India’s Defence Exports
Why in News:
- India’s defence exports for 2021-22 were estimated at ₹13,000 crore, the highest ever.
- India’s defence exports were worth Rs 8,434 crore in 2020-21, Rs 9,115 crore in 2019-20 and Rs 2,059 crore in 2015-16.
- The Government has set an ambitious target to achieve exports of about ₹35,000 crore ($5 billion) in aerospace and defence goods and services by 2025.
- The U.S. was a major buyer, as also nations in Southeast Asia, West Asia and Africa.
- The private sector accounted for 70% of the exports, while public sector firms accounted for the rest.
- While India’s defence imports from the U.S. have gone up significantly in recent years, Indian companies have been increasingly becoming part of the supply chains of U.S. defence companies.
Products in the pipeline
- 75 newly developed AI products and technologies, having applications in defence, would be launched.
- A high-powered council chaired by the Defence Minister, and Defence AI council is spearheading the initiative.
- The products to be launched are in the domains of automation, unmanned, robotics systems; cyber security; human behaviour analysis; intelligent monitoring system; logistics and supply chain management, speech/voice analysis and Command, Control, Communication, Computer & Intelligence, Surveillance & Reconnaissance (C4ISR) systems and operational data analytics.
Platforms that are considered for the sale
- The Defence Minister announced that India was ready to supply different types of missile systems, LCA/helicopters, multi-purpose light transport aircraft, warships and patrol vessels, artillery gun systems, tanks, radars, military vehicles, electronic warfare systems and other weapons systems to IOR nations.
- Assistance in capacity building and capability enhancement has emerged as a major theme in discussions with Indian Ocean littoral states with the Navy taking the lead in this area.
- In 2022, India signed a $374.96-million deal with the Philippines, its single biggest defence export order, for the supply of three batteries of shore-based anti-ship variant of the BrahMos supersonic cruise missile
- Vietnam is procuring 12 Fast Attack Craft under a $100 million credit line announced by India and discussions are continuing to identify systems under the second line of credit of $500 million. Vietnam is also interested in Advanced Light Helicopters and Akash surface-to-air missiles.
- To read about Akash Missile: https://officerspulse.com/akash-missile/
- To read about ALH: https://officerspulse.com/indian-coast-guard-icg/·
- HAL has pitched its helicopters and the Tejas LCA to several Southeast Asian and West Asian nations and is in the race to supply the LCA to Malaysia.
- To read about LCA– https://officerspulse.com/lca-mk2/
- Sale of BrahMos supersonic cruise missiles are at an advanced stage with some Southeast Asian nations.
Measures to improve defence exports·
- Measures announced to boost exports include simplified defence industrial licensing, relaxation of export controls and grant of no-objection certificates.
- Specific incentives were introduced under the foreign trade policy and the Ministry of External Affairs has facilitated Lines of Credit for countries to import defence products.
- In addition, defence attaches in Indian missions abroad have been empowered to promote defence exports.
- The Defence Ministry has also issued a draft Defence Production & Export Promotion Policy 2020.
- On the domestic front, to boost indigenous manufacturing, the Government had issued two “positive indigenisation lists” consisting of 209 items that cannot be imported and can only be procured from domestic industry.
- In addition, a percentage of the capital outlay of the defence budget has been reserved for procurement from domestic industry. For the year 2021-22, about 63% of the capital outlay or about ₹70,221 crore will be done from domestic defence industry
Initiatives taken for indigenization of defence products·
- The liberalisation of foreign direct investment in defence manufacturing, raising the limit under the automatic route to 74%, should open the door to more joint ventures of foreign and Indian companies for defence manufacturing in India.
- Mission Raksha Gyan Shakti- The Ministry of Defence launched it in 2018 with the goal of increasing Intellectual Property (IP) in the Defense Production Ecosystem.
- India’s Defence Technology Industrial Base (DTIB)·
- Chief of Defence Staff (CDS) has been tasked with promoting indigenous equipment in the armed force
- Defence India Startup Challenge– Read at https://officerspulse.com/defence-india-startup-challenge/
- Draft Defence Production and Export Promotion Policy 2020– Read at https://officerspulse.com/draft-defence-production-and-export-promotion-policy-2020/
- Defence Procurement Procedures (DPP) 2020– It allows for the publication of a list of weapons or platforms that cannot be imported
- It focuses on FDI in defence production and indigenization of manufacturing costs.
- It also introduces numerous new concepts, including the need for artificial intelligence in platforms and systems, the use of indigenous software in defence equipment, and ‘innovation’ by start-ups and MSMEs (Micro, Small and Medium Enterprises) as a new category of defence purchase.
- Buy (Indian – Indigenously Designed, Developed, and Manufactured), Buy (Indian), Buy and Make (Indian), Buy (Global – Manufacture in India), and Buy (Global – Manufacture in India) (Global).
- It raises the Indigenous Content (IC) requirement for all projects from 40 to 50 percent previously, depending on the category, to 50 to 60 percent now.
- Foreign vendors can receive 30% IC from Indian enterprises only if they purchase through Buy (Global).
- SRIJAN Portal
- The Department of Defence Production has created an indigenization webpage, srijandefence.gov.in, titled ‘opportunities for Make in India’ in Defense, that would provide information on things that can be indigenized by the private sector.
- DPSUs/OFBs/SHQs can use this portal to exhibit things that they have been importing or will be importing that the Indian industry can design, develop, and produce according to their capabilities or through joint ventures with OEMs.
- Corporatization of the Ordnance Factory Boards– Read at https://officerspulse.com/ordnance-factory-board-corporatisation/
- Innovations for Defence Excellence (iDEX)– Read at https://officerspulse.com/innovations-for-defence-excellence-idex-initiative/
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