Summary
The Indian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2025 report provides the market size forecast and the projected Compound Annual Growth Rate (CAGR) for the next five years. The report covers the industry analysis including the key market drivers, emerging technology trends, and major challenges faced by market participants. It also offers insights regarding key factors and government programs that are expected to influence the demand for maritime and border security market over the forecast period.
The growth in the Indian defense market, is mainly fuelled by its ongoing rivalry with Pakistan and the need to counter China. The need to secure strategic interests, against the backdrop of ever increasing Chinese presence in the Indian Ocean region, continues to fuel the growth of India’s defense expenditure. India, which in the past was involved in an armed conflict with both China and Pakistan, continues to share an uneasy relationship with China and an outright hostile relationship with Pakistan.
India shares a 3,323km land border with Pakistan, and an even longer 3,488km border with the People’s Republic of China (PRC), and has territorial disputes with both countries over the ownership of the Northern State of Kashmir and the North Eastern State of Arunachal Pradesh, respectively. These factors have played a crucial role in spurring growth in Indian base defense expenditure (excluding pensions) over the historic period, which increased from US$39.3 billion in 2016 to US$47.3 billion in 2020, reflecting a CAGR of 4.80% over the historic period.
The growth in defense capital expenditure is expected to be fueled by the need to stem the erosion in the country’s capabilities to counter Pakistan and China. Over the last few years, India has consistently ranked among the leading defense importers worldwide. Between 2014-2018, India was ranked as the second largest importer of defense equipment, behind only Saudi Arabia. The acquisition of defense equipment is mainly driven by the need to gain a significant technological advantage over Pakistan, while retaining a level of strategic parity with respect to China.
India is expected to procure and invest in segments such as multirole aircraft, frigates, destroyers, corvettes, submarines, tanks, artillery guns, multi-barrel rocket launchers (MBRL), helicopters, surface-to-air missiles and unmanned aerial vehicles (UAV) among others, over the forecast period.
This report offers detailed analysis of the Indian defense market with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.
In particular, it provides an in-depth analysis of the following -
- The Indian defense industry market size and drivers: detailed analysis of the India's defense industry during 2021-2025, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns
- Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
- Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
- Market opportunities:list of the top ten defense investment opportunities over the next 5 years
- Competitive landscape and strategic insights: analysis of the competitive landscape of the Indian defense industry.
Scope
- The Indian defense market is expected to grow at a CAGR of 10.46% over the forecast period.
- The Indian defense market has three major sectors: Airborne C4ISR, Multirole aircraft and Land Based C4ISR.
- The Indian Army Modernization with an explicit emphasis on development and induction of new wheeled armored vehicles and the Futuristic Infantry Fighting Vehicle (FICV) program will drive the Indian Army defense modernization spending. On the other hand, the thrust to induct LCA Tejas aircraft in greater volumes to replace the now obeselete MiG-21 aircraft will spur growth in the Indian Air Force defense expenditure, while the Indian Navy which accounts for the smallest portion of defense capital spending is anticipated to focus on modernization of its submarine arm and induction of new minesweepers.
Reasons to Buy
- Determine prospective investment areas based on a detailed trend analysis of the Indian defense market over the next five years
- Gain in-depth understanding about the underlying factors driving demand for different defense and internal security segments in the Indian market and identify the opportunities offered.
- Strengthen your understanding of the market in terms of demand drivers, market trends, and the latest technological developments, among others
- Identify the major threats that are driving the Indian defense market providing a clear picture about future opportunities that can be tapped, resulting in revenue expansion
- Channelize resources by focusing on the ongoing programs that are being undertaken by the Indian government
- Make correct business decisions based on in-depth analysis of the competitive landscape consisting of detailed profiles of the top defense equipment providers in the country. The company profiles also includes information about the key products, alliances, recent contract awarded, and financial analysis, wherever available
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Table of Contents
1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About GlobalData
2. Executive Summary
3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.1.1. Primary Threat Perception
3.1.2. Military Doctrine and Strategy
3.1.3. Procurement Programs
3.1.4. Top Procurement Programs by Value (US$ Million), 2020-2025
3.1.5. Geopolitical, Social and Economic Scenario
3.1.6. Political and Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. Indian defense expenditure, inclusive of pensions, expected to be US$482.1 billion cumulatively over 2021-2025
3.2.2. Indian defense expenditure, excluding pensions, expected to be US$324.4 billion cumulatively over 2021-2025
3.2.3. Modernization initiatives, hostile neighbors, territorial disputes, and the implementation of OROP and the 7th Pay Commission will be the key growth drivers
3.2.4. Defense budget as a percentage of GDP will increase to an average of 1.8% over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Revenue expenditure expected to increase over the forecast period
3.3.2. Procurement of equipment is expected to pick up over the forecast period
3.3.3. Trends in India’s defense capital expenditure - a review
3.3.4. Indian defense modernization programs - a review
3.3.5. Army continues to see the largest share of the defense budget
3.3.6. Defense expenditure allocation for the army expected to increase over the forecast period
3.3.7. Per capita defense expenditure is expected to increase over the forecast period
3.4. Homeland Security (Police) Market Size and Forecast
3.4.1. India is projected to spend US$84.5 billion cumulatively on homeland security (police) over the forecast period
3.4.2. Homeland security expenditure is expected to be driven by cross-border terrorism and domestic conflicts
3.5. Benchmarking with Key Global Markets
3.5.1. India’s defense budget expected to grow at a CAGR of 10.46%
3.5.2. The US and China dominate the global defense industry
3.5.3. India allocates a lower share of its GDP to defense than other Asian countries
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Top Defense Market Sectors by Value (US$ Million) - Projections over 2020-2025
3.6.2. Airborne C4ISR
3.6.3. Multirole Aircraft
3.6.4. Land-based C4ISR
4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Indian defense imports slowly declining
4.1.2. Russia dominates Indian arms imports
4.1.3. Aircraft accounted for the majority of defense imports during 2015-2019
4.2. Export Market Dynamics
4.2.1. India’s low level of defense exports is set to change over the forecast period
4.2.2. Underdeveloped nations in Asia and Africa are the main importers of Indian defense goods
4.2.3. Naval vessels accounted for the majority of defense imports during 2015-2019
5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining Power of Supplier: Low to Medium
5.1.2. Bargaining Power of Buyer: High
5.1.3. Barrier to Entry: Low to Medium
5.1.4. Intensity of Rivalry: High
5.1.5. Threat of Substitution: Medium to High
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Defense Procurement Procedure (DPP) - 2016:
6.1.2. Main features of revised Defense Procurement Procedure (DPP) - 2016
6.1.3. 2019 - Ammendments to the Defense Procurement Procedure (DPP) 2016
6.1.4. Offset policy to drive defense industrial modernization
6.1.5. Private sectors permitted to produce arms and ammunition under the new Draft Arms and Ammunitions Manufacturing Policy (DAAM)
6.1.6. Foreign direct investment (FDI) limit increased to 49% in the Indian defense sector
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement Policy and Process
6.2.3. Foreign OEMs are forming joint ventures in order to enter the market
6.2.4. India is emerging as a key outsourcing hub for global defense companies
6.3. Key Challenges
6.3.1. Depreciating value of Indian Rupee with respect to US Dollar constrains funding
6.3.2. Bureaucratic red-tape leads to protracted defense procurement projects
6.3.3. Limited capital expenditure constrains swift procurement decisions
6.3.4. Increasing emphasis on developing a robust defense industrial base will curtail export opportunities
6.3.5. Offset policy is biased towards the domestic public and private sectors
6.3.6. Insufficient information and transparency regarding future plans
6.3.7. Bureaucracy, corruption, and long project delays
6.3.8. Developing advanced, low-cost solutions is essential to gain market share
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.1.1. Indian Market Share Analysis, 2020-2025
7.1.2. Domestic public companies have a strong presence in the Indian defense industry
7.2. Key Foreign Companies
7.2.1. Lockheed Martin Corporation: Overview
7.2.2. Lockheed Martin Corporation: Products
7.2.3. Lockheed Martin Corporation: Recent Announcements and Strategic Initiatives
7.2.4. Lockheed Martin Corporation: Alliances
7.2.5. Lockheed Martin Corporation: Recent Contract Wins
7.2.6. BAE Systems Plc.: Overview
7.2.7. BAE Systems Plc.: Products
7.2.8. BAE Systems Plc.: Recent Announcements and Strategic Initiatives
7.2.9. BAE Systems Plc.: Alliances
7.2.10. BAE Systems Plc.: Recent Contract Wins
7.2.11. Thales: Overview
7.2.12. Thales: Products
7.2.13. Thales: Recent Announcements and Strategic Initiatives
7.2.14. Thales: Alliances
7.2.15. Thales: Recent Contract Wins
7.2.16. Boeing: Overview
7.2.17. Boeing: Products
7.2.18. Boeing: Recent Announcements and Strategic Initiatives
7.2.19. Boeing: Alliances
7.2.20. Boeing: Recent Contract Wins
7.3. Key Public Sector Companies
7.3.1. Mazagon Docks Shipbuilders Limited: Overview
7.3.2. Mazagon Docks Shipbuilders Limited: Products
7.3.3. Mazagon Docks Shipbuilders Limited: Recent Announcements and Strategic Initiatives
7.3.4. Mazagon Docks Shipbuilders Limited: Alliances
7.3.5. Mazagon Docks Shipbuilders Limited: Recent Contract Wins
7.3.6. Hindustan Aeronautics Limited: Overview
7.3.7. Hindustan Aeronautics Limited: Products and Services
7.3.8. Hindustan Aeronautics Limited: Recent Announcements and Strategic Initiatives
7.3.9. Hindustan Aeronautics Limited: Alliances
7.3.10. Hindustan Aeronautics Limited: Recent Contract Wins
7.3.11. Bharat Electronics Limited: Overview
7.3.12. Bharat Electronics Limited: Products and Services
7.3.13. Bharat Electronics Limited: Recent Announcements and Strategic Initiatives
7.3.14. Bharat Electronics Limited: Alliances
7.3.15. Bharat Electronics Limited: Recent Contract Wins
7.3.16. Bharat Electronics Limited - Financial Analysis
7.3.17. Bharat Dynamics Limited: Overview
7.3.18. Bharat Dynamics Limited: Products
7.3.19. Bharat Dynamics Limited: Recent Announcements and Strategic Initiatives
7.3.20. Bharat Dynamics Limited: Alliances
7.3.21. Bharat Dynamics Limited: Recent Contract Wins
7.3.22. Ordnance Factory Board: Overview
7.3.23. Ordinance Factory Board: Products
7.3.24. Ordinance Factory Board: Recent Announcements and Strategic Initiatives
7.3.25. Ordinance Factory Board: Alliances
7.3.26. Ordinance Factory Board: Recent Contract Wins
7.3.27. BEML: Overview
7.3.28. BEML: Products
7.3.29. BEML: Recent Announcements and Strategic Initiatives
7.3.30. BEML: Alliances
7.3.31. Goa Shipyard Limited: Overview
7.3.32. Goa Shipyard Limited: Products and Services
7.3.33. Goa Shipyard Limited: Recent Announcements and Strategic Initiatives
7.3.34. Goa Shipyard Limited: Alliances
7.3.35. Goa Shipyard Limited: Recent Contract Wins
7.4. Key Private Sector Companies
7.4.1. Tata Advanced Systems Limited: Overview
7.4.2. Tata Advanced Systems Limited: Products
7.4.3. Tata Advanced Systems Limited: Recent Announcements and Strategic Initiatives
7.4.4. Tata Advanced Systems Limited: Alliances
7.4.5. Tata Advanced Systems Limited: Recent Contract Wins
7.4.6. Mahindra Defence Systems: Overview
7.4.7. Mahindra Defence Systems: Products
7.4.8. Mahindra Defence Systems: Recent Announcements and Strategic Initiatives
7.4.9. Mahindra Defence Systems: Alliances
8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP Per Capita, US$
8.1.2. GDP (Current US$ Billion)
8.1.3. Exports of Goods and Services (Current LCU Billion)
8.1.4. Imports of Goods and Services (Current LCU Billion)
8.1.5. Gross National Disposable Income (US$ Billion)
8.1.6. LCU per US$ (Period Average)
8.1.7. Market Capitalization of Listed Companies (US$ Billion)
8.1.8. Market Capitalization of Listed Companies (% of GDP)
8.1.9. Total Government Cash Surplus/Deficit as a Percentage of GDP (LCU)
8.1.10. Goods Exports as a Percentage of GDP
8.1.11. Goods Imports as a Percentage of GDP
8.1.12. Services Imports as a Percentage of GDP
8.1.13. Services Exports as a Percentage of GDP
8.1.14. Foreign Direct Investment, net (BoP, Current US$ Billion)
8.1.15. Net Foreign Direct Investment as a Percentage of GDP
8.1.16. Mining, Manufacturing, and Utilities Output (LCU Billion)
9. Appendix
9.1. About GlobalData
9.2. Disclaimer
List of Tables
Table 1: India - Ongoing Procurement Programs
Table 2: India - Future Procurement Programs
Table 3: Top Indian Defense Procurement Programs by Value (US$ Million), 2020-2025
Table 4: Indian Defense Cooperation
Table 5: Indian Military Training Exercises
Table 6: Indian Defense Expenditure Including Pensions (INR Billion and US$ Billion), 2016-2025
Table 7: Indian Defense Expenditure Excluding Pensions (INR Billion and US$ Billion), 2016-2025
Table 8: Indian GDP Growth vs Defense Expenditure as a Percentage of GDP Growth, 2016-2025
Table 9: Indian Defense Budget Split Between Capital and Revenue Expenditure (%), 2016-2025
Table 10: Indian Capital Expenditure (INR Billion and US$ Billion), 2016-2025
Table 11: Indian Defense Budget Split (%), 2016-2025
Table 12: Indian Defense Budget in INR Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2016-2025
Table 13: Indian Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2016-2025
Table 14: Indian Per Capita Defense Expenditure (US$), 2016-2025
Table 15: Indian Homeland Security Budget (INR Billion and US$ Billion), 2016-2025
Table 16: Benchmarking with Key Markets, 2016-2020 vs 2021-2025
Table 17: Top Indian Defense Market Sectors by Value (US$ Million) - 2020-2025
Table 18: Indian defense contracts awarded to domestic vendors 2015-16 to 2019-20 (INR Crores)
Table 19: Percentage share of Indian defense suppliers in contracts awarded during the period 2015-16 to 2019-20
Table 20: Offset Policy in India
Table 21: Indian Budget Formation Timetable:
Table 22: Market Entry Strategies and Key Objectives of Foreign Companies in the Indian Defense Sector
Table 23: Key Players and their Operations in the Indian Defense Industry
Table 24: Top Defense Suppliers in the Indian Defense Industry - By Value (US$ Million), 2020-2025
Table 25: Scale of Operations of Domestic Public and Private Sector Companies in the Indian Defense Industry
Table 26: Lockheed Martin Corporation - Products
Table 27: Lockheed Martin Corporation - Alliances
Table 28: Lockheed Martin Corporation - Recent Contract Wins
Table 29: BAE Systems Plc. - Products
Table 30: BAE Systems Plc. - Alliances
Table 31: BAE Systems Plc. - Recent Contract Wins
Table 32: Thales - Products
Table 33: Thales - Alliances
Table 34: Thales - Recent Contract Wins
Table 35: Boeing - Products
Table 36: Boeing - Alliances
Table 37: Boeing - Recent Contract Wins
Table 38: Mazagon Docks Shipbuilders Limited - Products
Table 39: Mazagon Docks Shipbuilders Limited - Alliances
Table 40: Mazagon Docks Shipbuilders Limited - Recent Contract Wins
Table 41: Hindustan Aeronautics Limited - Products and Services
Table 42: Hindustan Aeronautics Limited - Alliances
Table 43: Hindustan Aeronautics Limited - Recent Contract Wins
Table 44: Bharat Electronics Limited - Products and Services
Table 45: Bharat Electronics Limited - Alliances
Table 46: Bharat Electronics Limited - Recent Contract Wins
Table 47: Bharat Dynamics Limited - Products
Table 48: Bharat Dynamics Limited - Alliances
Table 49: Bharat Dynamics Limited - Recent Contract Wins
Table 50: Ordinance Factory Board - Products
Table 51: Ordinance Factory Board - Alliances
Table 52: Ordinance Factory Board - Recent Contract Wins
Table 53: BEML - Products
Table 54: BEML - Alliances
Table 55: Goa Shipyard Limited - Products and Services
Table 56: Goa Shipyard Limited - Alliances
Table 57: Goa Shipyard Limited - Recent Contract Wins
Table 58: Tata Advanced Systems Limited - Products
Table 59: Tata Advanced Systems Limited - Alliances
Table 60: Tata Advanced Systems Limited - Recent Contract Wins
Table 61: Mahindra Defence Systems - Products
Table 62: Mahindra Defence Systems - Alliances
List of Figures
Figure 1: Indian Defense Budget, 2021 and 2025
Figure 2: The Indian Defense Imports/ Exports 2015 and 2019
Figure 3 : Indian Top Prospective Procurements/Developments
Figure 4: Indian National Security Threats
Figure 5: India’s Partner Countries for Defense Cooperation and Military Training
Figure 6: Indian Defense Expenditure Including Pensions (INR Billion), 2016-2025
Figure 7: Indian Defense Expenditure Including Pensions (US$ Billion), 2016-2025
Figure 8: Indian Defense Expenditure Excluding Pensions (INR Billion), 2016-2025
Figure 9: Indian Defense Expenditure Excluding Pensions (US$ Billion), 2016-2025
Figure 10: Indian GDP Growth vs Defense Expenditure as a Percentage of GDP Growth, 2016-2025
Figure 11: Indian Defense Budget Split Between Capital and Revenue Expenditure (%), 2016-2025
Figure 12: Indian Capital Expenditure (INR Billion), 2016-2025
Figure 13: Indian Capital Expenditure (US$ Billion), 2016-2025
Figure 14: Indian Defense Budget Split (%), 2016-2025
Figure 15: Indian Defense Expenditure Allocation By Military Services - Split by Army, Navy, Air Force and Others (INR Billion), 2016-2025
Figure 16: Indian Defense Expenditure Allocation By Military Services - Split by Army, Navy, Air Force and Others (US$ Billion), 2016-2025
Figure 17: Indian Per Capita Defense Expenditure (US$), 2016-2025
Figure 18: Indian Homeland Security Budget (INR Billion), 2016-2025
Figure 19: Indian Homeland Security Budget (US$ Billion), 2016-2025
Figure 20: Benchmarking with Key Markets - 2016-2020 vs 2021-2025
Figure 21: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2020 and 2025
Figure 22: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2020
Figure 23: Airborne C4ISR Market Size (US$ Million), 2020-2025
Figure 24: Multirole Aircraft Market Size (US$ Million), 2020-2025
Figure 25: Land Based C4ISR Market Size (US$ Million), 2020-2025
Figure 26: Top Indian Defense Procurements in Terms of Their Supplier Relationships
Figure 27: Indian Defense Import Trend (US$ Million), 2015-2019 (TIV Values*)
Figure 28: Country-wise Break-up of Indian Defense Imports (%), 2015-2019 (TIV Values)
Figure 29: Weapon Category Breakdown of Indian Defense Imports (%), 2015-2019 (TIV Values)
Figure 30: Indian Defense Export Trend (US$ Million), 2015-2019 (TIV Values)
Figure 31: Country-wise Breakdown of Indian Defense Exports (%), 2015-2019 (TIV Values)
Figure 32: Weapon Category Breakdown of Indian Defense Exports (%), 201s-2019 (TIV Values)
Figure 33: Industry Dynamics - Porter’s Five Forces Analysis
Figure 34: Key Challenges
Figure 35: Indian Defense Market Share Analysis, 2020-2025
Figure 36: Bharat Electronics Limited - Revenue Trend Analysis (INR Billion), 2015-2019
Figure 37: Bharat Electronics Limited - Operating Profit Trend Analysis (INR Billion), 2015-2019
Figure 38: Bharat Electronics Limited - Net Profit Trend Analysis (INR Billion), 2015-2019
Figure 39: GDP Per Capita in US$, 2015-2025
Figure 40: GDP (Current US$ Billion), 2015-2025
Figure 41: Exports of Goods and Services (Current LCU Billion), 2005-2014
Figure 42: Imports of Goods and Services (Current LCU Billion), 2005-2014
Figure 43: Gross National Disposable Income (US$ Billion), 2005-2012
Figure 44: LCU per US$ (Period Average), 2015-2024
Figure 45: Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 46: Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 47: Total Government Cash Surplus/Deficit as a Percentage of GDP (LCU), 2005-2012
Figure 48: Goods Exports as a Percentage of GDP, 2005-2014
Figure 49: Goods Imports as a Percentage of GDP, 2005-2014
Figure 50: Service Imports as a Percentage of GDP, 2005-2014
Figure 51: Services Exports as a Percentage of GDP, 2005-2014
Figure 52: Foreign Direct Investment, net (BoP, Current US$ Billion), 2005-2014
Figure 53: Net Foreign Direct Investment as a Percentage of GDP, 2005-2014
Figure 54: Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014
