India 

Explore India's burgeoning defence sector, projected to witness a USD 138 billion surge in ordering opportunities by 2032, driven by government support and strategic investments in indigenous manufacturing and technology development.

In the dynamic landscape of global security, India stands at the forefront, poised for significant strides in its defence sector. A recent report by Nomura sheds light on the tremendous opportunities awaiting companies engaged in defence production and technology development. With projections estimating a staggering USD 138 billion in ordering opportunities over FY24-32, the Indian defence sector emerges as a beacon of growth and innovation.

Key Drivers of Growth:

The report underscores several factors propelling the growth of India's defence sector. Foremost among these is the escalating demand for defence equipment, technologies, and services. As nations worldwide prioritize modernization efforts to bolster their security apparatus, India stands ready to meet this demand.

Government Support and Policy Reforms:

Integral to this growth trajectory is the unwavering support of the Indian government. Through favorable policy reforms, incentives, and initiatives such as "Make in India," the government is actively fostering indigenous manufacturing and technology development. This strategic focus not only enhances self-reliance but also fuels economic growth and innovation within the sector.

Projected Surge in Capital Expenditure:

The Nomura report highlights a significant surge in India's defence capital expenditure, poised to reach 37% of the total budget by FY30. This substantial increase, from the projected 29% in FY25, signifies a strategic shift towards modernization and capacity building. With a cumulative capital outlay of Rs 15.5 trillion over FY24-30, the sector is set to witness unprecedented growth compared to previous periods.

Opportunities Across Segments:

Diving deeper, the report identifies lucrative opportunities across various segments of the defence sector. The defence aerospace sector alone presents a USD 50 billion opportunity, spanning investments in aircraft, helicopters, UAVs, avionics, and related systems. Similarly, defence shipbuilding emerges as a significant area with a potential of USD 38 billion, bolstering maritime security through naval vessels, submarines, and patrol boats.

Enhanced Capabilities in Missiles and Artillery:

India's efforts to enhance its artillery and missile capabilities resonate in the projected USD 21 billion investment in missiles, artillery, and gun systems. This strategic alignment underscores the nation's commitment to bolstering its defensive capabilities and securing its borders effectively.

Rise in Defence Exports:

Another notable aspect highlighted in the report is the substantial growth in defence exports, estimated at USD 29 billion. With momentum expected to continue, Indian defence manufacturers are poised to leverage export opportunities, thereby diversifying revenue streams and expanding their global footprint.

Investment Potential in Key Players:

The report identifies key players poised for substantial growth in the Indian defence sector. Hindustan Aeronautics (HAL) and Bharat Electronics emerge as frontrunners, with significant potential for upside. HAL's strong moat in fighter aircraft and helicopters, coupled with its capability upgrade for indigenous engine development, positions it for a 28% potential upside. Similarly, Bharat Electronics holds promise with a potential upside of 32%, driven by increased visibility on order inflows and expansion in returns ratios.

Government Support Fuelling Industry Expansion:

The active support of the Indian government serves as a catalyst for industry expansion. By fostering an environment conducive to indigenous manufacturing and technology development, policymakers are paving the way for sustained growth and innovation within the defence sector. This strategic alignment not only strengthens national security but also propels economic growth and technological advancement.

Global Expansion and Collaboration:

Furthermore, the report underscores the increasing focus of India's defence industry on expanding its global presence through exports, technology transfer, and collaboration. By leveraging international partnerships and alliances, Indian defence manufacturers can tap into new markets, exchange expertise, and drive innovation, thereby solidifying their position on the global stage.

In Conclusion:

India's defence sector stands at the cusp of a transformative journey, fueled by escalating demand, government support, and technological advancements. With projected ordering opportunities of USD 138 billion over FY24-32, the sector presents a fertile ground for companies engaged in defence production and technology development. By capitalizing on key growth drivers, leveraging export opportunities, and investing in innovation, Indian defence manufacturers can not only bolster national security but also emerge as global leaders in the realm of defence technology and innovation. As the nation marches towards self-reliance and strategic autonomy, the Indian defence sector serves as a testament to resilience, innovation, and unwavering commitment to safeguarding the nation's interests on the global stage.