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India's Defence Sector to Invest $138 Bln Over Next Eight Years: Report

© AP Photo / Manish SwarupIndian Air Force soldiers cleans a Sukhoi Su-30 MKI
Indian Air Force soldiers cleans a Sukhoi Su-30 MKI - Sputnik India, 1920, 11.05.2024
The significant expansion of the sector is influenced by the rising budget allocation, modernization endeavors, and the government's emphasis on domestic production through initiatives such as "Make in India."
India's defence sector is reportedly due to offer contracts worth around $138 billion during the fiscal years 2024 - 2032, a report by foreign brokerage Nomura has concluded.
The report highlights a significant increase in India's defence capital expenditure, which is expected to rise to 37 percent of the total budget by FY30, indicating a remarkable jump from the projected 29 percent in FY25.

"India's government is actively supporting the defence sector through favourable policy reforms, incentives, and initiatives to promote indigenous manufacturing and technology development," said the report.

According to the report, the defence sector offers lucrative opportunities in aerospace and shipbuilding.
While the aerospace sector accounts for $50 billion of the contacts, covering investments in aircraft, helicopters, drones, avionics, and related systems, defence shipbuilding has $38 billion in investment potential in naval vessels, submarines, patrol boats, and support ships to bolster maritime security.
This amounts to a total capital investment of INR 15.5 trillion over FY 24-30.
While India's defence exports are likewise expected to grow and reach a value of $29 billion, investment in missiles, artillery and gun systems is projected to touch $21 billion, the report highlighted.
One of India's foremost producers, Hindustan Aeronautics Limited (HAL), has a strong advantage in fighter aircraft and helicopters, giving its shares a potential uptick of 28%. Additionally, HAL's significant capability upgrade serves as the foundation for an indigenous engine program.
On the other hand, Bharat Electronics shows promising potential with a 32% uptick due to its improved visibility on order inflows, belief in delivering favourable margins, and expansion in returns ratios.
Indian army Pinaka Multi launcher rocket system moves through the ceremonial Rajpath boulevard during India's Republic Day celebrations in New Delhi, India, Tuesday, Jan.26, 2021. - Sputnik India, 1920, 14.12.2023
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