India’s annual defence production hit a record high of almost Rs 1.27 trillion (Rs 1,26,887 crore) in FY24, growing 16.7 per cent over the previous year’s figure of almost Rs 1.09 trillion (Rs 1,08,684 crore), announced an official release issued by the Ministry of Defence (MoD) on Friday.
This is according to the data received from all defence public-sector undertakings (DPSUs), other PSUs manufacturing defence items, and private companies.
The record production figure reported in FY24 also means that the country’s defence ecosystem has covered over 40 per cent of the distance to the Centre’s ambitious annual defence production target of Rs 3 trillion by FY29.
In the past five years (since FY20), the value of defence production, which has been increasing steadily, has grown by over 60 per cent, added the MoD.
“MoD has achieved the highest-ever growth in indigenous defence production in value terms during FY24, on the back of successful implementation of the policies and initiatives of the government focusing on achieving ‘Aatmanirbharta’ (self-reliance),” said the release.
Acknowledging the achievement through a post on social-media platform X, Defence Minister Rajnath Singh said the “Make in India” programme was crossing new milestones year after year, under the leadership of Prime Minister Narendra Modi. He also added the government was committed to creating a “more conducive regime” for developing India as a “leading global defence manufacturing hub”.
The MoD release said of the value of production in FY24, about 79.2 per cent was contributed by DPSUs and other PSUs, while the private sector accounted for the remaining 20.8 per cent.
“The data shows that in terms of absolute value, both DPSUs/PSUs and private sector have recorded a steady growth in defence production,” added the release.
For this achievement, the MoD credited the ease of doing business and policy reforms and initiatives brought in by the government in the past 10 years and its focus on attaining self-reliance.
Rising defence exports have also contributed “tremendously” to growth in indigenous defence production, said the MoD, adding that outbound shipments of defence equipment had touched a record high of Rs 21,083 crore in FY24, reflecting a growth rate of 32.5 per cent over the FY23 figure of Rs 15,920 crore.
In February, Singh had said India’s annual defence production was expected to touch Rs 3 trillion by FY29, while exports of military hardware could reach Rs 50,000 crore.
The FY24 production figure has also been announced just weeks ahead of the full Budget for FY25.
With that and the FY29 production target in mind, members of the private defence industry have highlighted steps the Centre could take to sustain the current momentum in defence production.
Noting that the highest ever defence production figures in FY24 are an indication of the Indian defence industry’s coming of age, Rajinder Singh Bhatia, president of the Society of Indian Defence Manufacturers and Chairman (Defence Business) at Kalyani Group, said: “This growth momentum can be sustained by a greater push to exports and cutting short the domestic acquisition cycle.”
Anil G Verma, executive director and chief executive officer, Godrej & Boyce, said: “With the defence sector projected to grow at a 13 per cent compound annual growth rate (CAGR) from FY23 to FY30 and the government’s strong push for indigenisation, we are expecting an increase in the defence budget allocation for FY25.”
“We anticipate increased funding for research and development, armed forces modernisation, and support for the domestic defence manufacturing ecosystem. The Budget is likely to introduce incentives for domestic manufacturers, potentially including tax benefits or subsidies, to boost the ‘Make in India’ initiative and private sector participation,” Verma added.
Source; Business Standard
