With growing emphasis on self-reliance in the defence sector, the indigenous production of weapon platforms as well as the export of military hardware touched a new high in 2024. While the public sector dominated production, the private sector had a greater share in exports.
“The defence production went up to a record-high figure of Rs 1,26,887 crore, reflecting a growth of 16.7 percent over the defence production of the previous financial year,” the year-end review issued by the Ministry of Defence (MoD) on Thursday stated.
The value of defence production in FY 2022-23 was Rs 1,08,684 crore. Of the total value of production in 2023-24, about 79.2 percent has been contributed by Defence Public Sector Undertakings (DPSUs) and other public sector units (PSUs), and the remaining 20.8 per cent by the private sector.
The data shows that in terms of absolute value, both the public as well as the private sectors have recorded a steady growth in defence production. The MoD has set a target to achieve Rs three lakh crore defence production by 2029.
Defence exports touched a high of Rs 21,083 crore (approximately USD 2.63 Billion) during the 2023-24 financial year, a growth of 32.5 percent over the previous fiscal when the figure was Rs 15,920 crore, the MoD stated.
The figures indicated that the exports grew by 31 times in the last 10 years as compared to the 2013-14 financial year. The private sector and DPSUs contributed about 60 percent and 40 percent respectively.
The target set by the MoD for export of defence equipment is Rs 50,000 crore by 2029. India exports defence equipment to over 100 nations, with the top three destinations for defence exports in 2023-24 being the USA, France, and Armenia. The export portfolio includes a diverse range of advanced defence equipment, including aid defence missiles, rockets, Dornier Do-228 aircraft, Dhruv and Chetak helicopters, fast interceptor boats, lightweight torpedoes, bulletproof jackets, boots and helmets.
While complementing the role of the public as well as private sector for making tremendous efforts, the MoD also cited successful implementation of the policies and initiatives of the government in achieving the highest-ever value of production and exports.
The initiatives include a liberalised Foreign Direct Investment policy with increased limits, enhanced budgetary allocation with 75 percent of the Rs 1,40,691.24 crore allocation for capital acquisition (modernisation) for 2024-25 being earmarked for domestic procurement, priority for domestic procurement, simplified licensing process and launch of the Innovations for Defence Excellence (iDEX) scheme to involve the private industry and startups in research and development.
Further, to boost self-reliance in defence and minimise imports, the Department of Defence Production (DDP) in July, notified the fifth Positive Indigenisation List (PIL) consisting of 346 items. These include strategically-important line replacement units, systems, sub-systems, assemblies, sub-assemblies, spares and components as well as raw materials.
Earlier, four PILs comprising 4,666 items were notified by the DDP for DPSUs, of which 2,972 items, having import substitution value worth Rs 3,400 crore, have already been indigenised. These five lists for DPSUs are in addition to the five PILs of 509 items notified by the Department of Military Affairs. These lists include highly-complex systems, sensors, weapons and ammunition.
India, however, continues to be the top arms importer in the world, accounting for close to 10 percent of the global weapons trade. According to reports, India’s imports saw a 4.7 percent increase between 2014-18 and 2019-23.
