Why in News:
- India’s defence exports have increased from ₹1,521 crore in 2016-17 to ₹8,434.84 crore in 2020-21. The figure stood at ₹10,745 crore in 2018-19.
- 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 changing numbers
- According to the latest report of the Swedish think tank Stockholm International Peace Research Institute (SIPRI), three Indian companies figure among the top 100 defence companies in the 2020 rankings — Hindustan Aeronautics Limited (HAL), Ordnance Factory Board and Bharat Electronics Ltd (BEL). “Their aggregated arms sales of $6.5 billion were 1.7% higher in 2020 than in 2019 and accounted for 1.2% of the top 100 total.
- There was an overall drop in India’s arms imports between 2011-15 and 2016-20, according to another SIPRI report of 2020 and while India remained among the top importers, it was also included in the Top 25 defence exporters.
- Changing geopolitical reality meant that many smaller nations were now worried about security and would look towards India as it had the strength of low-cost, high-quality production.
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.
- 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 sLCA 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.
- Read about it at: https://officerspulse.com/draft-defence-production-and-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