India's Micro, Small, and Medium Enterprises (MSMEs) sector can play a crucial role in achieving self-reliance in defense equipment manufacturing, aligning with Prime Minister Narendra Modi's vision of 'Atmanirbhar Bharat.' The 'Make in India' initiative has already strengthened domestic manufacturing and reduced reliance on imported defense equipment through collaborations with foreign manufacturers. MSMEs cover various industries and offer specialized solutions, leading to innovation, job creation, and cost-effective defense equipment production. The government has allocated Rs 1,500 crore in FY 2023–24 for MSMEs and startups in defense manufacturing. Various schemes like iDEX and TDF support their involvement. India aims for a $26 billion defense industry with a $10 billion investment by 2025, generating 2–3 million jobs. Simplified defense export procedures have increased exports significantly, with a $5 billion export target by 2024.