Surpassing New Milestones: India’s Defence Production Achieves Highest-Ever Growth in FY 2023-24

Defence Industry

New Delhi: Announcing that India has achieved its highest-ever growth in defence production in 2023-24,  Defence Minister Rajnath Singh on July 5 highlighted the significant progress of the Make in India initiative and new milestones being surpassed. Singh reaffirmed the government’s commitment to fostering a more conducive environment to position India as a prominent global hub for defence manufacturing.

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Soaring to approximately Rs 1.27 lakh crore in FY 2023-24, India’s defence production marked a 16.7% increase over the previous year and a 60% growth since 2019-20. This achievement underscores the success of the government’s policies and initiatives aimed at achieving ‘Aatmanirbharta’ or self-reliance in defence manufacturing. The value of defence production in FY 2022-23 was Rs 1,08,684 crore.

Over the past five years, the value of defence production has been on a consistent upward trajectory, growing by more than 60 per cent since 2019-20.

Acknowledging this achievement in a post on X, Defence Minister Rajnath Singh highlighted the progress of the ‘Make in India’ programme under the leadership of Prime Minister Narendra Modi. Singh reiterated the government’s commitment to establishing India as a leading global defence manufacturing hub.

He extended congratulations to the Indian industry including defence public sector undertakings and other public sector undertakings manufacturing defence items, and the private industry, in his post.

big bang

“Of the total value of production (VoP) in 2023-24, about 79.2 per cent has been contributed by DPSUs/other PSUs and 20.8 per cent by the private sector,” the defence ministry said. According to the statement, data indicates that both DPSUs/PSUs and the private sector have experienced consistent growth in defence production in absolute terms.

The ministry noted that this accomplishment is attributed to the government’s policy reforms, initiatives, and efforts to improve the ease of doing business over the past decade, all aimed at achieving self-reliance.

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(Graph: Ministry of Defence)

According to the statement, the indigenisation efforts have been pursued aggressively on a sustained basis, that resulted in the highest ever VoP. Moreover, the spiralling defence exports have contributed tremendously to the overall growth in the indigenous defence production. Defence exports touched a record-high of Rs 21,083 crore in FY 2023-24, reflecting a growth of 32.5 per cent over the last fiscal when the figure was Rs 15,920 crore, it added.

Over the past year, the rise in defence manufacturing has also led to substantial returns for investors in major defence manufacturing PSUs. Reportedly, the shares of the largest defence manufacturing Public Sector Undertaking (PSU), Hindustan Aeronautics Limited (HAL), have surged by more than 197 per cent within the last year. Cochin Shipyard Limited has experienced even more impressive gains, with its stock soaring by over 913 per cent in the same period. This phenomenal performance has positioned Cochin Shipyard as a highly favoured defence stock among investors.

Meanwhile, the second-largest company in terms of market capitalisation, Bharat Electronics Limited (BEL) has also provided substantial returns to its shareholders, with a growth of over 167 per cent in a year.

Highlighting the effectiveness of the government’s initiatives and the industry’s responsiveness, there has been consistent rise in the value of defence production over the past five years. Continuing with its efforts to enhance capabilities and achieve greater self-reliance in defence manufacturing, India is poised to become a major player in the global defence market.