India's defence industry attains production milestone

The value of defence production in India has increased by more than 70% between 2016–17 and 2023–24. (Janes)

The value of defence production in India reached a record high of nearly INR1.27 trillion (USD15.2 billion) in fiscal year (FY) 2023–24, the Ministry of Defence (MoD) in New Delhi has announced.

The new record amounts to a 17% increase over the value of defence production in FY 2022–23, when it was INR1.08 trillion, MoD figures published on 5 July show.

The value of production represents the sum of reported annual turnover by the country's 16 state-owned defence public sector undertakings (DPSUs) and its private sector defence firms.

MoD statistics show that about 79% of the total value of defence production in FY 2023–24 – or INR1 trillion – was attributed mainly to state-owned enterprises including DPSUs and companies that were part of the Ordnance Factory Board that was restructured in 2021. The remaining 21% was attributed to private sector firms.

The MoD said, “The data shows that in terms of absolute value, both DPSUs/PSUs and private sector have recorded a steady growth in defence production.”

It attributed the increase in production value to a series of industry reforms introduced in recent years. These include measures to integrate private sector firms into supply chains and to simplify the licensing procedures for these companies. In 2023 the MoD said there had been a 200% increase in the number of licences issued to firms over the previous eight years.

According to the MoD statistics, the proportion of defence production value attributed to the private sector has remained relatively constant over the past eight years, averaging about 20% of the total.

During those eight years the total value of production has increased by about 71%.