India’s goal of becoming a global leader in defence manufacturing can gain momentum by strengthening its position in the ammunition market, according to a report titled “AMMO India 2024,” jointly released by FICCI and KPMG on Thursday.
The report highlights the significant opportunities in India’s ammunition industry, driven by ongoing geopolitical tensions, increased military spending, and rising insurgency. In 2023, the global ammunition market was valued at ₹1,29,260 crore (US$ 15.5 billion), with heavy-calibre ammunition accounting for 53.48% of global demand.
Grenades, mines, and mortars followed at 23.27%, while medium calibres made up 12.84% of the market. Global ammunition production is expected to grow to ₹1,84,092 crore (US$ 22.0 billion) by 2032, with a compound annual growth rate (CAGR) of 3.95%.
The report emphasizes that India’s ammunition industry is on a rapid growth trajectory, driven by strategic initiatives and pressing security needs. KPMG estimates that the Indian ammunition market was worth ₹7,057 crore (US$ 844 million) in 2023, representing about 5.5% of the global market. They project that the Indian market will grow at a CAGR of 4.93% over the next decade, reaching ₹11,981 crore (US$ 1.4 billion) by 2032.
Traditionally, India’s ammunition industry has been dominated by government entities such as Defence Public Sector Undertakings (DPSUs) and Ordnance Factories (OFs). However, these organizations have faced challenges like outdated technology, inefficiencies, and supply chain issues, limiting their ability to meet growing demands. This has prompted the need for a more dynamic and responsive production ecosystem.
The report notes a surge in investments from both domestic and international players, spurred by liberalized defence production policies and initiatives like “Make in India.” This has attracted increased private sector participation in the industry. India’s ammunition market is diverse, covering a range of calibres. Small-calibre ammunition, including 5.56mm, 7.62mm, 9mm, and 12.7mm, is widely used by Indian armed forces, particularly the 5.56 x 45mm NATO rounds.
Medium-calibre ammunition, such as 20mm, 25mm, 30mm, and 40mm rounds, is typically employed by armoured vehicles, aircraft, anti-aircraft artillery, and ships. The heavy-calibre category includes 105mm and 120mm tank ammunition, with the Indian military moving towards standardizing its artillery guns at 120mm calibre.
