India’s Defence Exports: Can Europe Become a Lasting Market?

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India is exploring joint ventures as a way to expand its participation in European defence procurement. Indian manufacturers could establish partnerships and production facilities in Europe, while European companies could enter the Indian market through arrangements consistent with the government’s Make in India framework.

In the global arms trade, credibility is delivered, not merely declared. A country may invest heavily in defence manufacturing, but its standing in international markets ultimately depends on whether it can supply reliable equipment on time and meet the expectations of overseas buyers. India’s growing presence in Europe suggests that its defence industry is beginning to make that transition.

Defence Secretary Rajesh Kumar Singh’s reported statement that India became Europe’s third-largest arms exporter over the preceding year points to a significant shift in the country’s defence manufacturing journey. Driven largely by European demand for ammunition and artillery products under the ReArm Europe initiative, the rise presents an opportunity for Indian manufacturers. The larger question is whether India can turn this surge into a lasting position in the global arms market.

Europe’s Demand Has Opened a Door

Europe’s renewed focus on defence preparedness has increased demand for military supplies, particularly as countries seek to replenish their ammunition stocks and strengthen their inventories. India has benefited from this shift, with Singh citing increased exports of standard ammunition, artillery shells and other military equipment to European markets.

The reported ranking should be understood within the period and product categories covered by the Bloomberg report cited by Singh. Even with that qualification, the development reflects India’s growing ability to serve international procurement requirements at a time when European countries are seeking additional sources of supply.

For India, this marks a welcome change from its longstanding dependence on imported military equipment. However, the current opportunity is partly shaped by an exceptional rise in European demand, and sustaining export growth will require Indian manufacturers to remain competitive after immediate procurement pressures ease. Reliable deliveries and consistent product quality will matter far more in the long run than a ranking achieved during a period of heightened demand.

Record Exports Reflect a Growing Industrial Base

India’s defence exports reached a record INR 38,424 crore in financial year 2025–26, equivalent to approximately EUR 3.6 billion, according to figures cited by Singh and the Ministry of Defence. This represented a 62.66 per cent increase from INR 23,622 crore in the preceding financial year, reflecting the expanding capacity of Indian manufacturers to serve both domestic and overseas markets.

The industrial base supporting this growth has widened considerably. According to Singh, India now has 16 major public-sector defence companies, around 840 large and medium-sized private firms, and approximately 17,000 smaller enterprises, including startups. This network gives manufacturers a broader production base and creates opportunities for specialised suppliers to participate in the defence industry.

Domestic procurement remains equally important. Singh said the government aims to direct 75 per cent of annual defence capital expenditure towards domestic purchases, with annual capital expenditure estimated at USD 20 billion to USD 25 billion. This market can help Indian companies build production capacity before competing for international contracts, while export orders can provide further opportunities to expand manufacturing.

Yet higher production does not automatically translate into technological independence. India will need sustained investment in research and development, indigenous designs and critical components if it wants to move beyond manufacturing equipment towards developing technologies that can compete internationally.

From Ammunition to a Wider Global Market

India’s defence exports extend beyond the ammunition and artillery products currently attracting European demand. Singh said Indian manufacturers supply defence goods to more than 80 countries, including small arms, protective equipment and defence components, while buyers in Southeast Asia have shown interest in additional products and weapons systems.

This wider market offers India an opportunity to reduce its dependence on any single region or product category. However, converting interest into sustained business will require manufacturers to meet the technical requirements of overseas customers and provide dependable support after delivery.

The first BrahMos shipment to the Philippines in April 2024 demonstrated the expanding reach of India’s indigenous defence industry. The country was beginning to supply a sophisticated missile system to another state, extending its role beyond the domestic market. Such exports can strengthen defence relationships, although their long-term value will depend on the supplier’s ability to maintain performance and support the equipment throughout its service life.

India’s own defence procurement relationships have also diversified beyond Russia, which remains deeply embedded in its military inventory. Singh identified France and Israel as significant suppliers, each accounting for approximately 15 per cent of India’s defence imports after Russia, according to his remarks. This diversification can improve access to different technologies, although maintaining equipment sourced from multiple countries creates additional logistical and maintenance requirements.

Singh’s references to Greece and Cyprus also point to opportunities for closer engagement with European partners. The significance of these relationships, however, will depend on whether they lead to concrete procurement arrangements or industrial cooperation rather than remaining diplomatic expressions of interest.

Joint Ventures Could Deepen India’s European Presence

Such partnerships could help Indian firms understand European procurement requirements and develop closer relationships with local customers. European companies, meanwhile, could gain access to India’s expanding defence market while exploring opportunities for shared production and industrial cooperation.

The approach offers a possible route towards more integrated supply chains, but its success will depend on practical arrangements involving investment, technology sharing and intellectual property. Companies must also meet regulatory requirements and demonstrate that their products can compete on quality, cost and delivery.

The government’s approach to foreign participation in India similarly seeks to encourage domestic manufacturing rather than simply increase imports of finished equipment. Both sides will therefore need to find partnerships that serve their commercial interests while meeting their respective procurement conditions.

Can India Turn the Surge into a Lasting Advantage?

India’s reported rise among Europe’s arms exporters is an important achievement, but maintaining that position will require more than increased production. Defence customers expect suppliers to meet contractual commitments, maintain consistent quality and provide technical support over the long term. Failure in any of these areas can weaken the reputation that export growth helps establish.

India must also ensure that its expanding manufacturing base develops deeper technological capabilities. The emphasis on Indian-designed, developed and manufactured products provides a foundation, but sustained progress will depend on investment in research and engineering rather than production volumes alone. A wider export market and stronger industrial partnerships with Europe could reinforce this process by creating opportunities to improve products and expand technical expertise.

The opportunity is clear, but the outcome remains uncertain. European demand has demonstrated that Indian manufacturers can serve important international requirements, while the country’s existing customer base offers scope for further growth. Whether this becomes a durable shift will depend on the ability to sustain exports beyond the present surge.

India’s defence industry has moved into a more prominent position in the global market, supported by record exports and a growing domestic manufacturing base. Its next task is to convert that progress into lasting competitiveness through reliable delivery, stronger indigenous technology and partnerships that extend beyond individual contracts. The balance sheet can record the value of a shipment, but only sustained performance can establish the credibility that makes future orders possible.