Indian Defence Market To Grow At 14% CAGR: Jefferies

New Delhi, Sep 9 (KNN) India's defence sector is projected to experience substantial growth, with the market anticipated to expand at a compound annual growth rate (CAGR) of 14 per cent from FY24 to FY30.

This anticipated growth is driven by a strategic emphasis on indigenisation and expanding export opportunities for Indian defence companies, according to a recent sectoral report by Jefferies.

The report highlights that global geopolitical tensions, combined with India's increasing focus on self-reliance in defence, are propelling significant momentum in order flow and revenue generation for local defence manufacturers.

The Indian government is actively working to enhance bilateral relations to boost defence exports.

As a result, India's defence expenditure is expected to more than double between FY24 and FY30, which is likely to positively impact defence stocks.

The total market opportunity for the Indian defence sector is estimated at approximately USD 90-100 billion over the next 5-6 years, with an annual growth rate projected at around 13 per cent during this period.

Despite India ranking among the top three global defence spenders, its 2022 defence expenditure was only 10 per cent of the U.S. spending and 27 per cent of China's expenditure.

Additionally, India remains the second-largest global importer of defence equipment.

On the supply side, major capital defence spending needs to increase at a steady rate of 7-8 per cent annually, maintaining the growth trend seen over the past decade.

In terms of exports, Indian defence companies are expected to achieve robust growth, with exports projected to grow at an 18 per cent CAGR between FY24 and FY30. India's defence exports have already increased 14-fold from FY17 to FY24, reaching USD 2.6 billion.

Jefferies forecasts that exports could reach USD 7 billion by FY30, aligning with the government's target of USD 6 billion by FY29.

(KNN Bureau)