HAL, BEL blaze way as India's defence production breaches Rs 1 lakh crore mark

State-owned Defence Public Sector Undertakings (DPSUs)—Hindustan Aeronautics (HAL), Bharat Electronics (BEL) and Mazagon Dock Shipbuilders Limited—occupied the top three slots in terms of the value of defence production for Financial Year 2022-23 as India’s total defence production crossed the Rs 1 lakh mark milestone for the first time.

An official source told THE WEEK on condition of anonymity that HAL, BEL and MDL occupied the top three slots in that order with the three top highest production values for 2022-23. “HAL totaled about Rs 24,000 crore, BEL about Rs 6,000 crore and MDL about Rs 6,000 crore”.

A defence ministry official release said, “The value currently stands at Rs 1,06,800 crore and it will go further up once the data is received from the remaining private defence industries. The current value of defence production in FY 2022-23 is a rise of more than 12 per cent over FY 2021-22, when the figure was Rs 95,000 crore.”

The defence production value is calculated by totaling the production values of the nine DPSUs, private companies and the new seven government-owned professionally managed corporate entities that were formed on June 16, 2021, by restructuring 41 Ordnance Factories (OFs).

Originally the 41 Ordnance Factories (OFs) were under the administrative control of the Ordnance Factory Board (OFB) operated under the defence ministry.

The restructuring of the OFB was done to enhance autonomy, improve accountability, competitiveness and efficiency besides deepening specialisation in the product range.

India’s defence industry is in the middle of a transformation with a number of policy reforms being undertaken to achieve ease of doing business, including the integration of MSMEs and start-ups into the supply chain.

“These measures have given a boost to the defence industrial manufacturing ecosystem in the country and generated tremendous employment opportunities,” the release added.

There has been an almost 200 per cent increase in the number of defence licenses issued to the industries in the last 7-8 years by the government.

At the moment, the public and private share in Indian defence production is about 80 per cent and 20 per cent respectively.

Notably, HAL and BEL also figure in SIPRI’s (Stockholm International Peace Research Institute) 2021 ‘Top 100’ list of the world’s defence companies that was released in December 2022. While HAL ranked 42nd, BEL was placed at 63rd place. Both companies had benefited from major orders placed by the Indian armed forces in recent years.