Indian Defense Market Size
| Study Period | 2019 - 2032 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2032 |
| Historical Data Period | 2019 - 2022 |
| CAGR | > 4.00 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Indian Defense Market Analysis
The Indian defense market is anticipated to register a CAGR of over 4% during the forecast period.
Although the COVID-19 pandemic affected the Indian economy, its impact was not felt on the country's defense spending. On the other hand, India's stand-off with China during the same timeframe forced the government to take quick measures to modernize its military equipment while also reducing its dependence on imports, thus, supporting the market growth.
The geopolitical conflicts between India and its neighboring nations and the threat of terrorism have forced the country further to reinforce its perimeter security and naval and airborne capabilities. The country has constantly been increasing its defense expenditure over the years. The military budget for 2022, valued at USD 70.6 billion (INR 5.25 trillion), represented an increase of 10% compared to the previous year's allocation and the sharpest increase in the defense budget in recent years. The increasing defense budget is expected to drive market growth during the forecast period.
Furthermore, India strives for self-sufficiency across various sectors, including defense, by promoting the 'Make in India' initiative through focused, sustained, and evolved indigenization programs. This may provide new growth opportunities for market players.
Indian Defense Market Trends
Air Force Segment to Dominate Market Growth 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 Mk 1, Dornier 228, HAL Dhruv ALH/Rudra, and HAL Light Combat Helicopter within the forecast period, are expected to drive the growth of the segment. The increasing efforts of India toward achieving self-reliance in terms of manufacturing and operations will create significant opportunities for regional vendors. India is currently working on its AMCA project. The aircraft's first flight is expected during 2025-26, while full production may occur by 2030. HAL is developing a new 13-ton-class helicopter, the Indian Multi-role 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 largest helicopter design attempted by India so far.
On the other hand, the Tejas Mk 2, a further development of the HAL Tejas, is expected to be in 2023, with series production to begin by 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 is also focusing on developing its air defense capabilities and has invested in the development of related capabilities by procuring both indigenous and foreign-made systems. Some of the 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.
'Make in India' Initiative Promoting Indigenous Manufacturing Capabilities in India
The Indian Department of Defense is taking many initiatives to promote Make in India in the defense manufacturing sector. For instance, In December 2022, India's defense exports stood at a record INR 14,000 crores in 2021-22 The defense budget for 2022-2023 announced that 68% of the defense capital procurement budget would be allocated toward procurement from the domestic industry. The Indian government has set the defense production target at USD 25 billion by 2025 (including USD 5 billion from exports by 2025). The Department of Defense Production (DDP) has established wide-ranging production facilities to produce various defense equipment through Defense Public Sector Undertakings (DPSUs) and Ordnance Factories. The products manufactured include heavy vehicles, arms and ammunition, tanks, armored vehicles, helicopters, fighter aircraft, warships, submarines, missiles, electronic equipment, earth moving equipment, special alloys, and special purpose steels. The IAF aims to obtain self-sufficiency by promoting Make in India through focused, sustained, and evolved indigenization programs. It is currently focusing on reducing the dependency on importing defense equipment. It inducted light combat aircraft, Akash Missile, and advanced light helicopters (ALH) in the recent past. It also plans to induct more capable and potent LCA Mk-IA and Mk-2 variants in the future. It is also actively supporting DoD of LCH, RPAs, medium power radars, low-level tracking radars, and other systems and closely coordinating with DRDO to develop various types of state-of-the-art weapons. The manufacturing of Ka-226 T helicopters, close-in weapon systems, and single-engine fighter aircraft under the Strategic Partner model is also in line with the Make in India initiative. India is also working on the HAL Advanced Medium Combat Aircraft (AMCA) program to develop a fifth-generation fighter aircraft. The Aeronautical Development Agency (ADA) is responsible for designing the plane, and Hindustan Aeronautics Limited (HAL) is responsible for the assembly. The first flight is expected to be by 2025-26, and serial production may begin by 2030. The Indian Shipyards have also made considerable progress in implementing the Make in India Program. The Indigenous Aircraft Carrier (IAC) 1, constructed by the Cochin Shipyard Limited, is India's largest and most complex warship. As of January 2022, it was undergoing sea trials and will be called INS Vikrant once it enters service with the Indian Navy. Other vessels, including submarines, destroyers, frigates, fleet replenishment oilers, survey vessels, diving support vessels, diving support craft, and tugboats, are also undergoing construction in India. Such developments may lead to a growth in the indigenous development and manufacturing of various defense technologies in India in the near future.
Indian Defense Industry Overview
The Indian defense market is moderately consolidated in nature with the presence of few players holding significant shares in the market. Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), Defense Research and Development Organisation (DRDO), Rostec, and Airbus SE are some of the major players in the Indian defense market. The Make in India initiative, launched by the Indian government, has propelled several partnerships between foreign and local manufacturers. Partnerships between Indian companies and their international counterparts as a Transfer of Technology (ToT) agreement are also anticipated to improve the current capabilities of the Indian conglomerates. For instance, the collaboration between Hinduja Group, Ashok Leyland, and Elbit Systems Ltd., Tata Motors with Bharat Forge and General Dynamics for military vehicles, the partnership between India and Russia for Frigates and AK-203 Assault Rifles, and Boeing's partnership with HAL and Mahindra for the production of F/A-18 Super Hornet fighters are some of the major partnerships in the recent past. India is also trying to develop its indigenous manufacturing capabilities and focusing on increasing the product range of the defense equipment that it can produce locally, thereby reducing its dependency on the import of defense equipment. Also, several public firms are developing new indigenous technologies, which are expected to enhance the market share of the local players during the forecast period.
Indian Defense Market Leaders
Hindustan Aeronautics Limited (HAL)
Rostec
Airbus SE
Defense Research and Development Organisation (DRDO)
Bharat Electronics Limited (BEL)
*Disclaimer: Major Players sorted in no particular order
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Indian Defense Market News
- In March 2023, the Indian Defence Ministry approved the procurement of 70 locally made HTT-40 basic trainer aircraft for USD 388.5 million. The new aircraft will complement the existing basic training fleet of Swiss-made PC-12 Mark II basic trainers with the Indian Air Force.
- In July 2022, the Indian Defence Ministry approved the procurement of military equipment and weapons worth USD 341 million, which included swarm drones, carbines, and bulletproof jackets.
Indian Defense Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Porters Five Forces Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION
5.1 Armed Forces
5.1.1 Army
5.1.2 Navy
5.1.3 Air Force
5.2 Type
5.2.1 Fixed-wing Aircraft
5.2.2 Rotorcraft
5.2.3 Ground Vehicles
5.2.4 Naval Vessels
5.2.5 C4ISR
5.2.6 Weapons and Ammunition
5.2.7 Protection and Training Equipment
5.2.8 Unmanned Systems
6. COMPETITIVE LANDSCAPE
6.1 Vendor Market Share
6.2 Company Profiles
6.2.1 Hindustan Aeronautics Limited (HAL)
6.2.2 Defense Research and Development Organisation (DRDO)
6.2.3 Ordance Factory Board (OFB)
6.2.4 Bharat Electronics Limited (BEL)
6.2.5 Goa Shipyard Limited (GSL)
6.2.6 Larsen & Toubro Limited
6.2.7 Hinduja Group
6.2.8 Kalyani Group
6.2.9 Tata Sons Private Limited
6.2.10 Reliance Group
6.2.11 Mahindra & Mahindra Ltd.
6.2.12 Rafael Advanced Defense Systems Ltd.
6.2.13 IAI Group
6.2.14 Rostec
6.2.15 Airbus SE
6.2.16 The Boeing Company
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
Indian Defense Industry Segmentation
The Indian defense market covers all aspects of the military vehicle, armament, other equipment procurements, and upgrade and modernization plans. The report also provides insights into the budget allocation and spending of the country in the past, present, and forecast periods.
The Indian defense market is segmented by armed forces and type. By armed forces, the market is segmented into the army, navy, and air force. By type, the market is classified into fixed-wing aircraft, rotorcraft, ground vehicles, naval vessels, C4ISR, weapons and ammunition, protection and training equipment, and unmanned systems. For each segment, the market sizing and forecasts have been provided by value (USD billion).
| Armed Forces | |
| Army | |
| Navy | |
| Air Force |
| Type | |
| Fixed-wing Aircraft | |
| Rotorcraft | |
| Ground Vehicles | |
| Naval Vessels | |
| C4ISR | |
| Weapons and Ammunition | |
| Protection and Training Equipment | |
| Unmanned Systems |
Indian Defense Market Research FAQs
What is the current India Defense Market size?
The India Defense Market is projected to register a CAGR of greater than 4% during the forecast period (2024-2032)
Who are the key players in India Defense Market?
Hindustan Aeronautics Limited (HAL), Rostec, Airbus SE, Defense Research and Development Organisation (DRDO) and Bharat Electronics Limited (BEL) are the major companies operating in the India Defense Market.
What years does this India Defense Market cover?
The report covers the India Defense Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the India Defense Market size for years: 2024, 2025, 2026, 2027, 2028, 2029, 2030, 2031 and 2032.
Indian Defense Industry Report
Statistics for the 2024 Indian Defense market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Indian Defense analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
