AEROSPACE & DEFENCE SECTOR OVERVIEW
Statistics, news & updates: everything you need to know about the Aerospace & Defence Industry in India
- Industry Clusters
- Growth Drivers
- Key Players
- Market Stats
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%. India’s defence industry accounts for about 1.6% of the GDP. The allocation of Defence in India’s union budget is approximately USD 34.53 billion and 31.1% of the defense budget is spent on capital acquisitions. Imports account to 60% of defense-related requirements and this offers a huge opportunity for foreign investors. In the next years, the Government target’s to step up local sourcing to 70% and in turn reduce the defence budget by 50%. The government is currently pursuing the goal of having a turnover of 25.5 billion USD in military goods and services by 2025.
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 and the growth is expected to continue with the plan of investments of about USD 1.83 billion in the development of airport infrastructure by 2026. The goal for the upcoming year is to open 15 new airports. Also, the production industry has seen some growth and India is planning to make its first 2-person aircraft in 2019. 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 the latest Aerospace & Defence Industry News here!
- 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 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
- The union budget FY2018-19 has a 7.7% increase in the defence budget
- Commercial aircraft sector is expected to see a growth rate of 4.8% in FY2018-19
- India aerospace defense market to reach more than 23 billion USD by 2024
- The civil aviation industry has registered a growth of 21.2% in travelers
Key Players in India
- Airbus, BAE Systems, Bell Helicopter, Boeing, Dassault, Honeywell Aerospace, GE Aviation, Raytheon, Lockheed Martin, Rockwell Collins, Sukhoi Aviation , Rolls Royce
- Tata Group, Mahindra Group, Reliance Industries, Bharat Forge, Hinduja Group, Hindustan Aeronautics, Taneja Aerospace
- India has the 3rd largest armed forces in the world
- India’s main arm suppliers are Russia 62%, US 15% and Israel 11%
- The allocation of defence in the union budget is approx USD 34.53 billion, the 5th largest defence budget in the world
- About 60% of its defence requirements are met through imports
- India’s current MRO (maintenance, repairs and operations) market size is estimated to be around $750 million.
- India is the world’s fastest growing domestic aviation market and the Revenue Passenger Kilometre (RPK) growth of 17.5% was higher than the global average of 7% in 2017.
- More than 80 international airlines connecting to over 40 countries
- Five international airports (Delhi, Mumbai, Cochin, Hyderabad, Bengaluru) have been completed and are operational under Public Private Partnership (PPP) mode