PM Modi aims for threefold increase in defence exports of India

Defence exports India: In traditional warfare discourse, weapons played a crucial role in influencing others through fear of military might. As a result, power became synonymous with military capabilities. However, with the rise of liberalism and the concept of “complex interdependence,” the notion of power shifted from hard power to soft power. With soft power, the idea of power changed to include socio-economic and political capabilities.

However, in the 1990s, there was another transition from soft power to smart power. Smart power referred to the use of soft power, with the possible addition of hard power. In other words, a policy of “carrot and stick.”

This led to an increase in defence spending worldwide, but India lagged behind. With the election of Prime Minister Modi, the situation has changed for the better. India is now not only importing military equipment but also manufacturing it. More interestingly, India, once a major importer, is now becoming an exporter of defence equipment.

Here, we will have a comprehensive analysis of India’s growing military capabilities, its imports and exports in the last few years.

PM Modi’s aim

On Monday, February 13, 2023, the Prime Minister of India, Narendra Modi, announced his aim to increase defence exports to $5 billion over the next two years. This becomes important as this target is three times the current level of exports. Additionally, there is an ongoing biennial Aero India show in Bengaluru, and the government is eyeing defence deals worth $9 billion (Rs. 750 billion).

In his speech he said, “From about $1.5 billion in 2021-22, India targets to export $5 billion worth of military hardware by 2025.” Speaking about the investment laws in defence sector he further said, “India has changed its laws to facilitate investments in the defence sector, making it a reliable defence partner.”

Being assured of the need of private sector he also said, “I call on India’s private sector to invest more and more in the country’s defence sector.” He was seen confident about the rejuvenation in the defence sector during the 8-9 years of his tenure. Let us understand the defence exports and imports of India in the last few years.

In the year 2013-14, India’s imports of defence equipment totalled Rs. 38,203 crores, while the exports of defence equipment were only Rs. 686.27 crores. According to reports, from 2014 to 2018, India was the world’s second-largest defence importer, after Saudi Arabia, accounting for 9.5% of global trade. In a later report by the Stockholm International Peace Research Institute (SIPRI), India’s foreign defence equipment procurement was equivalent to Saudi Arabia, accounting for 11% of world trade. However, things started to change soon after 2014.

With the increase in Budget Estimates (BE), the defence sector has grown tremendously in recent years. Although imports gradually increased in the beginning, they have been steadily declining since last year. The vacuum left by the decline in imports has been filled by indigenous equipment. However, the dramatic increase in exports is commendable. Defence exports in 2017-18 were Rs. 4,682 crores. In the five years until 2021-22, that figure increased by 174 per cent to Rs. 12,815 crores. If Prime Minister Modi’s aim is achieved, there will be a more than 300 per cent increase in defence equipment, providing a boost to India’s defence sector. Additionally, reports claim that this figure is estimated to reach the Rs. 17,000 crore mark in the financial year 2022-23.

Also read: Dominating the skies: The unstoppable Atmanirbhar Helicopter Revolution

Export and Indigenisation

During 2013-14, there were 22 major exports destinations for Indian defence products like Italy, Israel, Russia, USA, UAE, UK and France among others. In recent years, new countries such as Maldives, Egypt, Bhutan, Saudi Arabia, Ethiopia, Poland, Chile, and Hungary have been added to the list of export destinations.

The production of LCA Tejas has provided an edge to defence exports of India. Argentina and Egypt, along with the US, Australia, Indonesia, Malaysia, and the Philippines, have shown interest in buying the aircraft from India. Tejas is manufactured completely in India and is the first completely indigenous aircraft. Its demand by other countries is proof of successful defence exports aspirations of India.

During the DefExpo 2022 event, C.B. Ananthakrishnan, the Chairman and Managing Director (CMD) of Hindustan Aeronautics Limited (HAL), reported that a number of countries, such as Argentina, the Philippines, and Egypt, have expressed interest in the Advanced Light Helicopter (ALH) and Light Combat Helicopter (LCH), both of which are domestically designed. Speaking about the Philippines, the country is modernizing its defense capabilities in the face of various security challenges and long-standing territorial disputes with China in the South China Sea.

India, once an importer of bulletproof jackets, began exporting them to as many as 18 countries in 2020. According to Defence Minister Rajnath Singh, industrial licenses were issued to 15 companies for manufacturing bulletproof jackets. These companies have a production capacity of over 10 lakh per annum to meet both domestic and export requirements. Moreover, the jackets meet high international standards.

Apart from LCA, LCH and bullet proof jackets, India is also exporting Pinaka rocket launchers, Brahmos missiles, high speed guard boats and weapon locating radars. This is commended by Atmanirbhar Bharat and ‘Make in India’ initiative, and the list is continuously expanding with the designing and manufacturing of new equipment, the government is anticipating new ways ahead.

Also read: In global defence market, Tejas is top-shelf stuff

Planned move by Prime Minister

The government’s move towards increasing defence exports and decreasing imports was a deliberate and strategic decision, aimed at producing positive consequences. Prime Minister Modi had the dual goal of reducing imports while increasing exports, with the resulting gap to be filled by the growth of indigenous production. The Atmanirbhar Bharat and Make in India initiatives played an essential role in achieving these goals.

Recently, PM Modi inaugurated Asia’s largest helicopter manufacturing facility. The steps were taken by the government to boost the Make in India initiative by promoting indigenous design, development and manufacturing of defence equipment, platforms, systems, and sub-systems.

India imposed a phase wise import ban on 310 defence equipment and weapons in the last two years. In the capital allocation of 2021, 68 per cent was reserved for procurement from Indian industry.

Increasing exports obviously requires large-scale manufacturing and advanced technology. While Russia had been the biggest defence trading partner for India, the reduction in imports and increase in exports put India and Russia face-to-face. The cancellation of the Su-57 deal also came with a pinch of salt. Recently, Russia announced that it wants to collaborate with India for its Su-75 “checkmate” aircraft.

This whole development came in line with the NSA Ajit Doval’s back-to-back visits to United States, United Kingdom and Russia. In the US, Doval and his counterpart Jack Sullivan launched Initiative on Critical and Emerging Technologies (ICET). Moreover, the recent defence trade with US have been based on transfer of technology.

In the current world order, in order to maintain neutrality, India needs to maintain friendly relations with both the USA and Russia. During his visit to Moscow, Ajit Doval met with Russian President Vladimir Putin. As India is looking towards technology transfer and increased exports, this becomes a crucial agenda for the Doval-Putin meeting. The discussion was centred around strengthening bilateral issues, so there must have been a discussion on India’s ‘Make in India’ push, which is a need of the hour. Looking at the history of India and Russia’s relations, it is certain that Russia will acknowledge India’s stance and formulate policies accordingly, not just out of respect, but out of its own necessity.

This is proved by the dogfight between the USA and Russia during the ongoing Aero India show to become India’s ‘fifth-generation ally’. Russia wants India to procure Su-75 ‘Checkmate’, its latest fifth-generation aircraft that it showcased during the show, while the US showcased its latest multirole F-35A Lightning II and F-35A Joint Strike Fighter.

While India has both options open until now, the bargaining chip is with India, and it will surely go with the aircraft that provides technology transfer along with an indigenous manufacturing unit.

Also read: Decoding Ajit Doval’s sudden visit to Russia

Future of defence exports of India

The dream of India’s exports is a necessity in the current world order. India is currently exporting almost every commodity to the world. However, the defence sector has had a comparatively lower share. But with Prime Minister Narendra Modi’s focus on enhancing defence exports of India, the country is expected to significantly increase its share of defence exports in the world. At present, India exports defence equipment to as many as 75 countries, and this number is expected to increase in the coming years.

India is not only seeking to maintain a balance between the United States and Russia but also to counter China by exporting defence equipment to countries like the Philippines. It is also seeking to increase its exports to countries in Africa, Latin America and the Middle East. The entire concept of defence exports of India is in sync with India’s geopolitical needs and it will be interesting to see what unfolds in the near future.