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  • 04 March, 2023

  • 5 Min Read

Defense Exports

Defense Exports Target

  • The Ministry of Defense recently decided to increase India's yearly aim for defense exports to $5 billion by 2024–25.

Current status of export:

  • India is one of the top 25 nations that export large quantities of weapons, according to the Stockholm International Peace Research Institute (SIPRI).
  • In the years between 2017 and 2021, Myanmar, Sri Lanka, and Armenia were the three countries that imported the most Indian weapons, each at a rate of 50%.
  • In the last five years, India's exports of defence goods have increased by 334%. In 2021–2022, they reached around Rs 13,000 crore.
  • Almost 75 nations receive defence equipment from private businesses and PSUs in India.
  • Included in this are products from the munition list that fall within SCOMET's Special Chemicals, Organisms, Materials, Equipment and Technologies (Category 6) and for which the Directorate of Defense Production (DDP) within the Ministry of Defense gives a permit.
  • In the last five years, Indian defence exports have surged by 334%, according to a 2022 research from the Stockholm International Peace Research Institute (SIPRI).
  • Coastal Surveillance Systems, Kavach MoD II Launcher and FCS, Personal Protection Items, Offshore Patrol Boats, ALH Helicopter, SU Avionics, Bharati Radio, Spares for Radar, Electronic Systems, and Light Engineering Mechanical Components are among the significant defence exports.
  • Lightweight torpedoes, weapon finding radar, rapid patrol boats, 120 mm mortar armoured protection vehicles, 0.338 Lapua magnum sniper rifles, and simulators are some of the main exports from India over the past three years.

Exporting nations:

  • In a research published by India Exim Bank, it was noted that the top three recipients of Indian defence exports between 2017 and 2021 were Seychelles (2.3), Mozambique (5.0), and Mauritius (6.6).
  • When it comes to ammunition, Myanmar has been the greatest importer of Indian weapons, importing 50% of them between 2017 and 2021. Sri Lanka and Armenia each imported 25% and 11%, respectively.

Challenges to defense export:

  • The inability to generate large subsystems and components, insufficient R&D funding, and inadequate design capacity in key technologies are all barriers to domestic production.
  • The previous 49% FDI cap was insufficient to entice multinational industrial companies to open bases in India.
  • Building a manufacturing foundation necessitates a large financial, technological, and gestational commitment. By that time, everything had become obsolete due to modern technologies.
  • Long gestation: Establishing a manufacturing base requires a lot of money and technology, and it takes time. By then, products become obsolete due to emerging innovations.
  • Different jurisdictions: India's ability to manufacture defence products is hampered by the Ministry of Industry Promotion and Ministry of Defense's conflicting responsibilities.
  • Low quality: In a select few instances, the higher indigenization is mostly related to the low-end technology.
  • FDI Policy: The prior 49% FDI cap was insufficient to encourage international manufacturing companies to establish bases in India.

Governmental Programs:

  • India's defence exports have increased as a result of the government's strong push for defence self-reliance.
  • According to various indigenization projects, domestic purchases will account for 75% of the 2023–24 defence capital budget.
  • A ban on the import of the 3,738 items on three positive indigenization lists has been imposed.
  • In order to increase defence exports, two defence industrial corridors were established in Tamil Nadu and Uttar Pradesh.
  • Relaxation of licencing requirements: Moves including streamlined licencing for the defence industry, laxer export regulations, and the granting of no-objection certifications have made it easier to conduct business.
  • Processes are continually being streamlined to make doing business easier in an effort to increase defence exports.
  • DEPC Scheme (Defense Export Promotion Committee): DEPC Scheme was introduced in October 2018. It was designed to support the government's "Make In India" strategy by making potential Indian defence exporters and manufacturers' goods more globally marketable. 10 vehicles, pieces of equipment, and systems now have DEPC status.
  • The private sector will get 25% of the defence research budget in 2022–2023 for newer innovations and the creation of specialised technologies.

Main export destinations for defence:

  • India is in talks with several countries to export some of its most advanced indigenous platforms, such as the Light Combat Aircraft Tejas and the BrahMos supersonic cruise missile made by the joint Indian-Russian company BrahMos Aerospace Pvt Ltd.
  • India is in negotiations to export its indigenous LCA Tejas to 16 countries, including Argentina, Egypt, and other nations.
  • India has inked a contract with Mauritius for the delivery of one Advanced Light Helicopter (ALH Mk III) for the Mauritius Police Force as part of its efforts to export its domestic Advanced Light Helicopter to numerous other nations.

Way Forward

  • The expansion of the defence sector benefits India economically and strategically by lowering imports and generating jobs.

Source: The Indian Express

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