Maharashtra, having enjoyed an early lead, holds strong potential for expanding its defence and aerospace manufacturing capabilities
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In the last few years, several state governments in India have been working to promote their states as viable destinations for hosting privately owned defence and aerospace companies. The growing interest of state governments is understandable considering that it opens up prospects of attracting big ticket investments, creates employment, gains familiarity vis-à-vis high-end technologies and perhaps cross-sectoral spillovers in the civilian space. As the ecosystem around the defence manufacturing sector continues to expand in the country, we will have a peculiar sight wherein state governments compete with each other to court Indian and global defence companies.
Maharashtra is one such state which enjoys a head start in the arena of defence and aerospace manufacturing. In the last year, Maharashtra has attracted investments from several private defence companies. It was reported that Max AeroSpace & Aviation Pvt. Ltd. signed an MoU with the Government of Maharashtra for a proposed investment of INR 8,000 crores spanning across eight years to establish a facility for helicopter manufacturing in Nagpur. Earlier, Paras Defence & Space Technologies announced that it has signed an MoU with the Maharashtra Government to establish an optics park in the State, with an investment of around INR 12,000 crores spread across 10 years, starting from 2028. Economic Explosives Limited also signed an MoU with the Government of Maharashtra in January 2025 for establishing a proposed defence and aerospace project in Nagpur, estimated to be around INR 12,700 crores, focusing on a diverse set of defence products.
Considering the swiftly improving regulatory climate in India’s defence and aerospace sector over the last few years, Maharashtra is well-positioned to build on its existing strengths to drive the next phase of defence and aerospace manufacturing.
In addition to such big-ticket projects, several startups and MSMEs in the state are working or supporting manufacturing efforts in niche domains such as unmanned underwater systems, drones, small arms, defence components, etc. Considering the swiftly improving regulatory climate in India’s defence and aerospace sector over the last few years, Maharashtra is well-positioned to build on its existing strengths to drive the next phase of defence and aerospace manufacturing. This phase has to be a combination of continuity and change, involving large private players focusing on strategic programmes, and new startups developing futuristic products leveraging emerging technologies and cyber-physical systems.
Maharashtra has several factors which work to its advantage in further cementing its role in the defence and aerospace manufacturing realm. Considering its location on the Western coast of India, the state is uniquely positioned to contribute towards fulfilling India’s ambitious INR 50,000 crores defence exports target. In lieu of changing global geopolitical equations and enormous strains caused by wars in the Middle East and Eastern Europe, Maharashtra can play a unique role in fulfilling global demand for defence equipment.
From a policy perspective, Maharashtra has an Aerospace and Defence manufacturing Policy, 2018, enumerating its vision, action plan, fiscal and other State support. The State is also blessed with a long coastline facing promising defence markets in Africa, the Middle East, and Europe. In future, the newly constructed Samriddhi Expressway can act as an important bridge between regions around Nagpur and the port in Mumbai.
The cities of Pune and Mumbai are well recognised for hosting promising startups, business entities and technology institutions specialising in emerging technologies. The Indian Institute of Technology in Mumbai hosts a Technology Innovation Hub under the National Mission for Inter-disciplinary Cyber Physical Systems. The state hosts Defence Research and Development (R&D) labs such as the Armament Research and Development Establishment in Pune and is also home to a major fighter aircraft production facility in Nashik. From a manufacturing perspective, Maharashtra is already host to large engineering companies such as Bharat Forge Limited and Larsen & Toubro Precision Engineering & Systems, which are leading the private sector’s charge in defence manufacturing. Pune-based Bharat Forge Limited is working on the development of a range of defence items, including advanced artillery guns, armoured vehicles and making forays in domains such as Unmanned Aerial Vehicles. On the other hand, Walchandnagar Industries Limited, located near Pune, has played a significant role in India’s space programme.
However, it would be worthwhile for the state to curate the next phase of defence and aerospace manufacturing more strategically. For instance, a media report mentions that in the new Aerospace and Defence Policy 4.0, the Andhra Pradesh government has identified corridors which will focus on specific sub-domains of aerospace and defence manufacturing. Maharashtra has already identified key districts in the State for setting up similar hubs. However, the state must consider conducting an updated assessment of product-wise national and global demand in the defence and aerospace sector. Such an exercise can then pave the way for establishing additional product-based hubs within different parts of the state, which leverages geography, existing manufacturing and innovation ecosystem, talent and is in alignment with demand.
The state must consider conducting an updated assessment of product-wise national and global demand in the defence and aerospace sector.
Maharashtra signed MoUs with several defence companies at the World Economic Forum hosted at Davos in January 2025. From a reputational point of view, it was a strategic step in signalling Maharashtra’s growing profile in the defence and aerospace sector to the European audience, which has significantly increased its defence spending. However, the quantum of investments and partnerships could receive a major fillip if the state invests strategically in communicating its ability to host and curate the development of global defence and aerospace giants. For instance, the Paris Air Show of 2025 saw participation of senior officials from the States of Tamil Nadu and Telangana. In addition to conveying their respective states’ suitability & strengths in defence and aerospace sectors to the global audience, such participation also enables state governments to gain a deeper understanding of the expectations of global entities and accordingly introduce key policy interventions. At a national level, the armed forces are collaborating with select defence & aerospace industry bodies in hosting competitions and events. These events are useful reference points for States such as Maharashtra to identify promising startups for engagement and collaboration.
Maharashtra must substantially scale up its official presence in key defence & aerospace forums, within and outside India. Proposed investment summits in the state must pivot discussions around the state’s existing capabilities and those proposed in the domain of defence and aerospace. Maharashtra also needs to create a body of discussion forums to project cities like Nagpur, Nashik, Chhatrapati Sambhajinagar and Ahilyanagar for hosting key conversations around defence and aerospace manufacturing to not just attract companies but also the interest of technologists from the rest of the world. A general outreach to researchers working in prominent global technological institutions to establish ventures in the State needs to be conceptualised and initiated.
Proposed investment summits in the state must pivot discussions around the state’s existing capabilities and those proposed in the domain of defence and aerospace.
The successes gained from initiatives like the Maharashtra Defence and Aerospace Venture Fund must be used as a launch pad for facilitating additional conversations between prospective investors and state-based startups and MSMEs. Maharashtra must explore synergies and collaborations with national innovation programmes under the Central Government to augment its knowledge resources and R&D capabilities. Some of these national programmes are paving the way for Startups to collaborate with international partners. For example, the MEITY Global Startup Bridge Program facilitated collaboration between India’s IG Drones and VoxelSensors of Belgium. Latching on to such initiatives institutionally can open new doorways for Maharashtra-based defence and aerospace startups. These initiatives and programs can also present opportunities for attracting talent who are well-versed in emerging technologies and can support innovation endeavours of startups and private defence & aerospace players in the state.
Sanket Sudhir Kulkarni was a Fellow at the Observer Research Foundation
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Sanket Sudhir Kulkarni was Fellow at ORF's Mumbai Centre. Sanket's primary area of interest is studying geopolitics of energy trade. Also, Sanket closely monitors patterns ...
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