India Investing Heavily On Defence And Aerospace To Achieve Aatmanirbharta

The first Made-in-India C-295 is expected to be rolled out of the final assembly line facility at Vadodara by September 2026 and the remaining by August 2031

The Ministry of Defence (MoD) is set to implement Defence Reform 2.0 this year. This initiative aims to streamline complex acquisition processes. The goal is to enhance self-reliance in defence, known as Aatmanirbharta.

India is set to significantly increase its defence budget over the next decade, aiming to bolster its military readiness amid potential conflicts with regional adversaries, partic-ularly China and Pakistan.

According to forecasts by GlobalData, total defence spending, including pensions, is ex-pected to reach $415.9 billion from 2025 to 2029, reflecting a compound annual growth rate (CAGR) of 3.7 per cent. This strategic move is part of India's broader objective to enhance its military capabilities and assert its position on both regional and global stages.

Over the past few years, the defence budget has been showing a consistent upward tra-jectory, which highlights the Centre’s commitment towards modernising its defence infrastructure. In 2020, the total defence budget was approximately Rs 4,71,378 crore (equivalent to Rs 5.6 trillion or $67 billion) in 2023. In the ongoing fiscal year 2024-2025, this amount has risen to Rs 6.21 lakh crore, marking a 31 per cent increase from 2020.

As this increase in defence budget unfolds, one key question arises: to what extent does this recent increase in spending reflect the government’s broader objectives, particu-larly in relation to the ‘Make in India’ and ‘Atmanirbhar Bharat’ programmes, which aim to increase indigenous manufacturing and technological advancements?

The forecast spending comes at a time when the country faces significant geopolitical challenges, including territorial disputes with Pakistan and China. Enhancing military capabilities is seen as crucial for maintaining regional stability and deterrence.

While India’s defence partnership with Russia remains important, the country has ac-tively diversified its defence sources to reduce risks and gain access to advanced tech-nologies.

Towards this, the United States has become a key partner, with increased cooperation in areas like intelligence sharing, counter-terrorism, and joint military exercises. In-dia’s purchase of sophisticated U.S. systems such as C-17 Globemaster transport air-craft and AH-64E Apache attack helicopters in 2019, highlight this growing collabora-tion. According to SIPRI, the U.S. became the second-largest arms supplier to India be-tween 2019 and 2023, accounting for 9.8 per cent of its arms imports.

Defence exports touched a record Rs. 21,083 crore (approx. $ 2.63 billion) in FY2023-24, a growth of 32.5 per cent over the previous fiscal when the figure was Rs. 15,920 crore. The figures indicated that the exports grew by 31 times in the last 10 years as compared to FY 2013-14. The defence industry, including the private sector and DPSUs, have made tremendous efforts in achieving the highest-ever exports. The private sector and DPSUs contributed about 60 per cent and 40 per cent, respectively. The Defence minister has exuded confidence that the target to export defence equipment worth Rs. 50,000 crore by 2029 will be met.

C-295 TATA aircraft complex:

Prime Minister Narendra Modi and Spanish President Pedro Sanchez jointly inaugu-rated the TATA aircraft complex for manufacturing C-295 transport aircraft at TATA advanced systems limited campus in Vadodara in October 2024. In September 2021, the MoD had signed a Rs. 21,935-crore contract with Airbus Defence and Space SA, Spain, for supply of 56 aircraft - 16 to be brought in fly away condition from Spain and 40 to be built in India by TASL.

Of the 16 aircraft, six have already been inducted into IAF at 11 Sqn based at Vadodara. The last would be delivered by this August. The first Made-in-India C-295 is expected to be rolled out of the final assembly line facility at Vadodara by September 2026 and the remaining by August 2031.

The ministry achieved the highest-ever growth in indigenous defence production in value terms during the Financial Year (FY) 2023-24, on the back of successful imple-mentation of the policies and initiatives of the government.

Defence production went up to a record-high figure of Rs. 1,26,887 crore, reflecting a growth of 16.7 per cent over the defence production of the previous financial year. The value of defence production in FY 2022-23 was Rs, 1,08,684 crore. Of the total value of production in 2023-24, about 79.2 per cent has been contributed by DPSUs/other PSUs and 20.8 per cent by the private sector. The MoD has set a target to achieve Rs three lakh crore defence production by 2029.

Looking ahead, the achievements of 2024 have laid a strong foundation for the country future in defence. With a focus on self-reliance, indigenous production, and strategic partnerships, India is positioning itself as a dominant force in the global defence land-scape. The continued expansion of defence production and export capabilities, along with timely induction of advanced platforms and technologies, will ensure that India remains prepared to meet both current and future security challenges.