INDIA SCENARIO

• The Government of India has identified the Defence and Aerospace sector as a focus area for the ‘Aatmanirbhar Bharat’, with a formidable push on the establishment of indigenous manufacturing infrastructure supported by a requisite research and development ecosystem.
• In the Interim Union Budget 2024-25, the Capital Allocations pertaining to modernisation and infrastructure development of the Defence Services has been increased to INR 1.72 Lakh Cr representing a rise of 9.4% over FY 2023-24. The industry gets INR 6.22 Lakh Cr in Union Budget 2024-25, a jump of 4.79% over previous year.
• Ministry of Defence has set a target of achieving a turnover of INR 1.75 Lakh Cr in aerospace and defence Manufacturing by 2025, which includes exports of INR 35,000 Cr. Till Apr 2023, a total of 606 Industrial Licences have been issued to 369 companies operating in Defence Sector.
• To support the domestic defence industry, the government aims to ensure ease of doing business by creating a robust eco-system and supportive government policies. Towards this end, the government has taken steps to bring about de-licensing, de-regulation, export promotion and foreign investment liberalization.
• The Department of Military Affairs (DMA) has promulgated five Positive Indigenisation Lists comprising 5,012 items. Additionally, to promote export and liberalise foreign investments FDI in Defence Sector has been enhanced up to 74% through the Automatic Route and 100% by Government Route.
• The government has also announced 2 dedicated Defence Industrial Corridors in the States of Tamil Nadu and Uttar Pradesh to act as clusters of defence manufacturing that leverage existing infrastructure, and human capital.
• Further, in order to boost the domestic defence & Aerospace manufacturing sector, the Ministry of Defence has launched the Defence Testing Infrastructure Scheme (DTIS), with an outlay of Rs 400 crore for creating a state-of-the-art testing infrastructure in partnership with private industries.

UTTAR PRADESH SCENARIO

• Uttar Pradesh’s Bundelkhand region is home to one of the two dedicated Defence Industrial Corridors in the country
• 5000 hectares of developed land has been earmarked across six nodes along the Defence Industrial Corridor
• The six nodes include Aligarh, Agra, Kanpur, Lucknow, Chitrakoot and Jhansi
• 9 Cities viz. Chitrakoot, Jhansi, Kanpur, Lucknow, Agra, Aligarh, Ghaziabad, Meerut, GBNagar will stand to benefit by the UP DIC
• An investment of Rs 50,000 Cr is expected to take place in the region, supporting 2.5 lakh jobs
• Uttar Pradesh has the largest SME base, suitable for Defence Industry
• A robust & Aerospace & Defence Manufacturing Ecosystem is being created in UP. The Govt is in the process of establishing an Unmanned Aerial Vehicle (UAV) campus in Aerospace Hub, providing exclusive area for UAV OEMs and its component manufacturer. An integrated testing facility for Unmanned Aerial Systems (UAS) is also being planned near Kanpur
• 7 Ordnance factories, 4 HAL units and 2 Small Arms/ Field gun Factories already exist in Uttar Pradesh

• 3.3% Share of GDP spent on defence (2023-24)
• $2.63 Bn Defence exports have reached an all-time high in FY 2023-24
• INR 1.26Lakh Cr Current value of Defence production in FY 2023-24
• 4.79 % Increase in Defence Budget of FY 2024-25 over the FY 2023-24 Budget