22424309 army expenditure in india to 2018 market brief

8/12/2019 22424309 Army Expenditure in India to 2018 Market Brief

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DefenseMarket Brief

www.strategicdefenceintelligence.com

Army Expenditure in India to 2018:

Market Brief

Reference code: DF2258MB

Published: May 2013


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TABLE OF CONTENTS

Army Expenditure in India to 2018: Market Brief Page 2

Strategic Defence Intelligence. This product is licensed and is not to be photocopied Published: May 2013

TABLE OF CONTENTS

1 Introduction ........................................................................................................................... 51.1 What is this Report About? ................................................................................................................51.2 Definitions .........................................................................................................................................51.3 Summary Methodology .....................................................................................................................7

2 Army Expenditure in India: Market Size and Forecast ....................................................... 92.1 Historic Market Size ..........................................................................................................................92.2 Forecast Market Size ......................................................................................................................10

3 Defense Expenditure in India: Historic and Forecast Segmentation ............................. 113.1 Historic Segmentation .....................................................................................................................113.2 Forecast Segmentation ...................................................................................................................12

4 Appendix .............................................................................................................................. 134.1 Contact Us ......................................................................................................................................134.2 About SDI........................................................................................................................................134.3 Disclaimer .......................................................................................................................................13


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TABLE OF CONTENTS



LIST OF FIGURES

Figure 1: India Historic Army Expenditure, US$ Billion, 2009-2013 .............................................................................................................................. 9 Figure 2: India Forecast Army Expenditure, US$ Billion, 2013-2018 .......................................................................................................................... 10 Figure 3: India Historic Defense Segmentation, (%), 2009-2013 ................................................................................................................................ 11Figure 4: India Forecast Defense Segmentation, (%), 2013-2018 .............................................................................................................................. 12


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TABLE OF CONTENTS



LIST OF TABLES

Table 1: India Historic Army Expenditure, US$ Billion, 2009-2013 ............................................................................................................................... 9Table 2: India Forecast Army Expenditure, US$ Billion, 2013-2018 ........................................................................................................................... 10Table 3: India Historic Defense Segmentation, US$ Billion, 2009-2013 ..................................................................................................................... 11Table 4: India Forecast Defense Segmentation, US$ Billion, 2013-2018 ................................................................................................................... 12


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INTRODUCTION



1 Introduction

1.1 What is this Report About?

This report offers insights on Army expenditure of Indian Defense industry. It also provides data on the

overall segmentation of the industry for historic and forecast years.

1.2 Definitions

For the purpose of this report, the following timeframes apply:

Review period: 2009 to 2013

Forecast period: 2013 to 2018

Following are the definitions of expenditure considered for the purpose of this report.

Revenue expenditure includes troop training, institutional education, construction and maintenance

of various undertakings. It also covers the salaries, allowances, pensions, transportation, food,

insurance, welfare benefits and miscellaneous expenditures pertaining to all unit allowances for

training, contingency and other grants for officers, non-commissioned officers, enlisted men and

contracted civilians.

Capital expenditure (capex) covers research and development (R&D), procurement, maintenance,

transportation and storage of weaponry and other equipment. It also includes expenditure on aircraft

and aero engines, heavy and medium vehicles, naval equipment and expenditure on the purchase of

land, construction, plants and machinery.

Total defense expenditure includes administrative- and maintenance-related functions such as

salary, buying spares, general stores, food, medical stores, and other supplies.

The following are definitions of defense categories:

Military hardware refers to the broad range of machinery, systems, equipment and weapons used

by defense forces.

Air defense systems are defined as all measures designed to nullify or reduce the effectiveness of

hostile air action. They include ground and air based weapon systems, associated sensor systems,

command and control arrangements and passive measures. This may be to protect naval, ground

and air forces wherever they are positioned, but does not include the missile defense system.

Missile defense systemsare systems, weapons, or technologies involved in the detection, tracking,

interception and destruction of attacking missiles.

Naval defense systems are used to protect sea lanes, ferry troops, or attack other navies, ports, or

shore installations. It includes surface ships, amphibious ships, submarines, and seaborne aviation.

Homeland security (HLS) involves the protection of a countrys civilians and critical infrastructure

from natural or man-made disaster. Its margins extend to border and maritime patrol, customs

checks in ports and airports, search and rescue operations, disaster recovery, combating terrorism

and cyber attacks.


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INTRODUCTION



The following are miscellaneous definitions:

Indirect offsets involve both barter and counter trade deals, investment in the buying country, or the

transfer of technology unrelated to the weapons being sold.

Direct offsets is defined as an arrangement wherein the purchaser receives work or technology

directly related to the weapons sale, typically by producing the weapon system or its componentsunder license.

Multipliers are additional credits assigned over and above the market value provided to offsets for a

technology, product or service being offered.

Command, control and communications and intelligence system (C3I) refers to an information

system employed by a militarys top command to direct its forces. This system provides the military

with information on various parameters associated with executing a strategy during a military

exercise. The parameters include reconnaissance and surveillance, troop positions, inventory levels

and weather conditions. The communication system enables the transfer of images and video

captured by surveillance systems and data and voice between the command and control center. In

addition, the system aids in joint operations between the Army, Army and air force.

Maintenance, repair and overhaul (MRO) involves the servicing of a defense system with the

objective of restoring it to a state where it can perform its intended function. It could be routine

maintenance, replacement of faulty spare parts or checking the entire system to ensure smooth

functioning.

Airborne early warning and control systems (AEW&C) are airborne radar systems used by the

military to detect the movement of aircraft in its airspace. Used at high altitudes, they are used in

both defensive and offensive air operations and have the ability to help distinguish between civilian

and military aircraft.


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INTRODUCTION



1.3 Summary Methodology

All Strategic Defence Intelligence reports are rigorously sourced and created according to a comprehensive

four-stage methodology:

1) Market Study

A) Standardization

Market definitions are specified using recognized industry classifications. The same definition is used

for every country

Annual average currency exchange rates for the latest complete year are collected. These are applied

across both the historical & forecast data to remove exchange rate fluctuations

B) Internal Audit

Review of in-house databases to gather existing data:

o Historic market databases & reports

o Company databaseo Magazine portfolio

2) Research

A) Sources

Collection of the latest market-specific data from a wide variety of respected industry sources:

o Government statistics

o Industry associations

o Company filings

o Broker reports

o International organizations

B) Expert Opinion

Collation of opinion taken from Strategic Defence Intelligence journalist interviews of leading

industry figures

Analysis of third party opinion & forecasts:

o Broker reports

o Industry associations

o Defense media

o Official government sources

C) Data Consolidation & VerificationConsolidation of data & opinion to create historical datasets

Creation of models to benchmark data across sectors and geographies


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INTRODUCTION



3) Analysis

A) Market Forecasts

Feed of forecast data into market models:

o Macroeconomic indicators

o Industry-specific drivers

B) Report Writing

Analysis of market data

Discussion of industry trends & issues

Integration of survey results

4) Quality Control

A) Templates

Detailed process manuals

Standardized report templates & accompanying style guidesComplex forecasting tool used to ensure forecast methodologies are consistently applied

QC checklists

B) QC Process

Peer review

Senior Level QC

Randomized spot checks on data integrity

Benchmark checks across databases


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MARKET DATA


Strategic Defence Intelligence. This product is l icensed and is not to be photocopied Published: May 2013

2 Army Expenditure in India: Market Size and Forecast

2.1 Historic Market Size

The Indian Army budget reached to a value of US$19.1 billion in 2013, an increase of 14.1% on 2012. The

segment achieved a CAGR of 4.76% over 2009-2013.

Table 1: India Historic Army Expenditure, US$ Billion, 2009-2013

Year US$ Billion % Growth

2009 15.9

2010 17.2 8.0%

2011 18.1 5.5%

2012 16.8 -7.4%

2013 19.1 14.1%

CCAGR 2009-13 4.76%

Source: Strategic Defence Intelligence Analysis / SDI

Figure 1: India Historic Army Expenditure, US$ Billion, 2009-2013


-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

0.0

5.0

10.0

15.0

20.0

25.0

2009 2010 2011 2012 2013

GrowthRat

e(%)

US$Billion

Market Size Growth Rate (%)


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MARKET DATA



2.2 Forecast Market Size

The Indian Army budget is forecast to reach US$37.3 billion in 2018; an increase of 94.8% on 2013. This is

forecast to result in a CAGR of 14.26% from 2013 through 2018.

Table 2: India Forecast Army Expenditure, US$ Billion, 2013-2018

Year US$ Billion % Growth

2013 19.1

2014 22.5 17.6%

2015 24.6 9.1%

2016 28.4 15.6%

2017 32.9 15.7%

2018 37.3 13.4%

CCAGR 2013-18 14.26%


Figure 2: India Forecast Army Expenditure, US$ Billion, 2013-2018


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2013 2014 2015 2016 2017 2018

Growth

Rate(%)

US$

Billion

Market Size Growth Rate (%)


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IMPORTS AND EXPORTS DYNAMICS



3 Defense Expenditure in India: Historic and Forecast Segmentation

3.1 Historic Segmentation

With a market size of US$19.1 billion in 2013, Army segment in India equated to a share of 51.0% of the

overall defense industry. The segment stood largest within the industry.

Table 3: India Historic Defense Segmentation, US$ Billion, 2009-2013

Category Market Size % Share

Army 19.1 51.0%

Air Force 9.8 26.0%

Navy 6.0 16.0%

Others 2.6 7.0%

Overall 37.5 100.0%


Figure 3: India Historic Defense Segmentation, (%), 2009-2013


Army, 51.0%

Air Force, 26.0%

Navy, 16.0%

Others, 7.0%


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IMPORTS AND EXPORTS DYNAMICS



3.2 Forecast Segmentation

With a market value of US$37.3 billion, the Army segment in India is expected to occupy a share of 53.1% of

the overall defense industry by 2018. The segment is expected to be the largest within the industry.

Table 4: India Forecast Defense Segmentation, US$ Billion, 2013-2018

Category Market Size % Share

Army 37.3 53.1%

Air Force 16.2 23.1%

Navy 11.2 16.0%

Others 5.5 7.8%

Overall 70.2 100.0%


Figure 4: India Forecast Defense Segmentation, (%), 2013-2018


Army, 53.1%

Air Force, 23.1%

Navy, 16.0%

Others, 7.8%


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APPENDIX


4 Appendix

4.1 Contact Us

If you have any queries about this report or would like further information, please [email protected]

4.2 About SDI

SDI is a premium business information brand specializing in industry analysis.

4.3 Disclaimer

All Rights of this Report are reserved

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any

means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of thepublisher, SDI.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please

note that the findings, conclusions and recommendations that SDI delivers will be based on information

gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a

position to guarantee. As such, SDI can accept no liability whatsoever for actions taken based on any

information that may subsequently prove to be incorrect.
mailto:[email protected]:[email protected]:[email protected]

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