India’s defence exports have achieved an estimated Rs 13,000 crore for the fiscal year 2021-22, setting a new record. The United States emerged as a significant customer, along with countries from Southeast Asia, West Asia and Africa.
The Role of the Private Sector and Public Firms
Private sector firms were responsible for a staggering 70% of exports in this area, leaving public sector firms to account for the remaining portion. This represents a shift in dynamics from earlier years, when the private sector contributed as much as 90%. Concurrently, India’s defence imports from the U.S. have shown substantial increases in recent years. Indian companies are progressively becoming integral components of U.S. defence companies’ supply chains.
Policies to Boost Defence Exports
The Indian government has recently taken proactive measures aimed at stimulating defence exports. Notably, in January 2022, India penned a USD 374.96 million deal with the Philippines—the most significant single defence export order in its history—to supply three batteries of the BrahMos supersonic cruise missile’s shore-based anti-ship variant. On the domestic front, India instituted a phased import ban on 310 different weapons systems over the past two years, contributing to an increased reliance on home-grown technology.
Status of India’s Defence Exports: Striving for Self-Sufficiency
India’s vision for self-sufficiency in defence production hinges on robust export performance. Over 30 Indian defence companies have exported a diverse range of products—from personal protective items, offshore patrol vessels, avionics suits to radar systems—to countries worldwide. Despite these achievements, India’s defence exports remain below potential. The Stockholm International Peace Research Institute has listed India at 23rd in major arms exporters for the period 2015-2019. A significant hurdle to enhancing India’s defence exports is the absence of a dedicated agency within Indian Ministry of Defence to promote exports.
National Initiatives to Promote Defence Exports
The Indian government launched the Defence Production and Export Promotion Policy 2020, an overarching framework to stimulate domestic defence production capabilities for self-reliance and exports. Recently, changes have been made to encourage private-sector involvement in defence production.
The DPP 2016, for instance, introduced the Indian IDDM—an initiative that gives preference to companies that design, develop, and manufacture products indigenously. Another promising move is the strategic partnership model, which enables Indian firms to partner with foreign manufacturers for technology transfer.
Steps Towards Positive Indigenization
India’s push for positive indigenization is apparent in its two-pronged approach—enabling indigenous industry and restricting imports. The government has imposed bans on importing certain items; it has also released two indigenization lists containing 101 and 108 items, ranging from platforms and weapon systems to sensors. This push for positive indigenization is part of the broader vision to elevate India’s position as a global player in the defence sector.
