Friday, 17 May, 2024
By: Yash Gupte
Narendra Modi further said the country which was the largest defence importer for decades has now started exporting defence equipment to 75 countries in the world. Image Source: IANS
The Ministry of Defence has also been rapidly increasing its footprint in the indigenous manufacturing of the advanced artillery systems
Prime Minister Narendra Modi at the Aero India Expo in Bengaluru said that the perception of the biennial expo Aero India has changed, and it is now seen as a strength of India rather than just a show that highlights the scope of the defence industry. He also set a target to increase India’s defence exports from $1.5 billion to $5 billion by 2024-25. In order to provide a boost to defence exports and defence manufacturing in India, Egyptian President Abdel Fattah El-Sisi was invited as the chief guest for the annual Republic Day parade in New Delhi. Narendra Modi further said the country which was the largest defence importer for decades has now started exporting defence equipment to 75 countries in the world. “The India of today thinks fast, thinks far and takes quick decisions.” This year’s expo has the participation of more than 80 countries along with 800 defence companies, which include around 100 foreign and 700 Indian companies.
The Government of India has been focusing on making India a ‘defence exporting nation’ rather than a ‘defence importing nation.’
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. The government is focusing on making India an export country in the field of defence. 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 Ministry of Defence has been focusing on boosting up the defence production in India in different ways. The chart below shows the defence production in India from 2016 to 2022.
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. Armament Research and Development Establishment (ARDE) in Pune, Maharashtra is the nodal laboratory of DRDO for design and development of ATAG along with other laboratories of the defence body.
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.
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.
India had exported the defence equipment to more than 68 countries in 2019-20 which the highest till date. The year 2020-21 saw a decline in the number of countries where India had imported its defence equipment due to the widespread disruption in global supply chains caused by the covid-19 pandemic. India is maximizing its efforts to export its defence equipment to maximum countries around the world by simplifying the export authorization procedures and by also increasing the involvement of private industries in defence production.
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 Atmanirbharta 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. 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 Atmanirbhar Bharat objectives and also tend to establish India as a defence equipment exporting country in the world.
