Defence Secretary Rajesh Kumar Singh said India has emerged as Europe’s third-largest arms exporter, driven by increased demand under the “Rearm Europe” initiative and the expansion of its domestic defence industry.

Singh said India is widening its defence manufacturing base beyond 16 public sector companies to include private firms, small and medium enterprises and startups.

“In India, on the other hand, for the last 10 years, we've seen tremendous growth in our defence ecosystem. We have some, besides the 16 large public sector companies. We now have almost 840 odd companies with industrial licenses that are large and medium-sized, and some 17,000 small and medium enterprises, including startups. And the result of this diversified industrial base is becoming visible in terms of the value of domestic sales, which are now almost 17 billion euros.”

India’s defence exports have reached a record Rs 38,424 crore, or around 3.6 billion euros. Citing a Bloomberg report, Singh said increased European demand had boosted exports of artillery shells and ammunition of different calibres.

"Our exports have reached an all-time high of 38,424 crores, which is about 3.6 billion euros, and I was reading a Bloomberg report yesterday, which said that suddenly over the last year, India became the third largest exporter of arms to Europe, mainly because of the Rearm Europe initiative. As a result, a lot of standard ammunition of different types, artillery shells, and large- and small-calibre ammunition started getting exported to Europe in significant numbers,"

India now exports defence equipment to more than 80 countries, including bulletproof jackets, helmets, small arms, artillery and gun systems. Singh said the government aims to spend 75% of its annual defence capital expenditure, estimated at $20 billion to $25 billion, within the country. It prioritises Indian-designed, developed and manufactured equipment to strengthen technological independence.

Singh said India had reduced its dependence on Russian defence supplies while strengthening ties with France, Israel and other European countries. France accounts for around 15% of India's defence imports, alongside Israel as a major supplier.

India also plans to expand its participation in European defence procurement through joint ventures. European companies can similarly access India's defence market by establishing partnerships locally.

Singh said European firms seeking Indian procurement contracts must meet the country's Make in India requirements. While European localisation requirements stand at around 25%, India mandates at least 50%.

He said closer cooperation could integrate Indian and European defence supply chains and expand manufacturing partnerships on both sides.