BY: Mr. Amey Belorkar, Fund Manager – Defence and Aerospace Venture Fund, IDBI Capital Markets & Securities Ltd.

 

“We anticipate that Budget for FY 2025-26 will be pivotal in accelerating India’s journey towards self-reliance in the defence and aerospace sectors, both of which are on the brink of significant growth. The government’s emphasis on Atmanirbhar Bharat and Make in India is likely to be bolstered by strategic budgetary allocations that promote innovation, support MSMEs, and streamline defence procurement processes. A particular focus on emerging areas such as unmanned aerial systems (UAS), advanced materials, cyber defence, and space technology could unlock substantial opportunities for private capital engagement.

The burgeoning space tech industry, driven by advancements in satellite development, launch capabilities, and space exploration, offers significant potential for innovation and investment.

In line with the government’s indigenization drive, we foresee a projected growth of 15-20% in the defence sector, propelled by supportive budgetary measures, incentives for private sector involvement, and a robust push for indigenous manufacturing. The government’s planned introduction of a new scheme focused on R&D in deep-tech technologies, such as AI, robotics, and advanced weapon systems, is expected to further catalyze innovation and development within the sector. Initiatives targeting the modernization of India’s armed forces, along with anticipated attention on Defence Industrial Corridors and production-linked incentives (PLIs), are set to provide crucial momentum for the sector’s expansion.

At IDBI Capital Markets & Securities (ICMS), we remain dedicated to fostering this growth by enabling strategic investments that empower startups, MSMEs, and large enterprises within the defence and aerospace ecosystem. This commitment drives innovation and long-term value creation. A supportive Budget will likely attract greater private sector participation, with an emphasis on technological advancements, ultimately steering us towards strategic autonomy in defence capabilities. We look forward to significant budgetary support aimed at modernizing India’s armed forces.”