OVERVIEW OF THE SECTOR AEROSPACE & DEFENCE

Statistics, news & updates: everything you need to know about the Aerospace & Defence Industry in India

Aerospace & Defence Industry

 

  • Summary
  • Industry Clusters
  • Growth Drivers
  • Key Players
  • Market Stats

Summary

The Aerospace & Defence Industry in India is a strategically important sector in the country. With the strength of over 1.3 million active personnel, it is the world’s 3rd largest military force and has the world’s largest volunteer army. In recent years the Defence sector has grown extensively with a CAGR of 10%. In the Union budget 2017-2018 the defence expenditure received a boost of about 6%. With a budget allocation of $55.9 billion to the Ministry of Defence, India is the world’s 5th largest spender on defence. Between 2012 and 2016, the country accounted for 14% of all global arms exports making India the world’s largest arms importer. This is likely to change with the Government’s target to step up local sourcing to 70% and in turn reduce the defence budget by 50% in the next 10 years.

The Aerospace sector in India has also had a steady growth in both Defence and Civil Aviation sectors. Aerospace is predominant to bolster the Defence sector and contributes nearly 50% of the Value of Production of the sector.  With over 300 million in the middle class income group who can travel at least once a year by air and India’s growing economy that will boost the traffic trends both in passenger and cargo, the civil aviation Industry in India also offers large growth opportunities. With a value of about $16 billion the Aviation Industry in India is the 9th largest in the world and aims to become the 3rd largest by 2020. The Indian civil aviation market is one of the fastest growing markets in the world with travelers increasing at 20% every year. There are enormous opportunities for foreign investments and many global Aerospace and Defence companies are looking at India as a potential low-cost manufacturing destination and a high potential market.

Please see our latest Aerospace & Defence Industry Newsletter here!

Map- Industry Clusters

Growth Drivers

  • 100% FDI in defence sector: Up to 49% under automatic route; above 49%, through Government route where it is likely to result in access to modern technology
  • The ‘Make in India’ campaign seeks to cut the dependence on imported weapons and positions the country as a hub for defence manufacturing
  • India has signed 51 contracts valued $17.39 billion with foreign vendors for buying defence equipment and weapons and 90 deals worth $12.49 billion with Indian suppliers in the last three years
  • India plans to increase the number of operational airports to 250 by the year 2020
  • The FDI policy on Airports permits 100% FDI in Greenfield Projects and 74% FDI in Brownfield Projects under automatic route

Key Players in India

International

  • Airbus, BAE Systems, Bell Helicopter, Boeing, Dassault, Honeywell Aerospace, GE Aviation, Raytheon, Lockheed Martin, Rockwell Collins, Sukhoi Aviation , Rolls Royce

National

  • Tata Group, Mahindra Group, Reliance Industries, Bharat Forge, Hinduja Group, Hindustan Aeronautics, Taneja Aerospace

 

 

 

 

updated in May 2017

Market Stats

  • India has the 3rd largest armed forces in the world
  • The allocation of Defence in the Union budget 2017-18 is $34.53 billion and 31.1% of the defence budget is spent on capital acquisitions
  • About 60% of its defence requirements are met through imports
  • Total passenger traffic stood at 224 million during 2016
  • Domestic passenger traffic grew with a CAGR of  10.1% between FY 2006-16
  • Five international airports (Delhi, Mumbai, Cochin, Hyderabad, Bengaluru) have been completed and are operational under Public Private Partnership (PPP) mode