Following the news that India has allocated $72.6 billion to the Defence Research Development Organisation (DRDO) in its Union Budget for the Financial Year 2023-24;

Abhijit Apsingikar, Defense Analyst at GlobalData, offers his view:

“Growing presence along the Himalayan frontier, cross-border incursions and increased naval activity in the Indian Ocean by China are a cause of concern to India’s strategic interests, and hence India has enhanced it’s defense budget. GlobalData’s report, ‘India Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2022-2027,’ forecasts the total Indian defense expenditure, inclusive of pensions, to be $72.1 billion. The latest budget allocation of $72.6 billion for defense corroborates the forecast.

“The increased defense spending is also driven by the need to develop an indigenous defense industrial complex. About $19.8 billion is geared towards encouraging domestic production of critical defense equipment. The FY22 budget had reserved 68% of the overall acquisition budget for the procurement from domestic suppliers, of which 25% of the budget was again reserved for sourcing equipment from the private sector. Although the FY23 budget fails to explicitly define such measures, similar reserved budgetary provisions could be allocated later to encourage domestic industries to participate in the Indian defense supply chain.”