Summary
Between 2012 and 2016, the Indian defense budget increased at a CAGR of 3.41%, and is expected to increase significantly, at a CAGR of 6.65% during the forecast period, to reach a value of US$55.4 billion by 2021. Prolonged unresolved border issues and rising tension with two neighboring nations, China and Pakistan, are expected to fuel the defense budget in the coming years; in addition to the country's need to replace the aging and outdated military hardware and technology. Defense capital expenditure is expected to increase from US$15 billion in 2016 to US$21.2 billion in 2021, at a CAGR of 6.63%.
Key Findings
- During 2012-2016, Indian defense expenditure registered growth of 3.41%, increasing from US$34 billion in 2012 to US$38.9 billion in 2016
- Defense expenditure is anticipated to register a CAGR of 6.65% over 2017-2021and reach a value of US$55.4 billion in 2021
- Over the forecast period, the country's budget for homeland security is expected to be US$69.6 billion cumulatively
- The key areas of investment are expected to be multi-role aircraft, infrastructure construction, corvettes, surface to air missiles, and frigates
Synopsis
Strategic Defence Intelligence's report - Future of the Indian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2021 offers detailed analysis of the industry with market size forecasts from 2017-2021. This report sheds light on factors that influence demand in the industry, key market trends, and challenges faced by industry participants.
In particular, it provides an in-depth analysis of the following:
- Defense industry market size and drivers: detailed analysis of the defense industry during 2017-2021, including highlights of the demand drivers and growth stimulators. 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 the army, navy, and air force. It also details the key challenges faced by defense market participants within the country
- Porter's Five Force analysis of the defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, buyers, threat of substitution, intensity of rivalry, and barriers to entry
- Import and Export Dynamics: analysis of prevalent trends in the country's imports and exports over the last five years
- Market opportunities: details of the top five defense investment opportunities from 2016 to 2026
- Competitive landscape and strategic insights: including an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis
Reasons To Buy
- Identify and track the global defense market and make regional comparisons to effectively target new revenue streams
- Understand the importance of being led by the defense ministries in the military procurement market and define your strategies with insight on what your customers really want by analyzing recent orders, technical specifications, and the country's expected investment pattern during 2017-2021
- Make correct business decisions based on detailed analysis of the defense industry from 2017-2021,which includes the total competitive landscape of the sector with detailed profiles of the top domestic and foreign defense manufacturers along with information about their products, alliances, recent contract wins, and financial analysis
- Determine prospective investment areas by gaining an in-depth understanding of the industry in terms of market opportunities
- Channel resources by identifying various military requirements that are expected to generate revenues across different sectors during 2017-2021
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1 Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. SDI Terrorism Index
1.5. About Strategic Defence Intelligence
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1. Defense Market Size Historical and Forecast
3.1.1. Indian defense budget expected to be US$245.6 billion cumulatively over 2017-2021
3.1.2. Modernization initiatives, hostile neighbors, territorial disputes, and implementation of OROP and 7th Pay Commission will be the key growth drivers
3.1.3. Defense budget as a percentage of GDP will remain at an average of 1.6% over the forecast period
3.2. Analysis of Defense Budget Allocation
3.2.1. Revenue expenditure expected to increase over the forecast period
3.2.2. Army continues to see the largest share of the defense budget
3.2.3. Defense ministry will spend US$127.1 billion on its army over the forecast period
3.2.4. Indian MoD projected to spend US$62.2 billion on its air force over the forecast period
3.2.5. Expenditure for the navy expected to grow at a CAGR of 6.68% during 2017-2021
3.2.6. Per capita defense expenditure is expected to increase over the forecast period
3.3. Homeland Security Market Size and Forecast
3.3.1. India is projected to spend US$69.6 billion cumulatively on homeland security over the forecast period
3.3.2. Homeland security is expected to be driven by cross-border terrorism and domestic conflicts
3.3.3. India falls under "highly affected" of terrorism category
3.3.4. India has terrorism index score of 7.7
3.4. Benchmarking with Key Global Markets
3.4.1. India's defense budget expected to grow at a CAGR of 6.65%
3.4.2. The US and China dominate the global defense industry
3.4.3. India allocates a lower share of its GDP to defense than other Asian countries
3.4.4. India faces significant threat from foreign terrorist organizations
3.5. Market Opportunities: Key Trends and Growth Stimulators
3.5.1. Multi-role Aircraft
3.5.2. Infrastructure Construction
3.5.3. Corvettes
3.5.4. Surface to Air Missiles
3.5.5. Frigates
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 2011-2015
4.2. Export Market Dynamics
4.2.1. India's low profile in defense exports is set to change over the forecast period
4.2.2. Underdeveloped nations across Asia and Africa are the main importers of Indian defense goods
5 Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of supplier: low to high
5.1.2. Bargaining power of buyer: high
5.1.3. Barrier to entry: medium to high
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: A significant improvement
6.1.2. Offset policy to drive defense industrial modernization
6.1.3. Main features of revised Defense Procurement Procedure (DPP) - 2016
6.1.4. Private sectors permitted to produce arms and ammunition under the new Draft Arms and Ammunitions Manufacturing Policy (DAAM)
6.1.5. Foreign direct investment (FDI) increased to 49% in the Indian defense sector
6.2. Market Entry Route
6.2.1. Foreign OEMs are forming joint ventures in order to enter the market
6.2.2. India emerges as a key outsourcing hub for global defense companies
6.3. Key Challenges
6.3.1. Offset policy is biased towards the domestic public and private sectors
6.3.2. Insufficient information and transparency on future plans
6.3.3. Bureaucracy, corruption, and long project delays
6.3.4. 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. 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 - main 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. - main 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 - main 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 - main 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 Limited - overview
7.3.2. Mazagon Docks Limited - main products
7.3.3. Mazagon Docks Limited - recent announcements and strategic initiatives
7.3.4. Mazagon Docks Limited - alliances
7.3.5. Mazagon Docks Limited - recent contract wins
7.3.6. Mazagon Docks Limited - Financial analysis
7.3.7. Hindustan Aeronautics Limited - overview
7.3.8. Hindustan Aeronautics Limited - main products and services
7.3.9. Hindustan Aeronautics Limited - recent announcements and strategic initiatives
7.3.10. Hindustan Aeronautics Limited - alliances
7.3.11. Hindustan Aeronautics Limited - recent contract wins
7.3.12. Hindustan Aeronautics Limited - Financial analysis
7.3.13. Bharat Electronics Limited - overview
7.3.14. Bharat Electronics Limited - main products and services
7.3.15. Bharat Electronics Limited - recent announcements and strategic initiatives
7.3.16. Bharat Electronics Limited - alliances
7.3.17. Bharat Electronics Limited - recent contract wins
7.3.18. Bharat Electronics Limited - Financial analysis
7.3.19. Bharat Dynamics Limited - overview
7.3.20. Bharat Dynamics Limited - main products
7.3.21. Bharat Dynamics Limited - recent announcements and strategic initiatives
7.3.22. Bharat Dynamics Limited - alliances
7.3.23. Bharat Dynamics Limited - recent contract wins
7.3.24. Bharat Dynamics Limited - Financial analysis
7.3.25. Ordnance Factory Board - overview
7.3.26. Ordinance Factory Board - main products
7.3.27. Ordinance Factory Board - recent announcements and strategic initiatives
7.3.28. Ordinance Factory Board - alliances
7.3.29. Ordinance Factory Board - recent contract wins
7.3.30. BEML - overview
7.3.31. BEML - main products
7.3.32. BEML - recent announcements and strategic initiatives
7.3.33. BEML - alliances
7.3.34. Goa Shipyard Limited - overview
7.3.35. Goa Shipyard Limited - main products and services
7.3.36. Goa Shipyard Limited - recent announcements and strategic initiatives
7.3.37. Goa Shipyard Limited - alliances
7.3.38. 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 - main 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 - main
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, USD
8.1.2. GDP (current USD 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 (USD Billion)
8.1.6. LCU per USD (period average)
8.1.7. Market Capitalization of Listed Companies (USD Billion)
8.1.8. Market Capitalization of Listed Companies (% of GDP)
8.1.9. Total Government cash surplus/deficit as % 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$ Bn)
8.1.15. Net foreign direct investment as % of GDP
8.2. Minerals
8.2.1. Mining, Manufacturing, and Utilities Output (US$ Bn)
9 Appendix
9.1. About SDI
9.2. Disclaimer
Table 1: Indian Defense Expenditure (INR billion and US$ billion), 2012-2021
Table 2: Indian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2012-2021 (US$ bn)
Table 3: Indian Defense Budget Split Between Capital and Revenue Expenditure (%), 2012-2021
Table 4: Indian Defense Budget Split (%), 2012-2021
Table 5: Indian Defense Expenditure (INR billion and US$ billion), 2012-2021
Table 6: Indian Defense Expenditure for the air force (INR billion and US$ billion), 2012-2021
Table 7: Indian Defense Expenditure for the navy (INR billion and US$ billion), 2012-2021
Table 8: Indian Per Capita Defense Expenditure (US$), 2012-2021
Table 9: Indian Homeland Security Budget (INR billion and US$ billion), 2012-2021
Table 10:Benchmarking with Key Markets - 2012-2016 vs. 2017-2021
Table 11: SDI Research Terrorism Index
Table 12: Offset Policy in India
Table 13: Market Entry Strategies and Key Objectives of Foreign Companies in the Indian Defense Sector
Table 14: Key Players and their Operations in the Indian Defense Industry
Table 15: Scale of Operations of Domestic Public andPrivate Sector Companies in the Indian Defense Industry
Table 16: Lockheed Martin Corporation - Main Products
Table 17: Lockheed Martin Corporation - Alliances
Table 18: Lockheed Martin Corporation - Recent Contract Wins
Table 19: BAE Systems Plc. - Main Products
Table 20: BAE Systems Plc. - Alliances
Table 21: BAE Systems Plc. - Recent Contract Wins
Table 22: Thales - Main Products
Table 23: Thales - Alliances
Table 24: Thales - Recent Contract Wins
Table 25: Boeing - Main Products
Table 26: Boeing - Alliances
Table 27: Boeing - Recent Contract Wins
Table 28: Mazagon Docks Limited - Main Products
Table 29: Mazagon Docks Limited - Alliances
Table 30: Mazagon Docks Limited - Recent Contract Wins
Table 31: Hindustan Aeronautics Limited - Main Products and Services
Table 32: Hindustan Aeronautics Limited - Alliances
Table 33: Hindustan Aeronautics Limited - Recent Contract Wins
Table 34: Bharat Electronics Limited - Major Products and Services
Table 35: Bharat Electronics Limited - Alliances
Table 36: Bharat Electronics Limited - Recent Contract Wins
Table 37: Bharat Dynamics Limited - Main Products
Table 38: Bharat Dynamics Limited - Alliances
Table 39: Bharat Dynamics Limited - Recent Contract Wins
Table 40: Ordinance Factory Board - Main Products
Table 41: Ordinance Factory Board - Alliances
Table 42: Ordinance Factory Board - Recent Contract Wins
Table 43: BEML - Main Products
Table 44: BEML - Alliances
Table 45: Goa Shipyard Limited - Main Products and Services
Table 46: Goa Shipyard Limited - Alliances
Table 47: Goa Shipyard Limited - Recent Contract Wins
Table 48: Tata Advanced Systems Limited - Main Products
Table 49: Tata Advanced Systems Limited - Alliances
Table 50: Tata Advanced Systems Limited - Recent Contract Wins
Table 51: Mahindra Defence Systems - Main Products
Table 52: Mahindra Defence Systems - Alliances
Lockheed Martin Corporation
BAE Systems Plc.
Thales
Boeing
Mazagon Docks Limited
Hindustan Aeronautics Limited (HAL)
Bharat Electronics Limited (BEL)
Bharat Dynamics Limited (BDL)
Ordnance Factory Board
Bharat Earth Movers Limited (BEML)
Goa Shipyard Limited (GSL)
Tata Advanced Systems
Mahindra Defence Systems
