New Delhi: Continuing on its upwards trajectory, India's annual defence production has surged upwards of 15% to reach an all-time high of ₹1.78 lakh crore, the latest government data shows. The increase is on the back of increasing private sector production in the country, a significant part of which is export oriented.Indian defence production is expected to increase sharply within the next two years as several ammunition and explosives manufacturing hubs are set to go online, with export orders already lined up due to a global shortage of large calibre ammunition.Also Read: IAF launches project to produce indigenous long-range kamikaze drones"This upward trajectory is a clear indicator of the country's expanding defence industrial base. With sustained policy support, several new initiatives, increased private sector participation, and growing export capabilities, the defence production sector is poised for continued acceleration in the years ahead," defence minister Rajnath Singh said.Singh has set a target of defence production to reach ₹3 lakh crore by 2029.Industry insiders say that at least four ammunition hubs -- in Maharashtra, Himachal Pradesh, Madhya Pradesh and Andhra Pradesh -- are in advanced stages of construction and will start manufacturing and exporting goods in the coming months.Also Read: HAL, Tata, L&T among 10 firms in race for Rs 30,000 crore defence drone dealAccording to the latest government data, Defence Public Sector Undertakings and other PSUs accounted for approximately 76% of total production, while the private sector contributed 24%, which is a rise from 22% in FY 2024-25. Capacity in the public sector has also grown but is dwarfed by the production facilities being set up with private investment.Besides ammunition and explosives, new private sector units are investing in large scale drone manufacturing, electronics production, manufacturing of long-range weapons and robotics. "The share of the private sector is at its all-time high of around ₹42,000 crore in FY 2025-26, reflecting its expanding role in the defence ecosystem," officials said.Growth in defence production is also reflected in Indian military exports data, with the number crossing a record Rs 38, 424 crore in the last financial year. The upwards trajectory of Indian defence manufacturing is reflected in the fact that the number has increased by 110% since FY 2020-21, when it was at ₹84,643 cr.