Big boost for India’s defense sector as GST abolished on major military equipment
In exciting news for India’s defense industry, the government has made a big move to support military modernization and local manufacturing. The Chief of the Army Staff, General Upendra Dwivedi, announced that recent GST reforms will significantly help defense corridors across the country. With these changes, the Indian defense sector can now make larger investments and expect better results.
One of the most important updates is that GST has been completely removed on many military weapons, aircraft, and equipment. This means cheaper and easier procurement for the Indian armed forces. Drones, which play a crucial role in modern warfare, have also benefited — their GST rate has been drastically cut from 28% to just 5%.
Defense officials and industry experts see this as a major boost for the Make in India initiative. With reduced taxes, startups and small businesses working in defense technology will find it easier to invest in research, development, and manufacturing. This could lead to quicker upgrades and innovation in military equipment.
Under the new GST 2.0 rules, several military products that earlier faced 18% GST are now completely tax-free. These include advanced aircraft like the C-130 transport plane (which India has bought from the US) and the C-295 medium transport aircraft, jointly built by Airbus and Tata in Vadodara.
The reforms also remove GST from missile launch systems from drones, ship-launched missiles, flight simulators, underwater vessels, and emergency ejection seats used in fighter jets. These measures aim to make defense procurement more cost-effective and encourage increased domestic production.
Overall, these GST reforms are set to give a significant push to India’s defense manufacturing, helping the country become more self-reliant and strengthening its military capabilities. This is a positive step towards making India’s defense industry more competitive and innovative.
For more updates on India’s defense reforms and military modernization, stay tuned!
