Recent development/Investments

The Indian Defence Manufacturing sector has seen some major investments and developments in the recent past.

• In January 2022, DRDO successfully flight tested the final deliverable configuration of Man Portable Anti-Tank Guided Missile. The indigenously developed anti-tank missile is a low weight, fire & forget missile and is launched from a man portable launcher, integrated with thermal sight. The missile impacted the designated target and destroyed it.
• The 12th and largest-ever defence exhibition - DefExpo 2022 - marked the emergence of India’s defence industry as a sunrise sector for investment on the global scale, in line with the theme ‘Path to Pride’.Organised exclusively for Indian companies, the five-day event witnessed unparalleled participation of over 1,340 exhibitors, businesses, investors, start-ups, MSMEs, Armed Forces and delegates from several countries, with engagements spread over four venues.
• The Government has taken several policy initiatives in the past few years and brought in reforms to encourage indigenous design, development and manufacture of defence equipment, thereby promoting self-reliance in defence manufacturing & technology in the country.
• These initiatives, inter-alia, include according priority to procurement of capital items of Buy Indian (IDDM) category from domestic sources under Defence Acquisition Procedure (DAP)-2020; Notification of four ‘Positive Indigenisation Lists’ of total 411 items of Services and three ‘Positive Indigenisation Lists’ of total 3,738 items of Defence Public Sector Undertakings (DPSUs), for which there would be an embargo on the import beyond the timelines indicated against them; Simplification of Industrial licensing process with longer validity period; Liberalization of Foreign Direct Investment (FDI) policy allowing 74% FDI under automatic route; Simplification of Make Procedure; Launch of Mission DefSpace; Launch of Innovations for Defence Excellence (iDEX) scheme by involving Start-ups & Micro, Small and Medium Enterprises (MSMEs); Implementation of Public Procurement (Preference to Make in India) Order 2017; Launch of an indigenization portal namely SRIJAN to facilitate indigenisation by Indian Industry including MSMEs; Reforms in Offset policy with thrust on attracting investment and Transfer of Technology for Defence manufacturing by assigning higher multipliers; and Establishment of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu; Earmarking of 25% of R&D Budget for Industry led R&D; Progressive increase in allocation of Defence Budget of military modernization for procurement from domestic sources, etc.
• Till October 2022, a total of 595 Industrial Licences have been issued to 366 companies operating in Defence Sector.
• India’s first indigenous aircraft carrier INS Vikrant was commissioned by the Prime Minister at Cochin Shipyard Limited in September 2022.The commissioning showcased the country’s growing prowess of indigenous manufacturing and a major milestone in the path towards ‘Aatmanirbhar Bharat’. With 76% indigenous content, the 262.5 m long and 61.6 m wide ship is equipped with state-of-the-art equipment/systems, designed for a crew of around 1,600 officers and sailors.
• INS Arihant carried out a successful launch of a Submarine Launched Ballistic Missile in October 2022. The missile was tested to a predetermined range and impacted the target area in the Bay of Bengal with very high accuracy. All operational and technological parameters of the weapon system have been validated.
• In May 2022, India successfully fired the Extended Range Version of BrahMos Air Launched missile from Su-30 MKI fighter aircraft. The launch from the aircraft was as planned and the missile achieved a direct hit on the designated target in the Bay of Bengal region.
• India’s defence manufacturing sector recorded increased production to US$ 11.85 billion in FY22 from US$ 10.9 billion in FY21.
• India’s defence production stood at Rs. 17, 885 crore (US$ 2.24 billion) in FY23 (until 1 August, 2022)
• Defence production by PSUs stood at Rs. 10,831 crore (US$ 1.36 billion) in FY23 (until 1 August, 2022)
• The 3rd Edition of Vietnam India Bilateral Army Exercise “Ex VINBAX 2022” is scheduled to be conducted at Chandimandir from 1-20 August 2022.
• In June 2022, the Ministry of Defence approved the procurement of military equipment and platforms worth Rs. 76,390 crore (US$ 9.84 billion) from domestic industries.
• Foreign Direct Investment (FDI) equity inflow in the defence sector for April 2000-June 2022 stood at US$ 13.16 million, as per data released by the Department for Promotion of Industry and Internal Trade (DPIIT).
• Hindustan Aeronautics Limited (HAL) and Bharat Electronics Limited (BEL) signed a contract for the co-development and co-production of the Long Range Dual Band Infra-Red Search and Track System (IRST) for the Su-30 MKI under the MAKE-II procedure of Defence Acquisition Procedure (DAP) 2020 as a part of the Make in India initiative.
• India and Japan have agreed to enhance bilateral security and defence cooperation, including in the area of defence manufacturing in May 2022.
• The Startup Incubation and Innovation Centre, IIT-Kanpur (SIIC IIT-Kanpur) recently signed an MoU with Defence Innovation Organisation (DIO) to nurture and support start ups and SMEs in the defence sector through its flagship programme iDEX Prime.
• HAL has built and delivered more than 150 military Do-228 and to a variety of customers. HAL has also constructed two civilian Do-228 aircrafts.
• In November 2021, Raksha Mantri, Mr. Rajnath Singh, inaugurated the first private operationalised defence manufacturing facility in the Uttar Pradesh Defence Industrial Corridor (UPDIC), in Lucknow. The facility operated by Aerolloy Technologies — a wholly owned subsidiary of PTC industries — will manufacture parts for aircraft and helicopter engines, structural parts for aircrafts, drones and UAVs, submarines, ultra-light artillery guns, space launch vehicles and strategy systems.
• In November 2021, to demonstrate the growing India-Israeli technological cooperation, the Defence Research and Development Organisation (DRDO), India and Directorate of Defence Research and Development (DDR&D), Ministry of Defence, Israel, entered a Bilateral Innovation Agreement (BIA) to promote innovation and R&D in start-ups and MSMEs of both countries for development of dual use technologies.
• The Defence Research & Development Organisation (DRDO) and Indian Air Force (IAF) successfully flight tested two indigenously-developed smart anti-airfield weapons in November 2021.
• The 11th Defence Technology and Trade Initiative (DTTI) Group meeting between India and the United States (US) was held virtually on November 09, 2021. The aim of the DTTI Group is to focus on a bilateral defence trade relationship and create opportunities for co-production and development of defence equipment.
• In November 2021, the Indian Army signed an MoU with the Bhaskaracharya National Institute for Space Applications and Geo-Informatics (BISAG-N), Gandhinagar, Gujarat.
• The 12th edition of DefExpo, India’s flagship event showcasing land, naval, air and homeland security systems will be held in Gandhinagar, Gujarat, from March 10 to March 13, 2022. The aim of DefExpo-2022 is to build and achieve ‘Aatmanirbharta’ (self-reliance) in defence and increase defence exports to US$5 billion by 2024.
• To boost the Indian Government’s ‘self-reliant’ India initiative in June 2021, Defence Minister, Mr. Rajnath Singh, approved the budgetary funds worth Rs. 498.8 crore (US$ 66.83 million) to Innovations for Defence Excellence (iDEX), a Defence Innovation Organisation (DIO) for the next five years.