Indian Defence

How Indian Defence Making You Rich?

Indian Armed Forces are one the biggest in the world, which consists Indian Army, Airforce and
Navy. The President of India (currently Smt Droupadi Murmu Ji) is the supreme commander of the
Indian Armed Forces. India’s military is 4th most powerful military in the world. India has 1.4 million active personnel, which is 2nd highest in the world. India’s defence budget is 3rd highest in the world after US and China, which is around 76.6 billion dollars, which is also the highest defence budget in India’s
history too.

A Journey Towards Self Reliance

After the end of British rule from India, India already had 12 ordinance factories. They were the primary source of India’s defence manufacturing. After Independence India’s 1st PM Pandit Nehru was focused on self-reliance, but he did not focus on making India the biggest military power. Although, in 1958 India set up DRDO for innovation and technology advancement in the defence sector, but initially, DRDO’s budget was low. After the 1962 Indo-China war, Pandit Nehru’s government increased the defence budget to protect India’s sovereignty from 1.5% to 2.3% of India’s GDP. After 1965 India started importing major weapons from USSR and much military equipment manufacturing in India. In the 1980s India made huge investments in DRDO and started LCA (Light Combat Aircraft) and indigenous missile development programmes like Prithi, Agni, Akash, NAG, etc. India-Russia signed a Joint venture agreement on developing the advanced supersonic missile Brahmos. After the 1991 LPG reforms, private companies also came into defence manufacturing. After 2006 MAKE government policy also allowed 26% of FDI in the defence sector, but after all these India was still dependent on Russia, Israel, and other nations for heavy weaponry like fighters, Submarines, Destroyers, etc and also Private sector and FDI was also not very much involved in India’s defence.

Atmanirbhar Bharat Initiative -A Game Changer

No matter how big the military is if it is majorly dependent on imports for main military weapons and equipment, it could face a major crisis in future, during the war which is very alarming for the defence, security, and sovereignty of any Nation. Now comes a new era for India’s defence, when the government decide to push indigenous defence manufacturing. In 2016 PM Modi’s government came up with a defence procurement policy to promote Make in India in the defence sector. In which India focused on better-increased procurement efficiency, ease of doing business, fewer entry barriers and licencing process, and more incentives to the private sector, and the Government also increased FDI in India’s defence manufacturing from 26% to 75%, which motivates the private sector to invest more in India’s defence manufacturing in India. In this policy, the government put IDDM (Indigenously Designed, Developed, and manufactured) category at top priority. Aim for stars you will reach the moon. Make India the world’s biggest military power by PM Modi. In this new era, India is now aiming for stars.

India has set up a target to export 5 billion dollars worth of defence items by 2024-25. To achieve this target Indian government made many reforms. In 2021 India finally dissolved all ordinance factories and made 7 new defence companies, which is a huge base for India’s military. It was a very necessary and demanding process. The Indian government made the corporatization of ordinance factories to improve efficiency, production rate, and quality. After this step now these 7 new companies can list their shares in the market and raise more funds to spend on R&D, Manufacturing high-end technological weapons and equipment like HAL (Hindustan Aeronautics Limited).

Bolstered Growth In Defence Stocks Due To Government Actions

According to the latest SIPRI (Stockholm International Peace Research Institute) report, India’s total volume of imports fell by 21 per cent from 2012-16, which could be a reflection of the push to manufacture arms and weapons systems indigenously. The Ministry of Defence (MoD) has notified 310 major equipment/platforms in the last two years through three separate lists, which included combat aircraft, trainer aircraft, combat helicopters, utility helicopters, submarines, next-generation corvettes, tank engines, MRSAM systems, vessels, torpedoes, etc. These platforms are planned to be indigenised progressively till 2027 which means a great boost to Indian defence companies like HAL, BEL,
TATA, BDL, etc.

Now it is estimated that overall 4 lakh crore orders are to be placed to Indian companies for Indian defence, in which India is going to buy Tejas LCA (light combat aircraft), MK-1A Jets, light combat helicopters (LCHs), basic trainer aircraft, Anti-tank missiles, Astra beyond visual range missiles, Pinaka rocket system, Brahmos 1, and 2 (India-Russia Joint manufacturing in India), Akash, Armoured Vehicles, etc. Now India is also exporting Indian defence weapons and equipment and according to the gov officials, India’s defence exports grew by 334 per cent in the last five years; India now exporting to over 75 countries due to collaborative efforts. Recently India sold Brahmos to the Philippines, and there are many other countries who have shown interest in India’s indigenous defence platforms. Recently, India received the first-ever export order of Pinaka MBRL from Armenia along with anti-tank missiles and ammunition.

Now Indian military is placing more and more orders to Indian firms to develop and manufacture Indigoiues defence weapons and equipment for the Indian armed forces. This will impact India’s economy, military, common people, firms, and Indian and foreign investors in India alot in a positive manner.

But How?

  • As Indian firms manufacture more weapons for the Indian armed forces this generates millions of direct and indirect employment opportunities for common people in India. More skilled jobs for Indian youth will be generated in this sector and companies.
  • As Indian firms like DRDO, HAL, BEL, TATA, BDL, etc develop more advanced, quality defence items and weapons then the demand from other nations from different nations will also increase, which directly raises the exports of India and helps us to become one of the major defence exporters in the world.
  • As exports and sales of Indian firms increase it will also increase the stock prices and valuations of Indian firms that are developing and manufacturing defence items. Which will benefit all Investors and stakeholders in those companies.
  • As more employment opportunities will increase, exports will raise which will positively impact the overall Indian economy. India’s GDP will grow, Indian Rupee will become stronger, unemployment will fall, and India’s overall HDI (Human Development Index) ranking will also improve (It is one of the most important indicators to measure a country’s growth).
  • Now India become self-reliant in the defence sector, defence imports of India will fall and this will so much important for the Indian military to have indigenous weapons development and manufacturing capabilities to handle any war-like and war-like situation.
  • Currently, due to the Atmanirbhar Bharat initiative stock price of most of the defence firms like HAL, BDL, BEL, etc, are in all-time high , suppose if someone has bought these companies’ stocks in the last 2 years then surely currently he or she in profit.

There is no doubt, this Atmanirbhar India’s Defence is very much a success that we can see. The most recent and shining example of this is Make in India INS VIKRANT Aircraft carrier. Make in India Defence is a big success for India and the Indian armed forces and it is going to grow more and going to be very big and make India the most advanced military in the World. The healthy pipeline of orders and mission gives more comfort in terms of long-term earnings growth for companies like BDL, HAL & BEL. The balance sheet of these defence companies looks better with zero debt and working capital support from MoD.

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