DEFENSE SECTOR:

Introduction:
India's defense industry is robust, focusing on weapon development. The
country boasts one of the world's largest military forces, with 70 lakh active
soldiers and volunteers. The government controls 80% of the domestic defense
sector, which includes private defense industries, DPSUs, OFBs, and DRDOs.1
Recently, the government has made changes to promote self-sufficiency by
enhancing India's ability to design, develop, and produce its defense equipment.
Key military manufacturing firms like Hindustan Aeronautics Ltd. (HAL), Bharat
Electronics Ltd. (BEL), and Bharat Earth Movers Ltd. (BEML) play significant roles
in this sector. 2 To strengthen local capabilities in designing, developing, and
manufacturing military equipment, India should foster public-private
partnerships (PPPs) and leverage the private sector's expertise in technology
and finance.3
Budget:
Between 2017 and 2021, India's defense exports increased, from 1,520 crore to
8,435 crore in the fiscal year 2021–2022. The Indian government aims to invest
Rs. 2200 crore by the fiscal year 2024-2025. India has a potent supply chain with
over 12,000 MSMEs and 194 new defense technology solutions. 4 For the fiscal
year 2023-24, India has allocated 2% of its GDP to the military, with 13% of the
total government budget dedicated to defense. 5
Import & Exports:
India receives 12% of global arms exports and produces about 70-75% of its
defense items locally, importing the rest. The Ministry of Defence has allocated
Rs.6,21,541 crore in the Interim Budget of 2024-2025, representing a 4.7%
increase from previous budgets. This allocation accounts for 1.9% of GDP and
13% of Central Government Expenditure. 6 7 By 2025, the Ministry of Defense
aims to generate Rs. 2600 crore in aerospace and defense manufacturing

1
https://tinyurl.com/bdfzxyhf
2
https://www.ibef.org/industry/defence-manufacturing
3
https://tinyurl.com/chnddufa
4
https://www.biogecko.co.nz/admin/uploads/03.%20Dr.Jayasree%20nambiar%20(IEEE).pdf
5
https://www.irejournals.com/formatedpaper/1705527.pdf
6
https://doi.org/10.55163/KFLQ6518
7
https://tinyurl.com/yjhyb3jx
revenue, with Rs. 500 crore coming from exports. As of April 2023, 606 industrial
licenses have been granted to 369 businesses operating in the defense sector. 8
Government initiatives:
India has embraced the "Aatmanirbhar Bharat" concept, integrating it into the
mainstream manufacturing sector. The government is inviting foreign
businesses to collaborate with public-sector military units and is focusing on
boosting private-sector participation for overall national and economic
development. To strengthen the "Build in India, Build for the World" initiative,
the government has invited corporate involvement in 310 additional defense-
related sectors. To revitalize India's industrial growth and position the country
as a global manufacturing hub, 25 industries, including defense production, have
been identified for focus and development. 9 The private sector, including
companies like Tata, M&M, L&T, and Kalyani Forge, is actively involved in
producing and exporting weapons in the defense industry. The government has
introduced the Open General Export License (OGEL) system to facilitate the
export of defense equipment, parts, technology transfer, major platforms, and
equipment, promoting defense equipment exports.10
India is now the third-largest spender globally on military, transitioning from a
major importer to an exporter of key defense platforms. Notable exports include
the Dornier-228 aircraft, 155 mm Advanced Towed Artillery Guns (ATAGs),
BrahMos and Akash Missiles, various radars, simulators, armored vehicles,
mine-protected vehicles, PINAKA rockets and launchers, ammunition, thermal
imagers, body armors, systems, line replaceable units, avionics components,
and small arms parts.11 Following deregulation, the growth of Foreign Direct
Investment (FDI) in the defense industry was slower initially. However, a more
liberalized FDI policy has increased investment in India's defense sector. The
government's growth-oriented initiatives have created a favorable business
environment, benefiting the Indian defense industry through improvements in
FDI policies.12 The production of military equipment within the country will
provide immediate impetus to the manufacturing sector as in the case of major
industrialized nations like the USA, France, and Germany. 13 To improve research

8
https://tinyurl.com/5hdb6st9
9
https://www.idsa.in/policybrief/MakeinIndiaforDefence_lbehera_050215
10
https://www.trade.gov/country-commercial-guides/india-aerospace-and-defense
11
https://www.irejournals.com/formatedpaper/1705527.pdf
12
https://nirdprojms.in/index.php/maj/article/view/159897/109725
13
https://www.ijeast.com/papers/280-289,Tesma408,IJEAST.pdf
and development, India needs better design and development skills. Working
with designers and producers from other countries can help us get started. 14
Alliance by the Government:
 India and the UK have agreed to a Memorandum of Understanding (MoU)
for the International Cadet Exchange Programme (ICEP) between the two
countries. Additionally, the Defense Research and Development
Organization (DRDO) will work with the British Defense Science and
Technology Laboratory (DSTL) for joint research in the field of defense. 15
 The Ministry of Defense has agreed with BEML Limited, Bharat Electronics
Limited (BEL), and Mishra Dhatu Nigam Limited (MIDHANI) to develop
Advanced Fueling and Control Systems for Engines used in Heavy Duty
Applications.16
 The Ministry of Defence (MoD) signed a contract worth Rs. 1,752 Crore
with AWEIL (Advanced Weapon Equipment India Ltd.) for 463 Stabilised
remote-control guns for the Indian Navy and Indian Coast Guard.17
 MoD signed a contract worth over Rs 1070 crore with Mazagon Dock
Shipbuilders Ltd for 14 Fast Patrol Vessels for the Indian Coast Guard. 18
 MoU was signed between the Indian Navy and IIT Bombay for the M.Tech
Programme in Systems and Controls Engineering. 19

14
https://tinyurl.com/8yaac83h
15
https://tinyurl.com/5hdb6st9
16
https://tinyurl.com/yc2ntt6x
17
https://tinyurl.com/bdcvfn45
18
https://tinyurl.com/zfk69yeb
19
https://tinyurl.com/pfwyzzsk