India stands among the world’s foremost military powers,
playing a critical strategic role for the Indian government. The Global Power
Index ranks India’s defence sector fourth in terms of firepower, with an
impressive score of 0.0979 (with 0.0 being the best). In 2024, India allocated
approximately $75 billion to its defence budget, marking a real-term increase
and ranking as the fourth largest globally and the highest among all
ministries, showcasing the nation’s strong commitment to bolstering its defence
capabilities. As the world’s fourth-largest defence spender, India has set
ambitious goals, targeting $6.02 billion (₹50,000 crore) in annual defence
exports by 2028-29. India’s defence exports, in 2023-24, surged to ₹21,083
crores ($2.54 billion), a 31% increase over the previous year.
The Indian government aims to achieve a defence production
target of $25 billion by 2025, including $5 billion in exports. This vision is
driven by innovative initiatives such as ‘Innovations for Defence Excellence
(iDEX),’ which connects start-ups with defence establishments to develop
advanced technologies. iDEX has successfully engaged the start-up ecosystem
through the Defence India Start-up Challenge (DISC) and partnerships with
incubators.
Policy reforms have been instrumental in advancing India’s
defence sector. The Ministry of Defence has introduced five positive
indigenisation lists for the armed forces, comprising over 500 items, and four
additional lists covering more than 4,600 items for Defence Public Sector
Undertakings (DPSUs). These initiatives aim to promote self-reliance by
prioritizing Made-in-India weapons and platforms. Additionally, liberalized
foreign direct investment (FDI) norms now allow up to 74% FDI through the automatic
route (previously 49%) and 100% with government approval.
With the rising activities from both the defence and civil
aviation sector the aerospace industry is growing significantly, in India. The
defence aerospace sector alone accounts for USD 50 billion, covering
investments in aircraft, helicopters, unmanned aerial vehicles (UAVs),
avionics, and related systems. India is certain to become a major aerospace
hub.
The growth of India’s aerospace industry indicates that the
country is rapidly building capabilities to emerge as a preferred destination
to support the global AD&S supply chain. The sector is now opening up to
the private, both global and domestic, players, thus providing enormous
opportunity for collaboration and joint ventures for manufacturing of aero
components, Maintenance, Repair and Overhaul (MRO) facilities for civil and
military aviation sectors, besides overhaul and maintenance of aero engines.
Additionally, the Indian drone industry is experiencing
significant growth and transformation as of 2024, driven by supportive
government policies, increased investment, and a burgeoning startup ecosystem.
The Indian drone market is projected to reach $ 1.437 billion by 2029.
India’s space sector, valued at $44 billion and targeting
$11 billion in exports by 2033, exemplifies innovation through public-private
collaborations. Having launched 429 foreign satellites and earning $174
million, India continues advancing with navigation satellites like IRNSS and
missions such as Aditya L-1, demonstrating its leadership in aviation, space,
and global development.
The ICC National Expert Committee on Defence, Aerospace and
Space focuses on equi-proportional growth of the sector with innovation,
fostering collaboration among industry leaders, policymakers, and experts.
Chaired by Commodore (Cmde) P. R. Hari, Chairman and Managing Director of
Garden Reach Shipbuilders & Engineers Ltd., the committee aims to
strengthen India's self-reliance in defence manufacturing and establish the
nation as a global leader in defence innovation, production, and exports.
The sector is currently led by Ms. Raina Guha, who can be reached at raina.guha@indianchamber.net.
Email –
raina.guha@indianchamber.net
Chair –
Chairman,
Defence , Aerospace & Space sector C&MD, Garden Reach Ship Builders & Engineers (GRSE) Ltd.
Co-Chair –
Associate Partner
KPMG
Co-Chair –
CMD,
Dempo Group
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