Armed Forces modernization to create opportunities for IT in India's defense market

By eGov Innovation Editors | Feb 5, 2012

Thumbnail: 

The increasing use of information technology (IT) for secure and real-time communication and efficient human and machine management in the Armed Forces presents tremendous growth opportunities for the Indian IT sector, market research firm Frost & Sullivan said.

Although there is a lack of large system integrators in the country, Frost said Indian firms are moving up the value chain via tie-ups with foreign defense majors. India's defense budget is expected to cross $50 billion by 2015.

"Modernization of the forces aims to equip the futuristic individual soldier with hand-held computing devices, encrypted communication, thermal sensors and night vision devices, as well as to integrate these devices with the command, control, communications, computers and intelligence (C4I) systems at the command level for improved tactical decision-making," said Frost & Sullivan Research Associate Aditya Desai. "Given that India's armed force is one of the largest in the world, the modernization program will create both long-term and large-scale opportunities for the Indian IT sector."

New analysis from Frost & Sullivan showed that between 2011 and 2015, India's defense budget is expected to grow at more than 8 per cent year-on-year. India is projected to spend approximately $54 billion on foreign arms and equipment procurements, which will also generate offset opportunities worth $18 billion.

"All modern weapons and equipment are IT-intensive," Desai added. "This trend, along with their afterlife management, requires complex enterprise resource planning (ERP) and EAM suites customized to the requirements of the Indian defense forces."