Wednesday, May 29, 2024

India’s Defence Industry Emerges As An Exporter From Its Import-Dependent Past

By Staff Correspondent

India’s defence industry has demonstrated significant growth in recent years, with the latest achievement being the country’s all-time high in defence exports. This milestone is attributed to the steady government policy and the Indian defence industry’s remarkable contribution. According to the Press Information Bureau (PIB) in Delhi, the country’s defence exports have surpassed INR 16,000 crore, an increase of approximately INR 3,000 crore from the previous financial year. India’s exports have surged over 10 times since 2016-17, with the products exported to 85 countries worldwide. “This achievement is a testament to the Indian defence manufacturing industry’s growing capabilities, with 100 firms exporting defence products,” defence analyst, Major General VK Madhok (r) told IADB.

Prime Minister Narendra Modi expressed his pride in this achievement via Twitter, describing it as reflecting India’s talent and enthusiasm towards ‘Make in India’. He also acknowledged that the reforms in this sector over the last few years have delivered good results, and the government will continue to support efforts to make India a defence production hub.

India, which was once identified as a net buyer, is now exporting major military equipment worldwide, including Dornier-228, 155 mm Advanced Towed Artillery Guns (ATAGs), Brahmos missiles, Akash missile system, radars, simulators, mine protected vehicles, armoured vehicles, PINAKA rockets and launchers, ammunitions, thermal imagers, body armours, besides systems, line replaceable units (LRUs), parts and components of avionics and small arms. The increasing worldwide demand for Light Combat Aircraft (LCA)-Tejas, light combat helicopters (LCH), aircraft carriers (AC), maintenance repairs and overhaul (MRO) activities etc., highlights the growth potential of India’s defence manufacturing industry.

The Indian government has taken numerous policy initiatives to boost defence exports and initiated reforms over the last five to six years. Export procedures have been made easy and industry-friendly, with end-to-end online export authorisation curtailing delays and bringing Ease of Doing Business. The government has notified three Open General Export Licenses (OGEL) to export parts and components/transfer of technology/major platforms and equipment. The OGEL is a one-time export license, which permits the industry to export specified items to specified destinations enumerated in the OGEL without seeking export authorisation during the validity of the OGEL.

India can leverage its strengths in naval equipment, unmanned aerial vehicles (UAVs), electronic warfare (EW) systems, armoured vehicles, small arms, and ammunition to further increase its defence exports. The country can enhance its manufacturing capabilities and promote public-private partnerships to develop indigenous technologies and reduce dependence on foreign countries. “India can streamline the documentation process by creating a single window clearance mechanism and reducing bureaucratic red tape,” Maj Gen. Madhok (r) said.

The veteran and defence analyst went on to explain, “Expanding its market outreach, India can participate in international defence exhibitions, invite foreign delegations to visit its manufacturing facilities and partner with foreign defence companies for joint ventures. Offering competitive pricing for its defence products, enhancing their quality, and providing after-sales support can attract foreign buyers. Additionally, India can offer practical after-sales support to its foreign buyers by offering MRO services.”

India’s defence industry is poised to become a significant global player with a proactive approach towards foreign mutual trade and rising joint agreements with foreign countries for collective defence manufacturing and strengthening defence ties. Its rising prominence in global markets benefits the country’s economic growth and strategic security.

India Emerges As Significant Exporter In Global Defence Industry

“India’s defence industry is rapidly transforming, positioning the nation as a critical global player. Indian products and services, including UAVs, electronic warfare systems, armoured vehicles, small arms and ammunition, cybersecurity solutions, and training and simulation services, are in increasing demand globally,” said a source in the know of ongoing developments.

To boost domestic manufacturing and reduce import dependency, the Indian government has implemented significant reforms in the defence sector. These include simplified procurement procedures, up to 70% government funding for development costs, and an increase in foreign direct investment (FDI) to 74% through the automatic route, attracting further investments to the sector. The government has set an ambitious target of INR 1,75,000 crore for defence manufacturing, including exports worth INR 35,000 crore by 2024-25.

The defence manufacturing industry is vital to India’s economy, ranking fourth in firepower on the global power index, with a score of 0.0979. Investment in the sector is also surging, with 158 memorandums of understanding (MoUs) signed between the two defence corridors in Uttar Pradesh and Tamil Nadu, representing INR 23,933 crore in investments.

India’s proactive approach towards foreign mutual trade and joint agreements with foreign countries for collective defence manufacturing and strengthening defence ties offers significant growth opportunities for enhancing defence manufacturing in the country. “India’s rising prominence in global markets is promising for its economic growth and strategic security, positioning the nation as a crucial player in the global defence industry,” Maj Gen. Madhok told IADB before signing off.


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