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.

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Raina Guha

Email –

raina.guha@indianchamber.net

Expert Committee

Chair –

Commodore P R Hari

Chairman,

Defence , Aerospace & Space sector C&MD, Garden Reach Ship Builders & Engineers (GRSE) Ltd.

Co-Chair –

Commander Gautam Nanda, IN (Retd.)

Associate Partner

KPMG

Co-Chair –

Mr. Shrinivas Dempo

CMD,

Dempo Group

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