Year-ender 23: India witnesses historic 10x surge in defence exports, production scales new heights

New Delhi: The defence sector in India has unlocked several 'never-before' milestones in the year 2023, displaying a substantial surge in defence exports and reaching an unparalleled high in defence production, according to recent reports.

According to the Ministry of Defence defence exports have reached nearly Rs 16,000 crore in the financial year (FY) 2022-23, marking an increase of almost Rs 3,000 crore from the previous fiscal year. This escalation, as highlighted by the Defence Ministry, represents a tenfold rise since 2016-17, affirming India's pursuit of transitioning from a net importer to a notable net exporter.

Global Demand Surges for Indian Defence Products

The global demand for Indian defence products, which includes LCA-Tejas, light combat helicopters, aircraft carriers, and other related items, experienced a noticeable uptick, significantly contributing to this surge in exports. The government's strong emphasis on 'Aatmanirbharta' (self-reliance) in defence and the ongoing modernization of the Armed Forces, as per the Ministry of Defence, have played pivotal roles in driving this remarkable momentum. Additionally, the Defence Ministry's initiatives focused on bolstering border infrastructure, harnessing the power of Nari Shakti (women's empowerment), and ensuring the welfare of Ex-Servicemen have contributed significantly to these achievements.

The domestic shift: Positive indigenisation list unveiled

Also adding to the impetus of self-reliance, the Defence Ministry unveiled the Fifth Positive Indigenisation List (PIL) comprising 98 items, including highly complex systems, sensors, weapons, and ammunition. These items are now slated to be procured from indigenous sources in alignment with the Defence Acquisition Procedure 2020, thereby promoting domestic production and fostering self-sufficiency.

Furthermore, the Department of Defence Production (DDP) announced four PILs encompassing a total of 4,666 items in a bid to stimulate domestic manufacturing. This includes Line Replacement Units/Sub-systems/Spares and Components for Defence Public Sector Undertakings (DPSUs).

Record-breaking defence production: surpassing the 1 lakh crore mark

In another landmark moment, the value of defence production in FY 2022-23 surpassed Rs one lakh crore, marking a substantial increase from Rs 95,000 crore in FY 2021-22. The government's collaborations with defence industries and their associations aimed at addressing challenges and fostering defence production in the country played an instrumental role in achieving this milestone.

Policy reforms focusing on enhancing the ease of doing business, integrating Micro, Small & Medium Enterprises (MSMEs), and start-ups into the defence supply chain have yielded promising results. This initiative has resulted in nearly a 200 per cent increase in defence licences issued to industries over the last 7-8 years.

Investment in modernisation and infrastructure

Additionally, a record 75 per cent of the defence capital procurement budget, approximately Rs one lakh crore, was allocated for the domestic industry in FY 2023-24, marking a significant increase from the previous fiscal year's 68 per cent.

The Ministry of Defence received a total budget allocation of Rs 5.94 lakh crore for FY 2023-24, constituting 13.18 per cent of the total budget. A substantial portion of this allocation, amounting to Rs 1.63 lakh crore, has been designated for modernisation and infrastructure development.

In addition, Prime Minister Narendra Modi inaugurated the Hindustan Aeronautics Limited (HAL) Helicopter Factory in Karnataka, the country's largest facility for helicopter manufacturing. This factory is set to initially produce Light Utility Helicopters (LUHs) and gradually scale up production in the coming years.