Aerospace And Defence Electronics Industry, At A Glance

The Indian government has outlined a number of policies to promote indigenous production in the aerospace and defence (A&D) electronics sector. With the Indian market growing rapidly for A&D products, local manufacture has progressed, but not at the required rate, and a few challenges remain.

- Comconnect Consulting Research Team

India is one of the largest aerospace and defence (A&D) markets, globally. The country’s defence budget is sizeable and covers the requirements of the Army, Navy and Air Force. India currently needs to modernise its A&D capital equipment base by addressing obsolescence, and it also has to build additional capabilities by acquiring new capital equipment. The Ministry of Home Affairs has also made additional budgetary allocations for the requirements of the paramilitary and state police forces.

Considering the drive towards the large scale modernisation of the Indian defence forces, there will be an ever increasing need for the application of electronics. Emerging technologies are going to revamp warfare by harnessing the power of electronics. This, in turn, will make the Indian strategic electronics (SE) sector, mainly comprising the aerospace and defence sector, a vibrant industry over the next 10 years.

Market potential

The overall defence budget has increased by 44.31 per cent in the last four years, going up from ₹ 2.80 billion in 2014-15 to ₹ 4.04 billion in 2018-19 as the government has undertaken several projects in line with the Make in India campaign. Of the MoD’s total allocations, ₹ 2.79 billion is earmarked for what is widely considered as India’s defence budget, and the balance is distributed between miscellaneous expenses of the ministry (₹ 162 million) and pensions (₹ 1.09 billion). The opportunities in the Indian A&D market have also increased accordingly.