Year Ender 2024: Key Development in India’s Defence Sector

In 2024, India’s Defence sector made significant strides and reduced the country’s dependence on imports. The Union Budget for FY 2024-25 allocated ₹6.22 lakh crore (approx. US $75 billion) to the MoD, the highest among all ministries. This is an increase of ₹1 lakh crore (18.43%) compared to FY 2022-23 and 4.79% higher than FY 2023-24. In this blog, let us have a look at the significant development in the India’s Defence sector:

Key Developments in India’s Defence Sector

Record Defence Production

In FY 2023-24, MoD achieved the highest-ever growth in indigenous defence production, reaching ₹1,26,887 crore, a 16.7% increase from ₹1,08,684 crore in FY 2022-23. Of this, 79.2% came from DPSUs/PSUs and 20.8% from the private sector. MoD has set a target of ₹3 lakh crore in defence production by 2029.

Record Defence Exports

Defence exports in FY 2023-24 reached a record ₹21,083 crore (approx. US$ 2.63 billion), a 32.5% increase from ₹15,920 crore the previous year. Over the past decade, exports grew by 31 times. The private sector and DPSUs contributed 60% and 40%, respectively. MoD aims to achieve ₹50,000 crore in defence exports by 2029.

Major Acquisitions

In 2024 (up to November), the Defence Acquisition Council (DAC) and Defence Procurement Board (DPB) approved 40 capital acquisition proposals totalling ₹4,22,129.55 crore. Of these, 94.19% (₹3,97,584.34 crore) is designated for indigenous procurement. Notable acquisitions include:

• September 2024: The government accorded Acceptance of Necessity (AoN) for ₹1,44,716 crore, including Future Ready Combat Vehicles, Air Defence Fire Control Radars, Dornier-228 aircraft, and more.
• February 2024: AoN for ₹84,560 crore, including anti-tank mines, Air Defence Tactical Control Radar, Heavy Weight Torpedoes, and others.
• July 2024: AoN for ₹8,073 crore, covering Advanced Land Navigation Systems and Interceptor Boats.
• December 2024: AoN for ₹21,772 crore, including Fast Attack Crafts, Electronic Warfare Systems, and Advanced Light Helicopters.

Major Contracts with Leading Companies

Hindustan Aeronautics Limited

• In September 2024, a contract was signed for the supply of 240 AL-31FP Aero Engines for the Su-30MKI aircraft, valued at over ₹26,000 crore.
• In December 2024, a contract for the procurement of 12 Su-30MKI aircraft, along with associated equipment, was finalized at an approximate cost of ₹13,500 crore.
• Two contracts were signed in March 2024, with a combined value of ₹8,073.17 crore, for the acquisition of 34 Advanced Light Helicopters (ALH) Dhruv Mk III, including Operational Role Equipment for the Indian Army (25 ALHs) and the Indian Coast Guard (9 ALHs).
• A contract for RD-33 Aero Engines for MiG-29 aircraft was signed in March 2024 at a cost of ₹5,249.72 crore. These engines will be produced at HAL’s Koraput Division.
• In March 2024, a contract was also signed for the Mid Life Upgrade of 25 Dornier Aircraft with associated equipment for the Indian Navy, valued at ₹2,890 crore.

Bharat Electronics Limited

In February 2024, a contract was finalized for the procurement of 11 Shakti Electronic Warfare Systems, along with associated equipment for the Indian Navy, under the Buy (Indian-IDDM) category, at a total cost of ₹2,269.54 crore.

Mazagon Dock Shipbuilders Limited

In January 2024, a contract was signed for the acquisition of 14 Fast Patrol Vessels (FPVs) for the Indian Coast Guard, valued at ₹1,070.47 crore. These multi-role FPVs will be indigenously designed, developed, and manufactured under the Buy (Indian-IDDM) category.

Larsen & Toubro Limited

• In March 2024, two contracts were signed—one for the procurement of a Close-in Weapon System at a cost of ₹7,668.82 crore and another for a High-Power Radar at a cost of ₹5,700.13 crore.
• In December 2024, a contract was finalized with Larsen & Toubro Limited for the procurement of 155 mm/52 calibre K9 VAJRA-T Self-Propelled Tracked Artillery Guns for the Indian Army under the Buy (Indian) category, valued at ₹7,628.70 crore.

Cochin Shipyard Limited

In November 2024, a contract was signed for the Short Refit and Dry Docking of INS Vikramaditya, at a total cost of ₹1,207.5 crore.

Conclusion

The Indian defence manufacturing industry is a key sector of the economy and is expected to grow rapidly in response to increasing national security concerns. The demand for defence equipment in India has been rising, driven by ongoing territorial disputes.

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