India’s aerospace and defence (A&D) sector is entering a high-growth phase, but execution constraints could become the biggest risk to sustaining momentum, according to a new PwC India study titled Accelerating aerospace and defence manufacturing through operational excellence and supply chain resilience.

The A&D sector is poised to play a catalytic role in India’s economic transformation, helping drive the nearly 16-fold expansion in manufacturing required to realise the country’s ambition of becoming a $30 trillion economy by 2047. Strong demand, rising exports and policy support have positioned A&D manufacturing as a key pillar of India’s economic growth. However, the study highlights that large order backlogs, which could take up to a decade to clear, may test the sector’s ability to deliver at scale.

India’s A&D sector is at a turning point. Demand is strong and exports are rising, but the next phase will be defined by execution at scale.

India now exports defence products to nearly 100 countries. Domestic defence production reached a record ?1.54 lakh crore in FY25. However, large order books are creating pressure on delivery capacity.

For major manufacturers, order backlogs are already significant:

· 1.71x to 6.88x order book-to-revenue multiples
· 2–7 years of execution backlog
· In some segments, up to 5–10 years to clear existing orders

This points to a clear structural challenge. As Dinesh Arora, Partner and Leader Advisory, PwC India, notes: “The real test for India’s aerospace and defence sector is no longer whether demand exists, but whether the ecosystem can execute with speed, precision, and resilience. As order books expand, companies will need to move beyond incremental capacity addition and fundamentally strengthen planning, shopfloor productivity, supplier coordination, and digital integration. Those that build these capabilities early will be better positioned to convert growth momentum into reliable, globally competitive delivery. Put simply, India has the opportunity. Now it must build the execution engine to match it.”

To address the widening gap between order books and execution capacity, the study outlines six priority transformation areas:

I. Supply chain efficiency
II. Operational excellence
III. Planning and governance
IV. R&D acceleration
V. Workforce productivity
VI. Digital integration, or digital thread

These transformation levers can help the sector move from backlog-led growth to execution-led scale. The focus areas include stronger operations, shopfloor discipline, digital integration, indigenous vendor ecosystems, supply chain resilience and smarter use of advanced technologies. Together, these shifts can enhance productivity, minimise rework and enable manufacturers to execute faster, more reliably and in line with global competitive standards.

“For India’s aerospace and defence sector, the next phase of growth will be shaped not just by demand, but by the ability to execute with consistency, speed, and precision with scale. Companies that strengthen planning, modernise operations, and build resilient, digitally connected supply chains will be best placed to convert today’s order pipeline into timely, high-quality output at scale,” said Captain Vishal Kanwar, Aerospace Defence and Space Leader, PwC India.