India’s
aerospace and defence (A&D) sector is entering a high-growth phase, but execution
constraints could become the biggest risk to sustaining momentum, according to
a new PwC India study titled Accelerating
aerospace and defence manufacturing through operational excellence and supply
chain resilience.
The
A&D sector is poised to play a catalytic role in India’s economic
transformation, helping drive the nearly 16-fold expansion in manufacturing
required to realise the country’s ambition of becoming a $30 trillion economy
by 2047. Strong demand, rising exports and policy support have positioned
A&D manufacturing as a key pillar of India’s economic growth. However, the
study highlights that large order backlogs, which could take up to a decade to
clear, may test the sector’s ability to deliver at scale.
India’s
A&D sector is at a turning point. Demand is strong and exports are rising,
but the next phase will be defined by execution at scale.
India
now exports defence products to nearly 100 countries. Domestic defence
production reached a record ?1.54 lakh crore in FY25. However, large order
books are creating pressure on delivery capacity.
For
major manufacturers, order backlogs are already significant:
·
1.71x to 6.88x order book-to-revenue multiples
· 2–7 years of execution backlog
· In some segments, up to 5–10 years to clear existing orders
This
points to a clear structural challenge. As Dinesh Arora, Partner and Leader
Advisory, PwC India, notes: “The real test for India’s aerospace and defence
sector is no longer whether demand exists, but whether the ecosystem can
execute with speed, precision, and resilience. As order books expand, companies
will need to move beyond incremental capacity addition and fundamentally
strengthen planning, shopfloor productivity, supplier coordination, and digital
integration. Those that build these capabilities early will be better
positioned to convert growth momentum into reliable, globally competitive
delivery. Put simply, India has the opportunity. Now it must build the execution
engine to match it.”
To
address the widening gap between order books and execution capacity, the study
outlines six priority transformation areas:
I.
Supply chain efficiency
II. Operational excellence
III. Planning and governance
IV. R&D acceleration
V. Workforce productivity
VI. Digital integration, or digital thread
These
transformation levers can help the sector move from backlog-led growth to
execution-led scale. The focus areas include stronger operations, shopfloor
discipline, digital integration, indigenous vendor ecosystems, supply chain
resilience and smarter use of advanced technologies. Together, these shifts can
enhance productivity, minimise rework and enable manufacturers to execute
faster, more reliably and in line with global competitive standards.
“For India’s aerospace and defence sector, the
next phase of growth will be shaped not just by demand, but by the ability to
execute with consistency, speed, and precision with scale. Companies that
strengthen planning, modernise operations, and build resilient, digitally
connected supply chains will be best placed to convert today’s order pipeline
into timely, high-quality output at scale,” said Captain Vishal Kanwar,
Aerospace Defence and Space Leader, PwC India.