THE SHOT IN THE ARM

Despite India’s current level performance in defence exports, much optimism prevails within industry-watchers who are eyeing the massive opportunity that lies ahead of them.

- Kaustubh Shukla

India’s defence sector is experiencing an upturn. Over the last decade, the defence budget has grown more than four folds. In fact, in 2018, it was the fourth-largest globally, standing at $67 billion. Currently, the defence market is growing in double-digits, and the country is enjoying enhanced FDI (Foreign Direct Investment) limits for defence investments -- up to 49 percent under the automatic route and 100 percent through MoD’s (Ministry of Defence) approval. The turnaround time taken for authorisation of defence exports too, has fallen drastically to less than 50 percent in comparison to earlier. While there is no denying that we have indeed come a long way, we must also acknowledge the fact that we still have a long way to go.

LOOKING BEYOND THE CLOUD COVER

Although our defence exports have risen from ₹4,000 crore to ₹17,000 crore (as a share of the global pie) in the last two years, it is still at only at 2.1 percent thus suggesting ample scope and opportunity for growth. For such growth to take place, our domestic defence manufacturing capabilities must see an all-round improvement. Increasing the share of indigenous development that results into better self-reliance and import substitution followed up by continuous advancement in technology is the need of the hour.