CA Devang Maheshwari

India's defence sector 

Set to grow at 20% CAGR

Here are some critical points that you should not miss 

A thread ! Do retweet if you like

1/ India’s Defence Sector: A Global Powerhouse

India is transforming its defence capabilities:
 
- 2nd largest armed forces globally.  
- 4th largest military spender.  

- A sector evolving to counter threats from traditional borders to modern cyber warfare. 

2/ The Growth Story
 
- Projected CAGR: ~20% from FY24-FY29.  

- Defence production to grow from ₹1.75 lakh crore (FY25) to ₹3 lakh crore (FY29).  
- India’s focus: enhancing capabilities, reducing import reliance, and elevating its global stature.  

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3/ Defence Budget Highlights
 
- FY25 allocation: ₹6.22 lakh crore.  
- Defence spending has consistently ranged from 1.9% to 2.8% of GDP.  
- This steady investment showcases India’s long-term commitment to bolstering national security.  

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4/ Key Public Sector Players
  
- Heavyweights like HAL, BEL, BDL, and the restructured Ordnance Factory Board dominate.  

- The public sector holds ~80% of the defence market share.  

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5/ Private Sector Rising

- Major contributors: Tata, L&amp;T, Mahindra Defence, and Kalyani Group.  
- Liberalized FDI norms (up to 74% via automatic route) attract global partnerships.  

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6/ ‘Make in India’ Success
 
- Policies like ‘Make in India’ and ‘Atmanirbhar Bharat’ are reducing reliance on imports.  

- India aims to become a self-reliant defence powerhouse while fostering local R&amp;D and production.  

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7/ Defence Exports: A Booming Sector
  
- Export CAGR: ~28% over the last 6 years.  

- Expected growth: ~19% CAGR from FY24-FY29.  

- Products include aircraft, naval systems, missile tech, and military hardware.  

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8/ Strategic Role of Exports
 
- Defence exports enhance India’s global influence.  

- Strengthens diplomatic ties and positions India as a reliable defence partner in emerging markets.  

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9/ Technology Driving the Future
  
- Investments in AI, hypersonic weapons, and cyber defence are crucial.  

- Focus areas include intelligence, surveillance, and counter-terrorism technologies.  

- The aim: Build cutting-edge capabilities to tackle evolving threats.  

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10/ Budget Goals for FY29 
- Defence production target: ₹3 lakh crore.  

- Growth driven by public-private partnerships, global collaboration, and policy reforms.  

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11/ Why It Matters  
- India’s defence sector is not just about protecting borders.  
- It’s about fostering economic growth, creating jobs, and building global alliances.

The next 5 years will redefine India’s position in the global defence market.

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