Opportunities for Norwegian companies in the Indian Aerospace & Defence Sector

India has a huge defence sector, with a great need for modernization. The market opportunity for aerospace and defence (A&D) electronics in India is pegged to be at USD 70-72 billion in the next 10-12 years. The Navy and Coast Guard could be a promising market for the Norwegian maritime sector.

The Government of India has introduced various policies for greater inclusion of SMEs and private sector in the defence industry and at the same time increased the foreign direct investment ceiling, making it easier for foreign manufacturing participants in this industry.

Indian defence budget

As per the projections, India is planning to spend over USD 250 billion on capital procurement in the next fifteen years. The increase in spending also indicates the huge availability of opportunities for the domestic and global companies in the defence and aerospace sector. Defence & Aerospace sector is at the core of ‘Make in India’ campaign of the Government of India.

The Indian Ministry of Defence (MoD) follows the Defence Procurement Procedure (DPP) for capital acquisitions and the Defence Procurement Manual (DPM) for revenue purchases. The revised procedures provide more flexibility to the end-users and the industry to work together, especially on development projects.

Allocation of India’s Annual Defence Budget

Allocation of India’s Annual Defence Budget

From the Norwegian point of view, the Indian Navy and Coast Guard will be the most attractive as Norway has a lot to offer in the ocean space. There is also a scope of the civilian equipment for the defence industry. The Indian navy’s fleet is ageing very fast, which requires maintenance and modernization in the short term. In the long run, to improve this status, India will require manufacturing of new vessels in the coming years.

Navy and Coast Guard

Today’s Coast Guard fleet is insufficient to protect India’s maritime borders and interests. 38% of the existing vessels are on extended life or have expired their extended life. As per some projections, by 2025 India will have to add more than 1000 Fast Attack Crafts, 18-22 Corvettes, 16 Landing Craft Units, 12 Submarines, 6 Landing Platforms and 6.8 frigates to its existing fleet. To accelerate the modernization process, defence shipbuilding was opened for private shipyards in 2016. Three such shipyards namely L&T Shipbuilding, Reliance Defence & Energy and ABG Shipyard have been granted required licenses.

Possible areas of collaboration for Norway and India can be:

  • Naval design Engineering,
  • Manufacturing & Construction Technology
  • Co-production of marine equipment
  • Life cycle support
  • Export opportunities from India: Hulls for OPVs, Corvettes, FACs, Patrol Crafts, Aux Vessels.

India is likely to invest heavily in the modernization of its defence capability for reasons like its geo-strategic location, ambition to play crucial role in global affairs and the regional security challenges. The Indian Government has come out with policies to attract investment in the sector and provide incentive for local manufacturing. Norwegian companies need to look at India with all seriousness in their global strategy.

Make in India – Investment Report
Confederation of Indian Industry 
The Indian Express 
Ministry of Defence of India

For further information on the above, please contact:
Asheesh Agarwal
Senior Market Advisor
Innovation Norway, New Delhi
+91 9871567786 (M), +91 11 49099201 (D)

Pankaj R. Patil
Market Advisor
Innovation Norway, Mumbai
+91 9819811141 (M), +91 22 61372802

Photo: Cochin Shipyard

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