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Executive Analysis of IT Opportunities in Indian Defense Market
Frost & Sullivan, Oct 2011, Pages: 77
This Frost & Sullivan research service titled Executive Analysis of IT Opportunities in Indian Defense Market provides a detailed examination of major market trends and opportunities as well as key market drivers and restraints. In this research, Frost & Sullivan's expert analysts thoroughly examine the following: combat systems, namely networking and telecom systems, C4I systems, surveillance and radar systems, training and simulation systems and non-combat systems including software systems for enterprise resource planning (ERP), supply chain management (SCM), product lifecycle management (PLM), enterprise asset management (EAM), human capital management (HCM), and maintenance, repair, and overhaul (MRO).
Market Overview
Armed Forces Modernization Creates Opportunities for Indian IT Defense Market
The increasing use of information technology (IT) for secure and real-time communication and efficient human and machine management in the armed forces presents a tremendous growth opportunity for the Indian IT sector. Although there is a lack of large system integrators in the country, Indian firms are moving up the value chain through tie-ups with foreign defense majors by leveraging offset obligations.
The armed forces modernization program will drive growth through direct as well as offset opportunities. “Modernization of the forces aims to equip the futuristic individual soldier with hand-held computing devices, encrypted communication, thermal sensors, and night vision devices as well as to integrate these devices with the C4I systems at the command level for improved tactical decision-making,” notes the analyst of this research. “Given that India's armed force is one of the largest in the world, the modernization program will create both long-term and large-scale opportunities for the Indian IT sector.”
Future Success to Hinge on Investments in R&D
Between 2011 and 2015, India's defense budget is expected to grow at more than 8 per cent year-on-year. India is projected to spend approximately $54 billion on foreign arms and equipment procurements, which will also generate offset opportunities worth $18 billion. The massive increase in armed forces inventory, with procurement of medium multi-role combat aircraft (MMRCA), helicopters and naval vessels and submarines will create avenues for MRO, EAM, and PLM solutions The demand for secure and real-time communication between units on the battlefield among the three service arms and between the armed forces and the back-end staff will be the most important driving factor for the combat system segment. “All modern weapons and equipment are IT-intensive,” adds the analyst. “This trend, along with their afterlife management requires complex ERP and EAM suites customized to the requirements of the Indian defense forces.”
While the IT opportunities in the Indian defense market are expected to witness robust growth over the forecast period, bureaucratic and procedural delays, as well as high customization requirements will restrain the rate of market growth. The lack of expertise in combat systems will also rein in the possibility of higher growth rates. Indian IT firms do not possess the knowledge base and the expertise necessary to independently develop critical combat systems such as tactical communications systems or battlefield management systems. “While currently, the joint venture or consortia strategy is being adopted to overcome this challenge, it is imperative that market participants invest in R&D to develop these capabilities,” advises the analyst.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Combat systems
- Networking & telecom systemsC4I systems
- Surveillance & radar systems
- Training and simulation systems
- Programmes like F-INSAS)
- Non-combat systems
- Software systems for enterprise resource planning (ERP)
- Supply chain management (SCM)
- Product life cycle management (PLM)
- Enterprise asset management (EAM)
- Human capital management (HCM)
- Maintenance repair and overhaul (MRO)
- Defence logistics
This research service covers the IT opportunities in the Indian defense market during the period 2011-2015. It is possible to break the defense IT market into two different segments based upon the types of systems, namely combat systems and non-combat systems. The study analyzes PESTLE factors, market drivers, restraints and challenges and trends for both these market segments. The study offers crucial insights into the current and future size of the market. It also includes growth opportunities created by various modernization programs and the offsets obligations and profiling of key industry participants
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