February 10, 2020
India’s annual defence production has steadily risen, from US$10.4 billion in 2016-17 to US$11.3 billion in 2018-19
India’s defence exports have grown seven folds in the last two years to over US$1 billion in 2018-19
Till date, 281 Indian companies have been issued 461 Licenses for manufacturing in the defence sector
India also imports key defence products which were valued at US$104 million for 2019-20 as of January
Driven by increasing innovation, R&D and manufacturing capabilities as well as favourable policies of the Government of India, the nation is emerging as a key defence exporter. The authorisation for defence exports in the country has grown seven folds in the last two years from over US$213 million in 2016-17 to more than US$1 billion in 2018-19. Meanwhile, in the first nine months of 2019-20, India’s defence export was valued at more than US$825 million. The market for India’s defence export currently spans more than 40 nations, including developed nations such as the US, Australia, Germany, Israel, UAE, Saudi Arabia, Japan, France, the Netherlands, Sweden, Singapore, Indonesia, among others.
The nation’s success in defence export has been led by the Government’s efforts to boost production and promotion of indigenous design, development, and manufacturing of defence equipment, along with the Indian private sector. Revisions in the Defence Procurement Procedure (DPP) as well as in the FDI policy for the defence manufacturing industry have further helped in strengthening exports. Meanwhile, innovation ecosystems such as the Innovations for Defence Excellence (iDEX) are developing future capabilities. Such inclusive initiatives, along with funding aid, have involved MSMEs, startups, individual innovators, R&D institutes and Academia in the defence and aerospace industry along with large players.
To date, 281 Indian companies have been issued 461 Licenses for manufacturing in the defence sector, out of which 73 licensed companies covering 118 licenses have reported commencement of production. Besides, there are more than 8,000 MSMEs which are among the vendor base of OFB & Defence PSUs supplying various items to them. Backed by such a vast and growing network, the industry’s annual production value has steadily increased, from US$10.4 billion in 2016-17 to US$11.3 billion in 2018-19. In the first nine months of 2019-20, the sector’s output valuation was reported at over US$7 billion. India also imports key defence products which were valued at US$104 million for 2019-20 as of January.