SIPRI new export ranking list: Over the last five years, India’s defence exports have been valued at INR 4,682 crore in 2017-18, INR 10,746 crore in 2018–19, INR 9,116 crore in 2019-20, 8,435 crore INR in 2020-21, and 12,815 crore INR in 2021-22. As of March 14, 2023, the figure for 2022-23 was INR 13,399 crore. The Indian Prime Minister, Narendra Modi, is optimistic that his government’s efforts will result in a five-fold increase in India’s annual defence exports to INR 35,000 crore (US$5 billion) by 2024–25 from their current value of approximately 1.5 billion USD. India is exporting a variety of systems, such as helicopters, patrol vessels, personnel protective gear, surveillance systems, radars, and various components, to 85 countries. But SIPRI new export ranking list ousts India from the Top 25 exporters.
SIPRI excludes India from Top 25
India has been excluded from the SIPRI new export ranking list of the top 25 arms exporting countries, a list it had joined in 2015-19 with a 0.2% global export share. In the previous year’s report by SIPRI, India was ranked 23rd, ahead of Brazil and Portugal, with an equal export share. However, in this year’s report, India did not make the list. Despite this, India remains the world’s largest importer of arms, according to SIPRI, a position that India would prefer not to hold. SIPRI has identified India as the top arms importer for the period of 2018–22.
China was the world’s largest arms importer from 2005–09, while Saudi Arabia has held this position three times in recent years: in 2014-18, 2015-19, and 2016-20. Despite the Indian government’s efforts through the “Make in India” programme and systematic reduction of imports by releasing four “Positive Indigenization Lists” for 411 service items and three lists for 3,738 Defense Public Sector Undertakings (DPSUs), India remains the largest arms importer in the world.
Wide difference in global volume
Despite India’s increased defence exports, it has not been able to secure a spot among the top 25 major arms exporters in the world. One possible explanation for this is that the global volume of international arms transfers decreased by 5.1% in the previous year, with many countries in Africa and Asia reducing their arms imports due to economic reasons. This decline in arms transfers was observed in various regions, including Africa (-40%), the Americas (-21%), Asia and Oceania (-7.5%), and the Middle East (-8.8%), which has adversely affected India’s arms exports. Additionally, only a few countries continued to purchase arms, with India, Saudi Arabia, Qatar, Australia, and China being the five largest arms importers during 2018-22.
Upon closer examination of the 25 countries that export the most arms, it becomes apparent that the top ten exporters—the United States, Russia, France, China, Germany, Italy, United Kingdom, Spain, South Korea, and Israel—are responsible for 90.7 percent of global arms exports from 2018 to 2022. Their main exports consist of combat aircraft, major warships, surface-to-air missile systems, tanks, other armoured vehicles, and artillery. This indicates that the remaining 15 countries only make up nine percent of the global arms export market, placing them far behind the competition. Consequently, a country must possess a diverse range of “major military equipment” suitable for export in order to have a significant impact on the global market.
Israel, ranked tenth on the SIPRI new export ranking list, has a modest global share of 2.3 percent. Despite this, it has managed to export significant quantities of major military equipment, including 18 combat aircraft, 26 surface-to-air missile systems, 19 tanks, 69 other armoured vehicles, and 87 artillery pieces between 2018 and 2022.
SIPRI new export ranking list: Reasons for losing rank
“In contrast, India’s exports primarily consist of low-value products and relatively small export orders. However, India’s export orders have increased from INR 8,434 crore in 2020–21 to INR 12,814 crore in 2021–22, largely due to the sale of high-end products. For instance, BrahMos Aerospace secured a deal worth US$375 million with the Philippines for three batteries of the BrahMos supersonic cruise missiles, while Kalyani Strategic Systems Limited obtained a contract worth US$155.5 million for exporting 155mm artillery guns to an undisclosed country.
Secondly, India is competing against major players that have been dominating the export sector for a long time and have a history of technical advancement and built-in capacity. India is a new player and has just started manufacturing aircraft like Tejas and aircraft carriers. However, India is manufacturing and exporting a large list of equipment.
If we consider that a country wants to procure defence equipment, it will likely give preference to sources that have a long history of expertise. However, the pace at which India’s exports are growing speaks volumes about the faith that countries around the world are showing. Nevertheless, it cannot be ignored that India has lost some deals due to the aforementioned factors.
Thirdly, apart from the US, all the countries have a very concentrated market with only a few countries as purchasers. In fact, China, which accounts for 5.2 percent of global exports, sells 51 percent of its exports to Pakistan. China exemplifies how one big customer can make a difference in an exporting country’s fortunes.”
Don’t worry! Export rate is steadily increasing
So, even though India is not among the SIPRI new export ranking list top 25 defence exporting countries, its exports are increasing at a profound rate. A threefold increase in just five financial years. And as far as ranking is concerned, marginal variations change the ranking because of the meagre contribution to global exports. But yet there is a moral to this story. As per which India will have to carve out a market by identifying countries with long-term demand and the financial resources to meet their military requirements through imports. Along with that, there is a need for India to cut the cost of equipment to a competitive level.
Lastly, we can assure you that whatever the global ranking is, India’s thriving exports are an optimistic sign for India’s target of Rs. 35,000 crore, which now seems achievable.
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