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India's Defence Industry Seeks to Boost Exports Amid Government's "Make in India" Initiative

Strategic Insights

— 2 min read

As the country's defence industry witnesses a significant push into overseas markets following a brief but fierce military assault on Pakistan, companies such as BrahMos and Raphe mPhibr are leveraging the market's potential. The "Make in India" initiative, aimed at boosting manufacturing by exporting homemade industrial products, has garnered significant attention, with Indian forces using systems in harsh terrains and reporting successful outcomes. This validation has become a testament to the performance and capabilities of Indian-made systems, sparking interest among other countries.

Key Takeaways:

  • The Indian defence industry is making a push into overseas markets, driven by the government's "Make in India" initiative, with companies such as BrahMos and Raphe mPhibr seeking to capitalize on the growing demand for Indian-made systems.
  • Raphe mPhibr, a drone start-up, raised $100mn in June, achieving a near-$1bn valuation, partly due to expectations of increased overseas sales of its swarm-capable, vertical take-off and landing mR10 and mR10-IC models.
  • The Indian government aims to more than double its defence exports to Rs500bn ($5.8bn) by 2029, with Defence Minister Rajnath Singh stating that the global demand for indigenous products has increased significantly following Operation Sindoor.
  • India has been a significant importer of arms, buying from the US, France, Israel, and others, but is now looking to export its own defence products, including BrahMos anti-ship missiles and Akash air defence systems.
  • Indian companies such as Tata, Adani, and Larsen & Toubro have established defence arms, partnering with foreign producers under joint venture and "offset" arrangements to boost indigenous defence production.
  • The government is open to marketing Akash air defence systems and artillery guns to "friendly foreign countries, with a senior government official stating that India is not actively pushing for military sales.

Statistics:

  • India aims to increase its defence exports to Rs500bn ($5.8bn) by 2029, more than doubling its current level of Rs236bn.
  • Raphe mPhibr raised $100mn in June, achieving a near-$1bn valuation.
  • The Indian government has successfully brokered military deals involving state-owned companies, including the sale of four BEL-made Swathi weapon-locating radars to Armenia for about $40mn.
  • India exported BrahMos anti-ship missiles to the Philippines in 2022 for $375mn.
  • Adani's defence revenue comes from a mix of Indian and international orders, with about half of Solar Industries India's $1.7bn order book coming from international clients.

Sources:

  • Vivek Mishra, Chief Executive of Raphe mPhibr, stating that Indian forces' use of systems in harsh terrains has become a validation for other countries.
  • Defence Minister Rajnath Singh, stating that the global demand for Indian-made products has increased significantly following Operation Sindoor.
  • Prime Minister Narendra Modi, stating that the world saw a glimpse of "Make in India" and indigenous weapon systems in Operation Sindoor.
  • General Catalyst, a venture capital firm, leading Raphe mPhibr's fundraising.
  • Israel's Elbit Systems, partnering with Adani on drone development.
  • Bharat Electronics (BEL) and Bharat Forge, state-owned and industrial groups involved in defence production.
  • Solar Industries India, a maker of explosives and drones, moving into making drones and other weapons.
  • Amit Kalyani, Joint Managing Director of Bharat Forge, stating that the company's $181mn defence revenue last year came from exports.

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