NEW DELHI, Oct. 2
Private defence companies are rapidly expanding their presence in India’s military procurement market, accounting for 56 per cent of the value of tenders won by a group of 10 major defence companies in 2026, compared with just 3 per cent in 2019.
The shift marks a significant change in a sector where public-sector defence companies have traditionally dominated government contracts.
Data covering 10 defence companies show that public-sector firms accounted for around 97 per cent of the value of tenders won in 2019. Their share slipped marginally to 95 per cent in 2021 before falling sharply to 44 per cent in 2026.
Private-sector companies moved in the opposite direction.
Their share increased from 3 per cent in 2019 to 5 per cent in 2021 before jumping to 56 per cent in 2026, based on tender data available through September.
The figures point to increasing participation by private companies in India’s defence procurement ecosystem, although the 2026 data cover only the first nine months of the year and the analysis is limited to the 10 companies included in the dataset.
The overall value of tenders won by these companies has also fluctuated considerably.
The combined value stood at ₹3,799 crore in 2019 and increased to ₹6,598 crore in 2021.
By September 2026, the corresponding figure was ₹2,205 crore.
The decline in total tender value means the private sector’s larger percentage share should not be interpreted as showing that overall defence tendering has expanded. Instead, it indicates that private companies have captured a substantially larger portion of the tender value represented by the companies and contracts examined.
The changing competitive environment has also become visible in some high-profile defence programmes.
Defence Secretary R K Singh recently said Hindustan Aeronautics Limited failed to win the bid for a prototype of India’s indigenous Advanced Medium Combat Aircraft, or AMCA.
The development is noteworthy because HAL has traditionally occupied a central position in India’s military aviation industry.
The AMCA programme is intended to develop an indigenous advanced combat aircraft and represents one of India’s most ambitious future military aviation projects.
Greater private-sector participation in such programmes reflects the government’s broader effort to develop a more diverse domestic defence-industrial base rather than depend almost entirely on established defence public-sector undertakings.
The latest tender data, however, do not suggest that public-sector defence companies have lost their wider importance.
Across the longer period from 2011 to 2026, three of the five companies with the highest share of defence tenders are public-sector enterprises: Bharat Dynamics Limited, Mazagon Dock Shipbuilders Limited and Hindustan Aeronautics Limited.
HAL, Bharat Dynamics and Bharat Electronics also recorded some of the strongest tender-win shares relative to the tenders in which they participated.
The figures therefore point more towards a changing competitive balance than the displacement of defence PSUs.
India’s state-owned defence companies retain major capabilities across combat aircraft, helicopters, missiles, warships, submarines, radars, electronic systems and other strategic platforms.
Private companies, meanwhile, are increasingly competing for opportunities as government policy encourages greater domestic production and wider participation in defence manufacturing.
The rise of private companies is particularly relevant to India’s efforts to build a deeper indigenous defence supply chain.
A broader industrial base can potentially increase manufacturing capacity, introduce additional competition and expand the pool of companies capable of developing sophisticated military systems.
It can also create opportunities for specialised companies in electronics, aerospace, sensors, unmanned systems and other emerging defence technologies.
Tender wins alone, however, provide only one measure of the changing defence-industrial landscape.
The size and complexity of individual contracts can vary significantly, while large strategic programmes can influence annual figures disproportionately. The 2026 numbers are also incomplete because they extend only through September.
The longer-term significance will depend on whether private-sector companies continue winning a substantial share of contracts across multiple years and move beyond supplying components and subsystems towards designing, developing and integrating major military platforms.
Defence PSUs are likely to remain central to that ecosystem even as competition increases.
The data nevertheless show a striking shift within the sample examined.
In 2019, almost the entire value of defence tenders won by the 10 companies went to public-sector firms. Seven years later, private companies account for more than half.
That transition provides another indication that India’s defence-industrial landscape is becoming more competitive, with private companies increasingly challenging the dominance historically enjoyed by state-owned manufacturers.
