India's Strategic Electronics Sector Must Grow Faster

The large scale modernisation of the defence forces and the indigenisation of manufacturing are going to boost the strategic electronics sector of the country.

India has the second largest armed force in the world, and is considered the seventh largest aerospace and defence (A&D) market globally with a sizeable budget to cover the needs of the country’s Army, Navy and Air Force. The large scale modernisation of the defence forces and the drive to manufacture locally have become focus areas of the government. Emerging technologies are going to reshape modern day warfare, and will harness the power of electronics to do so. This will make the Indian strategic electronics (SE) sector, mainly comprising aerospace and defence, a vibrant industry over the next decade.

Opportunities galore

The defence sector in the country has been growing at a modest pace for the past few years, and has received a boost because of the Make in India programme. The concept of import substitution is being gradually accepted by stakeholders.

The Indian government is aiming at a turnover of 1.7 trillion and to export 350 billion (US$ 5 billion approximately) worth of military goods and services by 2025. It is the strategic partnership (SP) model in defence production that will boost the Make in India programme to a great extent. The ambitious weapon acquisition plans of the three armed forces, spread over the next ten years, will also help the sector to own capital assets worth Rs 15 trillion.

Defence production in India is gradually heading towards private sector participation. As per the ‘India’s Defence Market Outlook 2019-2025’ report, published by Market Research, between 2015-16 and now, out of 188 contracts, 121 have been signed with Indian vendors including DPSUs (defence PSUs), PSUs, OFBs (Ordinance Factory Boards) and private vendors to procure defence equipment.