Market Trends of India Defense Industry
The Air Force Segment is Expected to Hold the Highest Shares in the Market During the Forecast Period
The increased focus on the modernization of aircraft capabilities with the projected deliveries of various aircraft, including the Dassault Rafale, Ilyushin Il-76 (A50E) (AEW), HAL Tejas LCA Mk1, Dornier 228, HAL Dhruv ALH/Rudra, and HAL Light Combat Helicopter within the forecast period, are expected to drive the growth of the segment. India's increasing efforts toward self-reliance in manufacturing and operations will create significant opportunities for regional vendors. For instance, India is currently working on its AMCA project. The aircraft's first flight is expected from 2025 to 2026, while total production may occur by 2030.
In February 2023, HAL announced that it was involved in developing a new 13-ton-class helicopter for the Indian Armed Forces. The indigenous medium-lift helicopter may replace all imports in the class for the armed forces. Considering the scale of investments needed, this program may be the most extensive helicopter design attempted by India so far. In addition, the development of the Tejas Mk 2 started in 2023, with the series production to begin in 2026. The IAF is working on plans to continue the long-deferred requirement for 114 Medium Multi-role Combat Aircraft (MMRCA) 2.0 deal, worth an estimated USD 18-20 billion. The IAF also focuses on developing its air defense capabilities and has invested in developing related capabilities by procuring indigenous and foreign-made systems. Some notable ongoing programs include Akash SAM, S-400, and IAI MRSAM. Such programs are expected to drive the segment's growth during the forecast period.
The Naval Vessel Segment to Exhibit the Largest Market Share During the Forecast Period
Indian Navy, a vital component of the nation's defense, boasts an array of formidable vessels safeguarding the country's maritime interests. The primary objective of the navy is to protect the country's maritime borders and detect any threats or aggression against the nation's territory, people, or naval interests, both in war and peace. The country's annual rising defense expenditure drives demand for this segment. For instance, in 2022, the country's defense spending was USD 81.4 billion, a growth of 7% compared to 2021.
The Indian Navy has 181 surface vessels (frigates, aircraft carriers, destroyers, patrol vessels, and corvettes) and 18 submarines. Apart from this active naval fleet, the Indian Navy is also exploring innovative solutions such as the procurement of unmanned vessels and underwater systems to protect warships, besides the induction of clip-on suites that can be used by individual vessels. For instance, in February 2024, the Indian Navy commissioned its first survey vessel, a large (SVL) ship, INS Sandhayak. The ship has been designed to perform comprehensive hydrographic surveys of ports, harbors, navigational routes and channels, coastal areas, and deep seas. Its primary objective is to facilitate safe marine navigation. In November 2023, the Indian Navy announced that approximately 67 ships are under construction and are being developed under the Make in India initiative. Such developments are expected to drive the demand for this segment in India during the forecast period.
