Modernisation and indigenisation are the buzz words in India’s defence manufacturing market. The segment is receiving a lot of political push under the Make in India campaign. The concept of import substitution is being gradually accepted by stakeholders. In the past 12-15 months, several big-ticket contracts have been awarded to the Defence Public Sector Undertakings (DPSUs), private players and foreign vendors across different segments.
In a major policy move, the government formulated a Strategic Partnership model/policy in May 2017. Under this model, the government will select Indian companies and foreign firms who can join forces to make fighter jets, helicopters, armoured vehicles and submarines. Increase in FDI limit to 49%, abolition of FIPB, allowing foreign OEMs to change their offset partners, opening up public sector facilities for private sector, introduction of concept of SPs, etc. are some of the others conducive measures.
As part of another enabling move, the MoD has approved the creation of a Defence Innovation Fund (DIF) which is an attempt to foster innovation and technology development in the sector. The government is highly committed to its ‘Make in India’ vision and the DPP 2016 reflects a clear linkage with this ideology.
Nonetheless, teething troubles with the long-drawn contract award process need to be addressed. Insufficient and limited vendor base, non-conformity of the offers to the request for proposal (RFP) conditions, long field trials, complexities in contract negotiations and long lead time for indigenisation are the key issues that impede faster turnaround of capital acquisition projects.
The import content in India’s defence equipment continues to be very high. India imports over two-thirds of its defence equipment requirements, primarily due to the absence of a conducive local defence manufacturing ecosystem. This is an opportune time to embark on a new phase of self-reliance in the Indian defence sector by manufacturing technologically advanced equipment within India. In a nutshell, it is the velocity of the orders and not the quantum which will determine the growth of the sector
The data sources in our reports are both primary and secondary. The primary data is obtained from sources such as related ministries, industry experts, private companies, Conferences organized by us for the related sector etc. The secondary sources include annual reports of companies, industry associations, paid databases, web sites, etc. Our analysts and researchers combine the information from these primary and secondary sources with their industry expertise to synthesize the data presented in the report. We also conduct surveys and interviews for our research. For the surveys, we mostly conduct interviews with key players and relevant people in the sector. They are mostly via telephonic as well as personal interviews.
The report is divided into three sections with nineteen distinct chapters:
Section I: Market Size, Trends and Outlook
- Sector Overview
- Defence Budget Analysis
- DPP 2016 and Strategic Partnership Model
- Potential for Private Sector Participation
- Major Programmes/Acquisitions - Updates and Opportunities
- R&D Landscape
- Role of MSMEs
- Progress in Defence Offsets
- Trends in Defence Exports and Imports
- Future Outlook and Market Opportunities
Section II: Segment Overview, Key Trends and Market Opportunities
- Armoured Vehicles, Arms and Ammunitions
- Defence Logistics Vehicles
- Electronics and Communication Systems
Section III: Key Players
- Profiles of Defence Public Sector Undertakings (DPSUs)*
- Ordnance Factory Board
- Private Players**
*Each profile gives an overview of the DPSUs operations, indirect imports and vendor development, share in defence procurement, capex estimates, indigenisation targets, modernisation initiatives, key collaborations, R&D initiatives, financial performance, and future plans and strategies.
**Each profile gives an overview of the company’s operations, key contracts serviced, equipment supplied, recent collaborations, joint ventures, and future plans and strategies.