Addressing MSME challenges for Indian defence manufacturing

This article explains the current scenario of Indian defence production and how the MSME sector contributes to its success story

India has been among the top five highest military spenders in recent years and ranked fourth in 2022-23 with a defence budget of 5.25 lakh crores, behind the US, China and Saudi Arabia. The defence budget has been raised to 25.94 lakh crore for the current year, with a 13.1% increase from the previous year.

India's defence spending, which has been maintained at around 2% of the country's gross domestic product, offers a significant market opportunity for both global and domestic defence manufacturers and the wider defence industry. The government has implemented various policies and introduced several reforms in recent years to promote the indigenous design, development, and production of defence equipments:

• Prioritise domestic procurement and debottleneck procurement process

• Promote private sector participation and incentivise global OEMs to manufacture in India

• Reorganise industry structure to promote competition and indigenous design and development

• Promote export-driven growth

• Reduce import dependencies

Growth in India's defence production