India’s Defence Research & Development Capabilities Opening Up New Business Opportunities

India is heading high with the shining growth across the sectors and accelerating the momentum in the right direction to become a developed nation. But during this phase, the security of India’s border has the highest priority and thus the government is continuously working to develop state-of-the-art indigenous defence manufacturing facilities to be self-reliant in this strategic domain and balance out India’s imports with rising defence export.

The last five years have seen a sharp addition in India’s defence capabilities by commissioning indigenous INS Vikrant, Mk-III helicopter along with successful testing of nuclear-capable new generation ballistic missile “Agni P”. The move unleashed the untapped energy of India’s Defence Research & Development (R&D) capacity and extended its scope through “Atmanirbhar Bharat” and “ Make in India” initiatives.

However looking at the continuously changing geopolitics, India’s urge to reverse its position from a net importer of defence products to establish itself as one of the major exporters of such product range is also justified. The ongoing Ukraine-Russia war as well as Chinese disturbance over the Indo-pacific region are developing new challenges for the global defence market as the USA is cutting down its defence exports to fulfil their domestic requirement to counter Russia and China.

In such a scenario, India needs to be more dependent on its domestic defence production capabilities including startups to make its R&D competitive and resilient. This also brings an opportunity for Indian Defence manufacturers to fulfil the demand for defence equipment from European and other countries such as Japan, Germany, South Korea, etc.  This is a chance to extend the scope of India’s Defence manufacturing sector and balance the shrinking share of the USA in the global defence export market.  

To leverage this golden chance, the government is also allowing India’s private sector to come and join hands in Defence R&D with the Defence Public Sector Units (DPSUs) and allocate a significant share of the defence budget for this purposes through Special Purpose Vehicles (SPVs)  along with the innovation promotion among startups through defence startup challenges such as iDEX. This policy support will help the MSMEs in the defence sector and strengthen India’s security as well as defence export business in the time to come.