Ease of Doing Business in India’s Aerospace and Defence Sector

The aerospace and defence sector in India is at an inflection point, given the modernisation and indigenisation programmes being undertaken by all the three services of one of the largest military forces in the world. The Ministry of Defence has formulated a comprehensive plan for modernisation of obsolete equipment through a long-term vision plan, a capacity plan, a capacity roadmap, and a capital procurement plan.

The Indian government has also identified the aerospace and defence sector as a key area of the ‘Make in India’ programme (Aatmanirbhar Bharat) and has taken various steps to further establish manufacturing infrastructure in the country, supported by the requisite R&D ecosystem. The Defence Acquisition Procedure 2020 (DAP 2020) contains provisions to support this ‘indigenisation’, and subsequent action by the Indian Government – most recently the Indian MOD’s notification on 18 platform and projects which must be solely designed and develop by Indian industry – has reinforced this intent.

This challenges the existing business models of UK industry. That said, we believe it presents an opportunity. India’s private and public defence firms need foreign technology partners. (And India will still need to import some assemblies, sub-assemblies and components.) UK firms willing to work with Indian industry have the most to gain from the situation. Moreover, we are encouraging UK firms to look at India as part of their global supply chain – to reduce their input costs and to get imbedded into the Indian defence manufacturing system.

Despite all of this, there remain ‘ease of doing business’ challenges which we believe can be streamlined to the benefit of India’s industry and forces, and for UK firms. This survey on ‘Ease of Doing Business in India’s Aerospace & Defence Sector’, conducted for leading defence manufacturers in the United Kingdom, aims to analyse industry’s perception of the Indian aerospace and defence industry today.

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