India's defence exports surge to Rs 210 billion after global shift towards China+1, Russia-Ukraine war: Report

India's defence exports have surged from Rs 15 billion in 2017 to Rs 210 billion in 2024, registering a CAGR of 46 per cent, highlighted a report on 'Defence Conference 3.0' by Antique Stock Broking.

The report stated that the global shift towards a China+1 strategy and the impact of the Russia-Ukraine war offer India additional opportunities to fill supply chain gaps, potentially boosting its share in the global defence industry.

The report noted that the country's long-term goal is to become a global defence manufacturing hub is driven by Defence Public Sector Undertakings (DPSUs), private enterprises, start-ups, and MSMEs.

"Indian defence exports have grown multi-fold from INR 15 bn in 2017 to INR 210 bn in 2024 at a CAGR of 46%. The China + 1 strategy and the Russia-Ukraine war provides an additional opportunity for India to fill the gap created in the supply chain and hence increase its contribution to the global defence industry," the report read.

The report added that to achieve this target a well-developed domestic ecosystem is crucial as lower import content in products accelerates approvals by reducing international conflicts.

The report added that the Ministry of Defence has taken key initiatives to attract Indian private players and global Original Equipment Manufacturers (OEMs) include establishing aerospace parks and defence corridors, fast-tracking project approvals, and enhancing development and testing facilities.

Highlighting the potential in India's Maintenance, Repair, and Overhaul (MRO) segment the report explained that it holds a significant potential for global aerospace companies due to its technical expertise and cost-competitive solutions.

"India provides a huge opportunity in the MRO segment for global aerospace leaders given the expertise the country provides as well as the cost efficiency solutions compared to its global competitors" the report added.

India aims to increase domestic defence turnover to Rs 3 lac crore by 2029, Rs 500 billion targeted for exports. This growth will help reduce the Government of India's import bill as India remains the world's largest importer of defence equipment.

Under the Atmanirbhar Bharat initiative of the government, 75 per cent of the defence capital outlay is now reserved for domestic players, up from 49 per cent in FY21.

Given the geopolitical challenges and modernisation needs of its Armed Forces, the report added that India plans to invest Rs 8.3 lac crore in domestic procurement, offering substantial business opportunities for local companies.

"India intends to place orders worth INR 8.3 trn through domestic procurement and thus it presents a massive business opportunity for local players" it added.

As per the Ministry of Defence, India's defence manufacturing sector has witnessed an increase of 16.8 per cent in the fiscal year 2023-24. This significant increase marks the highest-ever growth in the country's defence production value. The total value of defence production reached Rs 1,26,887 crore this year, up from the previous year's figures.