The Indian Defense Industry Market Opportunities, …

1 Defense The Indian Defense Industry . Market opportunities , entry Strategies, Analyses and Forecasts to 2016. Reference code: DF0075MR. Published: November 2011. TABLE OF CONTENTS. TABLE OF CONTENTS. 1 Introduction .. 13. What is this Report About? .. 13. Definitions .. 13. Methodology .. 14. Secondary research ..15. Primary research ..15. Conventions ..15. ICD Research Intelligence Terrorism Index .. 15. About ICD Research .. 16. About Strategic Defence Intelligence ( ) .. 16. 2 Executive Summary .. 17. 3 Market Attractiveness and Emerging opportunities .

2 19. Defense Market Size Historical and Forecast .. 20. India s total Defense expenditure to grow at a CAGR of over the forecast period ..20. Hostile neighbors and modernization initiative will be the Industry s primary growth drivers ..22. Defense budget as a percentage of GDP will remain at an average of over the forecast period ..23. Analysis of Defense Budget Allocation .. 25. Capital expenditure allocation expected to remain at an average of 39% during the forecast period ..25. Army gets the largest share of the Defense budget.

3 27. Defense ministry will spend US$ billion on its army over the forecast Defense ministry will spend US$ billion on its air force over the forecast period ..31. Expenditure for navy is expected to grow at a CAGR of over the forecast period ..33. Homeland Security Market Size and Forecast .. 35. Homeland security budget of India estimated at US$ billion for the year 2010 ..35. Cross-border terrorism and domestic insurgency to be the main drivers of the homeland security ..37. India falls under worst affected of terrorism category.

4 38. India has terrorism index score of ..39. Benchmarking with Key Global Markets .. 40. India s Defense budget expected to grow at a CAGR of which is largest among the key global Defense spenders ..40. The US and China dominate the global Defense Industry ..42. India allocates a lower share of its GDP for Defense than countries with significant global Defense expenditure ..44. India faces significant threat from foreign terrorist organizations ..45. Market opportunities : Key Trends and Drivers .. 47. FDI set to increase, driven by government s policy shift from buy to make strategy.

5 47. The Indian Defense Industry Market opportunities and entry Strategies, Analyses and Forecasts to 2016 Page 2. ICD Research. This product is licensed and is not to be photocopied Published: November 2011. TABLE OF CONTENTS. UCAVs, combat systems and fighter aircraft divisions to be areas of key growth ..48. India to spend on UAVs during the forecast period ..49. India expected to replace its military helicopters ..49. India expected to modernize its navy with frigates and submarines ..49. 4 Defense Procurement Market Dynamics.

6 50. Import Market Dynamics .. 51. India was the largest arms importer during the review period ..51. Russia dominates Indian arms imports ..52. Aircrafts accounted for the majority of Defense imports during the review period ..53. Export Market Dynamics .. 54. Underdeveloped nations across Asia, Africa and Latin America are the main importers of Indian Defense goods 55. 5 Industry Dynamics .. 56. Five Forces Analysis .. 56. Bargaining power of supplier: low to high ..57. Bargaining power of buyer: high ..57.

7 Barrier to entry : medium to high ..57. Intensity of rivalry: high ..58. Threat of substitution: medium to high ..58. 6 Market entry Strategy .. 59. Market Regulation .. 59. Defense Procurement Amendment 2009 (DPA): A significant improvement ..59. Offset policy to drive Defense industrial modernization ..59. Buy and make ( Indian ) category introduced to promote indigenization of Defense related equipments ..60. Private sectors permitted to produce arms and ammunition under the new Draft Arms and Ammunitions Manufacturing Policy (DAAM).

8 61. Payment to foreign technology partners does not require governmental approval ..61. Foreign direct investment limited to 26% in the Indian Defense sector ..61. Market entry 63. Foreign OEMs are forming joint ventures in order to enter the Market ..63. India emerges as a key outsourcing hub for global Defense companies ..65. Key Challenges .. 66. Offset policy with restricted FDI of 26% is biased towards the domestic public and private Insufficient information and transparency on future plans ..66. Bureaucracy, corruption and long project delays.

9 67. Developing advanced low-cost solutions is essential to gain Market share ..67. 7 Competitive landscape and Strategic Insights .. 68. Competitive landscape Overview .. 68. The Indian Defense Industry Market opportunities and entry Strategies, Analyses and Forecasts to 2016 Page 3. ICD Research. This product is licensed and is not to be photocopied Published: November 2011. TABLE OF CONTENTS. Domestic public companies have a strong presence in the Indian Defense Industry ..68. Key Foreign 71. Lockheed Martin Corporation Lockheed Martin Corporation main products.

10 71. Lockheed Martin Corporation recent announcements and strategic initiatives ..72. Lockheed Martin Corporation alliances ..72. Lockheed Martin Corporation recent contract wins ..73. Lockheed Martin Corporation financial analysis ..73. BAE Systems Plc overview ..73. BAE Systems Plc main products and services ..73. BAE Systems Plc recent announcements and strategic initiatives ..74. BAE Systems Plc alliances ..74. BAE Systems Plc recent contract wins ..75. BAE Systems Plc financial analysis ..75. Thales overview.