India

India taking step towards an emerging weapons exporter

Business Technology

After establishing itself as a worldwide centre for the production of automobiles, India is now moving on to the production of weaponry, armaments, ammunition, battleships, and planes for both export and domestic use. ‘Make in India’ in the defence equipment manufacturing industry is no longer a distant dream. New Delhi is establishing itself as a supplier for worldwide armaments makers, and as a result, it is producing more equipment for its use rather than relying on imports.

The government said in August 2020 that by 2025, it hoped to reach $5 billion in exports and $25 billion in local defence manufacturing. Military equipment exports totalled Rs11,607 crore ($1.54 billion) in the fiscal recently concluded. Exports were Rs1,522 crore (about $200 million) just five years ago, for the fiscal year ended March 31, 2017.

The entire domestic production — private and public — for the fiscal year ending March 2021 was Rs84,667 crore (roughly $11.2 billion), significantly over the $25 billion plan. For the fiscal year ending March 2022, the statistics might be much higher.

Even though it produces warships, fighter jets, nuclear submarines, and missiles such as the Akash and BrahMos, New Delhi remains one of the top two worldwide importers of weaponry. In a report released this month, the Stockholm International Peace Research Institute (SIPRI) analysed two five-year periods: 2012-16 and 2017-21 and found that Indian weaponry imports fell by 21%. Despite this, India was the world’s top importer of significant weaponry from 2017 to 21 and contributed 11% of overall global arms imports during that period, according to the report.

According to the same report, India is ranked 23rd among the top 25 weapons exporters, with Myanmar, Sri Lanka, and Armenia as its main clients. This does not include the $374.96 million BrahMos missile export agreement to the Philippines signed in January of this year. The maritime plane Boeing P-8I, the Rafale fighter planes, the S400 air defence missiles, the submarine-hunting helicopters MH60R, ultra-light howitzers M777, aircraft engines for the Tejas, engines for warships, and spares account for a major portion of India’s import expenditure.

India’s future lies in developing its next-generation fighter jet, the Advanced Medium Combat Aircraft (AMCA). A design is in the works. The stumbling obstacle posed by the presence of a jet engine has been eliminated. A collaboration with the French business Safran is in the works to develop a jet engine. Safran and Hindustan Aeronautics Limited have a joint venture to produce helicopter engines.

Artificial intelligence, unmanned fighter planes, armed unmanned aerial vehicles, and robots are the wave of the future. These are at various stages of completion. This fiscal’s capital budget for equipment procurement would be Rs1,52,370 crore ($20 billion), a 76 percent increase over the Rs86,741 crore granted in 2013-14.

Domestic sources will account for around 68 percent of capital expenditures. R&D presently has a budget of Rs11,981 crore, of which 25% would be allocated to start-ups, academia, and private business.

In the last three years, the MoD has granted Acceptance of Necessity (AoN) to local manufacturers for equipment worth Rs2,47,515 crore, the first step in the procurement process. In three years, 121 acquisition contracts were signed with Indian vendors, out of a total of 191. The Defence Acquisition Council, chaired by Defence Minister Rajnath Singh, has rejected nine import requests totalling Rs46,695 crore.

With a budget of Rs498.78 crore for financial assistance, Innovations for Defence Excellence (iDEX) is engaging enterprises including MSMEs, startups, individual innovators, R&D institutes, and academics.

The Ministry of Defense declared that a private institute will lead the design and development of 18 main defence platforms. There are currently 2,851 goods on the ‘positive indigenisation list,’ which cannot be imported after a pre-determined cut-off date. The defence sector is interested in 4,006 of the 19,509 goods listed for local manufacturing.