Sector profile

Aerospace & defence

Indigenous defence production has more than doubled since 2020-21, and the Uttar Pradesh Defence Industrial Corridor (Lucknow, Kanpur, Jhansi, Agra, Aligarh and Chitrakoot nodes) is one of two such corridors in India. This page covers Ministry of Defence data and the state incentives.

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HAL Tejas light combat aircraft in flight at Aero India — Photo: Rahuldevnath via Wikimedia Commons, CC BY 3.0

Importance to the Indian economy

India's defence production reached a record ₹1.78 lakh crore in 2025-26, up 15.6% from ₹1.54 lakh crore in 2024-25; it was ₹1,27,434 crore in 2023-24 (Ministry of Defence, via PIB). The private sector's share rose to 24% in 2025-26.

Defence exports also hit a record ₹38,424 crore in 2025-26, up from ₹23,622 crore in 2024-25 and ₹21,083 crore in 2023-24. MSMEs supplying components, sub-assemblies and services to defence PSUs and private primes are a large part of this ecosystem.

The last three years in official data

Figures as published by the Government of India source linked against each year. We do not estimate or fill gaps.

Value of defence production in India₹ crore

2023-24

₹1,27,434 cr

2024-25

₹1.54 lakh cr

2025-26

₹1.78 lakh cr

Bars start at zero and are scaled to the largest value shown.

Year	Value (₹ crore)
2023-24	₹1,27,434 crSource: PIB, 24 Mar 2025 (PRID 2114546)
2024-25	₹1.54 lakh crSource: PIB, 17 Jun 2026 (PRID 2273824)
2025-26	₹1.78 lakh crSource: PIB, 17 Jun 2026 (PRID 2273824)

Defence exports₹ crore

2023-24

₹21,083 cr

2024-25

₹23,622 cr

2025-26

₹38,424 cr

Bars start at zero and are scaled to the largest value shown.

Year	Value (₹ crore)
2023-24	₹21,083 crSource: PIB, 9 Aug 2025 (PRID 2154551)
2024-25	₹23,622 crSource: PIB, 9 Aug 2025 (PRID 2154551)
2025-26	₹38,424 crSource: PIB, 17 Jun 2026 (PRID 2273824)

UP incentives for this sector

The Uttar Pradesh policy that applies to this sector, with the main incentives as stated in the policy or on Invest UP. Rates, caps and eligibility conditions are summarised; the policy text and its guidelines decide each case.

In force

Uttar Pradesh Aerospace & Defence Unit and Employment Promotion Policy 2024 (First Amendment)

Five years from notification (notification uploaded 31 Jan 2025; amendment uploaded May 2026). Nodal agency: UPEIDA

Incentive	Support (as per the policy)
Land	25% land subsidy; Defence Corridor land on rental at 1% for 10 years, then 1.5%
Capital subsidy	25–35% by category, with caps of ₹500–1,000 crore paid over 5–15 years (Anchor ₹200–1,000 crore; Mega Anchor ₹1,000 crore+)
Logistics	Up to ₹5 crore (imports) and ₹25 crore (exports)
R&D, skilling, marketing	CoE / R&D grant up to ₹10 crore; skilling up to ₹2 lakh a year; marketing ₹5–15 lakh; green infrastructure up to ₹1 crore

Source: Invest UP policy page; Policy document (PDF)

Applicable across sectors. A manufacturing project of ₹50 crore or more can also be evaluated under the UP Industrial Investment & Employment Promotion Policy 2022 (valid to 3 Nov 2027), and an MSME unit under the UP MSME Promotion Policy 2022. As a rule only one state policy can be used for the same investment, so compare the sector policy with these general policies on your own numbers before applying. Central schemes can often be combined with state support: see subsidy stacking.

MSME manufacturing sector

Sources

Scheme terms change; verify on the official portal; last checked 4 Oct 2026. This page is general information for planning, not a guarantee of eligibility, sanction or disbursement. See our Terms of Use & Disclaimer.

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