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Indian Defence Market

TrustmanDefence LawIndian Defence Market

Jul

13

Indian Defence Market

India’s new defence policy opens up $100 billion market. India is a tenth largest defence buyer in the world with an estimated 2.5% of the global defence expenditure.  A recent report puts India’s defence expenditure in the range of USD 32 billion which is set to rise to USD 42 billion by 2015.  The capital expenditure on new weapons platforms will also rise from the current USD 13.04 billion to 19.02 billion in 2015. For the XII five year plan (2012 -2017), India’s expenditure on weaponry is pegged at USD 120 billion.

Since 2001,  the defence industry had been liberalised and opened for private sector with participation upto 100% and allowing foreign direct investment upto 26%.  The private sector defence supplier is composed of around 5000 companies.  It accounts for around 20% Indian defence market in value terms and the rest of requirements are met through import.  The government has set the target to procure its 70% requirement from indigenous supplier.

Homeland Security Market

India’s homeland security agencies, which primarily consist of the paramilitary forces, state and central police forces and the intelligence agencies, function under the aegis of the Indian Ministry of Home Affairs (MHA). As maintenance of law and order is a state subject, all 28 Indian states maintain considerable police, armed police and special police forces. Provisioning and procurement of all items for the modernization of central police forces is handled by the Police Modernization Division (PMD) of MHA. The Indian Government through MHA is likely to spend over $ 7.5 billion and state governments close to $ 2 billion on the modernization of their police and para-military organizations in the next 3-5 years. The bulk of the expenditures will be on arms, ammunition, transport, communication equipment, bullet proof jackets, and explosive handling devices.