Defence industry of India

The Defence industry of India is a strategically important sector in India.[1] With strength of over 1.3 million active personnel, it is world's 3rd largest military force and has the world's largest volunteer army. The total budget sanctioned for the Indian military for the financial year 2015 is 2.47 trillion Indian rupees ($40.07 billion).[2]

Military budget

The military budget of India is about 2.4% for year 2015 of the total GDP as per World Bank statistics.[3] The defence expenditure for Fisical year 2017-18 allotted by Ministry of Finance is,excluding pensions a sum of 2,74,114 crores but including 86,488 crores for Defence capital.[4]

State orders

India has been spending worth nearly $3.5 billion to boost its ageing Soviet era military equipment. It has been pushing for greater indigenisation of the military industry as India imports around 70 per cent of its defence hardware mainly from Russia, Japan Israel and United States.[5]

Organisations

The production of Indian defence equipments prior to 2011 was completely in the hands of the Government of India. The Government of India also opened up the Foreign direct investment to 49% from the existing 26% and thereby increasing flow of funds from foreign countries. With the increase in FDI cap, private players such as companies from many developed countries will also be attracted to the Indian defence economy as they can have share in the Indian defence Companies.[6]

State-Run

Name Specialization Revenue (As of 2015) Employees (As of 2015) Notes
Bharat Dynamics Ammunition and Missile systems ₹32.81 billion (US$510 million) 3,183 [7]
Bharat Electronics Avionics ₹70.93 billion (US$1.1 billion) 9,952 [8]
Bharat Earth Movers Transport ₹28.02 billion (US$440 million)
Defence Research and Development Organisation Research and Development Annual Budget of ₹103 billion (US$1.6 billion) 30,000 [9]
Garden Reach Shipbuilders & Engineers Naval ships ₹16.94 billion (US$260 million) 3,133 [10][11]
Goa Shipyard Shipbuilding ₹6.81 billion (US$110 million) [12][13]
Hindustan Aeronautics Limited Aerospace manufacturer ₹177.53 billion (US$2.8 billion) 32,108 [14]
Mazagon Dock Limited Shipbuilding [15]
Mishra Dhatu Nigam Metallurgy [16]
Ordnance Factories Board Defence Equipment and Support ₹199.82 billion (US$3.1 billion) 1,64,000 [17][18][19]

Make in India

The Modi government in its first year cleared 39 capital procurement proposals, of which 32 proposals worth ₹889 billion (US$14 billion) (or 96% of value of total proposals) were categorized as Buy (Indian) and Buy and Make (Indian)—the top two prioritized domestic industry-centric procurement categories as per the defence procurement procedure (DPP).[20]

In July 2015, the defence ministry eased export regulations and stopped demanding multiple assurances on end-use from foreign governments even for sale of components by Indian entities.[21]

There are several Indian SMEs that cater to the Defense industry by supplying sub-assemblies and components and providing services like system integration. Under the Make in India initiative, these organizations are set to enhance their manufacturing and development efficiency, thereby contributing to making India self-reliant in defense production. Some of the system Integrators catering to the Defense sector in India are Mistral Solutions, Alpha Designs, Astra Microwave and SLN Technologies among others.[22]

References

  1. ↑ "The seven homegrown firms fighting over India’s $620 billion defence market". Quartz. Retrieved 2015-11-12.
  2. ↑ "India raises defence budget modestly as it confronts China challenge". Reuters India. Retrieved 2015-11-12.
  3. ↑ "Military expenditure (% of GDP) | Data | Table". data.worldbank.org. Retrieved 2015-11-12.
  4. ↑ Rajya Sabha TV (2017-02-01), FULL SPEECH: Finance Minister Arun Jaitley's Budget Speech | Union Budget 2017-18, retrieved 2017-02-01
  5. ↑ "Arms race: India approves defence procurements worth $3.5 bn, says report - The Express Tribune". The Express Tribune. Retrieved 2015-11-12.
  6. ↑ "Increase of F.D.I. Cap in Insurance & Defence Sector: Impact on Indian Economy | Adhrit Foundation". adhrit.in. Retrieved 2015-11-12.
  7. ↑ "BDL Annual Report" (PDF).
  8. ↑ "Bharat Elec - Announces Q4 & FY15 results - Currency Research Reports". www.moneycontrol.com. Retrieved 2016-04-20.
  9. ↑ "..:: India Strategic ::.. Indian Defence News: India’s Defence Budget 2011-12". www.indiastrategic.in. Retrieved 2016-04-20.
  10. ↑ Pike, John. "Garden Reach Shipbuilders & Engineers (GRSE)". www.globalsecurity.org. Retrieved 2016-04-20.
  11. ↑ "Annual Report 2013-2014" (PDF).
  12. ↑ Pike, John. "Goa Shipyard Ltd.". www.globalsecurity.org. Retrieved 2016-04-20.
  13. ↑ "Goa Shipyard Annual Report" (PDF).
  14. ↑ "HAL India Annual Report" (PDF).
  15. ↑ "Mazagon Dock Shipbuilders Limited - Ship Builder to the Nation.". www.mazagondock.gov.in. Retrieved 2016-04-20.
  16. ↑ "::Mishra Dhatu Nigam Limited::Home::,superalloy, titanium, special steel industry". www.midhani.gov.in. Archived from the original on 1 May 2016. Retrieved 2016-04-20.
  17. ↑ http://ddpmod.gov.in/about-department-defence-production
  18. ↑ "Factories of graft". indiatoday.intoday.in. Retrieved 2016-04-20.
  19. ↑ "Antony reviews Ordnance Factory Board work". The Hindu. 2012-04-17. ISSN 0971-751X. Retrieved 2016-04-20.
  20. ↑ "Make in India: Big role for private firms in defence", Mint, 15 February 2016
  21. ↑ "Make in India: How small tweaks in policy are drawing domestic and global firms to defence manufacturing", The Economic Times, 16 February 2016
  22. ↑ "MSMEs can boost India's defence exports with policy support", The Economic Times, 4 February 2017
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