India has emerged as the third-largest exporter of arms to Europe, benefiting from increased demand for military supplies under the European Union’s Rearm Europe initiative. Defence Secretary Rajesh Kumar Singh highlighted the development on October 23, 2026, as India’s defence manufacturing sector continues to expand.
India’s defence exports reached an all-time high of ₹38,424 crore in the financial year 2025–26, equivalent to around 3.6 billion euros. Singh said increased European demand for standard ammunition, artillery shells and large- and small-calibre ammunition has contributed to the rise.
Rearm Europe Drives Demand
Europe’s efforts to strengthen defence capabilities have created new opportunities for Indian manufacturers. Ammunition and artillery-related supplies have been significant contributors to India’s growing exports to the region.
India’s defence exports now cover more than 80 countries and include ammunition, artillery systems, small arms, helmets, bulletproof jackets and other tactical equipment.
India’s Defence Manufacturing Base Expands
According to Singh, India’s defence ecosystem has grown beyond its traditional base of public-sector companies. It now includes around 840 large and medium-sized companies holding industrial licences and nearly 17,000 small and medium enterprises, including startups.
The government aims to direct 75% of annual defence capital expenditure towards domestic procurement, prioritising equipment that is Indian-designed, developed and manufactured. This approach is intended to strengthen domestic capabilities and reduce reliance on imported defence technology.
India Eyes Greater Role in European Defence Supply Chains
India plans to increase its participation in European defence procurement through joint ventures and manufacturing partnerships. Indian companies could establish joint ventures in Europe to access government procurement programmes, while European firms could partner with Indian manufacturers to serve the domestic market.
Singh said closer cooperation could help integrate Indian and European defence supply chains. European companies participating in Indian procurement programmes would still need to comply with the country’s Make in India requirements.
The growing export base reflects India’s ambition to strengthen its position as a global defence manufacturing hub. However, the Defence Secretary has also cautioned that the current surge in international demand may not continue indefinitely, making sustained manufacturing capacity and long-term partnerships important for future growth.
