India Report

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    Growth of the Indian Defense Budget and its Impact on the Overall Defense Indian Defense Sector

    The Indian defense sector is one of the fastest defense industries within the global market, ranked as the third largest defense spender across the world. The Indian defense budget accounts for roughly 2.15% of the country’s GDP expenditure according to Indian defence news.

    The Indian government is poised to spend a value of roughly USD 130 Billion over the next five to seven years for fleet modernization as a part of the Indian air force modernization initiative. As per India latest military news, the Indian Ministry of Defense was noted to account for a value of USD 70.6 billion as part of the Union Budget 2022–2023. The percentage of domestic capital procurement, which was set at 64% in 2021–2022, has been increased to 68% of the Capital Acquisition Budget of the Defence Services for FY 2022–2023. This increase in value for the domestic capital procurement is seen to be in accordance with the burgeoning self-reliant India initiative which is also attracting interest from the international markets as per India latest military news.

    Indian defense sector - Germany
    Indian Defense Budget - US

    Growth in Indian Defense Budget and Local Procurement as a result of the Market in India Initiative

    As a part of the Make in India initiative, several defense manufacturers have started setting shop to establish business connections within the Indian defense sector. Some of the prominent state run organizations are noted to be Bharat Dynamics, Bharat Electronics, Bharat Earth Movers and DRDO (Defense Research and Development Organization). ADTCR, Helina, Guided Bomb, NAG, NGRAM and SAW are some of the future projects undertaken by the DRDO with a timeline that commences in FY 2022-2023. Indian defence news suggests that the completion of these programs would potentially increase the lethality of the Indian defense sector.

    As per Indian defence news, a robust ecosystem of the Indian defense sector that propels the ease of doing business within the Indian defense sector and the instation of policies which help propagate the agenda for atmanirbhar bharat are poised to be some of the key factors that will bolster domestic production.

    Key Drivers for the Indian Defense Budget and the Procurement within the Indian Defense Sector as per the Indian Defence News

    An increase in the Indian army modernization initiatives is also expected to be one of the key factors that drive the growth associated with the Indian defense budget. To support the growth associated with the Atmanirbhar Bharat initiative, the Indian government is also noted to have notified three positive indigenisation lists. The Indian military indigenisation list consists of 310 defense equipments to be sourced and produced locally. The growth of local sourcing is poised to increase the local employment opportunities within the Indian defense sector which is hereby poised to increase the spending potential of the general populous. On studying the multiplier effect from an Indian defense budget perspective, it is noted that the direct, indirect as well as induced employment opportunities within the Indian defense sector would increase which would propel the Indian defense budget.

    Indian army modernization - France

    Impact of the Defense Offset Policy and its Complications on the Indian Defense Sector as per India Latest Military News

    On the other side, as per India latest military news, the defense offset regulation was mired with criticism for its failure to attain the intended results, i.e, foreign vendors must fulfil their offset duty by investing at least 30% of the contract value in the Indian defence sector.

    As per recent Indian defence news, the Indian defense ministry was claimed to have been simplified the terms and conditions associated with the Indian defense offset policy. However, India latest military news states that the process that regulates the defense offset policy conclusion and implementation, as well as the system of contract management, remain overly complicated. The complications associated with the offset policy is noted to be one of the key factors that act as a restraint to achieving the targets set by the Indian defense sector in terms of the defense offset. India latest military news also suggested that as many as 15 companies were noted to have missed the first deadline for the implementation of the offset commitment.

    India Defense and India Military exports to International Markets as per Indian Defence News

    As per India latest military news, it was noted that to encourage exports and liberalise foreign investment, the Automatic Route has increased FDI in the defence sector by up to 74%, and the Government Route by 100%. In order to facilitate smooth movement of goods as well as raw materials, the Indian government is further noted to instate 2 dedicated Defence Industrial Corridors in the States of Tamil Nadu and Uttar Pradesh to serve as clusters of defence manufacturing for the Indian defense sector. The defense sector clusters would hereby help streamline the use of existing capital as well as infrastructure.

    Furthermore, another notable move as per the Indian defence news is that the establishment of government  schemes like iDEX (Innovations for Defence Excellence) and DTIS that help encourage innovation within the defence and aerospace ecosystem (Defence Testing Infrastructure Scheme).

    In terms of trade, Indian defence news suggests that the India latest military news also suggest that the Indian defense sector accounts for a value of 15% for global arms import. While, the overall market size of the Indian defense sector is noted to achieve a value of roughly USD 11.3 Billion. As per the Indian defense budget, the capital expenditure value for the India defense and military industries was also noted to grow by a value of 19% growth between FY2021-2022.


    The Indian defense sector’s acquisition council gave its approval for the purchase of next-generation corvettes (NGCs) for an estimated price of about $ 4.4 billion as per the Indian defense budget’s allocation. These NGCs will be adaptable platforms for a range of missions, including coastal defense, escort missions, deterrent, and Surface Action Group (SAG) operations. According to a statement from the Indian defense sector’s ministry and Indian defense companies, the NGCs would be built utilizing the most recent shipbuilding technologies and would be based on a new internal design of the Indian Navy and the Indian defense budget.

    The Project 15B class of vessels, which are being constructed at the MDL as an upgrade to the P15A (Kolkata Class) Destroyers with a heavy weapon load, are the Indian Navy’s next-generation stealth guided-missile destroyers as per India latest military news. The P17A (Shivalik Class) Frigates are a new generation of warships that have platform management systems, better stealth features, and cutting-edge armaments and sensors. As per Indian defense companies, seven P17A Frigates are being built at Indian defense companies, MDL and Garden Reach Shipbuilders & Engineers in various stages (GRSE). According to the government’s vision for “Aatmanirbhar Bharat,” and Indian defense budget allocation for the same, complicated frontline platforms like destroyers and frigates should be built domestically. As per India latest military news, along with the ships already in the works, ‘Acceptance of Necessity’ has also been granted for the construction of six Project 75 submarines and another 43 ships in India. HAL has been given a contract to deliver 12 Dorniers, 16 Advanced Light Helicopters, and 8 Chetaks in the aerospace industry. Additionally, buying 111 Naval Utility Helicopters under a strategic partnership model is a possibility according to the Indian defense budget’s feasibility.

    The Navy and Coast Guard’s maritime capacity building and Indian navy modernization received the highest priority in the Indian defense budget for the upcoming year due to the Chinese Navy’s massive expansion and growing presence in the Indian Ocean Region (IOR).

    Compared to the Indian defense budget predictions for 2021–22, the Navy and Coast Guard’s capital budgets increased by 44% and 60% annually, respectively as per India latest military news. Boeing is also scheduled to deliver the final two P-8I long-range maritime patrol aircraft to the Navy, fulfilling the order’s optional provision for an additional four aircraft. Of the 24 helicopters ordered, two MH-60R multi-role models have already been delivered. The Indian Navy also intends to acquire four additional Land Helicopter Dock (LHD) or Landing Platform Dock (LPD)-type ships to increase its amphibious capacity in accordance with the Indian defense budget allocation. These will more than treble the current capacity offered by INS Jalashwa, the former USS Trenton (LPD-14), an amphibious transport dock of the Austin class of the United States Navy according to India latest military news.


    The Operational Data Link (ODL) and an improved version of the Integrated Air Command and Control System (IACCS) are nearing completion, this data link will be allowing the IAF to fight modern high-tech warfare according to India latest military news. The IAF is also seeking the incorporation of Software Defined Radios, which will be a significant step toward Network Centric Operations (NCO). Processes have also been established to ensure that Artificial Intelligence (AI) and Machine Learning (ML) are incorporated into all future procurements that are in accordance with the Indian defense budget as per India latest military news.

    Airborne Warning and Control Systems (AWACS), Airborne Early Warning and Control (AEW&C), and Flight Refueling Aircraft (FRA) are among the additional combat support equipment being bought. To offer effective multi-layered air defense, Air Defense Radars, long and medium-range surface-to-air missile systems (S-400, MRSAM), Low-Level Quick Reaction Missiles (LLQRM), and Close In Weapon Systems (CIWS) are being bought according to India latest military news and Indian defense sector’s trends.

    As per Indian defense news and Indian defense sector’s trends, numerous weapons platforms, including the MiG-29, Jaguar, and Mirage-2000 fighter aircraft, as well as the An-32 transport aircraft, Mi-17/Mi17 1V helicopters, and SAGW& communication systems, are being upgraded as per Indian defense budget allocation. The encroachment of space, cyber, and information verticals on traditional domains is unavoidable in the future as per India latest military news.

    The IAF is constantly improving its capabilities to deal with conventional and non-conventional threats in the cyber and space domains. A network-centric operational capability with modern combat and combat support equipment, as well as quick deployment and redeployment capability, guarantees that conventional threats are dealt with effectively within the available resources as per Indian defense news. According to Indian defense news, Pan-IAF communication is enabled by a strong and stable operational network built on secure fiber optics, ground networks, and SATCOM links.

    The IAF plans to update the Su-30MKIs with new weaponry, avionics, sensors, and engines over the next few decades. The IAF operates 12 Su-30 squadrons, and at any given moment, 40-50 aircraft are undergoing overhaul repairs at HAL. Given the present phase-outs and inductions, the IAF will not be able to attain the sanctioned strength of 42 fighter squadrons in the next 10-15 years, and the force will remain at 35 squadrons according to India latest military news and Indian defense sector’s trends.


    As per Indian defense news, long-range rockets are the future of artillery. A Pinaka launcher with a range of 75 kilometers will be used. The multi-barreled ‘Smerch’ has a range of 90 kilometers. The Indian defense company, DRDO has been tasked with developing a rocket capable of traveling 125 kilometers. Six more Pinaka regiments were contracted, with delivery coming soon as per India latest military news and Indian defense sector’s trends.

    As mentioned by Indian defense news, with the introduction of long-range rockets, ariel surveillance is required to locate targets. The Indian military is looking for vertically fired drones with a range of 80 kilometers according to India latest military news. The technology will guide fire in enemy regions, including those that are out of sight.

    The success of the K9 Vajra cannon in eastern Ladakh has prompted the MoD to approve the procurement of 100 additional similar weapons. Originally designed for deserts, the gun’s adaptation for Himalayan winter incorporates cold-resistant batteries and non-freezing lubricants.

    The government has determined that around 400 products would be created locally rather than imported as per India latest military news. As per Indian defense news, the Indian military Design Bureau is working on major projects to ensure the Indian military’s independence in creating modern capabilities. ADB is working on crucial projects such as autonomous surveillance and armed drone swarm (high altitude area) and autonomous surveillance and armed drone swarm (desert/plains) according to India latest military news and Indian defense sector’s trends.

    The Sharang 130 mm gun system, which has been upgraded in terms of life and defense technology, has improved accuracy, range, and consistency, verifying Indigenous Defense Capability thus bolster Indian defense budget allocation in the future. The Indian military is preparing to receive the 4th Regiment. The entire amount required is 300, which is scheduled to be completed within a year as per Indian defense news and Indian defense sector’s trends.

    Indian defense news indicates that the Indian military inked a deal for loitering munitions last year, and delivery is due soon. Also, the process of creating it locally is underway as Indian defense companies are working on it, some in collaboration with original producers, and they will soon grasp the technology required. Once loitering munitions are deployed, they will aid in the Indian military’s target acquisition, precision strike capabilities, and surveillance according to Indian defense news.

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