Implications Of The New Policy On Defence & Aerospace Sector

Introduction

India has the third largest armed forces in the world, with a phenomenal 31.1% of its annual budget spent on capital acquisitions of defence equipment. At present, a staggering 60% of the defence equipment requirement of the armed forces is met by imports. Based on available statistics, a close ally and the world's oldest democracy, the United States of America is known to be the largest supplier to the Indian defence sector.

The aerospace sector is another key area of potential foreign collaboration for India, having seen remarkable growth over the last decade in the civil and defence aerospace fields. India is currently the 9th largest civil aviation market in the world, with projections seeing India as the 3rd largest aviation market by the year 2020. It has been announced that the allocation for the defence sector in India's 2016-17 budget is approximately Rs. 2244.56 billion (approx. USD 38 billion). Further, it is predicted that India will invest