India's Defence Exports Soar, New Report Highlights Unprecedented Growth

India's defence exports have skyrocketed from Rs 15 billion in 2017 to Rs 210 billion in 2024, driven by a 46% CAGR. A new report points to global supply chain shifts and domestic initiatives as key factors propelling India's ambition to become a global defence manufacturing hub.

India's defence exports have soared from Rs 15 billion in 2017 to Rs 210 billion in 2024, registering a compound annual growth rate (CAGR) of 46%, as highlighted in a report on 'Defence Conference 3.0' by Antique Stock Broking. The report attributes this growth to the global shift towards a China+1 strategy and the repercussions of the Russia-Ukraine war, which present India with additional opportunities to fill supply chain gaps, potentially bolstering its share in the global defence sector.

The report emphasizes India's long-term ambition to become a global defence manufacturing hub, driven by Defence Public Sector Undertakings (DPSUs), private enterprises, start-ups, and MSMEs. It articulates that strategies like the China+1 approach and the ongoing geopolitical tensions offer India a chance to address supply chain disruptions and enhance its footprint in the global defence industry.

To achieve this target, the development of a robust domestic ecosystem is crucial, as lower import content in products expedites approvals by minimizing international conflicts. The Ministry of Defence has undertaken significant initiatives to attract Indian private sectors and global Original Equipment Manufacturers (OEMs), including establishing aerospace parks, defence corridors, fast-tracking project approvals, and improving development and testing facilities.

The report highlights India's Maintenance, Repair, and Overhaul (MRO) segment's substantial potential for global aerospace firms due to its technical proficiency and cost-effective solutions. The report posits that India's MRO sector offers a significant opportunity for global aerospace leaders, given its expertise and competitive costs compared to international peers.

India aims to scale up its domestic defence turnover to Rs 3 lac crore by 2029, with Rs 500 billion targeted for exports. This growth is anticipated to reduce India's import bill, as the nation is currently the world's largest importer of defence equipment. Under the Atmanirbhar Bharat initiative, 75% of the defence capital outlay is reserved for domestic players, rising from 49% in FY21.

In light of geopolitical challenges and the modernization needs of its Armed Forces, India plans to invest Rs 8.3 lac crore in domestic procurement, generating substantial business opportunities for local companies. The report underscores that India intends to place orders worth INR 8.3 trillion through domestic procurement, presenting significant business prospects for local players.

According to the Ministry of Defence, India's defence manufacturing sector saw a 16.8% increase in the fiscal year 2023-24. This notable rise marks the highest-ever growth in the country's defence production value, with the total value of defence production reaching Rs 1,26,887 crore this year, boosting from last year's figures.

(With inputs from agencies.)