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The Indian defence industry has been steadily expanding over the past decade, and the government has been actively promoting defence exports as a means of generating revenue and boosting the country's economic growth. India’s defence exports reached an all-time high of approximately INR 16,000 crore (approximately $ 1.95 billion) in the 2022-2023 financial year, with the nation now exporting to more than 80 countries worldwide. 

The Indian defense industry comprises public and private sector companies that manufacture defense equipment, systems, and technologies. India has been exporting a range of defence equipments, including helicopters, naval vessels, aircraft, missiles, and armoured vehicles, among others. The government has set a target of achieving $5 billion in defence exports by 2025. 

In line with the objectives of the Make in India initiative, the GoI has established an Export Promotion Council (EPC) to encourage defense exports. Key measures taken to promote such exports encompass streamlining export processes, offering financial incentives, and fostering partnerships with overseas firms.

  • Simplification of Export Procedures: The Indian government has been simplifying export procedures to make it easier for companies to export defense equipment and technologies. The government has introduced the India Defence Mart, an online portal for defence exports which enables companies to apply for export licenses and track their applications online. The government has also streamlined the process of obtaining no-objection certificates (NOCs) from various agencies involved in the export process.
  • Financial Incentives: The government has introduced the Scheme for Promotion of Defence Exports (SPDE) to promote exports of defense products, which includes provision of financial support for attending international defense exhibitions, marketing, and publicity of Indian defense products abroad. The government has also launched a Technology Upgradation Fund Scheme (TUFS) to encourage the modernization of the Indian defence industry. The scheme provides financial assistance for technological upgradation and modernization of manufacturing facilities.
  • Strategic Partnership Model: The government has introduced a Strategic Partnership Model to boost domestic production of defence equipment through partnerships with foreign companies. The model encourages partnerships between domestic and foreign companies to develop new technologies and products. India and Russia have been working on the development of a hypersonic version of the BrahMos missile. The BrahMos missile is a testament to the strong defence cooperation between India and Russia, and the two countries are committed to further enhancing their strategic partnership in the defence sector in the future.
  • Defence Offset Policy: The government has introduced a Defence Offset Policy, which aims to provide additional benefits to the buyer of a product from a foreign supplier. Foreign OEMs that win contracts worth more than Rs 2,000 Crore would be required to invest at least 30% of the contract value in Indian businesses as offsets. Previously, the threshold for the use of offsets was Rs 300 Crore. Contracts with contract values under Rs 2,000 crore will not be subject to the offset obligation. The goal of the policy is to increase domestic production and technology transfer in the defence sector.

India's growing defence industry presents several opportunities for foreign companies to invest in the country. The Indian government has been actively promoting collaborations between domestic and foreign companies to develop new technologies and products.  The government has established a strategic partnership model, which intends to increase domestic defence equipment production through alliances with overseas companies.

India's defence industry presents opportunities for investment in several areas, including research and development, manufacturing, maintenance, and repair. Moreover, the country’s  skilled workforce, technological capabilities, and low production costs make it an attractive destination for foreign investors.
 

We are India's national investment facilitation agency.

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