Indian Defense Industry and its global pie

One of the fastest growing defense industry markets is from India. The kind of military equipment enhancing spend which is taking place in the Indian defense segment is also a plus for the kind of rapid development which is envisaged. The kind of spends on military hardware, technology and communication alone grew at CAGR of 5.8% for the review period till 2013.

The kind of equipment over hauling which is due in the Indian armed forces is also the key part for the growth which is seen by the Original Equipment Manufacturing companies and the ancillary companies associated with the defense industry. The recent surge in the terror attacks in India has put the state, central and the armed forces to a position to enhance their defense equipments by upgrading the weapons and the required infrastructure to retaliate the attacks, which offers an attractive proposition for defense manufacturers.

There is plethora of equipments and fleets which the Indian army, is aiming to procure in the next few years which can keep them abreast with the changing technological advancements and combat the rivals in an efficient manner.

Currently, the kind of import quantum signifies to the kind of total defense expenditure. While the Indian defense forces are aiming at becoming self-reliant in developing their own equipments, and systems, there is still a dearth in the progress to achieve the strategic autonomy position. There were numerous reasons which has curtailed the full fledge development of defense sector in India. One of the major reasons is how the government perceived threat in allowing the major investments from private parties in to the crucial sphere of Defense sectors, companies investing in R&D and not providing much of subsidiaries for investments.

Indian defense sector can certainly have a boom, if the government decisions come in favor of reducing dependence of the imports, encourage R&D and investments from private players, and support infrastructure to the defense sector development.

The kind of sensitivity involved with the sector is also the cause of concern from government agencies towards not allowing much of private player’s role in the equipment production and the strategic alliance. Despite of all it, the way the government has decided to open the industry for private players during the start of this decade, has changed the dynamics of the Indian defense sector, and the kind of FDI cap allowed along with the removal of reserved category notion for defense oriented development, has eased the environment.

Despite of all the current developments, the Indian defense industry is still at its budding stage, however the Indian defense sector is certainly maturing itself in to a force which can compete the global defense sector leaders. It’s matter of time that the hurdles and challenges to the growth of the sector, hurdles in the form of bureaucratic nature and flexible policies in place will fall in place.