Defense Expenditure Trends in India 2022
Defense Expenditure Trends in India 2022
Abstract
As of April 2021, India ranked only behind the US and China in terms of military expenditure. Although China spends a lower percentage of its GDP on defense than India, it spends approximately 3.5 times as much as India. The Ministry of Defence (MoD) develops defense and security policies and oversees their implementation by the armed forces (Army, Navy, and the Air Force).
Market insights:
In FY 2023, the MoD allocated INR 5251.66 Bn for defense spending, up from INR 4781.96 Bn in the previous fiscal year. This included expenditure for armed forces and civilian salaries, pensions, armed forces’ modernization, production establishments, maintenance, and research and development organizations. The Indian Army accounts for the largest share (58.28%) of the defense budget, followed by the Air Force (19.17%), and then the Navy (16.42%).
Impact of COVID-19:
Defence public sector undertakings (DPSUs) had stopped working on most projects after the lockdown was first imposed in 2020. Instead, they began manufacturing essential commodities, including personal protective equipment (PPE) kits, masks, and ventilator parts. After the lockdown, the ministry adopted a few primary measures to revitalize the defense manufacturing sector. These included raising foreign direct investment (FDI) (from 49% to 74%) in defense manufacturing under the automatic route.
Main deterrents to the growth of the market:
India has been unable to attract significant private sector investments in the defense manufacturing industry. This has resulted in delays in decision-making on the part of the government, placing of unsystematic orders, cancellation of tenders, and unreasonable quality requirements by the armed forces. All the major contracts that the government had signed with foreign OEMs in the last six years were off-the-shelf with no transfer of technologies between global and domestic defense manufacturing companies.
Content
Table of Contents
Chapter 1: Executive summary
Chapter 2: Socio-economic indicators
Chapter 3: Global Military Expenditure – An Overview
3.1. Global military expenditure – An overview
Chapter 4: India Defense Budget – An Overview
4.1. Defense budget in India – An overview
4.2. Defense budget allocation (INR Bn)
4.3. Defense services estimates (INR Bn)
4.4. Defense modernization budget (INR Bn)
4.5. Defense capital budget (INR Bn)
Chapter 5: Defense Budget – Segmentation
5.1. Budget analysis of the Armed Forces in India
5.1.1. Budget analysis of the Army in India
5.1.2. Budget analysis of the Navy in India
5.1.3. Budget analysis of the Air Force in India
Chapter 6: COVID-19 Impact Assessment
6.1. Impact of COVID-19 on the defense industry in India
Chapter 7: Impact of Russia-Ukraine war
7.1. Impact of Russia-Ukraine war on the defense industry in India
Chapter 8: Government Initiatives
8.1. Government initiatives
Chapter 9: Defense Export Scenario
9.1. Key highlights
9.2. Total export value splits
Chapter 10: Challenges
10.1. Challenges faced by manufacturers in the defense industry
Chapter 11: Recent developments
11.1. Recent developments
Chapter 12: Appendix
12.1. Research methodology
12.2. About Netscribes
12.3. Disclaimer
Market insights:
In FY 2023, the MoD allocated INR 5251.66 Bn for defense spending, up from INR 4781.96 Bn in the previous fiscal year. This included expenditure for armed forces and civilian salaries, pensions, armed forces’ modernization, production establishments, maintenance, and research and development organizations. The Indian Army accounts for the largest share (58.28%) of the defense budget, followed by the Air Force (19.17%), and then the Navy (16.42%).
Impact of COVID-19:
Defence public sector undertakings (DPSUs) had stopped working on most projects after the lockdown was first imposed in 2020. Instead, they began manufacturing essential commodities, including personal protective equipment (PPE) kits, masks, and ventilator parts. After the lockdown, the ministry adopted a few primary measures to revitalize the defense manufacturing sector. These included raising foreign direct investment (FDI) (from 49% to 74%) in defense manufacturing under the automatic route.
Main deterrents to the growth of the market:
India has been unable to attract significant private sector investments in the defense manufacturing industry. This has resulted in delays in decision-making on the part of the government, placing of unsystematic orders, cancellation of tenders, and unreasonable quality requirements by the armed forces. All the major contracts that the government had signed with foreign OEMs in the last six years were off-the-shelf with no transfer of technologies between global and domestic defense manufacturing companies.
Chapter 1: Executive summary
Chapter 2: Socio-economic indicators
Chapter 3: Global Military Expenditure – An Overview
3.1. Global military expenditure – An overview
Chapter 4: India Defense Budget – An Overview
4.1. Defense budget in India – An overview
4.2. Defense budget allocation (INR Bn)
4.3. Defense services estimates (INR Bn)
4.4. Defense modernization budget (INR Bn)
4.5. Defense capital budget (INR Bn)
Chapter 5: Defense Budget – Segmentation
5.1. Budget analysis of the Armed Forces in India
5.1.1. Budget analysis of the Army in India
5.1.2. Budget analysis of the Navy in India
5.1.3. Budget analysis of the Air Force in India
Chapter 6: COVID-19 Impact Assessment
6.1. Impact of COVID-19 on the defense industry in India
Chapter 7: Impact of Russia-Ukraine war
7.1. Impact of Russia-Ukraine war on the defense industry in India
Chapter 8: Government Initiatives
8.1. Government initiatives
Chapter 9: Defense Export Scenario
9.1. Key highlights
9.2. Total export value splits
Chapter 10: Challenges
10.1. Challenges faced by manufacturers in the defense industry
Chapter 11: Recent developments
11.1. Recent developments
Chapter 12: Appendix
12.1. Research methodology
12.2. About Netscribes
12.3. Disclaimer
Related Report
