India’s $5 Billion Defense Exports Target

Context

Recently, at the Aero India 2023 conference in Bengaluru, the Indian Prime Minister reiterated the defense ministry’s target to raise India’s annual defense exports to $5 billion by 2024-25.

Probable Question

 India currently exports defense equipment to over 75 countries. What efforts are being made to ramp up defense exports? (150 words, 10 marks)

Present Status of India’s Defense Export

• According to the Stockholm International Peace Research Institute (SIPRI), India is among the top 25 major arms exporters. 
• Myanmar has been the biggest importer of Indian arms at 50% during the 2017-2021 period, followed by Sri Lanka at 25% and Armenia at 11%.
• India’s defense exports have grown by 334% in the past five years. They touched nearly Rs 13,000 crore in 2021-22.
• India’s private companies and defense PSUs export defense equipment to over 75 countries.
• This includes munition list items under category 6 of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET), for which the Department of Defense Production (DDP) under the Ministry of defense issues an authorization.
• The major defense exports items are Personal Protective items, Offshore Patrol Vessels, ALH Helicopter, SU Avionics, Bharati Radio, Coastal Surveillance Systems, Kavach MoD II Launcher and FCS, Spares for Radar, Electronic Systems, and Light Engineering Mechanical Parts, among others.
• The major items exported by India in the last three years include lightweight torpedoes, weapon locating radar, fast patrol vessels, 120 mm mortar armored protection vehicles, 0.338 Lapua magnum sniper rifles, and simulators.
• Major Export destinations: Italy, Maldives, Sri Lanka, Russia, France, Nepal, Mauritius, Sri Lanka, Israel, Egypt, UAE, Bhutan, Ethiopia, Saudi Arabia, Philippines, Poland, Spain, and Chile have been some of the major export destinations for defense equipment and platforms.
• Top defense export countries: India Exim Bank stated that Mauritius a6 6.6%, Mozambique at 5%, and Seychelles at 2.3% have been among the top customers for India’s defense exports between 2017 and 2021.

Government Initiatives to Boost Defense Exports

To boost defense, the defense ministry has brought in several new policies, such as the following:

• Earmarking 75% of its defense capital budget for 2023-24 towards procurements from domestic sources.
• Earmarking 25% of the defense research budget for the private sector in 2022-23, for newer innovation and developing niche technology, in the field of defense.
• Three positive indigenization lists of 3,738 items, for which there would be an embargo on imports beyond timelines specified against them. 
• Two defense industrial corridors are being set up in Uttar Pradesh and Tamil Nadu.
• There is an ongoing simplification of processes for ease of doing business aimed at boosting defense exports.
• Defense Export Promotion Committee (DEPC) SCHEME: DEPC Scheme was launched in Oct 2018. It aimed at promoting the government’s ‘Make In India’ initiative by improving the marketability of products of prospective Indian defense exporters/ manufacturers globally. DEPC Status granted to 10 Vehicles/ Equipment/ Systems.

Major Defense Export Destinations

• India is in negotiations with a number of nations to export some of its high-end indigenous platforms, including the Light Combat Aircraft Tejas and the BrahMos supersonic cruise missile produced by BrahMos Aerospace Pvt Ltd, an Indian-Russian joint venture.  
• India is in talks with Argentina and Egypt, among other countries, to export its indigenous LCA Tejas, whereas 16 countries have shown an interest in it. 
• India is looking to export the indigenous Advanced Light Helicopter to several countries and has signed a contract with Mauritius for the export of one Advanced Light Helicopter (ALH Mk III) for the Mauritius Police Force. 
• India is in talks with Guyana to export the Dornier 228 and fast patrol vessels and will aim at exporting the latest HTT-40, Light Utility Helicopters (LUH), and Light Combat Helicopter (LCH).
• India is looking to export the weapon system and its lighter next-generation version (BrahMos NG) to over 10 countries, including South Africa, Egypt, UAE, and Saudi Arabia.

Challenges in India’s $5 Billion Defense Exports Target

• Inadequate design capability in crucial technologies, insufficient R&D investment, and the inability to produce significant subsystems and components all impede indigenous production.
• The previous FDI ceiling of 49% was insufficient to attract global industrial firms to establish bases in India.
• The establishment of a manufacturing base requires significant cash and technological investment, as well as a long gestation time. At that point, newer technologies have made things obsolete.

Key to Reaching the $5 Billion Defense Export

• Expanding indigenous offerings.
• Ramping up production for faster and more timely deliveries, particularly for PSUs. 
• Developing niche and critical technologies for export for fighting modern warfare but also eliminating competition.

News Source: The Indian Express

https://indianexpress.com/article/explained/decoding-the-5-billion-defense-exports-target-8466734/

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