added that every export order won by an Indian company is, therefore, a small test of the country’s industrial credibility. The rise in exports is happening alongside a much broader expansion of domestic defence manufacturing. Defence production reached Rs 1.78 lakh crore in 2025-26, more than three times the level recorded a decade earlier. That is significant because an export industry cannot be built on sporadic overseas orders. It needs factories, suppliers, engineers, testing facilities, research institutions and a domestic market capable of providing scale.Perhaps the biggest change is the growing role of private industry. Private companies accounted for roughly 45 per cent of defence exports in 2025-26 while public sector defence companies accounted for the balance. This marks a fundamental shift from the old model in which defence manufacturing was overwhelmingly the preserve of state-owned enterprises.The new ecosystem is far more diverse. Alongside traditional defence manufacturers are private engineering companies, MSMEs, start-ups and technology firms working on everything from ammunition and protective equipment to electronics, sensors, optics, software and specialised components. That matters because India’s biggest export opportunity may not necessarily lie in selling complete fighter aircraft or warships. It could lie in becoming a major supplier of the thousands of components and technologies that make modern military systems work.But there is another, less visible change taking place alongside the export surge: India is beginning to change the way it exports defence equipment. The latest overhaul of the defence export regime last week is significant because it tackles one of the less glamorous but critical problems facing Indian manufacturers—procedure.For an exporter, winning an international contract is only the beginning. The ability to move quickly from an opportunity to an actual shipment can determine whether a company wins or loses business. The revised framework, therefore, seeks to reduce repetitive approvals and make it easier for Indian companies to pursue overseas opportunities.For instance, consultation requirements have been removed for exports of non-lethal defence items to most destinations while safeguards remain for sensitive countries. Similarly, companies participating in international tenders and exhibitions can pursue those opportunities without the earlier layer of stakeholder consultation.Announced by MoD, the changes to the OGEL framework are potentially even more consequential. Three separate procedures covering major platforms and equipment, parts and components, and intra-company technology transfers have been consolidated into a single framework. The validity of an OGEL has also been extended from two years to three.More importantly, its coverage has been expanded from 41 countries to virtually all destinations, except specified sensitive countries and those subject to UN sanctions or arms embargoes. It signals an attempt to treat defence exporters as businesses competing in a global market rather than simply as entities seeking permission to ship controlled products.The revised framework also recognises the increasingly complex nature of defence supply chains. Indian companies that have long-term agreements with foreign original equipment manufacturers (OEMs) can now potentially obtain OGEL authorisation for eligible items linked to those contracts, subject to prescribed conditions. The range of items covered has also been widened.For India’s smaller manufacturers, these changes could matter disproportionately. A large defence company may have the legal, compliance and administrative capacity to navigate a complicated export process. An MSME often does not. If a smaller company can respond faster to an international tender, demonstrate its product at an overseas exhibition and execute multiple consignments under a longer-valid authorisation, the difference can be commercially significant.“The objective is no longer simply to produce more defence equipment. It is to create an ecosystem in which Indian companies can design, manufacture, market, export and support defence products competitively,” another defence official said.The geopolitical moment is also unusually favourable as the wars in Europe and the Middle East have pushed countries to increase military spending and exposed vulnerabilities in global defence supply chains. Governments are increasingly interested in diversifying suppliers rather than relying too heavily on one country or one supply chain. For India, this creates an opening.The country’s traditional advantages—competitive manufacturing costs, a large engineering workforce and an expanding technology sector—could make it an attractive alternative supplier. But converting that opportunity into a durable export business will require something more difficult than competitive pricing: trust.The government has set a target of Rs 50,000 crore in defence exports by 2029, alongside an ambition to raise total defence production to Rs 3 lakh crore. The targets are achievable in principle, but the easier gains may already have been made.Dr Sanket Kulkarni, assistant professor and Subhas Chandra Bose Chair of International Relations at Chanakya University, Bengaluru, said the expansion of OGEL is a significant step for India’s defence-industrial ecosystem. “Beyond boosting exports, it exposes Indian firms to global competition and compels them to meet international standards and quality benchmarks. Higher export orders can drive revenue and profits, enabling sustained investment in research and development,” said Kulkarni.Moving from components and relatively lower-value products to complex platforms and advanced technologies would require sustained investment in research and development. India will need stronger capabilities in areas such as propulsion, aerospace systems, sensors, electronic warfare, artificial intelligence and other high-end technologies.That is why the procedural reforms matter. A company competing for an international contract cannot afford uncertainty or lengthy approval processes. Defence manufacturers operate in a market where competitors can lose or win an order simply because they can respond faster. The next phase must, therefore, be about making Indian defence companies not only capable of manufacturing but competing at the speed of a global market.There is a diplomatic dividend too. Defence exports create relationships that can last decades. Countries that operate Indian equipment are more likely to develop institutional, technical and economic links with India. Defence manufacturing can, therefore, become an extension of India’s strategic partnerships.Kulkarni added that over the past two years, India has deepened defence-collaboration frameworks with foreign partners. Through joint ventures and manufacturing partnerships, Indian companies are gradually integrating into global defence supply chains. “These procedural changes position India as a credible supplier, especially in components and sub-systems. Simplified export processes can support long-term supply agreements with strategic partners at a time when global arsenals have been depleted by the wars in Eastern Europe and West Asia,” he said.According to Kulkarni, Indian private-sector defence companies should use this window to build manufacturing and supply partnerships with foreign OEMs, focusing on non-lethal segments such as drones and components, air-defence and counter-drone systems. This offers a valuable learning curve for domestic firms.Experts, therefore, believe extending OGEL to all countries except sensitive destinations signals a clear intent to widen the geographical reach of Indian defence exports and reflects growing confidence in India’s manufacturing and innovation strengths in defence and aerospace.Subscribe to India Today Magazine- EndsPublished By: Shyam BalasubramanianPublished On: Sep 10, 2026 19:54 IST