New Delhi, Aug. 7 -- India's defence sector is projected to grow from Rs 1.78 lakh crore in FY26 to Rs 3 lakh crore by FY29, registering a compound annual growth rate (CAGR) of about 19 per cent, according to a report by CareEdge Ratings.

The report attributes this expansion to higher government spending, increased private-sector participation, rising exports, and a stronger focus on indigenous technology development, ET reported.

Margins and Domestic Capabilities to Strengthen

The sector is expected to maintain Profit Before Interest, Lease Rentals, Depreciation and Taxation (PBILDT) margins of 20-22 per cent, indicating stable financial performance, the report noted.

Continued policy support-including up to 74 per cent foreign direc...