India’s defence sector is set for substantial growth, driven by global shifts and strategic initiatives.
A Nuvama report forecasts that defence exports will reach Rs 203 billion in FY25, with the government targeting Rs 500 billion by FY29.
The sector is at a pivotal moment, with opportunities opening in both domestic and international markets, positioning India as a key player in global defence.
European Defence Opportunities
The defence sector will tap into European markets, with European defence orders expected to start flowing by FY26.
Europe’s limited manufacturing capacity and workforce shortages create significant opportunities for Indian manufacturers.
As European nations seek strategic partnerships, Indian defence companies stand ready to step in and meet rising demand.
The report highlights that Europe’s defence expansion faces constraints due to local manufacturing and skilled workforce shortages, positioning Indian manufacturers to fill this gap.
Domestic Defence Push
Domestically, the Indian government plans to place Rs 1.5 trillion worth of large-scale defence orders by March 2025.
This initiative addresses slower order momentum in FY25 and will significantly boost defence stocks and enhance the sector’s capabilities.
The government’s push aligns with the growing need to bolster India’s defence capabilities and address evolving security challenges.
On the global stage, the reduction in US military aid to Ukraine has exposed NATO’s dependence on American defence funding.
The US contributes around 70% of NATO’s total defence expenditure, putting pressure on European nations to strengthen their own defence capabilities.
This shift creates a unique opportunity for India to meet Europe’s growing defence needs, further driving India’s defence exports on the world stage.
Record Defence Exports
India’s defence exports reached a record Rs 21,083 crore in FY2023-24, reflecting a 32.5% growth from the previous fiscal year.
Over the last decade, defence exports have increased 31-fold, with significant contributions from both the private sector (60%) and Defence Public Sector Undertakings (DPSUs) (40%).
This growth positions India as a major player in global defence markets.
Moreover, with rising global demand and a strong domestic push, India’s defence sector is increasingly poised for sustained growth in the coming years.
The sector is leveraging both domestic and international opportunities, positioning itself for long-term success on the global stage.
As the sector expands, Indian manufacturers will play an increasingly vital role in the global defence market, helping meet both domestic and international security needs.
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