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Rapid growth in India's defence industry is expanding quickly, on a fast fast-growing track, driven by major government investment, exports growth, and reforms focused on self-sufficiency and innovation in technology.
Table of Contents
Overview of India’s Defence Sector
India's defence manufacturing sector is gaining recognition; it is a key driver of the country's strategic and economic objectives. The government has placed a strong focus on this area, reflecting its significance for national security and economic growth. For 2023-24, the Ministry of Defense received the highest budget among all ministries, showing the emphasis on strengthening domestic defense production. India's defence exports have expanded remarkably, reaching a record high of ₹21,083 Crore in the Financial year 2023-24, which shows a sharp rise from ₹686 Crore in the Financial year 2013-14.
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Reason to Invest in Defence Manufacturing
Focus on indigenization - 75% of India's defence capital procurement budget for FY 24 was allocated to purchases from domestic sources.
Modernization - A budget of $130 billion within the next 5–7 years to modernize its defence fleet.
Cost Savings - India Provides a highly cost-saving manufacturing base as compared to Europe and North America.
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Incentives & Schemes for Defence manufacturing
India provides a range of incentives and schemes to strengthen defence manufacturing. Startups and MSMEs benefit from financial grants and innovation support under initiatives such as iDEX and ADITI. Additionally, the Defence Testing Infrastructure Scheme supports the development of key testing facilities, while infrastructure, and policies such as the Defence Acquisition Procedure (DAP) and the creation of Defence Industrial Corridors in Tamil Nadu and Uttar Pradesh to promote domestic production and attract foreign investment.
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Conclusion - Defence Sector
India's defence manufacturing sector is showing a strong growth, the sector is backed by the Indian government policies, focus on self-reliance, and rising exports. Some of the important investments in modernization, cost-effective manufacturing, and the establishment of the industrial corridors. India is slowly becoming a worldwide hub in defence production.
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