Data Stories: India’s Defense Market Becomes More Competitive as New Delhi Promotes Local Firms

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By Shane Mason, Senior Market Analyst

India’s defense market—the fifth-largest in the world at over $53 billion—is also one of the most competitive. Local firms currently account for one-third of Indian defense procurement. Supported by the government’s “Make in India” initiative, the indigenous share of defense investment is set to grow over the next five years. The rest of the Indian market is highly fragmented, and the armed forces field systems from several different countries. The inventory of the Indian Air Force (IAF), for example, includes Russian MiG and French Rafale fighters, American C-17 and C-130 transport aircraft, and Israeli Heron UAVs.

Russian firms, long dominant in the Indian market, have seen their market share reduced in recent years. However, a $3.2 billion contract for four S-400 surface-to-air missile systems will bolster its position through 2023. France, currently India’s largest source of defense imports thanks to an $8.6 billion contract for 36 Rafale fighter aircraft, will likely fall behind Russia in the coming years. While Israeli firms make up the majority of India’s unmanned aerial systems (UAS) and weapons procurement, American defense primes have had success addressing Indian requirements for transport aircraft and attack helicopters.

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