India’s Ambitious Rs 50,000 Crore Defence Exports Target to go hand-in-hand with Atmanirbharta

New Delhi, India: On assuming charge as Union Minister of Defence for second consecutive time, Mr. Rajnath Singh stated that one of ministry's targets would be to export over Rs 50,000 crore worth of defence equipment by 2028-2029. This seemingly ambitious objective is attainable, considering past track record. From 2016-17, starting at an exiguous Rs.1,522 crore, India's defence exports witnessed year-on-year increases of 207% and 129.5%, reaching Rs. 4,682 crore and Rs. 10746 crore in 2017-18 and 2018-19 respectively. Following two consecutive dips from 2019-2021, exports have grown consistently in post-pandemic years, showing remarkable resilience and commitment to target.  

move should not be intended to make India a leing arms exporter. Not even close, as India does not figure even in top 25 arms exporters in period 2019-2023, as per fact sheet released by Stockholm International Peace Research Institute(SIPRI). However, it does attain top spot in list of largest importers of major arms for same period. This trend will likely persist as India is expected to spend $220 billion in next ten years to modernize and integrate its armed forces. That is precisely why India has envisaged an export strategy to facilitate self-reliance in defence.  

Indigenization: Driving Force Behind Export Growth 

Indigenization has come on back of increased private sector participation, improvement in performance of defence PSUs, revised FDI norms, Positive Indigenization Lists and key projects like Light Combat Aircraft and INS Vikrant reaching ir Final Operation Clearance (FOC) and commissioning stages over last few years. While se developments have laid foundations, establishing an ecosystem for future developments, re is still a considerable gap between its huge arms import bill and its production capacity.

A recent survey by Nexgen Exhibitions Pvt Ltd, a company that organizes various security-related expos, underscored need for increased focus on Research and Development and technology integration, which could potentially boost defence exports to $5 Billion this year itself. Even with government and private spending, domestic defence industry would have limited opportunities for investment in research and development and production if it depended solely on domestic demand. In order to leverage economies of scale and stay relevant, India's industrial defence policy has to be supplemented with a robust export strategy. 

Driving Forces Behind Indigenization and Export Growth 

Department of Defence Production (DDP), responsible for export of Arms and Ammunition, proposed creation of a not-for-profit company under Companies Act, specifically as an export promotion/ facilitation body with participation from industry representatives. At present, re exists an Export Promotion Cell (EPC) under DDP that facilitates coordination between Industry, MoD, and potential buyer countries. On or hand, Defence Innovation Organization (DIO) is a section 8 company that manages Innovation for Defence Excellence (iDEX) platform for fostering innovation and technology development by engaging individuals, start-ups, MSMEs and or stakeholders. iDEX has been proactive in roping in indigenous producers, having cleared procurement of up to Rs. 2000 crores since its inception in 2018. Innovations identified as industry-worthy should not be confined to domestic market. An export promotion ecosystem that brings coordination between iDEX and EPC will bridge glaring gap between finding innovative talent and marketing it to or countries that look forward to buying from India.

Scheme for promotion of Defence Exports provides two options for turning Defence manufacturers into prospective exporters. One is to provide certificates to technically qualified vendors for marketing ir products in international market. Anor option is for prospective exporters with capacity to produce export-worthy items to test ir products using testing infrastructure/laboratories of MoD, subject to certain conditions. Once certified, such products can become a part of an arsenal under Defence Industrial Corridors that not only invests in upgring ir technical standards but also in branding and marketing same as potential force multipliers for security needs of buyer countries. 

Brand India in Defence: A Global Marketing Strategy 

Promotion of Brand India in Defence scheme aims to provide financial assistance to Indian Defence Attaches in different countries to undertake promotional activities for India's defence products. This is where job only begins. DDP needs to be equipped with measures to relentlessly follow up and execute any expressions of interest from enquiry stage right up till delivery, all within a suitable time frame. This would boost credibility of India's defence exports and aid in reducing bottlenecks in clearances to tre.

Defence is a peculiar industry. It involves long development cycles, short life cycles, high costs, regulations and ethical considerations. Moreover, nature of India's security apparatus requires that government handholds industry as it supervises its operations. To make this industry self-sufficient, it is essential that government provides market intelligence, supports innovative branding, encourages pathbreaking research and facilitates seamless delivery of military equipment that has potential to go global.