Modern Defense Industry in India

By:B2B Desk 2019-01-28

India’s defense industry has seen a massive transformation over the years. It has entered a new wave of transformation with the Government’s substantial policy changes and reforms like the Defense Procurement Procedure (DPP 2016) and also the major reforms made in foreign direct investment (FDI) regulations. The Government is in full vigor of developing an indigenous defense industry.

These reforms can be recognized from its target to change the status quo that was existent up till 2014. It also further wishes to strongly implement the Make in India campaign even in the defense sector. These reforms along with the country’s stronghold over the global defense space and the exceptional export potential in the field of engineering services and components sourcing shall together prove immensely beneficial for the country’s development in the defense space.

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This has also impacted the foreign OEMs along with the aerospace companies in India, who have gained profound interest in the defense industry.

India has planned to spend $ 130 billion on the modernization of the armed forces in the upcoming 5 years and attaining self- dependence in defense production is the primary target for the Indian Government. The Government has made reforms and policies opening up the Defense industry for the private sector to promote indigenous manufacturing. This expansion also opens gates for the foreign original equipment manufacturers to partner with the Indian companies.

100% FDI is permitted in defense industry out of which 49% is permissible under automatic route and anything further than 49% by Government route.

India’s Defense Growth Over the Years

The allotment towards defense in 2018 budget was around $ 41 billion with $ 13.3 billion set aside for capital overheads.

The sum budget allowed for the Indian military for the 2018-19 fiscal year is $ 62.8 billion, which is 12.1% of the total 2018-19 Union Government expenditure.

India’s share in international military expenditure was 3.3% in 2016.

Service/ department-wise allocation as a percentage of total defense estimates 2017-18 (BE):

Army: 55.9%

Navy: 14.6%

Airforce: 22.5%

DGQA (Director General of Quality Assurance): 0.5%

DGOF (Directorate General of Ordnance Factories): 0.8%

R&D: 5.7%

2018-19 is yet to be disclosed once the fiscal year ends.

26th January 2019 Parade witnessed some of the magnificent developments of Indian Defense Forces

This year, the Republic Day Parade witnessed the inclusion of M777 Howitzer and K9 Vajra, the self-propelled gun which are the latest artilleries inducted in the Indian Army. T-90 tanks, SU-30, Mig 29, Jaguar aircraft was also ba e major attraction of the parade.

Indian Air Force AN-32aircraft with 10% bio-jet fuel soared during the Republic Day 2019 fly-past. The aircraft touched the sky over Rajpath in a ‘V’ shape depicting the ‘Victory’ sign.

The 26th January parade 2019 also saw the addition of the self-propelled gun, M777 Howitzer and K9 Vajra which are the newest artilleries added in the Indian Army. T-90 tanks, SU-30, Mig 29, Jaguar aircraft were other main major attractions for the spectators of the parade.

Another addition to the 2019 parade was that this year one of the deputations of IAF will march to the melody of an astronaut during the parade and the theme was ‘Indian Air Force: Safeguarding Indian Skies’ for the IAF tableau this year.

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