Friday, 17 May, 2024
By: Yash Gupte
Though India has emerged as the world’s largest importer of arms from 2018-22, its indigenous defence production and measures taken to boost the defence exports cannot be ignored. Image Source: IANS
India remained the world’s largest arms importer for the five-year period between 2018-22 even though its arms imports dropped by 11 percent between 2013–17 and 2018–22.
The Ministry of Defence recently released data about India’s defence exports. The defence manufacturing sector has seen some major developments, investments and support from the government in the recent past. The Defence Acquisition Council (DAC) granted Acceptance of Necessity (AON) to capital acquisition bids totaling Rs. 7,965 crore ($1.07 billion) for the modernisation and operational needs of the armed services in November 2021, supporting the "Make in India" drive. Considering the increasing security risks India is facing, the defence manufacturing sector is expected to experience significant expansion. This will increase demand for defence technology. Incentivised by various government reforms, India is quickly ramping up its manufacturing capacity. The Government of India has been focusing on making India a ‘defence exporting nation’ rather than a ‘defence importing nation.’
Though the Indian Government is aiming to make India a defence exporting nation, a few reports reveal that though India has gradually emerged as a defence exporting nation, it has also emerged as the largest importer of defence equipment in the world. According to Swedish think tank Stockholm International Peace Research Institute’s (SIPRI) report titled ‘Trends in International Arms Transfer, 2021’ released in March 2022, India remained the world’s largest arms importer for the five-year period between 2018-22 even though its arms imports dropped by 11 percent between 2013–17 and 2018–22. The report revealed that India and Saudi Arabia have emerged as the largest arms importers from 2018-22, each accounting 11 percent of all global arms sales. India and Saudi Arabia were followed by Egypt, Australia and China.
Source: Stockholm International Peace Research Institute (SIPRI)
Russia was India's top arms supplier from 2013 to 2017 and again from 2018 to 22; however, between 2018 and 22, France overtook Russia to become India's second-largest arms provider, with a percentage of the country's overall arms imports falling from 64 percent to 45 percent. According to the most recent SIPRI data, among the top 10 arms exporters for the years 2018 to 22, India was the largest arms export market to South Korea, followed by Russia, France, and Israel. India was also the third largest market for South Africa which was ranked 21 in the list of arms exporters.
The report attributed the decrease in India’s arms import to several factors including India’s slow and complex arms procurement process, efforts to diversify its arms suppliers, and attempts to replace imports with major arms that are designed and produced domestically.
Though India has emerged as the world’s largest importer of arms from 2018-22, its indigenous defence production and measures taken to boost the defence exports cannot be ignored. The Ministry of Defence has also been rapidly increasing its footprint in the indigenous manufacturing of the advanced artillery systems. This was not only visible through the use of indigenous 105 mm howitzer at the Republic Day celebrations in 2023 but also through the use of Advanced Towed Artillery Gun System (ATAGS) at the Independence Day Celebrations at the Red Fort in 2022. As part of the Indian Army's artillery modernisation programme, the DRDO has taken over the development of the new generation of weapons. Also, in order to promote indigenous design and development of defence equipment ‘Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}’ category in the Defence Acquisition Procedure (DAP) 2020 has been accorded top most priority for procurement of capital equipment.
Source: India Brand Equity Foundation
The defence production in India was at an all-time high during 2017-18 at $12.2 Billion. There was a decline in the defence production in 2018-19 and 2019-20. One of the major reasons was the covid-19 pandemic which resulted in the nationwide lockdown for a long period of time and also the disruption in supply chains. But the government once again ramped up its efforts to increase the defence production in India as this is evident from the figures of 2020-21. The defence production increased to $10.9 Billion in the year 2020-21 and it ascended to $11.85 Billion in 2021-22.
Weapon Simulators, Tear Gas Launchers, Torpedo Loading Mechanisms, Alarm Monitoring & Control, Night Vision Monocular & Binocular, Light Weight Torpedo & Fire Control Systems, Armored Protection Vehicles, Weapons Locating Radar, HF Radio, Coastal Surveillance Radar, etc. are some of the major defence equipment exported over the past five years. At present, the exports are being made to more than 80 countries all over the world. Names of the countries cannot be divulged due to strategic reasons.
Source: Ministry of Defence
Government has taken various steps to improve Indian defence products and make them competitive globally. To achieve "Aatmanirbharta in Defence," the government has placed a focus on the indigenization of several defence products. The locally produced indig12.2enous goods become globally cost competitive, and it also makes it easier for MSMEs to be integrated into the global supply chain. Regularly and without charge, the DRDO transfers new technologies to the industries. Industries have been provided free excess to DRDO patents. DRDO conducts Niche Technology Demonstrations by engaging industries. This provides a dual benefit by assisting industries with user inputs for product improvement and for self-testing and evaluation of their products in field conditions.
Apart from a gradual increase in the number of countries importing Indian defence equipment, the numbers of India’s defence exporters have also increased. In 2016-17, there were 19 Indian defence equipment exporters. The number hit an all-time high of 76 in 2020-21. The rise in number of exporters can be attributed to the effective steps taken by the government in the implementation of the doctrine of Aatmanirbhar in the defense sector and by increasing the FDI in defense sector to 76 percent in 2020.
In an effort to provide a boost to the defense sector and increase the infusion of FDI, the government in September 2020 revised the regulations and permitted FDI under the automatic route up to 74 percent and 100 percent through the government route in any area, where it is likely to provide access to contemporary technologies. The Defence ministry has projected defence production worth $25 Billion by 2025. The iDEX (innovation for defence excellence) was launched in order to foster innovation and technology development in Defence by engaging Industries including MSMEs, start-ups, Individual Innovators, R&D institutes and Academia.
Private defence manufacturing companies, in particular defence equipment manufacturing companies in India, have benefited from this initiative as it created greater demand opportunities. These reforms are helping to meet the Aatmanirbhar Bharat objectives and also tend to establish India as a defence equipment exporting country in the world.
