Privatisation Thrust and Geopolitical Situation Transforming the Indian Defence Market

Privatisation Thrust and Geopolitical Situation Transforming the Indian Defence Market

The Market is at the Cusp of Revolution Due to These Mega Trends

RELEASE DATE
29-Apr-2021
REGION
South Asia, Middle East & North Africa
Research Code: MG2C-01-00-00-00
SKU: AE01464-SA-MT_25401

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Description

Defence Public Sector Undertakings (DPSUs) that have not delivered as per expectation have traditionally dominated the Indian defence market. As a result, India imports an estimated 70% of its defence needs. The acquisition cycle has also been long blamed for being inefficient resulting in delayed or cancelled contracts. Consequently, the Indian defence forces suffer from an inventory shortfall and operate legacy equipment. While the call for defence reforms has been a long-stated need, the effect of the faceoff with China and the COVID-19 pandemic’s economic impact have now seen the government change its stance. The Defence Acquisition Procedure 2020, along with Atmanirbhar reforms, aims to increase private sector participation with a view to hold DPSUs to greater accountability.

The Indian Defence market represents accessible cumulative capital and revenue acquisition opportunity of $306.95 billion from 2021 to 2030. India aims to increase its defence production output to $25 billion, including exports of $5 billion. Simultaneously, the FY 2021-2022 defence budget’s capital allocation was hiked by 18.7% to provide for modernisation.

The Indian defence market is at the cusp of a revolution, with the introduction of policy changes that promise to reduce program delays and speed up acquisition. Provisions such as allowing leasing of equipment and waiver of offset requirements in government-to-government deals also hold promise in the upcoming decade. The Ministry of Defence (MoD) has also set a target of doubling defence production and increasing defence exports by 5 times by 2025. To ensure that these goals are achieved, the MoD is pushing for enhancing private-sector participation to create a level-playing field and is also taking other steps such as corporatisation of Ordnance Factory Board. Successful implementation of the envisaged measures will have a long-lasting effect on the defence industry and the competitive landscape.

Author: Rohit Beri

RESEARCH: INFOGRAPHIC

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Table of Contents

Why is it Increasingly Difficult to Grow?

The Strategic Imperative 8™

The Impact of Strategic Imperative 8™ on India Defence Industry

Growth Opportunities Fuel the Growth Pipeline Engine™

Market Overview

Growth Drivers for Indian Defence Market, 2021–2030

Restraints to Growth for Indian Defence Market, 2021–2030

Executive Summary

Executive Summary (continued)

Key Predictions

Indian Defence Market, 2021–2030 Research Scope

Indian Defence Market Segmentation

Research Objectives and Questions

Indian Defence Industry Landscape—Public Sector

Indian Defence Industry Landscape—Domestic OEMs

Indian Defence Industry Landscape—Foreign OEMs

Growth Drivers for the Defence Market

Growth Driver Analysis for the Defence Market

Growth Driver Analysis for the Defence Market (continued)

Growth Driver Analysis for the Defence Market (continued)

Growth Driver Analysis for the Defence Market (continued)

Growth Restraints for the Defence Market

Growth Restraint Analysis for the Defence Market

Growth Restraint Analysis for the Defence Market (continued)

Growth Restraint Analysis for the Defence Market (continued)

Growth Restraint Analysis for the Defence Market (continued)

Defence Acquisition Procedure 2020

Defence Acquisition Procedure 2020 (continued)

Defence Acquisition Procedure 2020 (continued)

Defence Acquisition Procedure 2020 (continued)

Defence Acquisition Procedure 2020 (continued)

Defence Acquisition Procedure 2020 (continued)

Defence Acquisition Procedure 2020 (continued)

Defence Acquisition Procedure 2020 (continued)

Defence Acquisition Procedure 2020 (continued)

Defence Acquisition Procedure 2020 (continued)

Defence Acquisition Procedure 2020 (continued)

Key Programs—IAF

Key Programs—IAF (continued)

Key Programs—Indian Navy

Key Programs—Indian Navy (continued)

Key Programs—Indian Navy: Submarine Arm

Key Programs—Indian Navy: Naval Aviation

Key Programs—Indian Navy: Naval Aviation (continued)

Key Programs—Indian Army

Key Programs—Indian Army (continued)

Defence Budget 2021–2022—Overall Allocation

Defence Budget 2021–2022—Revenue Expenditure

Defence Budget 2021–2022—Capital Outlay

Defence Budget 2021–2022—Defence Pensions

Defence Budget 2021–2022—Summary

Forecast Methodology and Assumptions

Defence Market Size Forecast

Defence Market Segmentation

Opportunity Analysis

Competitive Landscape—Foreign Participants

Competitive Landscape—Foreign Participants (continued)

Competitive Landscape—Foreign Participants (continued)

Competitive Landscape—Foreign Participants (continued)

Competitive Landscape—Foreign Participants (continued)

Competitive Landscape—Foreign Participants (continued)

Competitive Landscape—Foreign Participants (continued)

Competitive Landscape—Government Participants

Competitive Landscape—Government Participants (continued)

Competitive Landscape—Government Participants (continued)

Competitive Landscape—Government Participants (continued)

Competitive Landscape—Emerging Indian Companies

Competitive Landscape—Emerging Indian Companies (continued)

Competitive Landscape—Emerging Indian Companies (continued)

Competitive Landscape—Emerging Indian Companies (continued)

Competitive Landscape—Emerging Indian Companies (continued)

Competitive Landscape—Emerging Indian Companies (continued)

Competitive Landscape—Emerging Indian Companies (continued)

Growth Opportunity 1: Leveraging on DAP 2020 and Atmanirbhar Reforms, 2021

Growth Opportunity 1: Leveraging on DAP 2020 and Atmanirbhar Reforms, 2021 (continued)

Growth Opportunity 2: High-value Acquisitions Programs, 2021

Growth Opportunity 2: High-value Acquisitions Programs, 2021 (continued)

Growth Opportunity 3: Tapping the Defence Exports Thrust by the Government, 2021

Growth Opportunity 3: Tapping the Defence Exports Thrust by the Government, 2021 (continued)

Growth Opportunity 4: Security and Digitalisation Market, 2021

Growth Opportunity 4: Security and Digitalisation Market, 2021 (continued)

Growth Opportunity 5: Integrated Aftermarket Services, 2021

Growth Opportunity 5: Integrated Aftermarket Services, 2021 (continued)

List of Exhibits

Legal Disclaimer

Abbreviations

India Negative Import List

India Negative Import List (continued)

India Negative Import List (continued)

Related Research
Defence Public Sector Undertakings (DPSUs) that have not delivered as per expectation have traditionally dominated the Indian defence market. As a result, India imports an estimated 70% of its defence needs. The acquisition cycle has also been long blamed for being inefficient resulting in delayed or cancelled contracts. Consequently, the Indian defence forces suffer from an inventory shortfall and operate legacy equipment. While the call for defence reforms has been a long-stated need, the effect of the faceoff with China and the COVID-19 pandemics economic impact have now seen the government change its stance. The Defence Acquisition Procedure 2020, along with Atmanirbhar reforms, aims to increase private sector participation with a view to hold DPSUs to greater accountability. The Indian Defence market represents accessible cumulative capital and revenue acquisition opportunity of $306.95 billion from 2021 to 2030. India aims to increase its defence production output to $25 billion, including exports of $5 billion. Simultaneously, the FY 2021-2022 defence budgets capital allocation was hiked by 18.7% to provide for modernisation. The Indian defence market is at the cusp of a revolution, with the introduction of policy changes that promise to reduce program delays and speed up acquisition. Provisions such as allowing leasing of equipment and waiver of offset requirements in government-to-government deals also hold promise in the upcoming decade. The Ministry of Defence (MoD) has also set a target of doubling defence production and increasing defence exports by 5 times by 2025. To ensure that these goals are achieved, the MoD is pushing for enhancing private-sector participation to create a level-playing field and is also taking other steps such as corporatisation of Ordnance Factory Board. Successful implementation of the envisaged measures will have a long-lasting effect on the defence industry and the competitive landscape. Author: Rohit Beri
More Information
No Index No
Podcast No
Author Rohit Beri
Industries Aerospace, Defence and Security
WIP Number MG2C-01-00-00-00
Is Prebook No
GPS Codes 9000-A1