🇮🇳 Defence Industry Poised to Be India’s Next Big Growth Story: ICRA’s Key Insights
India’s defence sector is emerging as a strategic pillar of national development and a high-potential growth area, according to a recent report by credit rating agency ICRA. With a growing domestic market, robust policy support, and a focus on indigenisation, the Indian defence industry is on a trajectory to become a global powerhouse.
Here are the top insights from ICRA that explain why India’s defence industry is set to soar:
🚀 Key Drivers of Growth in India’s Defence Sector
1. Rising Defence Budget
In Union Budget 2024–25, the defence allocation stood at ₹6.2 lakh crore, up 13% YoY.
A larger share is earmarked for capital expenditure, enabling procurement and infrastructure upgrades.
2. Make in India & Atmanirbhar Bharat Initiatives
The government aims to reduce defence import dependency by boosting local manufacturing.
Over 300 items have been banned from import, pushing domestic players to innovate.
3. Increased Private Sector Participation
Major Indian firms like Tata Advanced Systems, L&T Defence, and Bharat Forge are ramping up capacity.
Simplified policies and Defence Corridors in Uttar Pradesh and Tamil Nadu support private investment.
4. Export Opportunities
India exported defence equipment worth ₹21,083 crore in FY24, a 32% jump from the previous year.
Countries in Southeast Asia, Africa, and the Middle East are showing rising interest in Indian-built arms, drones, and tech systems.
5. Innovation & R&D Focus
DRDO and private players are investing in indigenous technologies like:
Combat drones
Hypersonic missiles
Radar and surveillance systems
AI-based battlefield solutions
📊 ICRA’s Outlook
ICRA projects that:
The Indian defence manufacturing industry could grow at CAGR of 12–14% over the next five years.
Export opportunities may triple by 2030 if policy momentum is sustained.
Public-private joint ventures will be critical for tech integration and global competitiveness.
🛡️ Defence Stocks to Watch
Investors are also turning bullish on key defence sector companies such as:
Hindustan Aeronautics Ltd (HAL)
Bharat Electronics Ltd (BEL)
Mazagon Dock Shipbuilders
Paras Defence
Cochin Shipyard
These stocks have delivered multibagger returns in the last 12–24 months.
❓ FAQs – India’s Booming Defence Sector
Q1. Why is India’s defence sector suddenly gaining attention?
Due to government policies on self-reliance, import bans, budget boosts, and global export demand, India’s defence industry has become a top growth sector.
Q2. Which companies are leading India’s private defence sector?
Tata Advanced Systems, L&T Defence, Bharat Forge, and Adani Defence are major private players.
Q3. What are India’s defence export targets?
The government aims to reach ₹35,000 crore in exports by 2030.
Q4. How does the ICRA report impact defence sector investments?
The report builds confidence among institutional and retail investors about long-term profitability in the sector.
Q5. What products is India exporting in defence?
India exports UAVs, radars, small arms, patrol boats, and communication systems, among others.
🧭 Final Takeaway
The Indian defence industry is no longer just about national security—it is evolving into a strategic economic engine. With policy support, export growth, and increasing innovation, the sector is poised to become one of India’s biggest sunrise industries in the years ahead.
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Reported by Benny on June 19, 2025.