New Delhi, June 18
Entities operating in the Indian defence sector are expected to sustain robust growth momentum, with likely revenue expansion of 15-17 per cent in FY26, a report showed on Wednesday.
The healthy revenue growth is primarily driven by strong execution progress on the back of a robust order book position, with order book/operating income (OB/OI) ratio at 4.4 times as of FY25 end, according to an ICRA analysis.
Over the years, the government has implemented numerous policy initiatives, with ‘Atmanirbhar Bharat’ at its core, to enhance domestic defence production capabilities, encourage investments and expand exports.
These include the liberalisation of FDI policies in the defence sector, continuation of the defence offset policy, establishment of two Defence Industrial Corridors and a sustained push towards indigenisation through the notification of five ‘Positive Indigenisation Lists’ and the online indigenisation portal ‘SRIJAN’.
“These apart, the government has also increased the budgetary outlay for the sector with a thrust towards capital outlay, which has grown at a CAGR of 8.29 per cent over the previous five years to Rs 1.92 lakh crore in FY2026 budget estimates (BE),” the report mentioned.