Saturday, 05 Oct, 2024
By 2028–2029, the government wants to almost quadruple India's yearly defence output to ₹3 lakh crore. The goal for defence exports is more than doubled, from the current level of ₹21,083 crore to ₹50,000 crore. Image Source: IANS
The government and the Indian defence companies are taking steps to expand their presence in the African countries. Tata Advanced Systems Ltd. (TASL) is establishing its first significant overseas defence production plant
According to the Raksha Mantri Rajnath Singh, India's defence production has reached an all-time high of ₹1.27 lakh crore in terms of value in 2023-24 and it is now exporting weapons and military hardware to more than 90 friendly countries. A few days ago, the Ministry of Defence attributed the growth to the successful implementation of the policies and initiatives of the Government directed towards maximising indigenous defence production and enabling participation of private companies like defence startups and MSMEs in the domestic defence production.
In accordance with information gathered from all Defence Public Sector undertakings (DPSUs), other PSUs producing defence items, and private enterprises, the nation's defence production has reached a record-high of ₹1,26,887 crore, up 16.7 percent from the previous fiscal year. In FY 2022–2023 defence output was valued at ₹1,08,684 crore.
Source: Department of Defence Production, Ministry of Defence
Indian armed forces are now using weapons and platforms manufactured on Indian soil and the country is rising on the global defence industrial landscape, Rajnath Singh said in a post on 'X' on the 10th anniversary of the NDA government's 'Make in India' programme. The government under Prime Minister Narendra Modi's "astute leadership" introduced the 'Make in India' programme with a vision to make the country self-reliant in every domain, he added. "Ten years since then, many reforms have been made in every sector including the defence sector. India is rising on the defence industrial landscape of the world," he said.
Approximately 79.2 percent of 2023–24's total value of production (VoP) came from DPSUs and other PSUs, with the private sector accounting for the remaining 20.8 percent. The data demonstrates that both the private sector and DPSUs/PSUs have seen a consistent increase in defence output in terms of absolute value. The industry, comprising DPSUs and other PSUs that produce defence items, as well as the private sector, were commended by Shri Rajnath Singh for bringing defence output to a record level.
Source: Department of Defence Production, 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 indigenisation of several defence products. The locally produced indigenous 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.
By 2028–2029, the government wants to almost quadruple India's yearly defence output to ₹3 lakh crore. The goal for defence exports is more than doubled, from the current level of ₹21,083 crore to ₹50,000 crore. The overall annual defence output target for 2024–2025 is ₹1,75,000 crore, including exports valued at ₹35,000 crore.
India’s Defence Production
Source: Department of Defence Production, Ministry of Defence
Talking about the defence exports, New Delhi’s defence exports crossed the ₹21,000 crore mark for the first time in 2023-24 and the defence ministry has set a target of increasing it to ₹50,000 crore in the next five years. Weapon Simulators, 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 90 countries all over the world. Names of the countries cannot be divulged due to strategic reasons. Over 100 firms are actively exporting defence products. Multiple sophisticated defence systems including 155 mm Advanced Towed Artillery Guns, Brahmos Missiles, etc, have been exported to other countries.
The government and the Indian defence companies are taking steps to expand their presence in the African countries. Tata Advanced Systems Ltd. (TASL) is establishing its first significant overseas defence production plant. With the long-term goal of serving the larger African market, the Casablanca, Morocco, company will first concentrate on manufacturing Wheeled Armoured Platforms (WhAP) for the Royal Moroccan Armed Forces.
India’s Defence Exports
Source: Department of Defence Production, Ministry of Defence
The Indian Army has already used a small number of the WhAP, an amphibious infantry combat vehicle that can traverse a variety of terrains, including the border with Ladakh. The new factory is anticipated to be operational within a year, with the first units scheduled for rollout within 18 months. It is anticipated to have an annual production capacity of 100 combat vehicles.
This project represents a significant turning point in India's defence export strategy as it enters the African market, which is expected to grow at an exponential rate in the years to come. About 350 jobs will be generated by the new plant, and a sizable amount of work will be done in India. It also emphasises Tata's foray into the fiercely competitive African defence industry, which has traditionally been dominated by European and Russian vendors but is currently witnessing a surge in interest from Indian businesses.
The DPSUs' sluggish performance in living up to expectations presents the largest obstacle to the government's export goal. There have been some unsuccessful recent attempts to transfer large systems. For example, Malaysia chose a Korean substitute for the light combat aircraft Tejas fighter that Hindustan Aeronautics Limited, the largest defence manufacturer in India, was unable to win in an international competition. Garden Reach Shipbuilders and Engineers previously lost a significant tender in the Philippines, demonstrating the challenges the DPSUs encounter while exporting weapons.
In order to promote indigenous defence production with special focus on participation of MSMEs and start-ups by bridging gaps in defence testing infrastructure in the country, Defence Testing Infrastructure Scheme has been launched to boost domestic defence and aerospace manufacturing.The central government has also taken a number of steps for the promotion of MSMEs in the defence sector. Defence procurement worth ₹5,463.82 crore was procured from the MSMEs in the year 2020-21. The value of defence procurement from MSMEs in 2019-20 was ₹4,603.95 crore. During the last five financial years (2018-19 to 2022-23), 239 capital acquisition contracts have been signed for procurement of defence items/equipment. Out of which, 168 contracts accounting for 68 percent of total contract value have been signed with Indian vendors including MSMEs. Around Rs 500 crore have been sanctioned for Defence start-ups from 2021-22 to 2025-26.
A report published by Jefferies states that the industry expects a noticeable 13 percent Compound Annual Growth Rate (CAGR) from FY23 to FY30, with an anticipated domestic defence opportunity of between $100 and $120 billion over the next five to six years.
