“India’s journey towards self-reliance in the ammunition sector is a collective effort that requires the dedication and ingenuity of all stakeholders. As we move forward, we remain committed to the vision of a self-reliant India, where our capabilities are built on the foundation of strength and innovation.” Cdr Gautam Nanda, Associate Partner, Aerospace and Defence, KPMG in India
In a bold stride towards becoming a global powerhouse in defence manufacturing, India is set to redefine its position in the ammunition market. The AMMO India 2024 report, a collaborative effort by FICCI and KPMG in India, presents a compelling narrative of India’s potential and strategic advancements in this critical sector. This report not only highlights the current trends and challenges but also underscores the immense opportunities that lie ahead for India’s ammunition industry.
Key Data Points
Global Market Size: In 2023 the global demand for ammunition was pegged at ₹1,29,260 crore (US$ 15.5 billion) with heavy calibre ammunition accounting for 53.48% of the global demand, followed by grenades and mines and mortars at 23.27% and medium calibres at 12.84%. Fuelled by the demand drivers mentioned here, the global ammunition is expected to increase to ₹1,84,092 crore (US$ 22.0 billion) in 2032, increasing at a CAGR of 3.95%.
Indian Market Growth: The Indian ammunition market, is on a fast track to grow driven by a combination of strategic initiatives and pressing security needs. Given the ammunition market is witnessing substantial growth we estimate the current market to be worth ₹7,057 crore (US$ 844 million) in 2023 which is about 5.5% of the global ammunition industry. Over the period 2023-2032 we anticipate the market to increase at a CAGR of 4.93% to ₹11,981 crore (US$ 1.4 billion)
Geopolitical conflicts, increase in military spending and rising insurgency: These are the primary reasons for the growth of this industry. This presents increased opportunities for Indian companies in the global ammunition market.
Indian Ammunition Industry Ecosystem: The Indian ammunition industry has traditionally been dominated by government-owned entities namely Defence Public Sector Undertakings (DPSUs). Despite their significant contribution, these organizations have faced legacy issues such as outdated technology, inefficiencies, and supply chain constraints, limiting their ability to meet demands. This has catalyzed the need for a more dynamic and responsive production ecosystem. In response to the increasing demand and supply- demand gap, the sector has seen a surge in investments from both domestic and international players. Liberalization of defence production policies and initiatives like ‘Make in India’ have played a crucial role in attracting private sector participation.
Cdr Gautam Nanda, Associate Partner, Aerospace and Defence, KPMG in India said “India’s journey towards self-reliance in the ammunition sector is a collective effort that requires the dedication and ingenuity of all stakeholders. As we move forward, we remain committed to the vision of a self-reliant India, where our capabilities are built on the foundation of strength and innovation.”
As India continues to focus on self-reliance and innovation, the future of its ammunition market looks promising, ready to meet both domestic and global defence needs. This optimistic outlook reflects a nation on the precipice of significant advancements, poised to make substantial contributions to make substantial contributions to the global defence landscape.
