S

DEFENCE
INDUSTRY
REPORT

18th OCT 2024

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Table of contents
1. Macroeconomic Outlook
1.1 Macroeconomic overview
1.1.1 The global GDP is expected to grow at a CAGR of 4.8% from CY23-28, having grown at a
CAGR of 4.0% during CY18-23, the low figure was due to COVID-19
1.1.2 India’s GDP was at US$ 3,570B in CY23 & is estimated to reach US$ 5,830B in CY28, growing
at a CAGR of 10.3% from CY23-28
1.1.3 In CY23, India’s inflation rate was 5.4%, & it is anticipated to decrease moving forward,
gradually stabilizing at around 4.0% by CY28
1.1.4 Public administration, defence, and other services sector GVA growth
1.1.5.1 Budget allocation towards defence in India
1.2 Geopolitical overview
1.1.5 Manufacturing GVA growth
1.2.1 Global geopolitical context
1.2.2 India geopolitical context
1.2.3 Impact of recent wars on the defence sector
1.2.4 Impact of inland & civilian conflicts on defence sector
1.2.5 Impact of terrorism on defence sector
2. Defence industry overview
2.1 Global defence spending overview
2.1.1. Global defence spending
2.1.2. Key trends
2.2 India’s defence spending overview
2.2.1 India’s defence spending
2.2.2 Share of capital vs revenue expenditure
2.2.3 Growth drivers of India’s defence spending
2.2.3.1 Indian defence modernization programme
2.2.3.2 Financial budget for capital expenditure
2.2.3.3 Government’s ‘Aatmanirbhar Bharat’ initiative to prioritize domestic production across sectors
2.2.3.4 Government initiatives to promote defence production
2.2.3.5 Efforts to reduce reliance on imports & promote exports
2.2.3.6 Strategic military developments
2.2.3.7 Positive indigenization list barring ammunition imports
2.2.4 India’s defence exports
2.2.5 India’s defence imports

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2.2.6 Indigenization trends & impact on imports & exports
2.2.7 Indian defence industry evolution
2.2.8 Indian defence industry policy & regulation updates
2.2.9 Key trends in Indian defence industry
2.2.10 India defence modernization programs & increase in budget for modernization of defence
2.2.11 Favourable factors supporting defence production & export promotion
3. Protective gear equipment value chain & type of material
3.1 Value chain & manufacturing overview of protective gear equipment
3.2 Different types of material used for manufacturing protective gear
3.3 Advantages vs disadvantages of different materials
3.4 Reasons for preferring Boron Carbide (B4C)
3.5 Boron Carbide (B4C) manufacturing techniques
3.5.1 Form of ceramic
4. Protective gear market overview
4.1 Protective gear market overview
4.1.1 Key growth drivers of the global protective gear market
4.1.2 Key trends of the global protective gear market
4.2 Indian protective gear market overview
4.2.1 Key growth drivers of the Indian protective gear market
4.2.2 Entry barriers
4.2.3 Key trends of the Indian protective gear market
4.2.4 Indian protective gear market breakdown by different types – Personal gear, platform gear, &
others
4.2.5 Impact of indigenization policy
4.2.6 Export potential
5. Personal protective gear market overview
5.1 Key use cases & applications of personal protective gear
5.2 Manufacturing overview personal protective gear
5.2.1 Bulletproof helmet
5.2.2 Bulletproof jacket & vest
5.2.3 Bulletproof armor panel
5.2.4 Bulletproof shield
5.3 Personal protective gear market overview – Global
5.3.1 Personal protective gear users: Army, Navy, Border Security & others

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5.4 Personal protective gear market overview – Indian
5.5.1 Key trends in personal protective gear market
5.5.2 Export potential
Platform protective gear market overview
6. Platform protective gear market overview
6.1 Platform protective gear market overview – Global
6.1.1 Order book analysis for major air, land & sea defence equipment manufacturers
6.2 Platform protective gear market overview – Indian
6.2.1 Indian platform protective gear market segmentation by type – Air, land & sea
6.2.2 India’s defence capabilities in comparison to key neighbouring adversaries' advisories & key
global players
6.3 Key use cases & applications of platform protective gear
6.4 Value chain & manufacturing overview of platform protective gear
6.5 Key trends in platform protective gear market
6.6 Export potential
Ammunition market
7. Ammunition market
7.1 Overview of ammunition and value chain & manufacturing
7.1.1 Overview of ammunition
7.1.2 Value chain & manufacturing
7.2 Global ammunition market
7.2.1 Global ammunition market breakdown by various types – Small, medium & large
7.3 Indian ammunition market
7.3.1 Indian ammunition market breakdown by various types – Small, medium & large
7.4 Key growth drivers of ammunition market
7.5 Cost analysis of ammunition
7.6 Key trends in ammunition
7.7 Impact of indigenization policy
7.8 Regulatory compliances for setting up a defence company in India
7.9 Export potential
8. SWOT for the defence industry
Competitive Benchmarking
9. Competitive benchmarking
9.1 Company overview

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9.2 Peer overview
9.3 Operational benchmarking
9.4 Quarterly financial benchmarking
9.5 Yearly financial benchmarking

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GLOSSARY OF ABBREVIATIONS USED
S.No. Abbreviation Full form
used
1 3D Three-Dimensional
2 APS Active Protection Systems
3 ADA Aeronautical Development Agency
4 AEW&C Airborne Early Warning & Control
5 AI Artificial Intelligence
6 AIP Air-independent propulsion
7 ALH Advanced Light Helicopter
8 AWS Akash Weapon System
9 BDL Bharat Dynamics Limited
10 BEL Bharat Electronics Limited
11 BEML Bharat Earth Movers Limited
C4ISR Command, Control, Communications, Computers Intelligence, Surveillance &
12
Reconnaissance
13 CAGR Compound Annual Growth Rate
14 CBRN Chemical, Biological, Radiological, and Nuclear
15 CEMILAC Centre for Military Airworthiness & Certification
16 COTS Commercial off the shelf
17 CPI Consumer Price Index
18 Cr Crore
19 CY Calendar Year
20 DAC Defence Acquisition Council
21 DAP Defence Acquisition Procedure
22 DBF Digital Beam Forming
23 DDP Department of Defence Production
24 DEWs Directed energy weapons
25 DGAQA Directorate General of Aeronautical Quality Assurance
26 DIC Defence Industrial corridor
27 DMA Department of Military Affairs
28 DPEPP Draft Defence Production & Export Promotion Policy
29 DPIIT Department for Promotion of Industry & Internal Trade
30 DPSUs Defence Public Sector Undertakings
31 DRDO Defence Research & Development Organisation
32 EOD Explosive Ordnance Disposal
33 ESM Electronic support measures
34 EU European Union
35 EW Electronic warfare
36 FDI Foreign Direct Investment
37 FGFA Fifth Generation Fighter Aircraft
38 F-INSAS Future Infantry Soldier as a System
39 FY Financial Year
40 GDP Gross Domestic Product
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41 GST Goods & Services Tax
42 HAL Hindustan Aeronautics Limited
43 HEAUV High Endurance Autonomous Underwater Vehicle
44 HPMWs High-Power Microwave Weapons
45 IAF Indian Air Force
46 IBMS Integrated Battlefield Management System
47 ICDP Integrated Capability Development Plan
48 iDEX Innovations for Defence Excellence
49 IED Improvised Explosive Devices
50 IGMDP Integrated Guided Missile Development Programme
51 INIP Indian Naval Indigenisation Plan
52 INR Indian Rupee
53 ISTAR Intelligence, Surveillance, Target Acquisition, & Reconnaissance
54 LAC Line of Actual Control
55 LCA Light Combat Aircraft
56 LDEWs Laser Directed Energy Weapons
57 LEMOA Logistics Exchange Memorandum of Agreement
58 LNG Liquefied Natural Gas
59 LTTE Liberation Tigers of Tamil Eelam
60 MICV Modern Infantry Combat Vehicles
61 MIDHNI Mishra Dhatu Nigam Ltd
62 ML Machine Learning
63 MoD Ministry of Defence
64 MSME Micro, Small & Medium Enterprises
65 MTA Multi-Role Transport Aircraft
66 NATO North Atlantic Treaty Organization
67 PIL Positive Indigenous List
68 PPE Personal Protective Equipment
69 PSU Public Sector Undertakings
70 R&D Research & Development
71 RBI Reserve Bank of India
72 SAGAR Security and Growth for All in the Region
73 SHQs Service Headquarters
74 SPARSH System for Pension Administration
75 TDF Technology Development Fund
76 TNDIC Tamil Nadu Defence Industrial Corridor
77 UAV Unmanned Aerial Vehicles
78 UHMWPE Ultra-High Molecular Weight Polyethylene
79 UK United Kingdom
80 UPDIC Uttar Pradesh Defence Industrial Corridor
81 US$ B / M United States Dollar Billion / Million
82 USA United States of America
83 UV Ultraviolet
84 Y-o-Y Year on year

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 Macroeconomic
Outlook

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1. Macroeconomic Outlook
1.1 Macroeconomic overview

1.1.1 The global GDP is expected to grow at a CAGR of 4.8% from CY23-28, having grown at a CAGR of 4.0% during
CY18-23, the low figure was due to COVID-19

The global economy slowed down owing to the COVID-19 pandemic, but post that, has shown recovery. After a significant decline in
CY20, recovery was made possible by extended fiscal support, adaptation to new work patterns, & vaccine distribution. Global GDP
grew in CY23 at the rate of 3.2%, which was slightly lower than the expected growth rate, because of the geopolitical crisis of the
Russia-Ukraine war & the Israel-Palestine conflict. Furthermore, global real GDP is projected to grow at an average rate of 3.1% from
CY23 to CY28. If we, however, look at corresponding growth projections for India, India is expected to maintain the highest growth
rate, with its current Y-o-Y growth rate standing at 7.8% in CY23 & projected to grow at 6.5% CAGR upto CY28

1.1.2 India’s GDP was at US$ 3,570B in CY23 & is estimated to reach US$ 5,830B in CY28, growing at a CAGR of 10.3%
from CY23-28

India is currently the fifth-largest economy in CY23 & is expected to become the third largest by CY30. India’s GDP (at current prices)
grew from US$ 2,700B to US$ 3,570B between CY18 & CY23. This GDP growth can be attributed to robust reforms like GST, corporate
tax revision, revised FDI limit, & growth across sectors. The real GDP growth reached 7.8% in CY23 & is projected to grow at a rate
of 6.5% till CY28.

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1.1.3 In CY23, India’s inflation rate was 5.4%, & it is anticipated to decrease moving forward, gradually stabilizing at
around 4.0% by CY28

The Russia-Ukraine war in CY22 has led to a geopolitical crisis, creating global supply chain disruptions & thus leading to an
unprecedented rise in prices. While this impacted India, the situation later stabilized due to a decrease in CPI, which fell to 5.4% in
CY23, compared to 6.7% in CY22. This decline was not only the result of the Indian government and RBI's inflation control measures
but also the gradual reduction in the fiscal deficit. In FY23, India's fiscal deficit stood at 6.4% of GDP, which declined to 5.8% in FY24
and is expected to decline to 4.9% by FY25. This improvement in the fiscal deficit has played a crucial role in easing inflationary
pressures by reducing government borrowing needs, thereby controlling public debt and stabilizing market expectations. The RBI kept
repo rates steady to prevent unnecessary market disruptions. Simultaneously, the government took actions such as reducing excise duties
on petrol and diesel, and lowering import duties on essential raw materials like crude edible oils. The anticipated decrease in inflation
over the coming years can be attributed to the government's comprehensive economic policies aimed at managing inflation, which
include monetary, fiscal, and supply-side measures.

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1.1.4 Public administration, defence, and other services sector GVA growth
The public administration, defence, and other services sector has demonstrated significant growth in recent years, underscoring its
expanding role in India's economic framework. This sector not only remains essential for national security and governance but also
serves as a key driver of overall economic progress. The GVA has seen constant growth, going from INR 24.2 lakh Cr in FY19 to INR
39 lakh Cr in FY24. This steady upward trend highlights the sector's resilience and growing importance in the country's broader
economic landscape.

1.1.5.1 Budget allocation towards defence in India

India’s defence budgetary allocation has steadily increased over the past five years, growing at a CAGR of ~7.6% between FY20-25,
reaching ~INR 6.2 Lakh Cr in FY25. India's growing economy, resource availability, regional security concerns, and military
modernization efforts have propelled its defence spending. This increase reflects the government's commitment to strengthening military
capabilities. Alongside this budget growth, the government has aggressively pursued indigenization policies, including the issuance of
PILs & prioritizing domestic procurement under DAP-2020, to ensure that a significant portion of this spending supports the
development of indigenous defence technology & manufacturing.

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1.2 Geopolitical overview

1.1.5 Manufacturing GVA growth

Manufacturing, a vital part of GDP, grew steadily from INR 28.1 Lakh Cr in terms of GVA in FY19 to INR 37.7 Lakh Cr in FY24.
Manufacturing stands as a cornerstone in the nation's economic advancement, driven by key sectors like automotive, engineering,
chemicals, pharmaceuticals, and consumer durables. Moreover, a strong manufacturing sector boosts exports, contributing to national
income. The industry generated 16-17% of India’s GDP pre-pandemic and is projected to be one of the fastest-growing sectors. Overall,
manufacturing industry’s health is pivotal for economic prosperity, making it a crucial GDP component and a key driver of growth.

1.2.1 Global geopolitical context

The global defence sector is influenced by shifting power, new technologies, & changing interests. Nations are dealing with rising
competition between major powers, regional conflicts, & asymmetric threats. Key events like the Russia-NATO tensions, US-China
rivalry, conflicts in the Gulf, & instability in Europe are driving increased defence spending & shaping military policies. These factors
contribute to a complex & unpredictable global environment.

• Russia NATO conflict: Russia's CY22 invasion of Ukraine escalated the conflict that began with Crimea's annexation in
CY14. It has created significant global risks, including a humanitarian crisis, impact on capital flows, trade, and commodity
markets. NATO-Russia relations are at their lowest since the Cold War, worsened by sanctions on Russia and NATO's support
for Ukraine. The war has driven up demand in the arms industry and led to the largest defence budget increases in 30 years for
European countries.

• US-China strategic competition: China's expanding military presence in the South China Sea, particularly near the
Philippines. The trade conflict, which began in CY18 with US tariffs on Chinese goods, disrupted global trade. Despite a CY20
trade deal, the US has restricted technology exports to China over intellectual property concerns. The growing trade of LNG
between the US and China, with China being a major purchaser, has raised concerns about China's influence on the US energy
sector.

• Gulf tensions: The Israeli-Palestinian conflict, intensified by the October 2023 Israel-Hamas war, is rooted in long-standing
disputes over land and self-determination. It is leading to a severe humanitarian crisis in Gaza. Meanwhile, Iran-backed
militants across the Middle East threaten Israeli and Western interests, particularly U.S. troops and commercial shipping. With
the main conflict involving Israel, the U.S., and Iran, where heightened risks stem from Iran's April 2024 aerial attack on Israel
and nuclear advancements.

• European fragmentation: Attention on European fragmentation has increased since last year. Europe is united on key issues
like boosting EU competitiveness, enhancing strategic autonomy, & supporting Ukraine, but disagreements mainly involve
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 how to implement & fund these goals. Tensions could arise from migration, which hit record levels last year. The update of
EU fiscal rules paused during COVID-19, might also cause conflicts between national governments & Brussels.
• Taiwan-China crisis: The Taiwan-China crisis is rooted in China's claim over Taiwan as a breakaway province & Taiwan's
insistence on its sovereignty. Tensions have escalated in recent years, with China increasing military activity near Taiwan,
heightening the risk of a potential conflict. The situation is further complicated by the United States’ strategic ambiguity,
supporting Taiwan with defence capabilities without officially recognizing its independence.

• Conflict in the West Asia: The ongoing conflict in the Middle East, particularly the escalation of hostilities involving Israel
and Hamas, has introduced significant uncertainties into the global economy. While immediate effects are primarily felt in
financial markets, with investors shifting towards safe-haven assets like the U.S. dollar, the potential for a broader conflict
raises concerns over oil prices. A disruption in oil supply due to attacks on Iranian infrastructure could lead to a sharp increase
in prices, impacting economies worldwide, especially in Europe, which lacks major domestic oil production. Furthermore,
rising oil prices contribute to inflationary pressures in the U.S., affecting production and shipping costs and ultimately raising
consumer prices. Prolonged high interest rates in the U.S. may deter investment in emerging markets, potentially leading to
currency depreciation in countries like Indonesia.

1.2.2 India geopolitical context

India's geopolitical position has changed significantly in recent years as it aims to strengthen its global presence. It focuses on
independence & a multipolar world while managing complex relationships with China, Pakistan, & Bangladesh.

• Pakistan: The CY1947 partition of India created Pakistan & left the Kashmir region as a hotspot of conflict, leading to several
wars: the CY1947 Kashmir war, the CY1965 Indo-Pak war, the CY1971 East Pakistan war, & the CY1999 Kargil War. Despite
diplomatic efforts, trust issues persist, & tensions remain high. The status of Pakistan-administered Kashmir is still unresolved,
straining relations further. Recently, Pakistan has strengthened its ties with China through increased defence cooperation &
joint military exercises.

• China: The CY1962 Sino-Indian War started ongoing tensions over territorial disputes in the Himalayan region, especially
along the LAC. The Galwan Valley clash in CY20, which resulted in fatalities, highlighted rising tensions. Despite these
political issues, trade & investment between India & China have continued to grow, with China becoming a major trading
partner for India. Ongoing border disputes & periodic military talks show the ongoing challenges in their relationship, with the
Galwan incident increasing strategic tensions.

• Maldives: India & Maldives, sharing a maritime border, have maintained a close relationship since Maldives' independence.
India helped the Maldives during an LTTE attack through Operation Cactus, preventing the terrorists' success. Both countries
have many trade & security agreements. Recently, China's influence in the Maldives has grown due to major investments &
loans, making the Maldives a key player in the India-China rivalry. The new Maldivian president has requested the removal of
Indian military personnel, reflecting a shift from the previous "India first" policy & potentially affecting future defence
cooperation. However, there is a notable shift in their approach towards India and seek to engage in cooperation.

• Bangladesh: India played a pivotal role in Bangladesh's independence from Pakistan by supporting the Mukti Bahini, leading
to the creation of Bangladesh. The Land Boundary Agreement resolved long-standing border issues & strengthened bilateral
relations. This improvement has enhanced commerce & connectivity between the two countries, providing economic benefits
to both. However, recent unrest in Bangladesh due to policy changes & a government shift has created sensitive conditions that
could impact bilateral trade & strain India's relationship with Bangladesh.

• Myanmar: India & Myanmar share a rich cultural heritage & close geographical ties & have strong relations. They work
together on border security to improve regional stability. India’s "Act East" strategy focuses on better connectivity & economic
cooperation with Myanmar, boosting regional growth. While military efforts have aimed to control insurgent groups, recent
decline in its control over Myanmar's border areas have led to the latter’s resurgence. The worsening crisis & ongoing ethnic
conflicts raise concerns about further instability.

1.2.3 Impact of recent wars on the defence sector

Recent wars have profoundly affected the defence sector, leading to advancements in technology, shifts in procurement strategies and
supply chains, increased investments in research and development, and the depletion of ammunition stockpiles. Technological
progress, particularly in autonomous systems, cybersecurity, and AI, is accelerating battlefield innovation. Conflicts are reshaping

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global procurement, with nations increasing production capacities and pursuing joint initiatives to enhance military readiness.
Sanctions on key suppliers like Russia have disrupted supply chains and reduced global arms exports. Simultaneously, defence R&D
is rising as countries prioritize modernization to maintain military competitiveness. These developments reflect the broader influence
of current geopolitical conflicts on the defence industry.

1.2.4 Impact of inland & civilian conflicts on defence sector

Ongoing inland & civilian conflicts have significantly impacted the defence sector, driving an increased focus on protecting civilian
populations & compliance with international humanitarian law. From political unrest and violence in Bangladesh and the Democratic
Repulic of Congo (DRC) to prolonged instability in Haiti and the Northern Triangle, there are numerous examples that highlight the
complex interplay of governance challenges and security concerns affecting millions of people globally. This civil unrest has resulted
in loss of many life & high displacement of people; thus, defence strategies are shifting towards humanitarian assistance,
peacekeeping operations, & rapid response to crises.

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The surge in inland & civilian conflicts has driven a significant increase in demand for protective gear like riot shields, protective
helmets, jackets, & others, pushing the industry towards rapid innovation & scale production to protect both military personnel &
civilians. In response, defence strategies are shifting towards prioritizing civilian protection, with a greater focus on humanitarian
assistance, peacekeeping, & the deployment of technologies that minimize civilian casualties.

1.2.5 Impact of terrorism on defence sector

The rise of global terrorism, particularly in regions like the Sahel, Somalia, Afghanistan and India, has escalated the demand for
advanced protective gear like bomb blankets, bomb suits, CBRN suits & masks, and ammunition as nations strive to protect both military
personnel and civilians. Terrorist groups exploit weakened governments and humanitarian crises to expand their influence, posing
significant security risks not only to local populations but also to global powers.

Violent extremism in the Sahel: The growing power of violent extremist organizations in the Sahel is worsening the humanitarian
crisis and spreading instability across Africa, posing significant security and financial risks to the United States and Europe. The collapse
of international counterterrorism support and weakening regional leadership has created a vacuum for these groups to expand.
Organizations like Jama'at Nusrat al-Islam wal Muslimeen, Islamic State in the Greater Sahara, and Islamic State in the West African
Province are exploiting this vacuum to launch attacks on government forces and civilians. The potential for increased cooperation
between terrorist groups and criminal organizations could further amplify the threats in the region and beyond.

Conflict with Al-Shabaab in Somalia: Al-Shabaab in Somalia remains one of al-Qaeda’s most formidable affiliates, the terrorist
organization continues to take advantage of Somalia's weak government and severe humanitarian crises to carry out indiscriminate
attacks on government forces, foreign peacekeepers, and civilians. The group's objectives include dismantling the Federal Government
of Somalia, expelling foreign forces, and creating a "Greater Somalia" by uniting all ethnic Somalis under strict Islamic rule. Despite
ongoing efforts by the United Nations, the African Union Transitional Mission in Somalia, the U.S., and East African nations to combat
the group since the early 2000s, al-Shabaab continues to demonstrate resilience, threatening the stability of Somalia and the region.

Instability in Afghanistan: Following the U.S. troop withdrawal from Afghanistan in August 2021, the Taliban swiftly regained control
of the country and the government in Kabul. Despite initial pledges to respect human rights, the group reinstated its strict interpretation

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of sharia law, including public executions, amputations, and floggings. Under Taliban rule, the progress made over the past two decades
in liberal and democratic rights has been reversed, particularly for women. Afghanistan is also grappling with one of the world’s most
severe humanitarian crises, compounded by economic shocks and the worsening impacts of climate change..

Terrorism in India: Terrorism has had a profound impact on Jammu and Kashmir, in the northeast and parts of central and southern
India. In CY22, J&K witnessed ~220 terrorist incidents, compared to ~150 attacks in CY21. A notable attack in Manipur during CY21
involved an ambush orchestrated by the People’s Liberation Army of Manipur and the Naga People’s Front. Terrorist groups have
predominantly targeted civilians and government officials using improvised explosive devices. The Indian government has been
proactive in detecting, disrupting, and neutralizing terrorist activities. U.S.-India counterterrorism cooperation has included joint special
forces exercises, a Quad counterterrorism tabletop exercise, and the U.S.-India Counterterrorism Joint Working Group to tackle growing
terrorism in the region.

In response to these persistent threats, countries are prioritizing defence upgrades, with a particular focus on personal protective
equipment for military and law enforcement personnel. This includes innovations in body armor, helmets, and tactical gear designed for
diverse combat scenarios. Additionally, the ammunition market has experienced increased demand for specialized munitions tailored to
counter the asymmetric warfare tactics commonly employed by extremist groups. As terrorism evolves, the need for advanced,
lightweight, and adaptable protective solutions continues to grow, further driving industry innovation. At the same time, this escalating
violence exacerbates humanitarian emergencies, leading to widespread displacement, poverty, and insecurity, underscoring the urgency
for enhanced defence measures globally.

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 Defence industry
overview

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2. Defence industry overview

2.1 Global defence spending overview

2.1.1. Global defence spending

In CY23, global defence spending accounted for US$ 2.4T, contributing 2.3% of the global GDP. The global defence spend is expected
to grow at 4.3% CAGR to US$ 3.0T by CY28.

The top spenders have continued to enhance their military capabilities, while conflicts in some regions have driven up military spending.
Conflicts & geopolitical tensions continue to drive military spending, as nations adapt their defence strategies to address both current
& anticipated threats. Long-term defence strategies are increasingly aligned with broader national security goals, emphasizing the need
for self-sufficiency & advanced capabilities.
• The USA had the highest military spending in CY23 with a budget of US$ 916.0B, which was an increase of 2.3% from the
previous year.
– Since CY1949, the USA has been consistently the top military spending nation, accounting for ~30% of the world's
military spending for the last two decades.
• In Europe, military expenditure totalled US$ 588.0B in CY23, which was an increase of ~16% from CY22.
– This notable increase was largely driven by boosts in Russian & Ukrainian military expenditure, as well as additional
increases by other European nations in CY23.
• USA, China, Russia, India, and Saudi Arabia are the top five countries in defence spending, collectively accounting for ~60%
of the global defence expenditure in CY23.
• India ranks as the fourth-largest global spender on defence, accounting for ~ 4% of total military expenditures worldwide.
• Latin America’s defence spending constituted ~2.0% of the worldwide total, facing constraints due to enlarged national debt
obligations, persistent challenges, & political transitions.

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2.1.2. Key trends

Advances in ammunition & ballistic protection material to protect against ammunition, electronic warfare, COTS solutions, & drone
usage are key trends shaping the defence industry worldwide.

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2.2 India’s defence spending overview

2.2.1 India’s defence spending

India’s defence spending was ~US$ 94B in FY24, growing at a 3.8% CAGR from FY19-23. It is estimated to reach ~US$ 145B in
FY29, growing at a CAGR of 9.1% over FY24-29.

India's defence expenditure has seen a significant increase since FY19. For FY25, the MoD has been allocated a total budget of ~US$
75B, the highest among the ministries. The Indian Army accounts for more than half of the total defence budget. Defence budgets often
exceed initial estimates due to unexpected operational demands, technological advancements, and escalating costs of procurement and
maintenance. Additionally, geopolitical tensions and evolving security threats often necessitate increased spending beyond the planned
allocations. Border tensions with China & Pakistan have been a significant driver of India's defence budget allocations, with a focus on
capital outlays for equipment upgrades & military infrastructure.

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2.2.2 Share of capital vs revenue expenditure
As per the Regular Union Budget for FY25E, the MoD has allocated 27.7% of the budget towards capital expenditure. This is aimed to
equip the armed forces with state-of-the-art, niche technology arms, ammunition, fighter aircraft, ships, platforms (specific vehicles or
facilities that use equipment), unmanned aerial vehicles, drones, specialist vehicles, personal protection equipment, etc. The sizeable
allocation under capital is centred around promoting ‘Aatmanirbharta’ in the defence industry. Allocation to the armed forces for revenue
expenditure (other than salary) meant for sustenance & operational commitment stands at 14.8%. This aims to provide a support system
to all platforms including aircraft & ships, & best maintenance facilities. The allocation also aims to facilitate personnel movement,
ammunition procurement, resource mobility, & day-to-day expenditure of armed forces. The defence pension budget stands at 22.7%,
to be incurred on monthly pension to ~32L pensioners through SPARSH and other pension disbursing authorities. The MoD has
allocated 30.6% of the budget towards pay & allowances & 4.2% for civil organizations under MoD.

Considering the MoD budget allocations over FY19-24, the share of revenue and capital expenditures have shown slight fluctuations.
Revenue expenditure as per the MoD budget allocations was over ~74% during FY19-20 and exceeded ~75% in FY19. As per FY24
(BE), capital expenditure allocation stood at ~29% and revenue share amounted to ~71%.

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2.2.3 Growth drivers of India’s defence spending

Given the ongoing geopolitical tensions along its borders, India must strengthen its indigenous defence manufacturing capabilities and
reduce reliance on foreign imports, particularly in the event of prolonged conflicts. The government has implemented significant reforms
in the defence sector, with a strong commitment to minimizing foreign dependence and building a robust domestic defence
manufacturing base. As a result, defence spending has increased, driven by multiple factors. Key drivers include extensive
modernization programs aimed at updating military capabilities, and the Make in India initiative, which promotes domestic
manufacturing and self-reliance. Additionally, the emphasis on policies to promote defence production, and other strategic initiatives is
contributing to this upward trend. These factors collectively enhance investment in the defence sector, foster new projects, prioritize
domestic production, and expand export opportunities.

2.2.3.1 Indian defence modernization programme

The modernization of the Armed Forces focuses on acquiring advanced platforms, technologies, and weapon systems to enhance defence
capabilities. This effort aims to provide top-tier facilities and support for all platforms and ensures efficient procurement of ammunition
and mobility of resources and personnel as required by security needs. The Indian government, in collaboration with the Armed Forces,
is actively engaged in various modernization projects.
• In FY 24, Ministry of Defence was allocated a total budget of INR 5.9 Lakh Cr. Capital outlay pertaining to modernisation
and infrastructure development was increased to INR 1.6 Lakh Cr.
• Indian Coastal Guards upgraded six Dornier aircraft have with state-of-the-art systems/sensors for the modernization of
ICG aircraft as part of the 17 ICG Dornier Mid-Life Upgrade contract.
• In FY23, Ministry of Defence proposed for creation of Non-Lapsable Fund for Defence Modernisation (DMF) is aimed
to use for modernization of Defence Forces and would supplement the regular yearly budgetary allocations by
eliminating any uncertainty in provisioning of adequate funds for various defence capability development and
infrastructure projects.

2.2.3.2 Financial budget for capital expenditure

The MoD remains the top recipient of budgetary allocation among all ministries. In recent years, the MoD has witnessed a significant
increase in its overall budget, especially in capital outlay to support critical defence initiatives and modernization efforts.
• The defence budget allocation for FY25 has increased by ~ INR1 Lakh Cr, representing an 18.4% rise compared to FY23, and
a 4.8% increase over FY24's allocation. A significant portion, 27.7%, is allocated to capital expenditure.
• The capital outlay has increased to INR 1,72,000Cr in FY25 122, reflecting a CAGR of 9%.
• A significant portion of India's increased capital budget has been allocated to modernization and equipment acquisition,
focusing on new technology and equipment. This investment aims to enhance India's military capabilities across air, sea, and
cyberspace domains.
• Infrastructure development along tense borders has also been strengthened, with a 30% year-on-year increase. The allocation
of INR 65B to the Border Roads Organisation is set to further accelerate improvements in border infrastructure.

2.2.3.3 Government’s ‘Aatmanirbhar Bharat’ initiative to prioritize domestic production across sectors
The "Make in India" initiative aims to reduce dependence on foreign suppliers while fostering domestic innovation. By scaling MSMEs
and supporting major industry players, it strives to boost India's global competitiveness and strengthen the defence manufacturing sector.
The government has introduced a range of policy measures and reforms to support these efforts, such as
• To decrease reliance on imports, the Ministry of Defence announced the ' Positive Indigenisation List’. In the past three years,
more than 12,300 items have been indigenized, enabling DPSUs to place orders worth INR 7,572Cr with domestic suppliers.
• The MoD has allocated 75% of the modernization budget for procurement from domestic industries in FY25. This strategy is
expected to boost GDP, generate employment, and enhance capital formation, thereby stimulating economic growth.
• Army is focusing on developing "future-ready mechanized" capabilities and integrating advanced weaponry. This effort
includes "Make in India" projects like:
– Led by DRDO's VRDE laboratory, aims to produce vehicles to fulfil the Indian Army's requirement for over 1,750
Futuristic Infantry Combat Vehicles.
• During FY21-23, the MoD has signed 122 contracts for defence equipment capital procurement. Notably, 100 of these
contracts, representing 87% of the total value, were awarded to Indian vendors.

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 • The Defence Acquisition Procedure announced in October 2020 aims to boost indigenous production & position India as a
global manufacturing hub for weapons & military platforms.
• Aligned with the ‘Atmanirbhar Bharat’ initiative, it supports the Indian defence industry through ‘Make in India’ projects and
a simplified acquisition process and have a monitoring mechanism for selection of best equipment in a transparent and
competitive manner. This policy provides a significant boost to indigenous manufacturing companies and mandates a
minimum of 50% indigenous content on cost basis of the base contract price i.e. total contract price less taxes and duties.

2.2.3.4 Government initiatives to promote defence production

• Defence Production and Export Promotion Policy (DPEPP) 2020: The Ministry of Defence has drafted the DPEPP 2020
as a key guiding document aimed at significantly enhancing the country's defence production capabilities to achieve self-
reliance. The policy provides a focused and structured approach to bolster domestic defence manufacturing.
• Defence Acquisition Procedure (DAP) 2020: The Defence Acquisition Procedure (DAP) 2020 is designed to bolster India’s
domestic defence industry under the 'Make in India' initiative. It establishes a prioritized procurement framework that favours
indigenous production and introduces measures to promote foreign direct investment. In 2020, the Indian government
implemented significant FDI reforms, increasing the automatic route limit from 49% to 74%, with provisions allowing up to
100% FDI under government approval. These reforms aim to strengthen domestic manufacturing capabilities, drive
technological innovation, and attract global investment, ultimately positioning India as a key manufacturing hub for both
import substitution and exports while safeguarding the interests of local manufacturers.
• Strategic Partnership Model (SPM): The Defence Acquisition Council (DAC) has approved the broad framework of the
Strategic Partnership Model, which aims to engage the Indian private sector in the production of advanced defence equipment.
This model fosters long-term partnerships between qualified Indian companies and global Original Equipment Manufacturers
through a transparent, competitive process. It enables Indian companies to collaborate with OEMs on large-scale military
contracts, facilitating technology transfers and building domestic manufacturing infrastructure and supply chains.
• Defence Industrial Corridors: The government has also established two dedicated Defence Industrial Corridors in Tamil
Nadu and Uttar Pradesh. These corridors are designed to serve as defence manufacturing clusters, leveraging the region's
existing infrastructure and human resources to enhance the defence sector's capabilities.
• Defence Offset policy: The Indian Defence Offset policy, aligned with the Make in India initiative, aims to boost indigenous
defence manufacturing and technology transfer. It mandates foreign defence contractors to invest a portion of the contract value
into India’s defence sector, enhancing local manufacturing capabilities, stimulating the economy, and fostering self-reliance.
By partnering with Indian defence contractors or transferring technology, foreign companies contribute to the country’s defence
preparedness and promote technological advancement. The policy applies to contracts exceeding INR 300 Cr, with a current
offset obligation of 30% of the total contract value.

2.2.3.5 Efforts to reduce reliance on imports & promote exports

In recent developments, India's defence sector has made significant strides towards self-reliance and reduced import dependency. Over
the past decade, India's defence capabilities and export performance have markedly improved, with a substantial increase in both defence
exports and industrial licenses. The Central Government is also targeting a significant rise in defence exports, supported by enhanced
foreign investment regulations.
• Over the past decade, Indian defence capabilities have significantly improved. Despite increasing arms requirements, the
proportion of imports to overall defence needs is decreasing, due to the introduction of PIL & domestic production initiatives.
• Defence exports reached INR 21,083Cr in FY24, a 31% increase from the previous year. By April 2023, 606 industrial licenses
had been issued to 369 defence sector companies.
• Defence exports reaches INR 16,000 Cr in FY23, marking a 10x increase since FY17. India now exports to over 85 countries,
thanks to collaborative efforts.
• The Central Government aims to boost defence exports to INR 35,000 Cr by FY25. To encourage exports and liberalize foreign
investments, the FDI limit in the defence sector has been increased to 74% through the automatic route and 100% via the
government route.

2.2.3.6 Strategic military developments

India's ongoing tensions with China, combined with the internal restructuring of its military commands, are poised to substantially
impact defence spending in the coming years.

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 • China factor: India is poised to deploy additional troops and reassign forces to its border with China, as tensions between the
two nations persist. This shift follows the reallocation of thousands of soldiers from India’s western frontier to bolster its
defence along the disputed border with China. The move comes in response to the 2020 Galwan Valley skirmish, the first
deadly clash in over four decades, which has since resulted in an enduring military standoff. Both India and China maintain
more than 50,000 troops in the Eastern Ladakh region, supported by artillery and air power. Given the broader front with China
compared to Pakistan, this deployment necessitates significantly larger resources and is expected to drive increased defence
spending.
• Theatre Commands: The formation of theatre commands in India represents a significant overhaul of the nation's military
structure, shifting from single-service commands to integrated, geographically defined units. This transformation, which
includes the Northern, Western, and Maritime Theatre Commands, aims to enhance operational efficiency and inter-service
coordination. While the integration will lead to better resource optimization by centralizing logistics and reducing duplication,
the initial restructuring will demand substantial government investment. This includes costs related to infrastructure upgrades,
personnel redeployment, and the cross-posting of officers between services. Consequently, the creation of theatre commands
is poised to drive increased defence spending in the short to medium term.

2.2.3.7 Positive indigenization list barring ammunition imports

The PIL is a strategic initiative by the Indian government, aimed at boosting indigenous manufacturing & reducing dependency on
imported defence equipment. Under this policy, the Indian armed forces must procure specified items exclusively from domestic
manufacturers. The government has implemented numerous policies under the 'Make in India' initiative and the 'Atmanirbhar Bharat'
vision, introducing reforms to promote the indigenous design, development, and manufacturing of defence equipment. These measures
aim to reduce the country's reliance on defence imports.
• The Indian government's push for self-reliance in the defence sector has gained significant momentum with the release of the
fifth Positive Indigenisation List (consisting of several items that will now only be procured from industry stakeholders) by the
Department of Defence Production (DDP), MoD, in July 2024.
• The MoD has introduced the SRIJAN portal to drive indigenization within the defence sector. Over 30,000 previously
imported items have been listed on the portal, inviting Indian manufacturers to participate in their production. It has also set
an ambitious goal of achieving 70% self-reliance in weaponry by CY27, opening substantial opportunities for industry
stakeholders.
• Bullet-resistant jackets and helmets have been on the first indigenization lists and banned from import since December
CY20. Similarly, the import of 155 mm ammunition has been prohibited since December CY22, and Bi-modular charge
systems since December CY24. These restrictions have given a significant boost to defence manufacturing.
• The Indian Army, used to spend huge amounts on imported ammunition. However, reliance on imports has significantly
decreased, and plans are in place to further reduce this in the future.
• The indigenization effort encompasses ammunition for various weapon systems, including tanks, artillery guns, air defence
missiles, and grenade launchers. This strategy not only minimizes import dependency but also broadens India’s export
potential.
• Both public and private indigenous firms are now fulfilling global ammunition demands. The ongoing development of high-
precision guided artillery ammunition by these firms is expected to lead to further advancements. The entry of new firms into
the ammunition sector is anticipated to improve the situation, ensuring the Indian Army is well-equipped with domestically
produced ammunition.
• As one of the world's largest arms importers, India has secured indigenous suppliers for different types of ammunition. The
Indian Army’s annual ammunition imports will now predominantly be sourced from Indian manufacturers.

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2.2.4 India’s defence exports

India’s defence exports have grown with a CAGR of 27.7% from FY18-23 and 32.4% from FY23-24. As of FY24, India has exported
over ~INR 21,083 Cr worth of defence equipment, sub-systems, parts, & components. India exports a wide range of defence products
which include weapon simulators, torpedo loading mechanisms, tear gas launchers, night vision binoculars, alarm monitoring & control,
lightweight torpedo & fire control systems, armoured protection vehicles, weapons locating radar, & coastal surveillance radar to 80+
countries. India has set ambitious targets, aiming to achieve US$ 5B in defence exports by CY25. India's growing defence exports
signify advancements in global defence manufacturing, reduced import dependency, streamlined export procedures, & government
efforts to bolster the industry, highlighting the increased capabilities & competitiveness of India's defence-based products.

2.2.5 India’s defence imports

India’s defence imports have grown with a CAGR of ~7.5% from FY18-21 followed by a decline at a CAGR of ~5.8% from FY21-22,
and defence imports stood at ~INR 50,061.7Cr in FY22. From CY18-23, India accounted for 9.8% of total global arms imports & was
among the world’s top arms importers for the period, with Russia as its main arms supplier. The imported items include a wide range of
defence equipment such as aircraft, weapons, vehicles, & electronics. India's defence imports have seen a decline in recent years due to
efforts to promote indigenization & reduce dependency on foreign suppliers. The Indian government has set ambitious goals to enhance
domestic manufacturing & reduce imports, such as the Defence Production Policy, which aims to make India one of the top 5 global
defence producers by CY25.

2.2.6 Indigenization trends & impact on imports & exports

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Under the Atmanirbhar Bharat initiative & DRDO, India's indigenization drive has spurred significant innovation, particularly in niche
technologies like space & naval domains. Programs like iDEX & SPRINT are pivotal, engaging start-ups, MSMEs, & private players
to develop cutting-edge defence solutions with government support.
India's defence exports have grown significantly, with a 28.5% CAGR from FY18-24, reaching ~INR 21,083 Cr in FY24, driven by
private sector involvement. Major platforms like ALH, LCH, LUH, Arjun Tanks, AKASH, (SAM), 155 mm Guns –ATAGS, PINAKA
MBRL & BrahMos missiles have gained international interest, expanding exports to 85+ countries.
The impact on imports is evident in the gradual decline in defence imports from FY21 onwards. Balancing the demands of operational
readiness with the growth of indigenous capabilities remains a key challenge, one that will determine the future trajectory of India's
defence sector.

2.2.7 Indian defence industry evolution

India's defence industry has evolved significantly since independence, reflecting a journey from reliance on inherited British
infrastructure to a robust, self-reliant sector. In the early years post-CY1947, the focus was on building foundational capabilities &
establishing state-run enterprises. The subsequent decades saw a shift towards enhancing self-reliance through domestic production &
strategic partnerships. The turn of the millennium marked a pivotal phase with increased private sector involvement, leading to the
ambitious Make in India initiative. Today, India's defence sector continues to innovate, integrating advanced technologies to strengthen
its global position.

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 2.2.8 Indian defence industry policy & regulation updates
The Indian government has recently introduced several new regulations & policies to reform & strengthen the defence sector. These
reforms, along with increased budgetary allocations & measures to promote indigenous design & development capabilities, are aimed at
reducing India's dependence on imports, encouraging foreign investment, & making the defence sector more efficient & self-reliant

• iDEX (ADITI) scheme (2024): The iDEX (ADITI) scheme fosters innovation in critical & strategic defence technologies.
Operating within the iDEX framework under MoD’s DDP program for FY23-26 this scheme involves collaboration with start-
ups & innovators to create advanced technological solutions for the Indian military. It also provides grants of up to INR 25 Cr
to support research, development, & innovation in defence technology.

• Defence Testing Infrastructure Scheme (2020): The Defence Testing Infrastructure Scheme has been launched to enhance
domestic defence & aerospace manufacturing by establishing Greenfield Defence Testing Infrastructure as a common test
facility.
– The primary aim is to support indigenous defence production, with a special focus on the participation of MSMEs & start-
ups, by bridging gaps in the country's defence testing infrastructure.

• DAP (2020): DAP 2020 establishes rules for timely acquisition of major defence equipment in India, ensuring quality
standards.
– The new amendments for the offset policy encourage investment & technology transfer for defence production, with
increased incentives for transferring key technologies.
– All the upgrades needed for the defence services & the Indian Coast Guard need to be sourced within India.
– Importing defence equipment or buying from foreign sources is allowed only in exceptional cases & requires special
approval from the DAC or the defence minister.
–
• Green Channel Policy (2017): A Green Channel Policy for procurement of defence stores & spares has been launched for
awarding Green Channel status to firms having predefined financial & quality credentials.
– Grant of Green Channel Certificate provides a waiver of pre-dispatch inspection & acceptance of stores under supplier’s
guarantee/warranty against the contracts concluded by various procurement agencies under MoD.

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 – Two DICs - UPDIC & TNDIC - have been set up aimed at attracting investment for defence industries, developing the
domestic supply chain & strengthening defence manufacturing ecosystem in the country.

2.2.9 Key trends in Indian defence industry

The Indian defence industry is undergoing a transformative phase, driven by a range of trends that are shaping its future trajectory. The
Make-in-India & self-reliant India (Atmanirbhar Bharat) campaigns, strategic integration of commercial off-the-shelf technologies, &
enhancements in the navy, air force and army collectively demonstrate India's commitment to enhancing its defence capabilities &
achieving self-reliance in Indian defence industry. The Indian defence industry, particularly in the private sector, has seen significant
growth and transformation over the years, driven by various government initiatives aimed at enhancing self-reliance and reducing
dependency on imports. In FY24, the total defence production in India touched INR 74,739Cr, of which private sector contributed ~22%
amounting to INR 16,411Cr. This represents the largest share of private sector involvement since FY17. Indian government plans to
increase its total annual defence production to INR 3 Lakh Cr by FY29.

2.2.10 India defence modernization programs & increase in budget for modernization of defence
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India’s defence modernization programs aim to build a well-balanced & technologically advanced military force that can effectively
safeguard national interests while also playing a significant role in regional & global security. Most of the modernization programs
either involve complete indigenous development or have substantial plans for indigenous components, fostering domestic growth. Some
of the modernization programs are as follows:

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India's defence budget for FY24 highlights a strong focus on modernization across its armed forces. The Indian Army, receiving the
largest share at INR 1.7 Lakh Cr (US$ 20B), is heavily investing in key projects. The Indian Navy, with a budget of INR 65K Cr
(US$7.9B), is enhancing its maritime capabilities, focusing on aircraft carriers, submarine fleets, & new frigates & destroyers.
Meanwhile, the Indian Air Force received significant budgetary support INR 80K Cr (US$ 9.7B) to maintain air superiority and enhance
its combat capabilities. It is using that budget to modernize its fleet with Rafale fighter jets, Tejas Light Combat Aircraft (LCA), S-400
air defence systems, & advanced transport & refuelling aircraft.

Across all services, modernization is closely aligned with the government’s ‘Make in India’ initiative, emphasizing the development &
production of advanced defence technologies domestically. This focus not only aims to enhance operational capabilities but also
promotes self-reliance & strengthens India’s defence manufacturing sector. Additionally, a significant portion of the budget is dedicated
to defence research & development, led by the Defence Research & Development Organisation (DRDO), & to infrastructure
development, ensuring that the armed forces are equipped to address emerging security challenges.

2.2.11 Favourable factors supporting defence production & export promotion

India's defence sector is experiencing significant growth & transformation, driven by a combination of favourable factors. Rising
national security concerns have led to increased demand & a surge in defence exports, with India now exporting to 85+ countries. The
government's proactive approach, including the Atmanirbhar Bharat Initiative & opening the defence industry to private sector
participation, has created a competitive advantage. Substantial budget allocations for research & development, the establishment of
Defence Industrial Corridors, & the emergence of defence tech startups are fostering innovation. These factors, coupled with supportive
policies & initiatives to promote indigenization, are positioning India as a growing force in defence production & exports, creating a
robust ecosystem for continued growth & self-reliance in the sector.

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 Protective gear equipment value
chain & type of materials

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3. Protective gear equipment value chain & type of material
The information in this chapter is for the protective gear market which includes protective equipment that can be used for ballistic
protection or non-ballistic protection. It can be further classified in two categories 1) personal protective equipment and 2) platform
protective equipment. The personal protective equipment includes ballistic protection products such as body armor, ballistic helmets,
ballistic shields etc. and non-ballistic protection products such as shoes, gloves, etc. The platform protective equipment includes both
ballistic protection such as armor panels and non-ballistic protection products such as for land, air and sea platforms.

3.1 Value chain & manufacturing overview of protective gear equipment

The production of protective gear involves a comprehensive value chain for both personal & platform equipment. The value chain
undergoes stages such as raw material procurement, component manufacturing, assembly & inspection, packing, & distribution and
testing, ensuring quality & safety for end users like military personnel & law enforcement. Personal protective gear includes vests,
helmets, & shields, while platform protective gear consists of armor panels for vehicles, naval ships & aircraft made from boron carbide
& Ultra High Molecular Weight Polyethylene (UHMWPE) or other ceramic materials. While personal protective gear is designed for
individual mobility and protection against small arms and explosives, platform protective gear focuses on safeguarding large assets like
vehicles and aircraft from heavier ballistic threats.

3.2 Different types of material used for manufacturing protective gear

In the defence sector, protective gear is crucial for ensuring the safety of military personnel in combat & hazardous environments. The
choice of materials for protective gear is influenced by various factors, including their mechanical properties, weight, & specific
applications. Various advanced materials are utilized to create effective protective equipment, each offering unique advantages. The
primary materials include aramid fibres, carbon composites, advanced materials like UHMWPE & ceramics (like alumina, silicon
carbide & boron carbide)
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3.3 Advantages vs disadvantages of different materials
When evaluating materials for protective gear & equipment in defence applications, it is essential to consider both their advantages &
disadvantages. This ensures a balanced understanding of each material's potential & limitations in various operational scenarios. Below
is a detailed analysis of the advantages & disadvantages of several key materials used in this context.

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3.4 Reasons for preferring Boron Carbide (B4C)
Boron carbide, commonly referred to as black diamond, is one of the hardest materials, surpassed only by diamond and cubic boron
nitride. Its unique combination of properties makes it ideal for various high-performance applications. As a strong covalent compound,
boron carbide boasts low density, exceptional strength, high-temperature stability, and excellent chemical resistance, making it
particularly well-suited for lightweight armor solutions. Here is an analysis of its advantages & application based on various properties:

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3.5 Boron Carbide (B4C) manufacturing techniques
Boron carbide is widely utilized in high-end, armor applications due to its superior hardness, and lightweight properties. Despite its
advantages, boron carbide faces challenges such as high manufacturing costs and limited shapeability. These issues have been addressed
through various processes including hot-pressing sintering, pressure less sintering, and reaction bonding. Each of these methods offers
distinct benefits and drawbacks, influencing their application in different armor scenarios.

Hot pressing sintering: Hot pressing sintering involves applying pressure and heat to boron carbide powder simultaneously within a
mould. The process is conducted at or slightly below the normal sintering temperature, resulting in a dense, uniform, and fine-grained
ceramic material. This method produces high-quality boron carbide (density of 2.5 g/cm³), making it highly effective for stopping steel-
core threats. However, its use is limited by several factors:
• Cost and processing difficulty: Boron carbide raw materials are expensive and challenging to process.
• Performance limitations: The material underperforms against AP bullets with tungsten carbide cores or hard steel core tips
compared to other materials like silicon carbide (SiC) or high-end alumina. B4C is renowned for its hardness, however, it
struggles with higher-velocity projectiles. Upon impact, B4C’s crystalline structure transforms into a glass-like state, leading
to a disordered atomic arrangement. This transition weakens the material's integrity at the contact point.
• Brittleness: Boron carbide is glass-like and exceptionally brittle upon impact, resulting in poor multi-hit performance. Hence,
the skill lies in the mixture of some chemicals that negate the brittleness of Boron Carbide for its use in Bullet Proofing.

Despite these drawbacks, hot-pressed boron carbide remains the material of choice for ultra-high-end Level IV and military plates
designed to stop high-calibre threats. The complexity and high cost of the hot-pressing sintering process, along with its production
limitations to simpler shapes, restrict its broader use.

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Pressure less sintering: Pressure less sintering of boron carbide occurs at very high temperatures, close to its melting point (∼2,300–
2,400°C). The addition of sintering aids such as alumina, chromium, cobalt, nickel, and glass reduce the temperature required for
densification. This method, utilized by the Defence Materials Technology Centre in combination with a VPP route, allows for unique
shaping processes. Although boron carbide materials sintered without pressure behave in a glass-like manner under high-velocity
impacts, this does not significantly impact their excellent ballistic performance. But pressure less sintering produces B4C with a density
below 2.5 due to the presence of voids in the microstructure, as the material is composed of pure B4C. Pressure less sintering helps in
producing boron carbide at a lower cost and allows for complex shapes, though it may not always match the performance of other
methods against certain threats.

Reaction bonding: Reaction-bonded boron carbide is formed by infiltrating preforms made of boron carbide and carbon powders with
molten silicon. The process yields a dense composite material, where boron carbide is complemented by the formation of silicon carbide
within the microstructure, along with traces of residual metallic silicon. RBB4C exhibits comparable ballistic performance to hot-
pressed boron carbide against ball threats, though it is generally on par with silicon carbide against steel-cored armor-piercing threats.
However, its performance against tungsten carbide core threats is less effective. The reaction-bonded method enables the fabrication of
dense boron carbide composites at significantly lower temperatures, offering two key benefits. First, it reduces processing costs. Second,
it allows for the production of large and complex-shaped boron carbide ceramics.

The choice of a manufacturing method for boron carbide armor depends on the specific requirements of the application, including cost,
performance, and shape ability. Hot pressing sintering remains one of the top choices for ultra-high-end applications despite its high
cost and processing complexity. Pressure less sintering offers a cost-effective alternative with greater shaping flexibility, while reaction
bonding provides a balance between cost and performance but faces limitations in specific threat scenarios. The industry continues to
evaluate and adopt these methods based on evolving needs and technological advancements. Certain companies have developed unique
manufacturing processes that combine elements of the above methods to achieve optimal results. These processes aim to reach a density
similar to hot-pressing, hardness comparable to pressure less sintering, and the multi-hit capability characteristic of reaction bonding.

3.5.1 Form of ceramic

Ceramics, known for their exceptional hardness and lightweight properties, play a vital role in the production of modern protective gear,
especially in body armor. These materials can be manufactured using various processes, including hot pressing sintering, pressure less
sintering, and reaction bonding, each offering distinct advantages in terms of strength and flexibility. Ceramics are typically utilized in
two main forms:

Ceramic tiles are small ceramic pieces arranged in a mosaic pattern to create the desired shape such as hexagons. The advantage of this
design is that upon impact, only the affected tile and a few neighbouring tiles are compromised, limiting the spread of damage. This
makes it more effective in multi-hit scenarios. However, the joints between the tiles can act as areas of potential weakness, and producing
multi-curved shapes with this system is challenging, resulting in most tile solutions being single-curved.

Monolithic ceramic, on the other hand, consists of a single piece of ceramic that can be produced in both single-curved and multi-
curved forms. The multi-curved version provides a better fit to the body. However, a major drawback of this system is that a projectile
impact may cause cracks over a larger surface area, making it difficult to manage multiple hits without additional front surface treatment.

The versatility of ceramics, whether in the form of tiles or monolithic structures, makes them indispensable in the design of protective
gear. While ceramic tiles offer better multi-hit resistance with localized damage control, monolithic ceramics ensure a superior body fit
but may be more susceptible to cracking upon impact. The production processes, allow for the creation of ceramics tailored for body
armor applications, providing a balance between protection, weight, and comfort. This adaptability ensures that ceramics remain at the
forefront of advanced protective solutions for modern defence needs.

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 Protective gear market
overview

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4. Protective gear market overview

4.1 Protective gear market overview

Globally protective gear is crucial for the safety and effectiveness of military and defence operations across various scenarios, including
close combat, counterinsurgency, and high-risk missions. This gear includes a wide range of equipment:
• Body armor protecting soldiers from small arms bullets, shrapnel, and IED explosions. This includes personal protective gear
equipment like:

• Defence platforms such as vehicles, aircraft, helicopters, and marine vessels

o Land-based armoured vehicles can be used to perform various roles, including infantry fighting, mine clearance, medical
evacuation, command control, etc.

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The global market for protective gear was valued at ~US$ 60B in CY23 and is projected to expand at a CAGR of 5.1%, reaching ~US$
77B by CY28. This growth is driven by increased investments in defence modernization, heightened security concerns, and ongoing
technological advancements.

4.1.1 Key growth drivers of the global protective gear market

The protective gear market is witnessing growth due to factors such as rising geopolitical tensions, technological advancements,
increased focus on soldier & equipment safety, & rising government budget allocations & expenditures towards the defence industry.

4.1.2 Key trends of the global protective gear market

The global protective gear market is evolving with the adoption of advanced technologies & materials. Key trends include the
development of flexible & lightweight materials, the integration of smart technology, & the customization of gear for specialized
applications. Additionally, global collaborations in research & development, & a growing focus on enhancement of ballistic protection
material is driving the industry.

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4.2 Indian protective gear market overview
Indian protective gear market is witnessing a significant growth driven by the country’s emphasis on modernizing its defence forces &
enhancing soldier safety. Valued at ~US$ 14B in FY24, the market is expected to grow at a CAGR of 4.6%, reaching ~US$ 18B by
FY29. This surge is attributed to increased budget allocation for defence spending due to heightened threat levels, government initiative
such as Make in India, & advancements in protective technologies tailored to meet the unique challenges of India’s defence landscape.

4.2.1 Key growth drivers of the Indian protective gear market

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Amid escalating geopolitical tensions and increased defence budget allocations, coupled with government initiatives such as ‘Make in
India’ and PIL, the Indian protective gear market is well-positioned for substantial growth. Additionally, key drivers include heightened
awareness among soldiers regarding advanced protective gear, a growing emphasis on safety and well-being, and ongoing upgrades in
skills and capabilities of the armed forces.

4.2.2 Entry barriers

The defense manufacturing industry in India for these products presents high entry barriers for new players due to significant capital
investments needed to establish manufacturing facilities, the need to customise products for the environment of use, requirement of
specific licenses like Defense Industrial License under IDR Act 1951 and specific certifications like BIS certification. In addition, to set
up facilities in compliance with applicable laws, licensing and certification requirements for products and need to comply with other
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legal requirements including using minimum 50% indigenous content to be eligible to supply products to the Ministry of Defence,
Government of India pursuant to certain schemes further increase the entry barriers. Key barriers include stringent regulatory
compliance, adherence to quality and safety standards, intense competition and market dominance, and substantial capital investment
requirements. Collectively, these factors present considerable obstacles for newcomers attempting to enter the Indian defense
manufacturing sector.

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4.2.3 Key trends of the Indian protective gear market
Key trends for Indian protective gear include modernization & investment in advanced protective gear, the push for indigenous
manufacturing with reduced import reliance, & the adoption of advanced materials for enhanced protection & mobility in the protective
gear market.

4.2.4 Indian protective gear market breakdown by different types – Personal gear, platform gear, & others
Indian protective gear market in FY24 is valued at ~US$ 14B & will reach ~US$ 18B in FY29, with platform protective gear making
up the majority at ~63% of the total market. This segment includes protective equipment for vehicles, aircraft, & marine vessels,
highlighting India's focus on securing & enhancing its defence platforms. Meanwhile, personal protective gear, which accounts for 37%
of the market, includes items such as body armor & helmets, emphasizing the ongoing efforts to safeguard individual soldiers. This
breakdown illustrates India's strategic investment in platform & personal protective equipment to strengthen its defence capabilities.

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4.2.5 Impact of indigenization policy
The indigenization policy in India aims to enhance self-reliance in defence production, significantly impacting the defence protective
gear market. The indigenization policy encourages the production of defence equipment within India, reducing reliance on imports. The
‘Make in India’ program has accelerated indigenization efforts in the defence sector.

India's import ban on 346 different types of weapons and platforms, coupled with the indigenization of ~12K items under the fifth PIL,
has been crucial in advancing the Aatmanirbharta (self-reliance) initiative within the defence sector. This strategic shift has led to the
domestic production of several advanced defence products, including light tanks, infantry combat vehicles, nasal vessels, and light
helicopter. By the end of CY25, most of the light are anticipated to be fully manufactured in India as outlined in the third PIL. These
indigenization efforts underscore a significant move towards enhancing self-reliance in defence production while also improving the
protection of personnel and equipment.

4.2.6 Export potential

India's defence exports have witnessed an exceptional surge over the past decade, with a growth factor exceeding 30 times. The country
now supplies defence products to more than 90 nations, a trend significantly driven by global conflicts such as the Russia-Ukraine war
and the Israel-Hamas conflict. These geopolitical tensions have prompted many countries to bolster their military capabilities,
positioning India as a pivotal supplier in the global defence market.

As of CY20, India exported bulletproof jackets and helmets to 34 countries, including Brazil, Mexico, Japan, the Philippines, Singapore,
the United Kingdom, and the UAE. It also supplied armor shielding to Germany, Mexico, Cambodia, and Saudi Arabia. India's non-
aligned stance has significantly boosted its defence protective gear exports, allowing engagement with a wide array of countries without
the constraints of formal military alliances. This strategic independence enables India to tailor its offerings to diverse needs, expanding
its market reach and fostering bilateral agreements based on mutual interests. As a result, India's defence protective gear enjoys a broad
customer base, strengthening its position in the global defence market.

In the first quarter of FY25, India’s defence exports surged by 78%, reaching INR 6,915Cr, compared to INR 3,885Cr in the
corresponding period of the previous year. Similarly, in FY24 defence exports touched a record high of INR 21,083Cr, an increase of
32.5% over FY23. Notably, India has commenced the export of bulletproof jackets manufactured to its national standards, which align
with international norms, to a lot of countries, including several European nations. India is now the fourth nation, following the United
States, United Kingdom, and Germany, to establish a national standard for bulletproof jackets, offering comprehensive 360-degree
protection. The Bureau of Indian Standards, responsible for setting quality standards across various products and services, has developed
more than 20,000 standards to date. With rising conflicts & heightened awareness regarding soldier safety & protection from threats,
India, with its growing defence manufacturing sector, can capitalize on the rising demand by exporting protective gear to countries
looking to enhance their war preparedness.

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 Personal protective gear
market overview

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5. Personal protective gear market overview

5.1 Key use cases & applications of personal protective gear

Personal protective gear is crucial for military personnel to ensure both safety and operational efficiency. It provides defence against
ballistic threats such as bullets from handguns and rifles, as well as shrapnel from explosive devices. In addition to ballistic protection,
this gear also shields against non-ballistic hazards, including combat-related injuries, and specialized threats such as chemical or
biological agents. The equipment includes ballistic helmets that protect the head from impacts while ballistic vests and plate carriers
guard against bullets and shrapnel. Hard armor plates inserted into carriers enhance protection against high-calibre rounds and ballistic
shields offer additional defence in close-quarter combat & room interventions.

5.2 Manufacturing overview personal protective gear

The production of personal protective gear involves a sophisticated value chain that spans from raw material procurement to distribution
to end users. This process includes several critical stages: component manufacturing, assembly & inspection, packing & storage, &
distribution. Essential personal protective gear components—such as vests, helmets, & shields—undergo a detailed production process,
which includes assembling anti-ballistic fabrics, trauma liners & other protective elements. Each component is carefully inspected &
packaged before being delivered to its final recipients, which may include military personnel as well as law enforcement agencies. The
efficiency & quality of this value chain is vital to ensuring the safety & protection of individuals in hazardous environments.

The manufacturing process of personal protective gear encompasses several key stages to guarantee optimal safety and durability. It
starts with creating patterns for various components, including outer carriers, soft and hard armor panels, harness & padding, helmet
shells, etc. Specialized machinery is then employed to cut, shape, and assemble these materials, followed by additional processes such
as pressing, trimming, and sealing. For advanced protective gear, ceramic plates may be bonded with high-performance polyethylene
in autoclaves to enhance protection. Throughout each stage, rigorous quality control measures are applied to ensure that every product
adheres to safety standards before it is packaged and dispatched to the market.

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5.2.1 Bulletproof helmet
The process starts with creating patterns for each component, followed by cutting anti-ballistic fabric for the helmet shell. For the
harness and padding, accessories such as Velcro and webbing are cut and sewn together. After assembling the anti-ballistic fabric, the
helmet shell undergoes various processes, including pre-form making, pressing, edge cutting, trauma pad application, inner cloth
attachment, and painting. The harness and padding are then inspected and fitted to the helmet shell. Finally, the completed helmet
undergoes quality checks, packaging, and labelling before it is ready for dispatch.

5.2.2 Bulletproof jacket & vest

The manufacturing process begins with creating patterns for the jacket components, including outer carriers, soft armor panels, and hard
armor panels. Anti-ballistic fabrics and accessories are then cut using specialized machinery. The components proceed through several
stages, including pressing, trimming, and sealing. In the final stage, the assembled components are integrated into the finished product,
which undergoes stringent quality control checks before being shipped. The National Institute of Justice (NIJ) defines the minimum
performance standards of “Ballistic Resistance of Body Armor” in NIJ Standard–0101.06. These standards are combined in different
levels like II, IIA, III, IIIA & IV.

5.2.3 Bulletproof armor panel

The manufacturing process for armor panels with creating patterns, followed by assembling anti-ballistic materials for cutting. The
panels are then pressed using a hydraulic press and trimmed. For armour-rated NIJ Level III & above, the process includes bonding
ceramic with HPPE backing in an autoclave. The final stage involves rigorous quality control checks before the product is shipped to
the market.

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5.2.4 Bulletproof shield
The process starts with creating patterns for the components, followed by cutting the anti-ballistic fabric on cutting tables. The cut
fabrics are then assembled and pressed using hydraulic presses. For shield panels, NIJ Level III or higher HPPE panels or ceramic-
composite panels are added and bonded. For harnesses and padding, additional materials such as Velcro, webbing, and padding are
included. The final steps involve finishing touches like trimming, painting, and quality checks before the bulletproof shield is prepared
for dispatch. The BIS has set standards like 17051 which defines standards for the protection level for ballistic shields.

Threat level as per IS 17051:

5.3 Personal protective gear market overview – Global

Personal protective gear is crucial for safeguarding troops & includes body armor, garment ensembles, footwear covers, gloves, &
helmets. Designed to protect against ballistic threats such as bullets & shrapnel, it also shields against non-ballistic hazards, including
combat-related injuries, environmental dangers, and specialized threats like chemical & biological hazards. The global market for
personal protective gear was valued at ~US$ 19B in CY23 & is projected to grow at a CAGR of 5.4%, reaching ~US$ 25B by CY28.

The ongoing conflicts in Russia-Ukraine & Palestine-Israel, have increased demand for personal protective gear. Additionally, Iran's
recent nuclear activities have heightened tensions with Israel & the US. The primary drivers of the personal protective gear market are
the rising demand for advanced equipment & increasing government procurement. European government spending on military personal
protective gear is expected to rise sharply, and along with this soldier modernization programs are anticipated to create lucrative
opportunities for the global market.

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5.3.1 Personal protective gear users: Army, Navy, Border Security & others
In CY23, the global distribution of active military personnel reveals significant regional disparities. Asia leads with 13M personnel,
comprising 62% of the world’s military forces, predominantly within the Army. Africa & Europe follow with 2.8M & 2.6M personnel,
respectively, reflecting a focus on ground forces in Africa & a more balanced military structure in Europe. North America, with 1.8M
personnel, emphasizes naval power, particularly within the United States. South America’s 1.1M personnel are more evenly spread
across different military branches, while Oceania has the smallest military force, focused primarily on territorial defence. To enhance
operational effectiveness, personal protective gear is essential. Army units depend on advanced body armor and helmets for ground
combat, while naval forces require specialized equipment for maritime operations. The air force prioritizes lightweight gear that protects
without sacrificing mobility during aerial missions. Additionally, border security personnel in high-tension regions are equipped with
protective gear designed for endurance and resilience, ensuring safety during prolonged operations.

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5.4 Personal protective gear market overview – Indian
India's personal protective gear market grew at a CAGR of 13.1% during FY22-23, reaching a value of ~US$ 5B in FY24, & is projected
to grow at a CAGR of 5.9% during FY24-29 to reach a value of ~US$ 6B by FY29. Key trends driving this growth include the
development of more durable & high-strength ballistic protection materials and innovations in self-healing ballistic protection materials.
A key driver of this growth is the product life cycle, with replacement demand arising due to the limited operational lifespan of
equipment. Bulletproof vests typically have a life span of 5 years, while helmets have a shelf life of 10 years and an operational life of
7 years, requiring replacements due to normal wear and tear.

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As of CY23, India’s active military personnel stand at 1.5M, with the Army constituting the majority at 83%, followed by the Air Force
at 9% and the Navy at 4%. Other branches, such as paramilitary forces and coast guards, account for 4% of the total. In terms of internal
security, India employs 3.3M personnel, with 64% serving in state police forces and 30% in the Central Armed Police Forces. The
remaining personnel are distributed among traffic police (3%), special police units (1%), and other specialized branches like the CID
and crime branches (2%). The expanding scope of military operations, including peacekeeping missions & counter-terrorism activities,
is driving the need for versatile protective gear capable of adapting to diverse environments & threats. The expanding scope of military
operations, including peacekeeping missions and counter-terrorism efforts, demands adaptable protective gear suited to various
environments and threats. The industry increasingly focuses on developing innovative technologies, such as advanced ceramics, to
produce flexible and lightweight armor. Governments are prioritizing the quality-of-life soldiers by investing in lighter, safer equipment
that enhances operational efficiency in daily activities. Rising cross-border tensions with China and Pakistan, internal conflicts and
growing terrorism are further driving market growth.

5.5.1 Key trends in personal protective gear market

The army personal protective gear market for ballistic & armoured equipment is poised for substantial growth, fuelled by technological
advancements, increased military spending, & a focus on soldier safety & modernization. As threats evolve, the demand for innovative
& effective protective solutions will continue to rise, shaping the future landscape of military protective personal gears.

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5.5.2 Export potential
India’s personal protective gear sector has significant export potential, driven by government initiatives and the establishment of high-
quality standards. The Defence Production Policy, announced in CY11, aims for substantial self-reliance in defence equipment design,
development, and production while encouraging private industry and SMEs to play a larger role.

India has exported personal protective gear, including bulletproof jackets, to a lot of countries, meeting international standards through
its own Bureau of Indian Standards (BIS). India has its own national standards for bulletproof jackets that offer 360-degree protection.
This recognition has strengthened India’s reputation as a reliable exporter of high-quality protective gear, especially in regions with
growing defence needs. BIS standards have boosted exports by aligning Indian products with global quality and safety benchmarks,
enhancing their competitiveness. This has opened new markets, built trust with international buyers, and streamlined certification,
reducing trade barriers and driving innovation across industries.

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 Platform protective gear
market overview

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6. Platform protective gear market overview

6.1 Platform protective gear market overview – Global

Global platform protective gear market has shown steady growth, reaching ~US$ 42B in CY23, up from ~US$ 30B in CY18, driven by
a CAGR of 5.0% during CY18-22 and 14.7% during CY22-23. This segment, which includes protective equipment for defence
platforms like vehicles, aircraft, & marine vessels, is projected to continue its upward trajectory, reaching ~US$ 53B by CY28. This
growth reflects increased investments in defence modernization & the rising demand for advanced protective solutions across the globe.

6.1.1 Order book analysis for major air, land & sea defence equipment manufacturers
Defence sector shows strong overall growth, suggesting a potentially favourable environment for protective gear manufacturers. BAE
Systems order book value increased significantly from US$ 48.3B in CY21 to US$ 54.2B in CY23, indicating rising defence spending.
Airbus demonstrated consistent growth in its order book, rising from US$30.6B in CY21 to US$40.6B in CY23.

In the Indian market, HAL maintained a stable order book of ~INR 80,000 Cr across FY21-FY23, reflecting steady domestic demand
for air defence equipment. Armoured Vehicles Nigam Limited showed a substantial order book of INR 37,006 Cr in FY22, and INR
32,644 Cr in FY23, indicating significant investment in land-based defence systems. This growth in the defence equipment market is
expected to drive demand for component suppliers, thereby creating strong demand potential for protective equipment as well.

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6.2 Platform protective gear market overview – Indian
Indian platform protective gear market has been steadily expanding, with its value growing from ~US$ 7B in FY19 to ~US$ 9B in
FY24. Looking ahead, the market is projected to accelerate at a CAGR of 3.9%, reaching ~US$ 11B by FY29. This upward trajectory
is fuelled by India's push for defence modernization, with a strong emphasis on indigenization efforts to reduce dependency on imports
& enhance domestic manufacturing capabilities.

6.2.1 Indian platform protective gear market segmentation by type – Air, land & sea
The Indian platform protective gear market has shown notable growth across air, land, and sea segments, driven by advancements in:
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 • Lightweight composite ballistic protection,
• Metal armor
• Reactive armor
• Transparent armor (bullet-resistant glass) for vehicles
• Composite armor
• Hull reinforcement
• Anti-mine and anti-torpedo systems for naval platforms
• Lightweight composite ballistic protection for helicopters
• Cars for VVIPs

The market is dominated by the land segment with 40%, followed by air with 35%, and sea with 25% of the total market during FY24.
In FY19, the market was valued at ~US$ 7B, with the land segment leading at 43%, the air segment at 32%, and the sea segment at
25%. By FY29, the market is projected to reach ~ US$ 11B, with land accounting for 38%, followed by air (36%), and sea (26%). This
growth underscores India's commitment to strengthening its defence capabilities across all platforms.

6.2.2 India’s defence capabilities in comparison to key neighbouring adversaries' advisories & key global players
India's defence capabilities demonstrate a complex positioning compared to key global players like China, Pakistan, Russia, and the
USA. In land systems, India boasts a significant number of tanks (4,614) and armoured vehicles (151,248), surpassing Pakistan but
trailing behind China. However, in self-propelled artillery, India’s count is notably low at just 140 units. Air power reveals a similar
picture; while India operates 2,296 total aircraft, including 606 fighter aircraft, it still falls behind both China and the USA. Naval
capabilities show India with a total fleet strength of 294 ships, including two aircraft carriers, which matches China’s capacity but is
less than that of the USA. Overall, while India has robust numbers in certain categories, there remains a need for modernization and
enhancement to fully match the capabilities of leading global military powers.

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6.3 Key use cases & applications of platform protective gear
Defence platform protective gear encompasses various types of protection equipment designed to safeguard military vehicles, naval
vessels, & aircraft from ballistic threats, small arms fire, explosives, bullets, & fragments, etc. The ability of modern military vehicles
and their crews to survive depends on the vehicles' capacity to endure blasts and shrapnel from improvised explosive devices. To counter
these threats, effective armouring systems are essential for ensuring sufficient protection for armed forces.

6.4 Value chain & manufacturing overview of platform protective gear

Production of platform protective gear involves a sophisticated value chain that spans from raw material procurement to distribution to
end users. This process includes several critical stages: component manufacturing, assembly & inspection, packing & storage, &
distribution. Essential platform protective gear components—such as vehicle, naval, & aircraft armor - undergo a detailed production
process, which includes making composite panels of materials such as boron carbide, UHMWPE, etc. These are shaped into armor
panels with careful inspection & quality control & delivered to its final recipients, which may include military vehicles, navy vessels,
military aircraft, & helicopters. The efficiency & quality of this value chain are vital to ensuring the safety & protection of individuals
in hostile environments.

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6.5 Key trends in platform protective gear market
The platform protective gear market is shaped by trends such as evolution towards multi-threat protection, increasing demand for
lightweight armor, integration of advanced technologies, use of advanced material, & focus on modular & scalable armor systems.
These trends highlight the ongoing evolution of platform protective gear, emphasizing the need for advanced solutions that enhance
protection, operational effectiveness, & adaptability in modern warfare.

6.6 Export potential

India's defence exports have experienced remarkable growth, achieving a CAGR of 32.5% between FY22-23, with exports reaching
over INR 21,083Cr in FY24. India's platform protective gear export potential is bolstered by its growing defence diplomacy and strategic
partnerships. Through signed MoUs with countries such as Bangladesh, Zimbabwe, and Kenya, India has expanded its defence exports,
including mobility vehicles and armoured personnel carriers.

Recent exports, such as ambulances to Kenya, high-powered trucks to the Thai army, and armoured vehicles to the Guyana police force,
highlights India's increasing role in global defence supply. The government's creation of defence Lines of Credit has further facilitated
these exports, with countries like Vietnam, Bangladesh, and Kyrgyzstan benefiting from this initiative.

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 Ammunition market

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7. Ammunition market

7.1 Overview of ammunition and value chain & manufacturing

7.1.1 Overview of ammunition

Ammunition, is a critical component of war equipment serves as a fundamental component of military combat readiness, is essential
for the operational effectiveness of armed forces. It is categorized into three primary types based on calibre: small-calibre, medium-
calibre, and large-calibre.

Small-calibre ammunition typically refers to calibres smaller than 14.7 mm. Small-calibre ammunition encompasses a variety of
calibre sizes, including 5.56 mm, 7.62 mm, 9 mm, and 12.7 mm, each designed for specific applications. The 5.56 X 45 mm NATO
round is widely used by both the Indian armed forces and paramilitary units. For precision shooting, machine guns, and single-shot
rifles, the 7.62 X 51 mm and 12.7 X 99 mm NATO rounds are favoured. In contrast, 9 mm, .38 calibre, and .45 ACP are the standard
choices for pistols, employed by military and law enforcement personnel.

Medium-calibre ammunition covers calibres between 20 mm and 60 mm. Medium-calibre ammunition encompasses high-
performance rounds in the 20 mm, 25 mm, 30 mm, and 40 mm range. In India, Infantry Fighting Vehicles (IFVs) predominantly utilize
30 mm ammunition of Soviet or Russian origin, while newer platforms are increasingly adopting NATO-standard ammunition. This
type of ammunition is also commonly employed in aircraft, anti-aircraft artillery, and naval ships, which are equipped with autocannons
featuring calibres between 20 mm and 40 mm. Medium-calibre ammunition, used in machine guns, has larger projectiles & more
propellant for extended range. These versatile munitions are integral to modern defence systems, providing robust firepower across
various military platforms.

Large-calibre ammunition refers to calibres greater than 60 mm. Large-calibre ammunition, used in land & naval artillery, tanks, and
Infantry support weapons incorporates advanced propellant systems & electronic components like fuses & guided systems. Large-
calibre ammunition typically refers to the ammunition of 105 mm and 120 mm calibres, widely used in military applications. The Indian
Navy, for instance, employs 76 mm naval guns across its major surface combatant vessels. Additionally, the Indian Army is progressively
standardizing its artillery on 155 mm calibre systems, aiming to enhance operational efficiency and firepower consistency across its
artillery units. It is important to note that the manufacturing facilities for large-calibre ammunition cannot be adapted for small-calibre
production due to the distinct technical requirements involved in handling and producing different calibre sizes. Each calibre requires
specialized infrastructure and equipment tailored to its specific production demands.

The War Wastage Reserve (WWR) consist of military materials held in reserve for potential wartime needs, including bullets, rockets,
missiles, weapons, and fuel. The Indian government has revised the WWR policy, aiming to stock enough ammunition for 40 days of
intense warfare, allowing sufficient time for production to ramp up and meet military demands. Recent global events such as the Russia-
Ukraine conflict and escalating border tensions with China have necessitated a significant increase in these reserves. This shift is
expected to create substantial demand for ammunition over the coming years of particular note is the fact that only about 200 of the 410
Bofors guns in India remain operational. Additionally, with the inclusion of 155mm ammunition in India’s positive indigenization list
and the ban on imports effective since December 2022, the responsibility for meeting this growing demand falls on domestic
manufacturers, further highlighting the need for modernization and private sector involvement in defence production.

7.1.2 Value chain & manufacturing

The ammunition value chain begins with raw material procurement & ends with distribution to the end consumer. The process includes
stages such as sourcing raw materials (metals, chemicals, & packaging materials), and manufacturing components (shell, cartridge, fuse
& primer). This is followed by quality control & testing (including visual, dimensional, & weight inspection, as well as quality testing),
& then packaging & storage (including packing, lot & batch number assignment, & storage). The final stage is the distribution to the
end consumer, which includes the military and special police forces.

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7.2 Global ammunition market
Global conflicts & geopolitical tensions have sharply increased, driving higher demand for ammunition worldwide. Conflicts in regions
like Eastern Europe, the Middle East, & parts of Asia have underscored the need for strong defence capabilities. Additionally, the rise
of non-state actors & insurgency has led governments to enhance internal security, with law enforcement agencies increasingly relying
on advanced ammunition. In response, the ammunition industry is rapidly expanding, with countries boosting production, investing in
R&D, & forming alliances to secure a steady supply of advanced munitions. As global security concerns rise, the ammunition industry
plays a crucial role in protecting nations & maintaining stability. The global ammunition market is experiencing significant growth,
with demand in CY23 valued at ~US$ 16B. The market is expected to reach a value of ~US$ 19B in CY28 growing at a CAGR of
4.2%. The volumetric demand for small-calibre ammunition in CY23 was estimated at 2.3B rounds. The demand across various calibres
was estimated at 36.0M rounds for medium-calibre ammunition. The demand for heavy-calibre ammunition was projected to reach
around 1.8M rounds in CY23. In other categories, such as grenades, mortars, and mines, the global demand was estimated at 1.8M units.
Additionally, the global demand for loitering ammunition in CY23 was estimated at 94K units.

North America holds the largest share in the global ammunition market at 34%, followed closely by Asia Pacific with 30%. Europe
accounts for 20% of the market, highlighting its significance in the global supply of ammunition. Latin America and the rest of the
world have smaller shares, representing 7% and 9% respectively. This regional distribution underscores North America and Asia Pacific
as key players, driven by their large defence expenditures and modernization efforts in military capabilities. Meanwhile, Europe
maintains a considerable portion, influenced by geopolitical tensions and defence initiatives. Latin America and other regions though
relatively smaller, offer good market opportunities.

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7.2.1 Global ammunition market breakdown by various types – Small, medium & large
In CY23, large calibre (>60mm) holds the largest market share at ~53%, followed by medium calibre (20-60 mm) at ~13% & small
calibre (< 14.7mm) at 7%. The large calibre segment is projected to achieve the highest CAGR of ~5% during both CY18-23 and
CY23-28. This significant growth is primarily driven by the increasing utilization of 155mm ammunition.

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7.3 Indian ammunition market
The Indian ammunition industry is rapidly expanding, driven by strategic initiatives & urgent security needs. Key factors include
increasing geopolitical tensions, the necessity to replenish national stockpiles, a comprehensive modernization program, & the push for
self-reliance. The government has decided to reduce ammunition imports and instead procure ammunition requirements from domestic
sources. Previously, only the state-owned Ordnance Factory Board was permitted to produce ammunition and India’s private sector was
only allowed to manufacture parts of ammunition such as the shell or fuse. However, the MoD under its ‘Make in India’ and
‘Atmanirbhar Bharat’ initiatives is encouraging the private sector to manufacture ammunition in India. The MoD has already introduced
the fifth Positive Indigenisation List, which includes plans to stop the import of all types of ammunition by 2025.
To maintain military readiness & meet annual training requirements, India focuses on maintaining & replenishing its ammunition
stockpile, ensuring sufficient supplies for sustained operations. The Indian ammunition market is currently valued at US$ 659M in
FY24, it is expected to grow at a CAGR of 5.8% to reach a value of US$ 1,174M by FY29.

7.3.1 Indian ammunition market breakdown by various types – Small, medium & large
Ammunition's shelf life varies depending on its composition, storage, & manufacturing processes & must be managed according to
Directorate General of Quality Assurance (DGQA) guidelines, which ensure the quality & reliability of Indian military equipment. In
FY24, medium calibre (20-60 mm) holds the largest market share at ~37%, followed by large calibre (>60mm) at ~21% & small calibre
(< 14.7) at 11%. Large calibre ammunition is projected to experience the highest CAGR of ~8% during FY23-29, building on its
impressive CAGR of ~9% from FY19-24. This growth is driven by a rationalization plan aimed at conversion to 155 mm ammunition,
supported by the Make in India initiative, which promotes domestic production. The initiative also aims to position India as a global
player in ammunition exports, aligning with the vision of to make for the world.

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7.4 Key growth drivers of ammunition market
The Indian ammunition industry is rapidly expanding, fueled by strategic initiatives & urgent security requirements. Key factors behind
this growth include rationalization plan for Indian artillery, the necessity to replenish national stockpiles, an extensive modernization
program, & the nation's commitment to achieve self-reliance.

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7.5 Cost analysis of ammunition
The cost composition of ammunition components is a critical factor in the overall production & procurement process. Ammunition
comprises several key components, each contributing differently to the total cost. The projectile, which includes the bullet or warhead,
represents the largest cost share (40-50%), reflecting its complexity & material requirements. The propellant, responsible for the
combustion process that propels the projectile, also commands a significant portion of the cost (25-30%). Additionally, the cartridge
casing (12-20%) & the primer (10-13%), which initiates ignition, contribute to the overall expense, though to a lesser extent.
Understanding the cost distribution among these components is essential for optimizing production efficiency & budgeting in defence
manufacturing.

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Combustible cartridge cases offer several benefits compared to traditional brass cases. They are entirely combustible, eliminating the
presence of spent cases. This leads to a better crew compartment environment by reducing toxic fumes and minimizing clutter from
spent metals. Additionally, these cartridges can enhance firing rates and decrease barrel wear. In large calibre bi modular charge system
is used. It consists of two types of modules: the bottom Charge module, designed for short-range fire and comprising one Zone-1 module
and two Zone-2 modules, and the top Charge module, which covers long and maximum ranges with three to six modules spanning
Zones 3 to 6. BMCS offers significant advantages over traditional charges, including simpler operations and reduced logistical demands
for storage, transportation, and combat scenarios. It enables effective firing distances from 5 to 43 km with sufficient range overlap.
Key benefits include enhanced safety due to uniform modules, ease of tactical firing, elimination of residual charge demolition, and a
longer shelf life. Furthermore, the modular charge system can be utilized with any 155mm gun firing systems (39, 45, and 52 calibre)
due to its flexible design and military background.

7.6 Key trends in ammunition

Ammunition is an essential element of military equipment and weapons, serving as a fundamental component of armed forces. In recent
years, the Indian defence sector has witnessed a remarkable transformation, driven by strategic initiatives and a commitment to boosting
domestic manufacturing capabilities. This evolution not only addresses the growing demand for sophisticated ammunition but also
aligns with broader defence reforms aimed at strengthening national security. Key trends in ammunition market include a strong push
towards indigenization under the "Make in India" initiative, increased private sector participation, & significant investments in advanced
technologies such as drones, cybersecurity, & space defence. This shift aims to enhance self-reliance, modernize the armed forces, &
position India as a global defence exporter.

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7.7 Impact of indigenization policy
The indigenization policy in India is a strategic initiative aimed at reducing the country's dependence on imports for defence equipment
& enhancing self-reliance by promoting the development & procurement of defence items from domestic manufacturers. This policy is
part of the broader "Atmanirbhar Bharat" (self-reliant India) vision, which seeks to boost the domestic defence industry, including both
public & private sector enterprises. Under this policy, the MoD has introduced 5 Positive Indigenisation List, which are lists of defence
items that are banned for import and can only be purchased from Indian manufacturers. These lists include a wide range of items, from
major systems & platforms to smaller components, & ammunition (such as 155 mm) to foster indigenous production capabilities.

Strategic autonomy: By indigenizing ammunition production, India reduces its reliance on foreign suppliers, ensuring a steady &
secure supply chain during geopolitical tensions or crises. The defence industry is now capable of manufacturing a wide variety of
ammunition for various weapon systems like tanks, artillery guns, air defence missiles, and grenade launchers. Rapid progress has been
made towards achieving complete “Aatmanirbharta” in the manufacturing of ammunition required by our armed forces within the
country.

Import substitution: Due to targeted policies like the ‘DAP 2020’ & the PILs, India's dependency on imported ammunition has
significantly decreased. These policies mandate that specific defence items, including ammunition, are procured exclusively from
domestic manufacturers, drastically cutting import costs & reinforcing self-reliance.

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Increased export potential: India's strengthened indigenous defence manufacturing capabilities have notably increased its export
potential. In 2022, the country exported US$ 72.9M in explosive ammunition, ranking as the 26th largest exporter globally. A key player
in this success is Yantra India Limited (YIL), a prominent state-owned defence production company, which is witnessing a surge in
demand for its 155mm artillery shells. YIL's success builds upon the groundwork established by Munitions India Limited (MIL), another
Indian defence public sector undertaking (PSU). In February 2024, MIL achieved a significant milestone by securing its largest export
order to date—a US$ 225M contract with Saudi Arabia for 155mm artillery shells. This growth in exports can be attributed to supportive
policies, such as indigenization, which facilitate the development of advanced ammunition technologies, thereby enabling India to
emerge as a competitive player in the global defence market.

Increased domestic procurement: India has cultivated a supportive environment for its domestic defence industry, allowing local
companies to flourish and contribute significantly to the nation's overall development. The Indian Army plans to award contracts to two
companies for the supply of 155mm terminally guided munitions projectiles, with a delivery rate of 197 TGM per year, along with 170
fire control systems, 87 projectile simulators, and 87 projectiles for its operational artillery guns. Along with this, all types of 155mm
ammunition have been made available for private-sector participation. Trials are scheduled for October and November, involving
various private and public companies. This strategic initiative bolsters the domestic defence sector, fostering the development of
indigenous defence products by reducing competition from imports.

7.8 Regulatory compliances for setting up a defence company in India

The defence manufacturing industry in India for these products presents high entry barriers for new players due to significant capital
investments needed to establish manufacturing facilities, the need to customise products for the environment of use, requirement of
specific licenses like Defense Industrial License under IDR Act 1951 & Arms Act and contiguous land parcels for to set up facilities so
that safety distances mandated by the Explosive Rules, 2008 for factories licensed for the manufacture and storage of explosives can be
adhered, and the lengthy customer approval cycles. In addition, to set up facilities in compliance with applicable laws, licensing and
certification requirements for products and need to comply with other legal requirements including using minimum 50% indigenous
content to be eligible to supply products to the Ministry of Defence, Government of India pursuant to certain schemes further increase
the entry barriers. Key barriers include stringent regulatory compliance, adherence to quality and safety standards, intense competition
and market dominance, and substantial capital investment requirements. Collectively, these factors present considerable obstacles for
newcomers attempting to enter the Indian defense manufacturing sector.

Establishing a defence company in India requires adherence to various regulatory and statutory requirements to ensure compliance and
operational efficiency. Key areas of compliance include licensing, export-import regulations, taxation, environmental regulations, labour
and employment laws.

To begin, companies must notify the concerned ministries regarding the defence equipment they intend to manufacture or assemble.
This step is crucial for obtaining the required licenses and clearances. The Ministry of Home Affairs (MHA) and the Department of
Promotion of Industry and Internal Trade (DPIIT) play a significant role in issuing licenses for a range of defence-related items,
including small arms and ammunition, tanks, warships, defence aircraft, spacecraft, and allied equipment.

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Moreover, defence companies in India are obligated to comply with various labour and employment laws that regulate wages, employee
benefits, safety standards, and working conditions. This ensures a fair and safe working environment for employees.

7.9 Export potential

In FY24, India exported ammunition, totalling 4.7M units, largely consisting of small-calibre ammunition & machined components. As
per DGFT India has exported ~US$ 437B of arms and ammunition (including parts and accessories thereof) in FY24. The Make in
India policy's focus on defence indigenization has significantly boosted private sector participation in ammunition manufacturing,
expanding both domestic production & export potential.

India is focusing on improving its exports for defence products. Some of the major ones being:
• Personal protective items
• Offshore patrol vessels
• Advanced light helicopter
• SU avionics
• Bharati radio
• Coastal surveillance systems
• Kavach MoD II launcher and FCS
• Spares for radar
• Electronic system
• Light engineering mechanical parts

Leveraging both private & public sector capabilities, the army plans to largely eliminate ammunition imports in the coming years. This
strategic shift not only reduces costs but also positions India as a key global supplier, with companies like Munitions India Limited
(MIL) & other private firms.

India's defence sector is rapidly expanding its ammunition production capacity, with both public and private players enhancing output.
Major players contributing to this growth include:
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 • Adani Defence has two major facilities producing 150M rounds small calibre ammunition, annually. It also plans to produce
medium & large calibre ammunition as well.
• Economic Explosives has secured a contract worth INR 212 Cr for loitering munitions.
• Bharat Forge, approved to produce a wide range of ammunition.
• Saarloha Advanced Materials a subsidiary of Kalyani group specializing in specialty steels for critical applications, partnered
with Arsenal J.S. Co (Bulgaria) to bid for Indian army ammunition supply.
• AAN Engineering a subsidiary of Rico Auto Industries focusing on structural metal products, partnered with SFTE Spetstechno
Export (Ukraine) to bid for Indian army ammunition supply.
• SMPP Ammunition Private Limited has been allocated 800 acres of land by the Deputy Director of Industries, Single Window
Clearance Agency, Nalagarh, Distt. Solan, Himachal Pradesh (“Government of HP”) situated at Plot no. 01, Industrial Area,
Lakhanpur, Tehsil Nalagarh, Distt. Solan (Himachal Pradesh), India for setting up their manufacturing facility.

Munitions India, formed in CY21 (erstwhile ordnance factory board), has already achieved significant export milestones, with orders
totalling INR 1,726 Cr in FY24, with a robust order book from international clients. Inspired by successful ammunition export models
in countries like the UK, France, & South Africa, India is now capitalizing on global supply chain disruptions caused by ongoing
conflicts. The Indian Army's 10-year ammunition plan in CY23, which has reached 85% indigenization, includes securing supply chains
& improving quality, with over 30 variants of ammunition being indigenized, further strengthening India’s defence sector.

Indian government is actively promoting defence exports through a range of initiatives, some of the major ones being:
• Establishment of a dedicated export promotion body to develop strategies, coordinate schemes, and market defence products
internationally.
• The Defence Export Steering Committee (DESC) monitors sensitive exports and fosters collaboration among stakeholders.
• Export financing mechanisms, such as EXIM Bank and buyer’s credit, support sales to economically weaker nations.
• Offset policies are aligned to boost export capabilities by incentivizing technology acquisition and integrating defence systems
for global markets.

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 SWOT Analysis
Competitive benchmarking

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8. SWOT for the defence industry
The defence protective equipment & ammunition industry is a significant contributor to India’s defence sector. While the sector
faces threats such as regulatory hurdles, geopolitical situations & supply chain challenges, it also benefits from strong government
support and a skilled workforce. The increasing demand for indigenous manufacturing, driven by initiatives like "Make in India,"
provides substantial growth opportunities, positioning the industry for a pivotal role in enhancing national defence capabilities.

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 Competitive Benchmarking
benchmarking

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9. Competitive benchmarking
The defence protective equipment & ammunition industry is a significant contributor to India’s defence sector. While the sector
faces threats such as regulatory hurdles, geopolitical situations & supply chain challenges, it also benefits from strong government
support and a skilled workforce. The increasing demand for indigenous manufacturing, driven by initiatives like "Make in India,"
provides substantial growth opportunities, positioning the industry for a pivotal role in enhancing national defence capabilities.

9.1 Company overview

SMPP Limited: Established in 1985 by an alumna of IIT, SMPP Ltd is a manufacturer of critical defence equipment, including personal
protection, platform protection, and ammunition, with global sales. Provided to only selected companies in India, the SM Group holds
a defence/industrial license from the Ministry of Defence, Government of India, as an approved manufacturer of combustible cartridges,
bulletproof vests, helmets & shields, vehicle armor, and aircraft armor. SMPP Ltd is equipped with state-of-the-art infrastructure,
including an in-house testing laboratory.

SMPP Ltd operates in two main sectors: the production of ballistic protection products and the manufacturing of ammunition. In the
realm of ballistic protection, the company specializes in personal protection products, including ballistic vests, helmets, and shields.
In the field of personal protection products, they have obtained multiple patents and became the first company in India to secure a patent
for a protective band specifically designed to improve the defence capabilities of bullet-resistant helmets against hard steel core bullets
fired from AK-47 rifles. Furthermore, they have also secured a patent for this product in the United States. SMPP Ltd is the market
leader in India of personal ballistic protection products made of composites, in terms of value of domestic government orders awarded
in FY 2024.For platform protection, they provide armour for vehicles, naval, and aircraft. Additionally, the company is engaged in the
manufacturing of combustible cartridges. In the coming year, SMPP Ltd plans to establish a new facility which is anticipated to be the
largest private-sector ammunition manufacturing site in India, covering an area of 800 acres.

Additionally,
SMPP Ltd is among the few armour manufacturing companies in India to manufacture bullet resistant boron carbide plates. From the
powder stage to the final ceramic plate, SMPP Ltd utilizes innovative, unique, and cutting-edge technologies to guarantee that its
products adhere to international quality standards. SMPP Ltd was the first Indian company to receive BIS certification under the BIS
17051:2018 standards for bullet-resistant jackets. Additionally, they are the only Indian company to possess three body armour
certifications: BIS 17051:2018 (bullet-resistant jackets), BA 9000:2016 (quality management system for various products), and certain
models certified by the National Institute of Justice (NIJ) 01.01.06 (ballistic-resistant body armour) and have been listed on the
Compliant Product List of National Institute of Justice, USA.

9.2 Peer overview

MKU Limited (MKUL): MKU Limited, formerly known as M Kumar Udyog was established in 1985 as an Indian defence and
homeland security company. With deep expertise & understanding of the challenges faced by the military forces on the frontline, coupled
with extensive R&D capabilities, it has specialized in advanced personal and ballistic protection solutions. It also offers range of
optronics solutions such as night vision and thermal weapon sights, , monocular & binocular hand held devices.

TATA Advanced Systems Limited: TATA Advanced Systems Limited is a wholly owned subsidiary of Tata Sons. It is a private player
in India’s aerospace and defence sector. It offers end-to-end solutions, including aerostructures and aero engines, airborne platforms and
systems, defence & security, and land mobility solutions. With robust capabilities, resources, and scale, these integrated systems span
hardware, software, technology, and digital innovations.

Star Wire (India) Limited: Star Wire (India) Limited was established in 1991 as a manufacturer of critical components and special
steels. It manufactures steels in the form of castings, forged, and rolled products through its sustained and dedicated efforts. Along with
this, Star Wire (India) Limited offers bulletproof jackets tailored to meet the demands of defence and paramilitary forces. It also has a
subsidiary called Starwire Engineering Limited which is equipped with precision machining infrastructure, critical welding capabilities,

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and assembly facilities. It serves sectors such as steam, gas, nuclear, IST, and hydro turbines, in addition to supplying aerial ammunition
hardware.

Troops Comforts Limited: Troop Comforts Limited was established in CY21 as a wholly owned government defence public sector
undertaking under the Ministry of Defence. The company specializes in manufacturing a wide range of clothing and accessories for the
Indian Armed Forces, including ballistic protection gears, uniforms suitable for extreme climates, life cycle clothing, mountaineering
equipment etc. Troop Comforts envisions to contribute to a self-reliant India in technical textiles and apparel.

Kalyani Strategic Systems Limited: Kalyani Strategic Systems Limited was established in 1966 as a wholly owned subsidiary of
Bharat Forge Limited, designed to lead defence initiatives. With over five decades of expertise in design, engineering, metallurgy, and
manufacturing, the Kalyani Group is an auto component exporter, with a durable global customer base. Leveraging its metallurgical
and engineering strengths, Kalyani is in artillery and export market with products like artillery systems, protected vehicles, armoured
upgrades, ammunition, air defence solutions, small arms, and defence electronics.

Adani Defence Systems and Technologies Limited: Adani Defence Systems and Technologies Limited is a subsidiary of Adani
Enterprises Limited. It deals in products such as unmanned systems, counter drone systems, small arms & accessories, ammunition,
missiles, and aircraft service & MRO. It focuses on critical technologies and platforms along with an approach beyond assembly, testing,
and integration (ATI), it is also involved in sub-systems and component-level manufacturing.

Munitions India Limited: Munitions India Limited is a wholly owned government company operating under the Department of
Defence Production in the Ministry of Defence. It specializes in manufacturing a wide range of products, including small and large arms
ammunition, explosives, detonators, primers, projectiles, propellants, specialized chemicals, mines, grenades, charges, and bombs.

Premier Explosives Limited: Premier Explosives Limited was established in 1980 and focuses on manufacturing explosives and
detonators using indigenous technology. The company offers an extensive range of products and technologies, including emulsion and
slurry explosives, LD cartridge explosives, bulk explosives, cast boosters, detonating fuses, and various types of detonators, including
electric and non-electric options.

Hindustan Aeronautics Limited: Hindustan Aeronautics Limited was formed in 1964, through an amalgamation of Hindustan Aircraft
Limited and Aeronautics India Limited. The company specializes in the design, development, manufacture, repair, and overhaul of
aircraft, helicopters, engines, and related systems, including avionics and accessories. It is committed to innovation and excellence,
offering a diverse range of products and services catering to both military and civilian aviation needs.

Bharat Electronics Limited: Bharat Electronics Limited established in 1954 under the Ministry of Defence meets the specialized
electronic needs of the Indian armed forces. It provides advanced products and systems across various sectors, including radars, missile
systems, and electronic warfare. It also excels in the non-defence arena with its tamper-proof electronic voting machines, enhancing
electoral transparency in India.

Solar Industries Limited: Solar Industries Limited, established in 1995, specializes in the production of a comprehensive range of
industrial explosives and explosive initiation devices. The company manufactures different types of packaged emulsion explosives, bulk
explosives, and initiation systems. Additionally, it has expanded its operations to include the production of ammunition for military
applications.

Data Patterns (India) Limited: Data Patterns was established in 1985 as a vertically integrated provider of defence and aerospace
electronics solutions, focusing on the indigenously developed defence products industry. The company specializes in high-reliability
electronics for various applications, including radar systems, electronic warfare, rugged displays, fire control systems, and launch
vehicle check-outs. It has an extensive product range encompassing advanced technologies supported by in-house software development
for seamless integration and functionality.

MTAR Technologies Limited: MTAR Technologies, established in 1970, is an Indian company specializing in precision engineering.
It manufactures mission-critical precision components and critical assemblies for projects of high national importance. It addresses

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engineering needs from design to manufacturing and integration. The company also operates an export-oriented unit that serves leading
multinational clients in the fuel cell, oil, energy, and aerospace sectors.

Astra Microwave Products Limited: Astra Microwave Products Limited, incorporated in 1991, began with designing and
manufacturing microwave products like filters, transmitters, and antennas. The company advanced into producing space-borne hardware
for Indian satellites. It further expanded its production into other critical sectors with a wide range of solutions in microwave and
millimetre-wave technologies for defence, homeland security, space, and telecommunications.

Bharat Dynamics Limited: Bharat Dynamics Limited was incorporated in 1970 as a public sector undertaking under the Ministry of
Defence, India. It was established as the manufacturing hub for guided missile systems and allied equipment for the Indian Armed
Forces. Today, it produces guided missiles, underwater weapons, airborne products, and other defence equipment while also providing
product life cycle support, including refurbishment and life extension for vintage missiles, ensuring the readiness of defence assets.

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9.3 Operational benchmarking
Revenue from sale of products (domestic)

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Revenue from sale of products (exports)

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Revenue from operations (protection products, INR Million)

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Revenue from operations (ammunition components, INR Million)

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9.4 Quarterly financial benchmarking
Revenue from operations:

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Revenue growth:

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Earnings before interest, taxes, depreciation, and amortization (EBITDA):

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EBITDA margin (%):

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Profit after tax (PAT):

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PAT margin (%):

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Notes:
( NA) Indicates information that is not available
*Majority of batching plants are owned & operated by 3 rd party
Source: Consolidated financial information for SMPP Limited have been derived from restated financial statements for the
quarter ended June 30, 2024, June 30, 2023.
Premier Explosives Limited’s consolidated financials have been derived from official BSE website for the quarter ended June
30, 2024, June 30, 2023.
Hindustan Aeronautics Limited’s consolidated financials have been derived from official BSE website for the quarter ended
June 30, 2024, June 30, 2023.
Bharat Electronics Limited’s consolidated financials have been derived from official NSE website for the quarter ended June
30, 2024, June 30, 2023.
Solar Industries India Limited’s consolidated financials have been derived from official NSE website for the quarter ended June
30, 2024, June 30, 2023.
Data Patterns (India) Limited’s financials have been derived from official BSE website for the quarter ended June 30, 2024,
June 30, 2023.
Mtar Technologies Limited’s consolidated financials have been derived from official BSE website for the quarter ended June
30, 2024, June 30, 2023.
Astra Microwave Products Limited’s consolidated financials have been derived from official BSE website for the quarter ended
June 30, 2024, June 30, 2023.
Bharat Dynamics Limited’s financials have been derived from official BSE website for the quarter ended June 30, 2024, June
30, 2023. Financials for quarter ended June 30, 2024, June 30, 2023 are standalone.
Revenue from Operations for the year/ period as appearing in the restated consolidated financial information.
Revenue growth (%) is calculated as a percentage of Revenue from Operations of the relevant year/ period minus Revenue from
Operations of the preceding year/ period, divided by Revenue from Operations of the preceding year/ period.
EBITDA is calculated as restated profit for the year/ period minus other income plus finance costs, depreciation and
amortisation, total income tax expenses.
EBITDA Margin (%) is calculated as EBITDA divided by Revenue from Operations
PAT means Restated profit for the year/ period as appearing in the restated consolidated financial information
PAT Margin (%) is calculated as Profit for the year/ period as a percentage of Revenue from Operations

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9.5 Yearly financial benchmarking

Revenue from operations:

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Revenue growth:

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Earnings before interest, taxes, depreciation, and amortization (EBITDA):

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EBITDA margin (%):

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Profit after tax (PAT):

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PAT margin (%):

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Net debt:

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Net Debt to EBITDA margin (in times):

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Return on equity:

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Return on capital employed:

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Cash conversion cycle:

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Net fixed assets turnover ratio:

Notes:
( NA) Indicates information that is not available
*Majority of batching plants are owned & operated by 3rd party
Source: Consolidated financial information for SMPP Limited have been derived from restated financial statements for the financial
years ended March 31, 2024, March 31, 2023, and March 31, 2022. RDC
Consolidated financial information for MKU Limited have been derived from MCA for the financial years ended March 31, 2023,
and March 31, 2022.
Consolidated financial information for TATA Advance Systems Limited have been derived from MCA for the financial years
ended March 31, 2023, and March 31, 2022.
Star Wire (India) Limited’s financials have been taken from MCA document for the financial year ended March 31, 2023, and
March 31, 2022. Financials for year ended March 31, 2023, and March 31, 2022 are standalone
Troops Comforts Limited financials have been derived from official company website for the financial year ended March 31, 2023,
and March 31, 2022.

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Kalyani Strategic Systems Limited’s financials have been taken from MCA document for the financial year ended March 31, 2023,
and March 31, 2022. Financials for year ended March 31, 2023, and March 31, 2022 are standalone.
Adani Defence Systems and Technologies Limited financials have been derived from official company website for the financial year
ended March 31, 2024, and March 31, 2023.
Munitions India Limitedfinancials have been taken from MCA document for the financial year ended March 31, 2023, and March
31, 2022. Financials for year ended March 31, 2023, and March 31, 2022 are standalone.
Premier Explosives Limited’s consolidated financials have been derived from official company website for the financial year ended
March 31, 2024, March 31, 2023, and March 31, 2022.
Hindustan Aeronautics Limited’s consolidated financials have been derived from official company website for the financial year
ended March 31, 2024, March 31, 2023, and March 31, 2022.
Bharat Electronics Limited’s consolidated financials have been derived from official company website for the financial year ended
March 31, 2024, March 31, 2023, and March 31, 2022.
Solar Industries India Limited’s consolidated financials have been derived from official company website for the financial year
ended March 31, 2024, March 31, 2023, and March 31, 2022.
Data Patterns (India) Limited’s financials have been derived from official company website for the financial year ended March 31,
2024, March 31, 2023, and March 31, 2022.
Mtar Technologies Limited’s consolidated financials have been derived from official company website for the financial year ended
March 31, 2024, March 31, 2023, and March 31, 2022.
Astra Microwave Products Limited’s consolidated financials have been derived from official company website for the financial year
ended March 31, 2024, March 31, 2023, and March 31, 2022.
Bharat Dynamics Limited’s financials have been derived from official company website for the financial year ended March 31, 2024,
March 31, 2023, and March 31, 2022. Financials for year ended March 31, 2024, March 31, 2023, and March 31, 2022 are
standalone.

Revenue from Operations for the year/ period as appearing in the respective financial statements of these companies.
Revenue growth (%) is calculated as a percentage of Revenue from Operations of the relevant year/ period minus Revenue from
Operations of the preceding year/ period, divided by Revenue from Operations of the preceding year/ period.
EBITDA is calculated as restated profit for the year/ period minus other income plus finance costs, depreciation and amortisation, total
income tax expenses.
EBITDA Margin (%) is calculated as EBITDA divided by Revenue from Operations
PAT means profit for the year/ period as appearing in the respective financial statements of these companies.
PAT Margin (%) is calculated as Profit for the year/ period as a percentage of Revenue from Operations
Net Debt is calculated as total of non-current borrowings and current borrowings minus total of cash and cash equivalents and bank
balances.
Net Debt to EBITDA is calculated as Net Debt divided by EBITDA. Net Debt is calculated as total of non-current borrowings and
current borrowings minus total of cash and cash equivalents and bank balances.
Return on Equity is calculated as profit for the year/ period divided by total equity.
Return on Capital Employed is calculated as EBIT divided by capital employed. Capital employed is calculated as total current assets
minus current liabilities. EBIT is calculated as profit before tax plus total finance costs.
Cash Conversion Cycle (Days)
• For Fiscal 2024 and 2023, cash conversion cycle is calculated as Inventory days plus Trade receivable days minus Trade
payable days. Inventory days is calculated as Average Inventory divided by Cost of Goods Sold (‘COGS’) multiplied by 365
days.
• Trade receivable days is calculated as Average Trade receivables divided by revenue from operations multiplied by 365 days.
• Trade payable days is calculated as Trade payable divided by COGS multiplied by 365 days.
• Cost of Goods Sold (‘COGS’) which is a sum of the cost of raw materials and components consumed, (increase)/decrease in
inventories of finished goods, work-in-progress, scrap, purchase of traded goods and cost of services
Net Fixed Assets Turnover Ratio is calculated as revenue from operations for the year/period divided by net cost of property, plant, and
equipment.

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