Defence Manufacturing Industry in India

Defence exports reached an all-time high of approximately Rs. 16,000 crore (US$ 1.93 billion) in FY23, over a 10-times increase since 2016-17.

Advantage India

Growing
Demand

* Demand growth is likely to accelerate with rising concerns of national security.

* Till April 2023, a total of 606 industrial licences were issued to 369 companies operating in the defence sector.

* Defence exports rose 240% over five years in FY23, to US$ 1.9 billion (Rs. 15,918.16 crore); India now exporting to over 85 countries due to collaborative efforts.

* The Ministry of Defence has set a target of achieving defence exports worth US$ 2.41 billion (Rs. 20,000 crore) for FY24.

Growing Demand

Competitive
Advantage

* India had the world’s fourth-largest defence expenditure, as of 2022, and has set a target of US$ 6.02 billion (Rs. 50,000 crore) worth of annual defence exports by 2028-29.

* The Government of India opened the defence industry for private sector participation to provide impetus to indigenous manufacturing.

* In the Interim Budget 2024-25, US$ 2.9 billion (Rs. 23,855 crore) was allocated to DRDO, while a corpus of US$ 12.0 billion (Rs. 1 lakh crore) was earmarked for Deep Tech, offering long-term loans to tech-savvy companies to foster innovation in defence technologies within India.

Competitive Advantage

Government
support

* Under the Atmanirbhar Bharat Initiative, five positive indigenization lists of 509 products have been promulgated by Department of Military Affairs and Ministry of Defence to be manufactured domestically for the defence sector, instead of being sourced via imports.

* SRIJAN portal launched to promote indigenisation. More than 34,000 items are available for public view and 10,000 items have been indigenized till January 2024.

Government Support

Opportunities

* Government has established two Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu.

* India has around 194 defence tech startups building innovative tech solutions to empower and support the country’s defence efforts.

Opportunities
Last updated: May, 2024

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DEFENCE MANUFACTURING INDUSTRY IN INDIA

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