The Indian Defense Sector Market Opportunities And Entry Strategies, Analyses
summary
summary
This report offers insights into the market opportunities and entry strategies adopted by foreign OEMs
(original equipment manufacturers) to gain a market share in the Indian defense industry. In
particular, it offers in-depth analysis of the following:
Market opportunity and attractiveness: detailed analysis of the current industry size and
growth expectations during 20102015, including highlights of the key growth stimulators. It also
benchmarks the industry against key global markets and provides detailed understanding of
emerging opportunities in specific areas.
Procurement dynamics: trend analysis of imports and exports, together with its implications and impact on the Indian defense industry.
Industry structure: five forces analysis to identify various power centers in the industry and how these are likely to develop in the future.
Market entry strategy: analysis of possible ways to enter the market, together with detailed descriptions of how existing players have entered the market, including key contracts, alliances, and strategic initiatives.
Competitive landscape and strategic insights: analysis of competitive landscape of the defense industry in India. It provides an overview of key defense companies (both domestic and foreign), together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
Business environment and country risk: a range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and
availability, labor force, demographics, and political and social risk.
Scope
analysis of Defense industry market size from 2004 through 2009 and forecasts till 2015
analysis of defense budget allocation
Benchmarking with key global markets
Market opportunities
Defense procurement dynamics
Industry dynamics
Market entry strategy
Competitive landscape and strategic insights
Business environment and country risk
Reasons To Buy
Gain insight into Indian defense industry with current, historic and forecast market values
Get insight on market opportunity and attractiveness
Get insight on industry procurement dynamics
Gain insight on industry structure
Gain insight into the regulations governing the Indian defense industry and the potential market entry strategies with an expert analysis of the competitive structure
Identify top companies of the Indian defense industry along with profiles of all those companies
Key Highlights
The Indian defense sector is one of the fastest growing markets globally, with an estimated US$13.9 billion of the annual administrative budget allocated for the acquisition of military hardware and technology in 2010. Defense expenditure which refers to the part of the budget that is spent on the acquisition of all types of military hardware and technology has grown at a CAGR of 12.14% from 200509. Defense expenditure is expected to record a CAGR of 6.59% during 2010-15, to reach an annual spend of US$42.6 billion by 2015. This is primarily due to ageing military hardware and technology, domestic insurgencies and hostility from neighboring countries. Strong growth in the sector is attracting foreign original equipment manufacturers (OEMs) and leading players from the domestic private sector to enter the market. Moreover, terrorism is leading to sharp increases in the defense budget and a shorter sales cycle, which translates as an attractive market for defense manufacturers.
The areas that are specifically expected to emerge over the short to medium-term include unmanned combat aerial vehicles (UCAVs), advanced electronic warfare systems, combat systems, rocket and missile systems, fighter and trainer aircraft, stealth frigates, and submarines. In addition, spend on IT and communications is expected to increase significantly, with a strong focus on enterprise applications, systems integration, and real-time mobile communications.
Keywords
Defense, India, Lockheed Martin, BAE Systems Plc, Rolls-Royce Group Plc, EADS N.V., General Dynamics, SAAB, General Electric, Thales SA , Honeywell International Inc, Raytheon, Hindustan Aeronautics Limited, Bharat Electronics Limited, Ordnance Factory, BEML, Bharat Dynamics Limited, Goa Shipyard Limited, Mazagon Dock Limited, Larsen and Toubro Ltd, Rolta India Limited, Wipro Limited, Godrej and Boyce Manufacturing Company Limited, Bharat Forge, Tata Motors, Tata Advanced Systems Limited, Punj Lloyd Ltd, Mahindra & Mahindra, Infosys Technologies Ltd, Tata Consultancy Services Ltd
Table of Contents :
"1 Introduction
1.1 About this Report
1.2 Definitions
1.3 Methodology
1.3.1 Secondary research
1.3.2 Primary research
1.3.3 Conventions
1.4 ICD Research Terrorism Index
1.5 About ICD Research Defense Intelligence Centre
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1 Defense Market Size and Forecast
3.1.1 Indias total defense expenditure to grow at a CAGR of 6.59% during 2010-15
3.1.2 Hostile neighborhood and modernization initiative would be the primary drivers
3.2 Analysis of Defense Budget Allocation
3.2.1 Share of capital expenditure to increase over 201015
3.2.2 Defense capital expenditure to reach US$19.2 billion by 2015
3.2.3 Air force holds largest share of capital expenditure, though army gets majority of the total budget
3.3 Homeland Security Market Size and Forecast
3.3.1 Homeland security budget of India increased by 25% in 2009
3.3.2 Cross-border terrorism and domestic insurgency to be the major drivers of the homeland security market
3.4 Benchmarking with Key Global Markets
3.4.1 India expected to remain one of the top ten defense spenders in the world during the forecast period
3.4.2 Saudi Arabia, Israel and the US are the leading defense spenders as a percentage of GDP
3.4.3 India is the fifth most terror prone country
3.5 Market Opportunities: Key Trends and Growth Stimulators
3.5.1 FDI set to increase, driven by governments policy shift from buy to make strategy
3.5.2 UCAVs, combat systems and fighter aircraft divisions to be areas of key growth
3.5.3 Defense spending on IT and communications to increase significantly, with a strong focus on simulation and real-time systems
4 Defense Procurement Market Dynamics
4.1 Import Market Dynamics
4.1.1 Domestic private sector to increase its share from 9% in 2009 to 39% in 2015
4.1.2 Israel and the US have gained significant market shares in comparison to Russia and other European countries
4.2 Export Market Dynamics
4.2.1 Indias low profile in defense exports is set to change in the next five years
4.2.2 Underdeveloped nations across Asia, Africa and Latin America are the major importers of Indian defense goods
5 Industry Dynamics
5.1 Five Forces Analysis
5.1.1 Bargaining power of supplier: low to high
5.1.2 Bargaining power of buyer: high
5.1.3 Barrier to entry: medium to high
5.1.4 Intensity of rivalry: high
5.1.5 Threat of substitution: medium to high
6 Market Entry Strategy
6.1 Market Regulation
6.1.1 Defense Procurement Amendment 2009 (DPA): a significant improvement
6.1.2 Offset policy to drive defense industrial modernization
6.1.3 Buy and make (Indian) category introduced to promote indigenization of defense-related goods
6.1.4 Private sectors permitted to produce arms and ammunition under the new Draft Arms and Ammunitions Manufacturing Policy (DAAM)
6.1.5 Payment to foreign technology partners does not require governmental approval
6.1.6 Foreign direct investment limited to 26% in the Indian defense sector
6.2 Market Entry Route
6.2.1 Foreign OEMs are forming joint ventures in order to enter the market
6.2.2 India emerges as a key outsourcing hub for global defense companies
6.3 Key Challenges
6.3.1 Offset policy with restricted FDI of 26% is biased towards the domestic public and private sectors
6.3.2 Insufficient information and transparency on future plans
6.3.3 Bureaucracy, corruption and long delays
6.3.4 Developing low cost, yet advanced, solutions is essential to gain market share
7 Competitive Landscape and Strategic Insights
7.1 Competitive Landscape: Overview
7.1.1 Domestic public companies have a strong presence in the Indian defense sector
7.1.2 Domestic public companies registered a CAGR of 19.75% during 2005-08
7.2 Key Foreign Companies
7.2.1 Lockheed Martin: overview
7.2.2 Lockheed Martin: product focus for the Indian Defense sector
7.2.3 Lockheed Martin: recent announcements and strategic initiatives
7.2.4 Lockheed Martin: alliances
7.2.5 Lockheed Martin: recent contract wins
7.2.6 Lockheed Martin: financial analysis
7.2.7 BAE Systems Plc: overview
7.2.8 BAE Systems Plc: product focus for the Indian defense sector
7.2.9 BAE Systems Plc: recent announcements and strategic initiatives
7.2.10 BAE Systems Plc: alliances
7.2.11 BAE Systems Plc: recent contract wins
7.2.12 BAE Systems Plc: financial analysis
7.2.13 Rolls-Royce Group Plc: overview
7.2.14 Rolls-Royce Group Plc: product focus for the Indian defense sector
7.2.15 Rolls-Royce Group Plc: recent announcements and strategic initiatives
7.2.16 Rolls-Royce Group Plc: alliances
7.2.17 Rolls-Royce Group Plc: recent contract wins
7.2.18 Rolls-Royce Group Plc: financial analysis
7.2.19 EADS N.V.: overview
7.2.20 EADS N.V.: product focus for the Indian defense sector
7.2.21 EADS N.V.: recent announcements and strategic initiatives
7.2.22 EADS N.V.: alliances
7.2.23 EADS N.V.: recent contract wins
7.2.24 EADS N.V.: financial analysis
7.2.25 General Dynamics: overview
7.2.26 General Dynamics: product focus for the Indian defense sector
7.2.27 General Dynamics: recent announcements and strategic initiatives
7.2.28 General Dynamics: alliances
7.2.29 General Dynamics: recent contract wins
7.2.30 General Dynamics: financial analysis
7.2.31 SAAB: overview
7.2.32 SAAB: product focus for the Indian defense sector
7.2.33 SAAB: recent announcements and strategic initiatives
7.2.34 SAAB: alliances
7.2.35 SAAB: recent contract wins
7.2.36 SAAB: financial analysis
7.2.37 General Electric: overview
7.2.38 General Electric: product focus for the Indian defense sector
7.2.39 General Electric: recent announcements and strategic initiatives
7.2.40 General Electric: alliances
7.2.41 General Electric: recent contract wins
7.2.42 General Electric: financial analysis
7.2.43 Thales: overview
7.2.44 Thales: product focus for the Indian defense sector
7.2.45 Thales: recent announcements and strategic initiatives
7.2.46 Thales: alliances
7.2.47 Thales: recent contract wins
7.2.48 Thales: financial analysis
7.2.49 Honeywell: overview
7.2.50 Honeywell: product focus for the Indian defense sector
7.2.51 Honeywell: recent announcements and strategic initiatives
7.2.52 Honeywell: alliances
7.2.53 Honeywell: recent contract wins
7.2.54 Honeywell: financial analysis
7.2.55 Raytheon: overview
7.2.56 Raytheon: product focus for the Indian defense sector
7.2.57 Raytheon: recent announcements and strategic initiatives
7.2.58 Raytheon: alliances
7.2.59 Raytheon: recent contract wins
7.2.60 Raytheon: financial analysis
7.3 Key Public Companies
7.3.1 Hindustan Aeronautics Limited: overview
7.3.2 Hindustan Aeronautics Limited: products and services
7.3.3 Hindustan Aeronautics Limited: recent announcements and strategic initiatives
7.3.4 Hindustan Aeronautics Limited: alliances
7.3.5 Hindustan Aeronautics Limited: recent contract wins
7.3.6 Hindustan Aeronautics Limited: financial analysis
7.3.7 Bharat Electronics Limited: overview
7.3.8 Bharat Electronics Limited: product and services
7.3.9 Bharat Electronics Limited: recent announcements and strategic initiatives
7.3.10 Bharat Electronics Limited: alliances
7.3.11 Bharat Electronics Limited: recent contract wins
7.3.12 Bharat Electronics Limited: financial analysis and market performance
7.3.13 Ordnance Factory: overview
7.3.14 Ordnance Factory: product and services
7.3.15 Ordnance Factory: recent announcements and strategic initiatives
7.3.16 Ordnance Factory: alliances
7.3.17 Ordnance Factory: recent contract wins
7.3.18 Ordnance Factory: financial analysis
7.3.19 BEML: overview
7.3.20 BEML: product and services
7.3.21 BEML: recent announcements and strategic initiatives
7.3.22 BEML: alliances
7.3.23 BEML: recent contract wins
7.3.24 BEML: financial analysis and market performance
7.3.25 Bharat Dynamics Limited: overview
7.3.26 Bharat Dynamics Limited: product and services
7.3.27 Bharat Dynamics Limited: recent announcements and strategic initiatives
7.3.28 Bharat Dynamics Limited: alliances
7.3.29 Bharat Dynamics Limited: recent contract wins
7.3.30 Bharat Dynamics Limited: financial analysis
7.3.31 Goa Shipyard Limited: overview
7.3.32 Goa Shipyard Limited: product and services
7.3.33 Goa Shipyard Limited: recent announcements and strategic initiatives
7.3.34 Goa Shipyard Limited: alliances
7.3.35 Goa Shipyard Limited: recent contract wins
7.3.36 Goa Shipyard Limited: financial analysis
7.3.37 Mazagon Dock Limited: overview
7.3.38 Mazagon Dock Limited: product and services
7.3.39 Mazagon Dock Limited: recent announcements and strategic initiatives
7.3.40 Mazagon Dock Limited: alliances
7.3.41 Mazagon Dock Limited recent contract wins
7.3.42 Mazagon Dock Limited: financial analysis
7.4 Domestic Private Companies
7.4.1 Larsen and Toubro Ltd: overview
7.4.2 Larsen and Toubro Ltd: product and services
7.4.3 Larsen and Toubro Ltd: recent announcements and strategic initiatives
7.4.4 Larsen and Toubro Ltd: alliances
7.4.5 Larsen and Toubro Ltd: recent contract wins
7.4.6 Larsen and Toubro Ltd: financial analysis and market performance
7.4.7 Rolta India Limited: overview
7.4.8 Rolta India Limited: product and services
7.4.9 Rolta India Limited: recent announcements and strategic initiatives
7.4.10 Rolta India Limited: alliances
7.4.11 Rolta India Limited: recent contract wins
7.4.12 Rolta India Limited: financial analysis and market performance
7.4.13 Wipro Limited: overview
7.4.14 Wipro Limited: product and services
7.4.15 Wipro Limited: recent announcements and strategic initiatives
7.4.16 Wipro Limited: alliances
7.4.17 Wipro Limited: recent contract wins
7.4.18 Wipro Limited: financial analysis and market performance
7.4.19 Godrej and Boyce Manufacturing Company Limited: overview
7.4.20 Godrej and Boyce Manufacturing Company Limited: products and services
7.4.21 Godrej and Boyce Manufacturing Company Limited: recent announcements and strategic initiatives
7.4.22 Godrej and Boyce Manufacturing Company Limited: alliances
7.4.23 Godrej and Boyce Manufacturing Company Limited: recent contract wins
7.4.24 Godrej and Boyce Manufacturing Company Limited: financial analysis
7.4.25 Bharat Forge: overview
7.4.26 Bharat Forge: products and services
7.4.27 Bharat Forge: recent announcements and strategic initiatives
7.4.28 Bharat Forge: alliances
7.4.29 Bharat Forge: recent contract wins
7.4.30 Bharat Forge: financial analysis
7.4.31 Tata Motors: overview
7.4.32 Tata Motors: products and services
7.4.33 Tata Motors: recent announcements and strategic initiatives
7.4.34 Tata Motors: alliances
7.4.35 Tata Motors: recent contract wins
7.4.36 Tata Motors: financial analysis and market performance
7.4.37 Tata Advanced Systems Limited: overview
7.4.38 Tata Advanced Systems Limited: products and services
7.4.39 Tata Advanced Systems Limited: recent announcements and strategic initiatives
7.4.40 Tata Advanced Systems Limited: alliances
7.4.41 Tata Advanced Systems Limited: recent contract wins
7.4.42 Tata Advanced Systems Limited: financial analysis
7.4.43 Punj Lloyd Ltd: overview
7.4.44 Punj Lloyd Ltd: products and services
7.4.45 Punj Lloyd Ltd: recent announcements and strategic initiatives
7.4.46 Punj Lloyd Ltd: alliances
7.4.47 Punj Lloyd Ltd: recent contract wins
7.4.48 Punj Lloyd Ltd: financial analysis
7.4.49 Mahindra & Mahindra: overview
7.4.50 Mahindra & Mahindra: recent announcements and strategic initiatives
7.4.51 Mahindra & Mahindra: products and services
7.4.52 Mahindra & Mahindra: alliances
7.4.53 Mahindra and Mahindra: recent contract wins
7.4.54 Mahindra and Mahindra: financial analysis
7.4.55 Infosys Technologies Ltd: overview
7.4.56 Infosys Technologies Ltd: products and services
7.4.57 Infosys Technologies Ltd: recent announcements and strategic initiatives
7.4.58 Infosys Technologies Ltd: alliances
7.4.59 Infosys Technologies Ltd: recent contract wins
7.4.60 Infosys Technologies Ltd: financial analysis
7.4.61 Tata Consultancy Services Ltd: overview
7.4.62 Tata Consultancy Services Ltd: products and services
7.4.63 Tata Consultancy Services Ltd: recent announcements and strategic initiatives
7.4.64 Tata Consultancy Services Ltd: alliances
7.4.65 Tata Consultancy Services Ltd: recent contract wins
7.4.66 Tata Consultancy Services Ltd: financial analysis
8 Business Environment and Country Risk
8.1 Business Confidence
8.1.1 Business confidence index
8.1.2 Market capitalization trend Bombay Stock Exchange, India
8.1.3 FDI inflows by sector
8.1.4 Deployment of credit by sector
8.2 Economic Performance
8.2.1 GDP at constant prices
8.2.2 GDP per capita at constant prices
8.2.3 GDP at current prices
8.2.4 GDP per capita at current prices
8.2.5 GDP split by key segments
8.2.6 Agriculture agricultural output value at current prices (Local Currency)
8.2.7 Agriculture agricultural output value at current prices (US Dollar)
8.2.8 Agriculture agricultural output at current prices as a percentage of GDP
8.2.9 Manufacturing manufacturing output at current prices (Local Currency)
8.2.10 Manufacturing manufacturing output at current prices (US Dollar)
8.2.11 Manufacturing manufacturing output at current prices as a percentage of GDP
8.2.12 Manufacturing mining, manufacturing and utilities at current prices (Local Currency)
8.2.13 Manufacturing mining, manufacturing and utilities at current prices (US Dollar)
8.2.14 Manufacturing mining, manufacturing and utilities at current prices as a Percentage of GDP
8.2.15 Construction construction output at current prices (Local Currency)
8.2.16 Construction construction output at current prices (US Dollar)
8.2.17 Construction construction output at current prices as a percentage of GDP
8.2.18 Industry - crude steel production
8.2.19 Industry - crude oil consumption
8.2.20 Inflation rate
8.2.21 Fiscal deficit as a percentage of GDP
8.2.22 Trade balance as a percentage of GDP
8.2.23 Exports as a percentage of GDP
8.2.24 Imports as a percentage of GDP
8.2.25 Exports growth
8.2.26 Imports growth
8.2.27 External debt as percentage of GDP
8.2.28 Exchange rate US$-INR (annual average)
8.2.29 Exchange rate US$-INR (end of fiscal)
8.2.30 Debt service ratio
8.3 Infrastructure Quality and Availability
8.3.1 Transport total airports
8.3.2 Transport highways and railways
8.3.3 Transport - passenger vehicle production volume
8.3.4 Transp
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