India's defence exports are poised to experience significant growth as European nations increase their defence spending to reduce reliance on the United States for security.

A recent report by Nuvama highlights that Europe's limited manufacturing capacity and workforce shortages are creating opportunities for Indian defence manufacturers.

The Pentagon's proposed $50 billion annual budget cuts have put pressure on European countries to bolster their defence capabilities, potentially leading to an influx of defence orders from Europe as early as the first half of FY26.

The reduction in US military aid to Ukraine has exposed NATO's heavy dependence on American defence funding, with the U.S. contributing about 70% of NATO's total defence expenditure over the past decade. This shift in global dynamics has placed Europe under mounting pressure to increase its defence spending.

India's defence exports reached a record ₹21,083 crore in FY 2023-24, marking a 32.5% growth from the previous fiscal year and a 31-fold increase over the past decade.

Several Indian companies, including Bharat Electronics, Hindustan Aeronautics, Bharat Dynamics, and Paras Defence, are expected to benefit from the European Union's massive rearmament plan. The EU's €800 billion defence spending plan could lead to increased procurement of components and subsystems from Indian firms, positioning India as a key player in the global defence export market.

India's competitive pricing, particularly for systems like the Akash and BrahMos missiles, which are significantly cheaper than their U.S. or European equivalents, makes its defence products appealing to European nations seeking cost-effective solutions.

The Indian government has set ambitious targets for defence exports, aiming to reach ₹500 billion by FY29, further underscoring the sector's potential for growth.

Agencies