India's ₹79,000 Crore Defence Procurement Boosts Modernisation Amidst Global Tensions
The Indian government has approved a massive ₹79,000 crore procurement proposal for defence modernisation. Meanwhile, retail inflation hit a five-year low, and startup funding surged. However, export growth slowed, and the Life Insurance Corporation's (LIC) investments sparked debate.
The Defence Acquisition Council approved proposals worth approximately ₹79,000 crore to upgrade military equipment and capabilities. This significant investment comes amidst global geopolitical tensions.
India's annual retail inflation plummeted to 1.54 % in September, the lowest since June 2017. This dip, driven by easing food and fuel prices, could influence monetary policy decisions. However, private-sector growth eased to a five-month low in October, with the HSBC flash composite PMI dropping to 59.9.
Indian startups raised about US $504.6 million during the week ending October 24, an 83 % jump compared with the same period last year. Venture-capital firms are shifting focus towards deep-tech, hardware, defence, and semiconductor startups. Early-stage VC firm Unicorn India Ventures plans to close its third fund at ₹1,200 crore by December 2025, with a majority of capital earmarked for these sectors.
The Life Insurance Corporation of India (LIC) has increased investments in companies like the National Stock Exchange of India Limited (NSE). While these investments support market depth and transparency, limited public disclosures about specific investments raise questions about regulatory oversight and governance practices. LIC's recent investment of roughly US $3.4 billion in the Adani Group, despite legal challenges, has also sparked controversy.
India's export momentum showed signs of slowing, with new export order growth hitting a seven-month low. Officials, however, report progress in finalising a bilateral trade deal with the United States. The Department for Promotion of Industry and Internal Trade (DPIIT) also announced MoUs with key banks to support recognised startups.
The Indian government's defence modernisation push, coupled with record-low retail inflation, signals a mix of strategic and economic priorities. While startup funding soared, export slowdown and LIC's investments under scrutiny highlight the need for balanced growth and regulatory vigilance.
