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The Wire
3 days ago
- Business
- The Wire
India's Military Jugaad: From Battlefield Fix to Export Opportunity
As India pushes to expand defence exports, it should also market a less publicised strength: the military's unmatched jugaad – its ability to improvise cost-effective, adaptable fixes to upgrade and sustain a wide array of equipment. For militaries that can't afford cutting-edge Western systems, India's -driven approach offers a distinct niche: reasonably priced, battle-tested, resource-efficient alternatives to meet operational needs. Veterans and defence analysts argue that India's knack for stretching limited budgets to deliver battlefield capability is highly exportable – especially to developing nations with similar constraints. There is growing interest in refurbished air defence systems, upgraded Soviet-era platforms, and low-cost ISR (intelligence, surveillance, reconnaissance) solutions that blend components from diverse sources. India's experience with retrofitting legacy platforms offers a viable model Many militaries across Africa, Latin America, Central Asia, and Southeast Asia face the same problems that shaped India's jugaad ethos: tight budgets, aging inventories, unreliable supply chains, and politically fraught procurement. These countries are not necessarily looking for next-gen weapons – but for maintainable, effective systems that won't strain their defence budgets. India's experience with retrofitting legacy platforms like the 1960s-era MiG-21 'Bis', modularising battlefield electronics, developing simulators, and integrating Israeli, French, Russian, and indigenous systems offers a viable model. Military technicians from the armed forces, Defence Public Sector Undertakings (DPSUs), and DRDO have extended the life of Cold War-era Soviet air defence systems, which performed effectively during last month's Operation Sindoor alongside modern platforms. Indigenous systems like the Pinaka multi-barrel rocket launcher, the Dhanush 155mm/45-calibre howitzer, and the ALH Rudra helicopter embody the mindset – melding domestic engineering with imported subsystems to produce efficient, cost-effective weapon platforms. Rudra combines a locally built airframe with Indian Helina anti-tank missiles and French Mistral air-to-air missiles. Pinaka integrates indigenous engineering with imported subsystems to deliver a powerful, modular system adaptable to many battlefield needs. Dhanush represents a smart upgrade of the 1980s-era Bofors FH-77B howitzer, retrofitted with modern electronics and locally sourced components. By enhancing a proven system, Indian engineers created an affordable artillery piece with renewed battlefield relevance. 'India should showcase and export its jugaad capabilities, which remain unparalleled,' said Brigadier Rahul Bhonsle (Retd) of New Delhi-based Security Risks consultancy. He called jugaad the indigenous defence industry's core strength, arguing it offers economical alternatives to nations struggling with expensive system replacements. Still, Bhonsle warned that in its current form lacks the standardisation and documentation needed for global exports. To become a serious exporter of adaptive military technology, India must transform from ad hoc innovation into a certifiable, modular, and globally compliant framework. Industry experts agree. Manuals, upgrade protocols, and implementation documentation are needed to make jugaad export-ready. Collaborations between start-ups, MSMEs, DRDO, armed forces technicians, and the corporatised Ordnance Factory Board could help formalise the process. Western militaries operate under strict rules on certification and IP compliance—standards that improvised fixes often breach. Even India's celebrated upgrades to the Su-30MKI, integrating French and Indian missiles with Israeli EW systems and helmet-mounted sights, would violate OEM contracts in most Western countries. Nevertheless, India's ability to keep over 290 ageing Chetak and Cheetah helicopters flying in Siachen at 14,000 feet – far beyond the original design envelope – is a striking example of battlefield ingenuity. How jugaad helped India during past conflicts During the 1999 Kargil War, the IAF rapidly armed Mirage 2000H fighters with Indian-made 1,000 lb precision-guided bombs, achieving devastating accuracy. Earlier, Indian defence technicians had quietly helped the Northern Alliance in Afghanistan maintain and overhaul its Mi-17 and Mi-35 helicopters – critical assets in the fight against the Taliban. On land, Soviet-era BMP-1 and BMP-2 infantry combat vehicles were upgraded with thermal sights and night-fighting capabilities. DRDO engineers repurposed the BMP-2 chassis to build the MUNTRA series of unmanned ground vehicles for surveillance, mine detection, and NBC operations – keeping troops out of high-risk zones. Likewise, the T-72 'Ajeya' tanks were retrofitted with Israeli and Indian thermal imagers and night sights, despite lacking the original design provisions. The P-18 early warning radar from the 1970s was modernised with Indian-built digital processors and Identification Friend or Foe (IFF) systems. Naval aviation saw similar upgrades. The licence-built Dornier Do-228, a German design from the 1980s, was retrofitted with EO pods for coastal surveillance, creating real-time ISTAR capability. These low-cost aircraft now supplement the Indian Navy's expensive P-8I Poseidons. In conflict zones like Kashmir, the Northeast, and Punjab, the Army turned civilian vehicles – tractors, Maruti Gypsies, Nissan Jongas – into light armoured vehicles, fitting them with machine guns and communications gear. These improvised platforms, often built in local workshops, were ideal for rugged terrain and counterinsurgency missions. Also Read: The Wonders of Jugaad in the Indian and Pakistani Militaries Army engineers also regularly adapted commercial cranes and trucks into mobile bridging systems for flood relief and operations in high-altitude zones – quick, local solutions that proved invaluable during emergencies. Looking forward, there is significant export potential in jugaad -style life-extension kits, low-cost battlefield management systems, drone jammers, and retrofit packages – particularly for countries still operating Soviet-origin tanks, APCs, and aircraft. Indian start-ups and state research labs are also blending off-the-shelf components with limited imports to build drones, simulators, and training systems – many of which proved effective during Operation Sindoor. What this shows is that when jugaad is embedded in a formal engineering framework, it can drive a new model of affordable hybrid innovation. But to scale globally, it must be codified – its ingenuity preserved, but refined into standardised, export-ready packages. Veterans argue the Ministry of Defence must evolve from a gatekeeper into a facilitator – empowering the private sector, particularly MSMEs and start-ups, to lead in adapting India's jugaad model for international markets. That shift requires simplifying procurement rules, speeding up export clearances, and investing in documentation and quality control. Only by cutting red tape and backing Indian innovation can the country transform its battlefield experience into a global defence asset. But unlocking potential ultimately rests with the MoD – still hampered by bureaucracy and risk aversion. Whether it can rise to the moment remains uncertain.
India Today
09-06-2025
- Business
- India Today
India eyes Rs 50,000 crore defence export target by 2029 as global demand surges
India's defence sector has achieved a remarkable milestone as the country's defence exports surged to Rs 23,622 crore in the financial year 2024-25, marking a 12.04 per cent increase over the previous year's figure of Rs 21,083 crore. While indigenisation in India's defence forces has been underway for several decades, the last 11 years have seen a rapid acceleration, with the country now joining the ranks of elite global players in defence heavily dependent on imports to meet its defence needs, India is now exporting military hardware to more than 80 countries, including prominent global powers such as the United States and France. Armenia also figures among the top buyers in 2023-24, indicating the growing trust in India's defence capabilities. Public sector defence undertakings (DPSUs) and private players have both contributed significantly to the export momentum. In 2024-25, DPSUs exported equipment worth Rs 8,389 crore, a sharp 42.85 per cent jump from Rs 5,874 crore in the previous fiscal companies accounted for Rs 15,233 crore, a marginal increase from Rs 15,209 crore the year before. The Ministry of Defence has set an ambitious target of taking defence exports to Rs 50,000 crore by upward trajectory is also evident in the broader scale of defence production. The sector has witnessed a staggering 174 per cent growth over the past Rs 46,429 crore in 2014-15, India's total defence production has now reached Rs 1,27,265 crore in 2023-24. The government has outlined a long-term goal of scaling domestic defence manufacturing to Rs 3 lakh crore by of the key policy initiatives fuelling this growth is the Positive Indigenisation List, under which the Ministry of Defence has banned the import of several hundred categories of weapons, equipment, and spare has not only reduced dependency on foreign suppliers but also created space for domestic innovation and production, enabling India to meet its own defence requirements with locally made InTrending Reel
Time of India
04-06-2025
- Business
- Time of India
Officers from 10 DPSUs, private organisations join IIM-Vizag's defence MBA
Visakhapatnam: Amid India's push for increased defence production, IIM-Vizag has launched its novel and first-of-its-kind modular MBA programme for officers in the defence sector. Approved by the dept of defence production under the ministry of defence, 37 officers from 10 defence public sector undertakings (DPSUs), Naval Armament Depot, and Geomarine Dynamics India Ltd have enrolled for the programme. The 10 DPSUs include Yantra India Ltd, Troop Comforts Ltd, Munitions India Ltd, Mishra Dhatu Nigam Ltd, India Optel Ltd, Hindustan Shipyard Ltd, Advanced Weapons and Equipment India Ltd, Armoured Vehicles Nigam Ltd, BEML Ltd, and Bharat Electronics Ltd. Hindustan Shipyard Ltd CMD, Commodore Hemant Khatri (retd) said he has been noticing a profound shift in the mindset of Indians. "Previously, there might have been a sense of impossibility or hesitation. Now, however, there is a burgeoning confidence and self-belief, fostering an attitude of 'it is possible, and we can do it'. This fundamental change is evident in a newfound willingness to invest, experiment, and innovate – the driving force propelling India towards its future aspirations. This conviction is crucial for the nation's continued progress," he said. Explaining India's economic turnaround and its progress across various sectors, including railways, telecom, digital transactions, chip manufacturing, defence production, etc., Khatri said that today's youth are expected to be the leaders who will shape India in 2047. "This generation has the potential to propel the nation forward, transforming it into a developed country and fulfilling the aspirations of 1.4 billion people. The mantle of leadership will rest on their shoulders. In 2014, India was ranked the 11th largest economy in the world and now it stands as the fourth largest economy. This is a testament to the innovative spirit of its people. I urge the participants to foster an innovative India, lead in research and development, and drive decisive, transformative progress," he added. IIM-V director Prof M Chandrasekhar reflected on the personal significance of the programme. "This programme is particularly nostalgic for me, as I fondly recall joining HAL in 1983 as a young trainee. I later moved to L&T. Defence sector experience, therefore, remains very dear to me, it is a solid foundation upon which I built my career. Today, India's defence sector is no longer merely tied to budget cycles or geopolitical events; it has become a strategic growth sector with sustained expansion. Industry experts estimate India's defence capital outlay will grow by up to eight percent annually over the next five years, translating into defence procurement worth over $130 billion or approximately 11.1 lakh crore. A case in point is the performance of defence mutual funds and the Nifty India defence index, both of which have outpaced the broader market, reflecting strong investor trust and confidence in defence stocks," he said.
Mint
03-06-2025
- Business
- Mint
Will the bull run in defence stocks continue? Long-term growth seen, but valuations flash warning signs
Defence stocks have been on a blistering rally, with the NSE Defence Index soaring 20 percent in the last one month, vastly outperforming the Nifty 50, which rose by only about 1 percent during the same period. With India sharpening its strategic focus on indigenous defence manufacturing amid global geopolitical tensions, many investors are wondering: Will the bull run in defence stocks continue? While the long-term fundamentals remain strong, market experts warn that valuations have already priced in much of the near-term earnings growth. The bull case for defence stocks is rooted in a larger geopolitical and policy shift. According to Omniscience Capital, which manages a defence-focused smallcase, the Indian government is likely to ramp up defence spending from the current ~2 percent of GDP to 3–4 percent over the next decade. With India expected to become a $10 trillion economy by 2035, this would imply an annual defence budget exceeding USD 300 billion, or ₹ 30 lakh crore—translating to a 16–17 percent CAGR in defence expenditure over the next ten years. Omniscience Capital's report, 'Operation Sindoor: An Inflection Point for Bharat's Omni Defence Strategy', argues that the recent military and security operations have highlighted the need for a robust, future-ready defence infrastructure—not just to protect borders, but also to secure India's digital ecosystems, trade routes, and overseas strategic assets. India's domestic defence production crossed ₹ 1.4 lakh crore in FY25, with DPSUs (Defence Public Sector Undertakings) contributing around ₹ 1.1 lakh crore, or 78 percent. Of this, ₹ 90,000 crore came from 8 listed DPSUs, forming 66 percent of the total DPSU output. The government now aims to double the total defence production to ₹ 3 lakh crore by 2029. Even assuming DPSUs maintain a 60 percent share, their combined output would need to grow at 18 percent CAGR, hitting ₹ 1.8 lakh crore by 2029. Analysts project that the turnover of listed DPSUs will grow by 18 percent in FY26 and 22 percent in FY27, while 9 unlisted DPSUs are estimated to generate over ₹ 20,000 crore in FY26 alone. Private players are also expected to play a larger role, diversifying the sector's investment potential. However, while the sector's structural growth story remains intact, concerns around high valuations are surfacing. The median trailing P/E of listed DPSUs stands at 57, with forward P/E for FY26 and FY27 at 45 and 36, respectively. Valuations are even steeper for private defence companies, making investors vulnerable to corrections if expectations aren't met. Dr. Vikas Gupta, CEO of Omniscience Capital, said, 'The future of India's defence sector is undoubtedly bright. However, we urge investors to remain valuation-conscious. Much of the high growth has already been factored into stock prices, particularly in the short term.' Despite these cautionary signals, experts argue that the rally has legs over the long run. India's strategic ambitions—to become the world's third-largest economy by 2027–28 and a 7–8 percent contributor to global GDP—will require significant defence investment. The Indian Armed Forces are under pressure to modernize, especially with neighboring countries likely to boost their own defence spending in response to India's growing capabilities. Moreover, a strong fiscal position and global interest in India as a defence exporter could help sustain capex in the sector, while also creating tailwinds for listed players. Overall, the bull run in defence stocks has been driven by compelling macro themes: rising geopolitical risk, India's focus on self-reliance, and ambitious spending targets. However, with valuations running ahead of fundamentals in many cases, the question for investors is no longer whether defence is a growth story—it is how much of that growth is already in the price. Experts suggest a balanced approach: remain invested for the long-term transformation underway, but be selective and valuation-conscious in the short run. The next leg of the rally may belong not to the sector as a whole, but to the well-positioned companies with sustained earnings visibility. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Hans India
02-06-2025
- Business
- Hans India
Defence PSUs likely to clock 18 pc growth as India beefs up armed forces
Mumbai: India will gradually increase its defence budget as a percentage of GDP from around 2 per cent at present to 3 per cent or even 4 per cent over the next decade, according to a report released by Omniscience Capital on Monday. With a $10 trillion GDP, the defence budget is expected to grow to more than $300 bn or around Rs 30 lakh crore. This implies a 16-17 per cent annualised growth till 2035, the report observes. The total output of the defence PSUs is expected to double to Rs 1.8 lakh crore by 2029, indicating a growth of 18 per cent over the next four years, according to the report. The report further states that Operation Sindoor has triggered a renewed focus on defence, vigilance, and strategic preparedness to attack enemies and safeguard not only our borders and citizens but also the critical resources, economic and trade infrastructure, and the digital ecosystem. As per the report, the mid-term target for domestic defence production is set at Rs 3 lakh crore by 2029. In FY25, domestic defence production crossed Rs 1.4 lakh crore, of which 78 per cent was contributed by the defence PSUs at around Rs 1.1 lakh crore. The listed defence PSUs accounted for more than Rs 90,000 crore of this, accounting for 66 per cent of the total defence PSUs' share. This growth outlook gets revalidated if one looks at the analyst estimates for the next couple of years. The total turnover of 8 listed defence PSUs is expected to grow at 18 per cent and 22 per cent for FY26 and FY27, respectively. Nine unlisted defence PSUs combined are expected to report a total turnover in excess of Rs 20,000 crore in FY26, according to the report. According to the report, in the long term, the defence pensions, which account for around 25 per cent of the total defence budget, currently, and the largest part of the expense under the salary head (currently around Rs 2 lakh crore), are expected to grow at a slower pace. The expected annualised growth of the capital budget and supplies would be even higher, potentially at levels above 20 per cent. The cumulative capex over the next 10 years could range from Rs 50 lakh crore (at 2.4 per cent in 2035) to Rs 64 lakh crore (at 3 per cent in 2035). It also expects the Rs 3 lakh crore domestic defence production target for 2029 announced earlier might be revised upward and exceeded. The report notes that while the growth potential of the defence sector is unmistakably robust, the TAM (total addressable market) is large, and the growth rates are likely to remain high for decades. However, the investors need to pay attention to the valuations. The median trailing price to earnings (P/E) multiple of the 8 listed DPSUs is 57. The forward median P/E for FY26 and FY27 is at 45 and 36, indicating that the high growth potential is significantly priced in. For some of the private sector names, the multiples are even higher, and hence, investors are advised to be extremely cautious while allocating capital to specific names at current levels.
