Stories
Indian Defence Sector Shifts Focus to Internal Capex Amid Delayed Government Orders
- •Indian defence and aerospace manufacturers are investing heavily in internal plants, technology, and acquisitions to secure long-term market growth.
- •Despite a massive Rs 5 lakh crore pipeline including Rafale fighters and submarines, companies are moving away from solely waiting for government contracts.
- •Mergers and acquisitions have become a key strategy to rapidly acquire new technologies, products, and global customer relationships.
- •Defence electronics, drones, and critical materials like superalloys are emerging as high-growth areas driving import substitution and export opportunities.
Key Questions Answered
The defence pipeline is anchored by 114 Rafale fighters under the Multi-Role Fighter Aircraft programme worth about Rs 3.25 trillion, six P-75(I) submarines estimated at Rs 900 billion, along with eight Next Generation Corvettes and the Quick Reaction Surface-to-Air Missile system awaiting Cabinet Committee on Security clearance.
Faced with delays in final approvals for large government contracts, companies are pivoting from an order-driven growth phase to pouring capital into their own plants, technology, and acquisitions to secure long-term market share and enhance value addition.
Defence electronics, critical materials like nickel-based superalloys and titanium alloys, and drones are emerging as high-growth pockets where companies are using mergers and acquisitions to quickly acquire technology, manufacturing know-how, and customer relationships.
