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Solar’s $1.3 bn bet shifts India’s defence game

By Sohail Khan 15 September 2026, 2:13 pm

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Business News›News›Defence›Solar's $1.3 bn bet is a turn for India's defence-industrial complex

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Solar's $1.3 bn bet is a turn for India's defence-industrial complex
Synopsis

The piece argues that Solar Industries’ ₹12,951-crore acquisition of South Africa’s Omnia Holdings could mark a new phase for India’s defence industry, as Indian companies increasingly move beyond domestic production into overseas acquisitions, manufacturing and technology partnerships.

defence 1 — Domestic defence production touched Rs 1.78 lakh cr in FY2025-26, up from Rs 84,643 cr in FY2020-21, while exports reached a record Rs 38,424 cr. *(AI-generated image)*

Solar Industries' Rs 12,951-crore acquisition of South Africa's Omnia Holdings is much larger than most recent overseas bets by Indian defence companies. So much so, shares of Solar Industries crashed more than 12% intraday on Tuesday due to concerns over funding of this huge acquisition. But the importance of the deal lies elsewhere too. The deal comes as India's defence manufacturing industry has reached a scale that would have been difficult to imagine a decade ago. And the deal can be an inflection point for India's defence-industrial complex which can begin to get ambitious.

Domestic defence production touched Rs 1.78 lakh crore in FY2025-26, up from Rs 84,643 crore in FY2020-21, while exports reached a record Rs 38,424 crore. Indian companies are now beginning to use that expanding industrial base to enter foreign markets, form technology partnerships and, in a few cases, establish manufacturing operations overseas. Solar Industries' big bet could be a sign that Indian companies are acquiring enough scale, capacity and ambition to go global.

ALSO READ | Solar Industries to acquire South Africa’s Omnia for Rs 12,951 crore in biggest global expansion push

Solar Industries' big bet on a global explosives business

Solar's acquisition of Omnia is not a conventional defence takeover. Omnia is a diversified South African chemicals company whose businesses include agriculture and mining, with its BME unit supplying explosives and blasting solutions to mines. Solar is paying about $1.35 billion in cash for all outstanding shares, with completion expected in early to mid-2027 subject to regulatory approvals. Omnia operates across 23 countries and gives Solar access to markets including North America, Australia, Brazil, Indonesia and much of Africa.

Solar's traditional business and its newer defence operations draw on related capabilities. The company makes high-energy materials, initiating systems and explosives for both commercial and military applications. Its defence order book stood at about Rs 18,000 crore by the end of 2025, including roughly Rs 11,000 crore of international orders, according to CRISIL. Defence had risen to around 24% of revenue in the first nine months of FY2026, compared with 5-7% five years earlier.

The Omnia acquisition therefore looks less like an Indian defence company suddenly venturing abroad and more like the next step for a company that has spent years building manufacturing capacity and overseas distribution in explosives. Solar had already established operations in Africa. Omnia gives it a much larger international network and a substantially broader mining business. The company is using capabilities developed in India and its existing international business to buy scale overseas.

The domestic base has changed first

The numbers explain why such ambitions are becoming possible. India's defence production was Rs 46,429 crore in FY2014-15. It reached Rs 1.27 lakh crore in FY2023-24, Rs 1.54 lakh crore in FY2024-25 and Rs 1.78 lakh crore in FY2025-26. Private companies accounted for Rs 42,000 crore, or about 24%, of the latest figure. Defence exports have seen an explosive growth — from Rs 686 crore in FY2013-14 to Rs 38,424 crore in FY2025-26. Private-sector companies contributed Rs 17,353 crore of those exports last year.

The change is visible in individual companies. Solar's defence revenue rose to Rs 2,634 crore in FY2026, almost double the previous year, while its defence order book reached Rs 18,000 crore. Bharat Forge's Kalyani Strategic Systems has emerged as a major exporter of artillery systems. Tata Advanced Systems has moved into complete military aircraft and armoured vehicles. Adani Defence has built a business around drones, counter-drone systems, missiles and ammunition.

For these and many other companies, government procurement has provided an initial domestic market in which to build production lines, qualify products and develop engineering teams. Exports then give those factories a larger market.

That export experience is increasingly feeding another form of internationalisation in the shape of partnerships and local manufacturing.

Tata has taken an Indian combat vehicle abroad

The clearest example is Tata Advanced Systems' operation in Morocco. In September 2025, Tata opened a defence manufacturing facility at Berrechid near Casablanca, its first overseas defence manufacturing plant. The factory produces the DRDO-Tata WhAP 8×8 armoured vehicle for Morocco and potentially other African markets. Reuters reported that the plant was expected to source 35% of components locally, with plans to raise that to 50%.

The first lot of WhAP vehicles was handed over to the Royal Moroccan Army in December 2025. Tata describes the facility as its first overseas defence manufacturing operation.

This is a different model from Solar's acquisition. Tata is taking an Indian-developed product abroad and establishing production close to the customer. Morocco is also being used as a potential gateway into African markets. The move shows how an Indian defence company can progress from exporting a product to manufacturing it in the market where it is sold.

Tata is pursuing the same strategy through its relationships with major Western aerospace companies. Its C-295 partnership with Airbus has created India's first private-sector military aircraft final assembly line in Vadodara. Under the original $2.52-billion contract, 16 aircraft are to be made in Spain and the remaining aircraft assembled in India.

In 2025, Tata and Dassault Aviation also agreed to manufacture Rafale fighter fuselages in Hyderabad. The facility is expected to produce up to two fuselages a month, with output intended for Indian and global markets. It will be the first production of Rafale fuselages outside France.

These and other such arrangements put Indian factories inside the supply chains of global defence companies rather than leaving Indian manufacturers dependent solely on domestic orders.

Kalyani shows another route

Bharat Forge's defence arm has followed a more technology-intensive path. In January 2024, Kalyani Strategic Systems acquired a majority stake in Zorya Mashproekt India, a company linked to the Ukrainian marine gas-turbine manufacturer. Its stake was initially 66.24% and was to settle at 51% on a fully diluted basis after the technology partner acquired shares. Zorya Mashproekt India was created to develop Indian capabilities in the design, manufacture, repair and overhaul of gas-turbine engines.

The war in Ukraine had disrupted the supply chain around Zorya-Mashproekt, which supplied marine gas turbines used by the Indian Navy. in 2023 that the Navy was looking at Indian options for such engines and that Bharat Forge and BHEL were among the companies consulted.

Kalyani has also used partnerships rather than acquisitions to widen its technology base. Kalyani Rafael Advanced Systems, its joint venture with Israel's Rafael, manufactures missile systems in India and has supplied MRSAM missile kits to the Indian armed forces.

More recently, Kalyani Strategic Systems agreed to work with US companies AM General and Mandus Group on 105-mm and 155-mm artillery platforms. In September 2026, it signed another agreement with France's Thales to develop and manufacture 70-mm rocket systems in India.

Foreign companies bring technology, product designs or access to established defence markets while Indian firms increasingly bring engineering, manufacturing and cost competitiveness.

Partnerships are becoming export platforms

Adani's relationship with Israel's Elbit Systems is an earlier example of this model. Adani Elbit Advanced Systems manufactures Hermes 900 drones in Hyderabad. By 2024, Adani said around 70% of the drone had been indigenised. The Hyderabad facility had already produced drones for export and was being expanded into a larger manufacturing hub for UAVs and missiles.

Mahindra Defence has pursued a similar approach with Embraer. In 2024 the two companies signed an MoU to explore making India a regional hub for Embraer's C-390 Millennium military transport aircraft.

Bharat Forge has separately entered agreements with foreign propulsion and weapons companies. Its Kalyani Strategic Systems signed a 2023 pact with Rolls-Royce Marine North America covering areas including design, development, licensed manufacturing, installation and aftermarket support for naval marine propulsors.

The underlying proposition is changing. Foreign defence companies increasingly see India as a place where they can manufacture for the Indian military and potentially for third-country markets. Indian companies see those relationships as a way to acquire technology, qualify themselves with global OEMs and build products that can travel beyond India.

Scale is beginning to change the ambition

The government's procurement policy has helped create scale in India's defence manufacturing industry. In 2024, the Defence Acquisition Council approved capital acquisition proposals worth Rs 4.22 lakh crore, with 94.19% of the value earmarked for indigenous sources.

That creates an unusually large home market for companies willing to invest ahead of orders. A manufacturer that wins a major Indian programme can amortise tooling, testing and engineering costs over much larger production runs. Once the product is proven with the Indian armed forces, it becomes easier to approach foreign customers. The export numbers show that this is already happening. India supplied defence products to around 80 countries in FY2024-25, ranging from ammunition and weapons to subsystems and complete systems.

For companies such as Solar Industries, the next question is therefore no longer whether India can manufacture defence products at scale. It is whether the resulting companies can turn that scale into global businesses.

Solar has now placed a $1.35-billion bet on the answer. Tata has put an Indian-designed armoured vehicle into production in Morocco. Bharat Forge is acquiring technology and building relationships with Western weapons companies. Other firms are following through joint ventures, contract manufacturing and overseas orders.

The Indian defence industrial base is still dominated by public-sector production, which accounted for about 76% of output in FY2025-26. But the private sector's share has risen steadily and its role in exports is already much larger than its share of production.

The government's stated target is Rs 3 lakh crore of annual defence production and Rs 50,000 crore of exports by 2029. If Indian manufacturers continue to win domestic programmes and convert them into export products, the next stage may involve more Tata-style overseas factories, more Kalyani-style technology deals and more Solar-style acquisitions. The Omnia transaction shows how far the ambition can extend when an Indian defence-linked manufacturer decides that its natural market is no longer India alone.

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bharat forgesolar industriesSolar Industries acquisitionIndian defense manufacturingOmnia HoldingsSolar IndustriesKalyani Strategic SystemsIndian defense companiesexpanding defense production in India

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