Friday, 17 May, 2024
By: Yash Gupte
The Government of India has been focusing on making India a ‘defence exporting nation’ rather than a ‘defence importing nation.’ Image Source: IANS
In order to identify potential areas for collaboration, particularly in niche technologies, he invited Israeli industries to deepen their investments in joint ventures with Indian companies.
Defence Minister Rajnath Singh held a telephonic conversation with his Israeli counterpart Mr. Yoav Gallant on March 3, 2023. It was a first conversation between the two ministers during which Raksha Mantri Rajnath Singh underlined the Government of India’s priority for indigenisation and domestic manufacturing of defence equipment under ‘Aatmanirbhar Bharat’. In order to identify potential areas for collaboration, particularly in niche technologies, he invited Israeli industries to deepen their investments in joint ventures with Indian companies. He acknowledged Israeli industries' contributions to the development of an active and world-class defence manufacturing ecosystem in India.
The Egyptian President Abdel Fattah El-Sisi was invited to take part in the annual Republic Day parade in New Delhi as the chief guest with an aim of providing boost to defence exports and defence production in India. Narendra Modi added that the nation, which for decades was the world's top importer of defence products, has now begun to sell military hardware to 75 different nations. "The India of today thinks quickly, broadly, and decisively." More than 80 countries and 800 defence businesses, including over 100 international and 700 Indian enterprises had participated in Aero India Expo 2023. The Government of India has been focusing on making India a ‘defence exporting nation’ rather than a ‘defence importing nation.’
In recent years, the government has made some significant expenditures, advances, and support for the defence manufacturing industry. In support of the "Made in India" initiative, the Defence Acquisition Council (DAC) accepted as necessary (AON) capital purchase bids worth Rs. 7,965 crore ($1.07 billion) for the modernization and operational needs of the armed services in November 2021. The government is focusing on making India an export country in the field of defence. The defence manufacturing industry is anticipated to see significant growth in light of the rising security risks India is experiencing. 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 Defense has been rapidly expanding its presence in the domestic production of advanced artillery systems. This was made clear by the usage of both the indigenous 105 mm howitzer and the Advanced Towed Artillery Gun System (ATAGS) at the Red Fort's Independence Day festivities in 2022 and 2023, respectively. The DRDO has taken up the development of the new generation of weapons as part of the Indian Army's artillery modernisation programme. 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, the "Buy {Indian-IDDM (Indigenously Designed, Developed, and Manufactured)}" category in the Defence Acquisition Procedure (DAP) 2020 has been given first priority for the purchase of capital equipment in order to promote indigenous design and development of defence 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.
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 Aatmanirbhar in the defense sector and by increasing the FDI in defense sector to 76 percent in 2020.
In an effort to enhance the military industry and attract FDI, the government amended the regulations in September 2020 and allowed FDI under the automatic route up to 74 percent and 100 percent through the government route in any sector where it is probable to increase access to modern technologies. By 2025, the Defense Ministry expects to produce $25 billion worth of defence equipment. Private defence manufacturing companies, in particular defence equipment manufacturing companies in India, have benefited from this initiative as it created greater demand opportunities. The Atmanirbhar Bharat goals are being met with the help of these reforms, which also have a capability to make India a global exporter of defence goods.
