The Future of the Indian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

Indian defense budget between 2014 and 2018, inclusive of military pensions, increased at a CAGR of 8.07%, and is expected to continue maintaining robust growth at a CAGR of 8.94% during the forecast period to reach a value of US$95.1 billion by 2023. Prolonged unresolved border issues and rising tension with two neighboring nations, China and Pakistan, is expected to fuel the defense budget in the coming years; in addition to the country’s need to replace its aging and outdated military hardware and technology.

Defense capital expenditure is expected to increase at a CAGR of 8.07% as India is expected to procure and invest more in segments such as multirole aircraft, corvettes, submarines, tanks, artillery guns, Multi Barrel Rocket Launchers (MBRL), helicopters, submarines, surface-to-air missiles, Unmanned Aerial Vehicles (UAV) and frigates, among others, during the forecast period. In addition, expenditure on IT and communications is expected to increase significantly, with a strong focus on enterprise applications, systems integration, and real-time mobile communications.

Furthermore, one of the key factors driving the Indian defense budget during the forecast period will be the implementation of OROP (One Rank, One Pension) and the 7th Central Pay commission, which is expected to further inflate the military’s revenue expenditure.

The Indian Ministry of Finance (MoF) has significantly increased its expenditure on homeland security to counter a series of terrorist attacks and prevent the smuggling of arms and explosives, as well as domestic uprisings. Over 2014-2018, the country invested a total of US$56.3 billion in homeland security, which is expected to increase to US$88.6 billion over the forecast period. Due to the nature of the security threats that the country faces, the main opportunities for growth in homeland security are expected in the border security, police force modernization, aviation, mass transportation, and maritime security markets.

India was the world’s top importer of military hardware over 2012-2016. The country’s defense equipment imports, which accounted for 13% of global arms imports over 2012-2016, were three times larger than its closest rivals, China and Pakistan. The country relies on imports to meet 60% of its defense requirements, with the remaining 40% being met by domestic companies.

The report ""The Future of the Indian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023"" offers detailed analysis of Indian defense industry with market size forecasts covering the next five years.

In particular, it provides an in-depth analysis of the following:

• Indian defense industry market size and drivers
  
• Budget allocation and key challenges
  
• Porter’s Five Force analysis of Indian defense industry
  
• Import and Export Dynamics
  
• Market opportunities
  
• Competitive landscape and strategic insights
  

Companies mentioned in this report: Lockheed Martin Corporation, BAE Systems Plc. , Thales, Boeing , Mazagon Docks Limited, Hindustan Aeronautics Limited (HAL) , Bharat Electronics Limited (BEL) , Bharat Dynamics Limited (BDL), Ordnance Factory Board, Bharat Earth Movers Limited (BEML) and Goa Shipyard Limited (GSL), Tata Advanced Systems Limited (TASL) and Mahindra Defense Systems (MDS)

Scope

• India has a coastline, land frontier, island territories, airspace, and crucial offshore installations to defend against the various potential security threats. As a result, it is highly necessary for the Indian Armed Forces to be prepared to repel any external threat. The Indian Government is therefore continuously focusing on improving the country’s existing defense infrastructure. Only 40% of the defense needs are currently fulfilled by the domestic defense industry and the rest is imported from various countries of the world.
  
• The Indian Government has identified the need to build a strong and self-sustaining defense sector as a top priority. This has prompted the Indian MoD to consistently allocate an increasing share of its budget toward the defense sector, a trend that is expected to continue over the forecast period. Historic data shows that India invested US$197.7 billion in the defense sector during 2014-2018, and this is expected to increase to US$287.5 billion over 2019-2023.
  
• Historic data shows the average capital expenditure allocation of the total Indian defense budget was averaging 33.2%, and the allocation is expected to decline marginally during the forecast period to an average of 30.6%.
  
• The Indian MoD is expected to invest in submarines, multi-role aircrafts, corvettes, tanks, artillery guns, Multi Barrel Rocket Launchers (MBRL), helicopters, submarines, surface-to-air missiles, Unmanned Aerial Vehicles (UAV) and frigates among others.
  

Reasons to buy

• This report will give the user confidence to make the correct business decisions based on a detailed analysis of Indian defense industry market trends for the coming five years
  
• The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  
• Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  
• A deep qualitative analysis of Indian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts.