India’s Defense Exports Hit Record ₹38,424 Crore as Europe Restocks Ammunition

India’s defense manufacturers have a record order book, but their next growth test sits deeper in the production chain. The country’s defense exports reached a record ₹38,424 crore in fiscal 2025-26, up 62.66% from ₹23,622 crore a year earlier, according to an official government factsheet. European efforts to replenish depleted ammunition inventories helped create that opening, while tight supplies of propellant, fuzes and specialized materials could restrict how quickly Indian factories expand further.

The ₹38,424-crore figure covers India’s entire defense-export sector, not ammunition sales alone. State-owned defense companies supplied ₹21,071 crore, or 54.84% of the total, while private companies accounted for ₹17,353 crore. Exports by the state-owned group grew 151%, compared with 14% growth for private manufacturers. India now sells defense products to more than 80 markets, and its number of registered exporters increased from 128 to 145.

Administrative changes contributed to the expansion. India revamped its online defense-export portal and simplified authorization procedures, reducing some of the friction between an order and permission to ship it. The demand surge, however, has a clear European component. Defense Secretary Rajesh Kumar Singh said India was exporting standard ammunition and artillery shells of various calibers to European countries in significant quantities.

Europe’s restocking drive opened a new supply channel

Trade data indicate that Indian companies shipped at least $872 million in ammunition-related products to Europe during the four years following Russia’s invasion of Ukraine. The comparable total for the preceding four years was $49.2 million. Those categories included shells, propellant and explosives, making the increase substantial but narrower than India’s complete defense-export figure.

Nearly three-quarters of the reported European shipments went to 13 Central and Eastern European countries. Within those specified ammunition categories and markets, India ranked second among foreign suppliers behind South Korea not second across Europe’s overall weapons market.

A narrower dataset covering seven European destinations shows both the scale of the increase and signs that annual growth will not be linear. Their imports from India rose from $5.92 million in 2021-22 to $151.31 million in 2023-24, then eased about 8% to $139.64 million in 2024-25. Slovenia received $71.74 million in the latest year, more than half of the seven-country total.

The wider demand environment is unlikely to disappear quickly. The European Union adopted temporary instruments in 2023 to support ammunition production and common procurement. Its ammunition-production program allocated €500 million to projects involving explosives, powder, shells, testing and certification. That policy response illustrates why European buyers have looked beyond established domestic sources: replenishment depends on expanding the entire industrial network, not merely placing larger shell orders.

Shell output depends on the least available inputs

An ammunition plant cannot increase finished output simply by adding assembly shifts. Propellant must arrive in sufficient volume and meet consistent specifications. Specialized chemicals, energetic materials, electronic components and high-grade metals must also pass laboratory testing. Modern fuzes add another demanding manufacturing stream, particularly when customers require repeatable quality across large production lots.

India’s Comptroller and Auditor General highlighted this constraint in Report No. 10 of 2024, identifying propellant-production delays that affected ammunition-filling factories. That is a consequential bottleneck: installed filling capacity has limited value when upstream energetic materials arrive late. It also makes production expansion dependent on suppliers that may require their own plants, qualification work and capital investment.

Retired Maj. Gen. Rajan Kochhar said many ammunition variants had reached almost 91% indigenization, while integration of critical technologies remained unfinished. High domestic content can reduce exposure to imported components, but the remaining gaps may sit in precisely the materials and subsystems that determine reliability and production tempo. Kochhar identified raw-material quality, critical components and the ability to design and manufacture modern fuzes as central requirements.

Questions also remain about the final destination of some products. India’s direct exports to Ukraine were comparatively small at $6.28 million in 2024-25, less than 5% of its shipments to the seven European destinations. Reports have alleged that Indian-made ammunition reached Ukraine through European intermediaries, but India’s foreign ministry called one such account speculative and misleading. Available trade records do not conclusively trace all reported materials through to Ukraine.

India has already demonstrated that European restocking can produce a sharp export increase. Durable growth will require something harder than capturing emergency orders: dependable propellant supply, qualified materials, scalable testing and modern fuze production, backed by procurement relationships that remain after the immediate inventory shortage eases.

By David Whitaker — Associate editor for AMI’s aerospace and drone systems desk, translating flight systems, aircraft programs, spaceflight, and UAV developments into accessible technical stories.