New Delhi, Dec. 20 -- India's aerospace and defence manufacturing ecosystem is entering a decisive phase. Rising defence spending, a sharper focus on indigenization and growing export ambition are creating a longer runway for domestic suppliers. Large public sector players have already captured investor attention, and their valuations reflect that optimism.

The opportunity now lies further down the value chain.

A new set of small and mid-sized companies is quietly building capabilities in aerospace electronics, precision manufacturing and complex systems integration. These businesses may not be headline grabbers, but they sit at critical points in aircraft and platform programmes.

They are also seeing improving order visibility and the...