As Aero India 2021 shows, opportunities aplenty in aerospace, defence sectors

The theme for Aero India 2021 is billed as the 'runway to a billion opportunities'. India's defence Budget for 2020-21 is Rs 4,71,378 crore, 9.37 per cent higher than that in 2019-20. Of the Ministry of Defence total allocations, Rs 323,053 crore has been provided under the Defence Services Estimates (DSE), which deals with expenses of the three-armed forces and the Defence Research and Development Organisation (DRDO).

India ranked 19th among the world's defence exporters in attracting foreign investments. India's defence exports increased 700 per cent in two years - from Rs 1,521 crore in 2016-17 to Rs 10,745 crores in 2018-19.

India has been unable to leverage its export potential fully. Compared to the global standards that offer commercial aerospace manufacturing over $100 billion worth of export opportunities, India stands at $300 million only.

At Aero India, the focus is on 'Make in India'. India's defence production policy is focussed on local R & D and production. This is a huge opportunity for Indian industry, especially the small and medium enterprises. The contribution of the Indian private sector in the defence and aerospace sector is expected to grow from the present Rs 20,000 crore to Rs 70,000 crore - 80,000 crore by 2025 according to the Society of Indian Defence Manufacturers (SIDM). SIDM is laying special focus on exports and integrating Indian defence industry with global supply chain with an aim of achieving $5 billion exports in line with the targets laid down in defence production policy 2018.

The contract for 83 LCA MK1A was formally handed over by MoD to HAL during the inaugural function of Aero India 2021. LCA Tejas model was handed over by RM to CMD.

India is the third-largest military spender in the world, while India's spending grew by 6.8 per cent to $71.1 billion. India's tensions and rivalry with both Pakistan and China are among the major drivers for its increased military spending.

Sales of arms and military services by the sector's largest 25 companies totalled $361 billion in 2019, which are 8.5 per cent more compared to 2018. The largest companies have a geographically diverse international presence.

With a global presence spanning 24 countries each, Thales and Airbus are the two most internationalised companies - followed closely by Boeing (21 countries), Leonardo (21 countries) and Lockheed Martin (19 countries).

The United Kingdom, Australia, the USA, Canada and Germany host the largest numbers of these foreign entities. Outside the arms industry hubs of North America and Western Europe, the largest numbers of entities of foreign companies are hosted by Australia (38), Saudi Arabia (24), India (13), Singapore (11), the UAE (11) and Brazil (10).