Key Insights• India’s precision-guided munition market is undergoing a historic transformation driven by the most significant defence modernizations push in the country's history. • Capital expenditure has seen a sharp rise, with ₹2.19 lakh crore allocated for 2026-27 a 21.84% increase over the previous year. Within this, ₹1.85 lakh crore has been earmarked for capital acquisition, representing an increase of approximately 24% over FY 2025-26. The defence budget has risen from ₹2.53 lakh crore in 2013-14 to ₹7.85 lakh crore in 2026-27 a nearly threefold increase.• Indigenous defence manufacturing has received a massive boost, with ₹1.39 lakh crore reserved for procurement from domestic defence industries in 2026-27 approximately 75% of the capital acquisition budget. Defence production reached a record ₹1.78 lakh crore in FY 2025-26, while defence exports touched an all-time high of ₹38,424 crore a 62.66% increase over the previous fiscal year.• Loitering munitions have emerged as a significant growth segment. The DAC approved procurement of Loiter Munition Systems for Army artillery regiments in December 2025, while SMPP entered into a teaming agreement with KNDS in June 2026 to manufacture state-of-the-art loitering munitions in India under the 'Make in India' framework.Market Outlook• According to the research report, "India Precision-Guided Munition Market Outlook, 2031," published by Actual Market Research, the India Precision-Guided Munition Market is anticipated to add to more than USD 1.06 Billion by 2026–31.• The Indian Air Force is also preparing for large-scale procurement of the Astra Mk2 beyond-visual-range air-to-air missile, with limited series production expected to commence from July 2026. Plans are underway to ramp up manufacturing of Astra Mk2 and the upcoming Astra Mk3 "Gandiva" missiles with private sector support.

The IAF conducted a successful flight test of the Astra missile with an indigenous Radio Frequency Seeker in July 2025.• The Indian Army is pursuing its largest artillery expansion by procuring 300 additional K-9 Vajra 155mm/52-calibre tracked self-propelled howitzers, to be built locally by L&T in technological partnership with South Korea's Hanwha Aerospace. The Army is also acquiring precision-guided artillery ammunition through the KATANA 155 mm precision-guided artillery munition, with SMPP and KNDS signing a teaming agreement in November 2025.• Loitering munitions and kamikaze drones are emerging as defining requirements in modern conflicts. The DAC has cleared jet-based kamikaze drone systems for the Indian Army, providing enhanced electronic warfare capabilities with greater lethality and cost-effectiveness. The Indian Army has a significant and urgent requirement for advanced loitering munitions.Policies & Regulatory Landscape • India's defence procurement operates through the Defence Acquisition Procedure framework, with the Defence Acquisition Council chaired by the Defence Minister granting in-principle approval for capital procurement proposals before the acquisition process is initiated. The Union Budget 2026-27 places national security at the core of India's modernizations, self-reliance and innovation priorities.• The Defence Procurement Manual 2025, unveiled by the Defence Minister in October 2025, facilitates revenue procurement amounting to approximately ₹1 lakh crore by the three Services and other establishments under the Ministry of Defence. The new manual features a chapter on promoting self-reliance to foster indigenous design and development of defence items.• The government has taken definitive steps towards indigenization through initiatives including iDEX and promoting FDI in defence manufacturing.

India aims to achieve defence manufacturing worth ₹3 lakh crore and defence exports worth ₹50,000 crore by 2029.• India's defence exports have touched an all-time high of ₹38,424 crore in FY 2025-26, marking a 62.66% growth over the previous fiscal year. Indian-made military equipment is now exported to multiple countries, with BrahMos missiles being supplied to the Philippines and Indonesia. PGM Procurement & Industry Impact• The HAMMER precision-guided munition procurement will equip the IAF's Rafale and LCA Tejas fleets, while the Navy will deploy them on Rafale Marine fighters. The munitions are slated to be manufactured in India by Bharat Electronics Limited (BEL) under the Make in India initiative, in partnership with France's Safran. The HAMMER buy is estimated at about ₹2,400 crore. The munitions were originally procured under emergency powers following the 2020 Galwan clashes.• The Astra Mk2 beyond-visual-range air-to-air missile is poised to commence limited series production from July 2026, marking a transformative moment in India's indigenous defence capability. The missile has a range exceeding 200 km.

DRDO may soon bring private players on board to manufacture Astra missiles. Plans are underway to ramp up manufacturing of Astra Mk2 and the upcoming Astra Mk3 "Gandiva" missiles with private sector support.• The Verba Very Short-Range Air Defence System (V-SHORADS) procurement will provide a major capability upgrade to the Army Air Defence arm. The Russian-origin system, an advanced successor to the Igla family, will be produced in India by Adani Defence Limited under transfer of technology from Rosoboronexport. The Verba features a multi-spectral seeker far harder to fool with flares or laser dazzlers.• The Akash Tarang anti-UAV electronic warfare system has been approved for procurement, providing frontline formations with an effective shield against hostile drones and unmanned aerial threats. The system is built to detect, track and jam hostile drones before they get anywhere near forward troops. Industry News • Bharat Dynamics Limited is India's premier missile manufacturer and a key player in the PGM market. BDL produces a wide range of guided weapons including Astra air-to-air missiles, Akash surface-to-air missiles, Nag and Helina anti-tank missiles, torpedoes, and countermeasure dispensers.

BDL has been designated as the production agency for the indigenous MP-ATGM system. The company is establishing a new ₹1,200 crore missile manufacturing unit in Andhra Pradesh with eight assembly lines.• Bharat Electronics Limited is the production partner for the HAMMER precision-guided munitions under the Make in India initiative, in partnership with France's Safran. BEL is also involved in the joint venture with Safran Electronics & Defense for HAMMER production.• Adani Defence and Aerospace has been designated as the production partner for the Russian-origin Verba V-SHORADS systems under transfer of technology from Rosoboronexport. The company is also among the private firms that have been on boarded to become development-cum-production partners for indigenous tactical missiles.• Larsen & Toubro is the production partner for the K-9 Vajra self-propelled howitzers, building them locally in technological partnership with South Korea's Hanwha Aerospace.• NIBE secured a ₹6.12 crore order from Israel's Elbit Systems for guided rocket parts, aligned with India's broader Atmanirbhar Bharat and Make in India initiatives.Segment AnalysisIndia Precision-Guided Munition Market By Product Type• Loitering munitions represent a rapidly expanding segment driven by autonomous systems development and lightweight embedded electronics. Manufacturing typically requires 6 to 15 months, while storage life ranges between 8 to 15 years. Preventive maintenance cycles are generally conducted every 2 years, with electronic subsystem replacement occurring after 6 to 8 years depending on usage intensity and storage conditions.• Interceptor missiles form a high-complexity segment supported by advanced systems engineering and long validation cycles.

Production cycles generally range from 24 to 48 months, while storage life extends between 15 to 30 years. Depot-level inspection programs are typically conducted every 3 to 5 years, with major refurbishment cycles initiated after 15 years as part of long-term sustainment programs.• Torpedoes are supported by established naval defense manufacturing capabilities focused on propulsion, guidance systems, and underwater endurance technologies. Manufacturing lead times generally range from 18 to 30 months, while storage life extends between 15 to 25 years. Scheduled overhaul cycles are typically conducted every 4 to 6 years, with subsystem replacement occurring after 5 to 8 years. India Precision-Guided Munition Market By Subsystem• India’s guidance and navigation systems segment is built on inertial technologies, satellite-aided systems, and advanced electronics integration. Production lead times generally range from 8 to 18 months, while subsystem service life extends between 10 to 20 years. Preventive maintenance cycles are typically scheduled every 2 to 4 years, supported by periodic calibration and firmware update programs.• Target acquisition systems incorporate electro-optical, infrared, and radar-based technologies supported by structured testing and validation frameworks.

Manufacturing cycles generally range from 6 to 15 months, while subsystem lifecycle spans 10 to 18 years. Calibration and inspection cycles are typically conducted every 2 to 3 years, supported by environmental qualification testing processes.• Propulsion systems represent one of the most technically intensive subsystems, requiring advanced materials and precision engineering capabilities. Production cycles generally range from 12 to 24 months, while storage life extends between 10 to 20 years. Major maintenance cycles are typically scheduled every 3 to 5 years, with refurbishment programs initiated after 10 to 15 years.• Warhead production operates under strict safety, handling, and quality assurance frameworks aligned with national defense regulations. Assembly lead times generally range from 8 to 18 months, while storage life extends between 15 to 30 years. Inspection cycles are typically conducted every 3 to 5 years, with refurbishment programs initiated after 12 to 18 years. India Precision-Guided Munition Market By Launch Platform• Land-based systems rely on mobile and fixed launcher architectures supported by structured deployment frameworks and modernization initiatives.

Integration cycles generally range from 10 to 20 months, while preventive maintenance is typically scheduled every 12 to 36 months. System upgrade programs are generally implemented after 10 to 15 years.• Naval platforms form a key component of maritime defense capability development supported by advanced combat systems and long-endurance launch architectures. Integration programs generally range from 18 to 36 months, while lifecycle support extends beyond 20 years. Maintenance cycles are typically performed every 18 to 36 months, supported by periodic modernization initiatives.• Unmanned systems represent a fast-growing segment driven by autonomous technologies, modular payload integration, and digital command-control frameworks. Integration cycles generally range from 6 to 18 months, while software update cycles occur 3 to 6 times annually. Preventive maintenance intervals typically range from 6 to 18 months, with lifecycle spanning 10 to 20 years.Considered in this report• Historic Year: 2020• Base year: 2025• Estimated year: 2026• Forecast year: 2031Aspects covered in this report• Precision-Guided Munition Market with its value and forecast along with its segments• Various drivers and challenges• On-going trends and developments• Top profiled companies• Strategic recommendationBy Product Type• Tactical Missiles• Guided Rockets and Artillery Shells• Guided Bombs (PGMs/Smart Bombs)• Loitering Munitions• Interceptor Missiles• Torpedoes• Hypersonic MissilesBy Subsystem• Guided and Navigation Systems• Target Acquisition Systems• Propulsion Systems• Warheads• Power Supply SystemsBy Launch Platform• Airborne• Land-based• Naval• Unmanned Systems.