Defence Manufacturing Industry in India

India's defence exports in the previous seven years have exceeded Rs. 85,000 crore (US$ 11 billion).

Advantage India

Growing
Demand

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

* There is a critical need to build technological capabilities over countries such as China, Pakistan due to the ongoing territorial disputes over the ownership of the Northern State of Kashmir and the North Eastern State of Arunachal Pradesh, respectively.

Growing Demand

Competitive
Advantage

* Government of India changed the automatic route limit for FDI in the defence sector to 74%; this will boost national security, self-sufficiency in product design, increase investments, income and employment.

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

Competitive Advantage

Government
support

* In November 2021, Defence Acquisition Council (DAC) boosted the ‘Make in India’ initiative by according Acceptance of Necessity (AoN) — to capital acquisition proposals worth Rs. 7,965 crore (US$ 1.07 billion) — for modernisation and operational needs of armed forces.

* On October 15, 2021, Prime Minister, Mr. Narendra Modi, dedicated the seven defence public sector undertakings (PSUs)—created through the restructuring of the Ordnance Factory Board (OFB)—to improve functional autonomy, efficiency, growth potential and innovation in the defence sector.

Government Support

Opportunities

* India’s proactive approach towards foreign mutual trade and rising joint agreements with foreign countries such as USE, Kazakhstan and the US for joint defence manufacturing and strengthening defence ties—offer huge potential growth opportunities to boost defence manufacturing in India.

Opportunities
Last updated: May, 2022

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