India’s Defence Industry: From Importer To Exporter

Story Highlights
  • India was the world's second-largest weaponry importer from 2014 to 2018
  • The S-400 air defence system, four stealth frigates, AK-203 assault weapons, a second nuclear attack submarine on lease, and certain Kamov-226T utility helicopters, Mi-17 helicopters, and a short-range air defence system are among the Russian imports.

According to a research published by the Stockholm International Peace Research Institute (SIPRI), India was the world’s second-largest weaponry importer from 2014 to 2018, accounting for 9.5 percent of worldwide totals. In 2014-18, Russia contributed 58 percent of Indian arms imports, and countries including Israel, the United States, and France all increased their arms imports to India.

In reality, Russia’s proportion of Indian imports is set to grow in the future years, as India has signed several agreements with Russia and many more are in the works.The S-400 air defence system, four stealth frigates, AK-203 assault weapons, a second nuclear attack submarine on lease, and certain Kamov-226T utility helicopters, Mi-17 helicopters, and a short-range air defence system are among the Russian imports. This clearly demonstrates that India has been significantly reliant on weaponry imports to strengthen its defence sector for many years.

However, according to a new report from the Stockholm International Peace Research Institute (SIPRI), India’s arms imports fell by 33% between 2011-15 and 2016-20, and as a result, India has lost its top spot to countries with the highest arm imports to Saudi Arabia, which fell by 24% between 2009-13 and 2014-18.

These figures show that India is reducing its arms imports and, as a result, developing its defence sector by manufacturing its own military equipment, while also aiming to increase revenue by exporting arms and military equipment to other countries.As a result, the crucial question that now enters the discussion is: Can India transition from being a net importer to a net exporter of military goods?

The answer to this issue may be found in the fact that in January 2022, India accomplished an unique milestone when it received a $375 million order from the Philippines for the supply of three BrahMos supersonic cruise missile batteries, as well as training and support.

This mega-deal is New Delhi’s first significant export, and the good news is that countries as far away as Vietnam and Indonesia have expressed interest in the missiles. India’s strong track record in the defence sector, particularly in the last five years, is reflected in this missile purchase.

According to a declaration submitted to a parliamentary panel by the Ministry of Defence, India’s defence exports have increased about sixfold in the last five years, from 1500 crore to 9000 crores, with the private sector accounting for 90% of the total.

According to the ministry, India’s military exports are currently destined for 84 countries. This report from the Ministry of Defence can also be compared to the Stockholm International Peace Research Institute’s report (SIPRI). According to a research published by SIPRI in the year 2020, India is currently ranked 25th among 25 nations with significant defence exports.Furthermore, according to reports, the Defence Ministry is also working on a well-thought-out policy for defence manufacturing and export promotion, which is also nearing completion.

Furthermore, the export value of PSUs such as BEL, HAL, BEML, GRSE, BDL, and MIDHANI for the financial year 2021 was Rs 376.46 crore, Rs 194 crore, Rs 463 crore, Rs 87.49 crore, Rs 145 crore, and Rs 19.42 crore, respectively, which is a promising indicator for India’s Defense sector.

However, the value of defence exports for certain defence public sector undertakings, such as MDL, GSL, and HSL, was zero for fiscal year 2020-21, but with India’s well-thought defence policies and demand for exports, even these DPSUs can contribute to India’s economy in the near future by expanding its growth in terms of defence exports.Overall, the public sector contributed a large amount of Rs 68,000 crore to the total production of Rs 85,000 crore.

Considering all of these facts and figures, one can safely conclude that India’s defence sector is rapidly evolving and will soon be able to create new chapters in its history by transitioning from an importer to an exporter.

Furthermore, India’s honourable Defense Minister stated that the government aims to accomplish an export target of Rs 35,000 crore by 2024-25. This aim does not appear unattainable, given the promising picture of India’s developing defence business, but India must focus on a few key areas to achieve it. To begin with, with the evolving concept of “Make in India,” India should look to award a number of contracts to its domestic defence industry, and the good news is that the Defence Ministry has already spent over Rs 51,000 crore on domestic purchases, accounting for 58 percent of the capital budget for 2020.

In 2021, a Rs 48,000-crore contract for 83 LCA Mk-1A jets was signed with Hindustan Aeronautics Limited, alongside a $ 2.5-billion contract for 56 medium transport aircraft for the Indian Air Force, which is being jointly executed by Airbus Defence and Space and Tata Advanced Systems Limited under the Make in India initiative. Steps like this will undoubtedly aid India in accomplishing its goal.

Second, India can concentrate on developing medium-high-tech weapons such as the BrahMos missile, the Pinaka multi-barrel rocket launcher, advanced light helicopters, naval ships, the Akash air defence system, and the Astra air-to-air missile, as well as other low-tech and non-lethal military weapons. India might reach the $5-million level in five years if it can capture the non-lethal military equipment market. India can also aim for lethal weapons after Make in India is fully operational, at which point it will be able to meet the $10 to $15 billion target within a decade.

Third, India should focus on promoting innovation, research and development, and start-ups with developed technology, as well as appointing the necessary number of scientists and professionals in the manufacturing sector, in order to increase India’s military output and therefore reduce imports.

As a result, it can be concluded that, with all necessary steps taken and monitored, India can not only become one of the top countries in terms of military imports, but also address the lingering threats posed by China and Pakistan, without having to rely on countries such as Russia, France, and Israel for military imports in times of military emergency.

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