India’s Defence Imports, History, Significance, Limitations

India has been consistently ranked among the top defence importers globally, as per the Stockholm International Peace Research Institute (SIPRI) reports. The country's strategic imperatives, coupled with evolving security dynamics, have necessitated substantial defence imports to modernize its armed forces. Despite a strong push for indigenization under the 'Atmanirbhar Bharat' initiative, India's complex procurement processes and the technological edge offered by foreign equipment continue to drive its import reliance.

Background

India's defence imports reflect its strategic needs, sourcing advanced technology and weaponry globally to bolster its military capabilities against regional threats and geopolitical challenges.

History of Defence imports in India 

The history of defence imports in India can be classified as:

• Post-Independence Era (1947 - 1960s)
  • Building the foundation: India inherited military equipment from the British era. Its defence imports were minimal and largely from Britain.
  • Diversifying sources: India began diversifying its sources by acquiring military hardware from other Western countries like France (Dassault Ouragan fighters).
• Indo-China War and Its Aftermath (1960s - 1970s)
  • Imports from Israel: During the Indo-China War and Indo-Pak wars of 1965 and 1971, Israel provided arms to India. 
  • Soviet partnership: India signed agreements with the Soviet Union to license the production of MiG aircraft and tanks.
• Era of Expansion and Modernization (1970s - 1980s)
  • Emergence as a top importer: By the 1980s, India had emerged as one of the largest importers of Soviet defence equipment globally.
• Liberalisation and Diversification (the 1990s)
  • Western sources: India started exploring military hardware from Western countries, including France (Mirage aircraft) and Israel (unmanned aerial vehicles).
• High-profile acquisition (the 2000s-2010s): India acquired several high-profile defence procurements, such as INS Vikramaditya (from Russia) and Scorpene-Class submarine (from France)
• Strategic Partnerships and Defence Diplomacy (2010s - 2020s)
  • US-India Defence Trade: Signing of defence agreements and purchasing U.S. military equipment like the P-8 Poseidon.
  • Diversified portfolio: India's defence imports became more diversified, including hardware from France (Rafale jets), Israel (advanced missile systems), and Russia (S-400 missile systems).

Major arms suppliers to India 

India has diversified its defence purchase with several partners mentioned below in the table

SIPRI Report 2023- Key Highlights of India 

SIPRI's (Stockholm International Peace Research Institute) "Trends in International Arms Transfers" report analyses global arms sales, identifying key exporters and importers, shifts in trade patterns, and the impact of geopolitical changes on arms flows. Key highlights related to India are: 

• Top global arms importer: India maintained its status as the largest global arms importer from 1993 to 2022, with an 11% share in 2018-22. 
  • However, in overall terms, arms imports fell by 11% between the periods 2013-17 and 2018-22.
• Russia's diminishing share: Although Russia remained the top arms supplier, its share dropped from 64% to 45% in 2018-22. 
• Significant increase from France: Arms imports from France soared by 489%, including 62 combat aircraft and 4 submarines, making France the second-largest supplier to India in 2018-22.

Factors behind India’s Defence Import

There are several factors which are responsible for India’s dependence on imports, especially in the defence sector, these include:

• Regional security concerns: India's strategic environment is marked by complex borders and historical conflicts, particularly with Pakistan and China. 
  • For example, to maintain operational readiness on its borders, India has procured advanced weaponry like the Russian S-400 Triumf air defence missile systems. 
• Military modernization programs: The Indian Armed Forces are undergoing extensive modernisation to replace outdated equipment. 
  • Eg, The procurement of Rafale jets from France is intended to upgrade India's aging fighter fleet.
• Strategic partnerships and Defence diplomacy: Defence imports are often tied to broader diplomatic relations. 
  • E.g., India and Soviet Union signed the Treaty of Friendship in 1971
  • India procured the Phalcon airborne warning and control system (AWACS) from Israel.
  • The United States has emerged as a key defence partner, with India purchasing P-8I Poseidon maritime patrol aircraft. 
• Limitations of domestic defence industries: India's defence sector, despite its growth, often cannot fulfill all the requirements of the armed forces, leading to imports. 
  • Eg., the T-90 tanks from Russia complement India's own Arjun tanks, given the larger scale of requirement and the need for rapid deployment capability
  • Further, there are significant technology gaps in certain areas
    • E.g., India imports nuclear submarines like the INS Chakra (an Akula-class submarine) from Russia due to the complexity of nuclear propulsion technology.
  • There are also significant delays in domestic R&D projects, often due to funding constraints and infrastructure shortcomings. 
    • The Light Combat Aircraft (LCA) Tejas program has seen significant delays, leading to interim imports of fighter aircraft to maintain combat readiness.
• Immediate defence preparedness: The urgency of modernising forces sometimes necessitates immediate procurement from foreign entities due to the time it takes to develop and produce domestically. 
  • Eg., the acquisition of the Heron TP drones from Israel for high-altitude surveillance. 
• Policy and procurement processes: Complex and time-consuming procurement processes sometimes make foreign acquisitions more expedient than waiting for domestic alternatives. 
  • Eg., the fast-track procurement of Spike anti-tank guided missiles from Israel amidst rising border tensions.

Limitations of Defence Manufacturing in India 

India's defence manufacturing has been facing several limitations, despite the country's strong push towards self-reliance in defence production. Here are some of the factors responsible for these limitations:

• Infrastructure constraints: Lack of advanced manufacturing infrastructure has often impeded the production of sophisticated defence equipment. 
  • Eg., India's domestic aircraft production has faced hurdles due to the absence of state-of-the-art facilities for large-scale manufacturing.
• Investment shortfalls: Defence R&D requires substantial, sustained investment. However, Indian defence firms, particularly public sector undertakings, have traditionally been underfunded, affecting their R&D output.
• Protracted procurement processes: Lengthy and bureaucratic procurement processes can discourage innovation and responsiveness within the domestic industry. 
  • E.g., slow down the introduction of indigenously developed equipment like the Arjun Main Battle Tank.
• Over-dependence on the public sector: The Indian defence sector has been dominated by public sector undertakings, leading to monopolies in certain areas and stifling competition, which is vital for innovation and efficiency.
  • The defence sector has historically been closed to private and foreign direct investment, which has led to a lack of competition and innovation.
• Lack of skilled workforce: High-end defence manufacturing requires a skilled workforce. India faces a shortage of trained personnel in certain new and high-tech areas of defence production.
• Intellectual property challenges: Acquiring and indigenizing foreign technology often comes with intellectual property rights (IPR) restrictions, limiting the ability to fully absorb and reproduce complex systems.
• Supply chain issues: Defence manufacturing often relies on global supply chains, which can be disrupted by geopolitical tensions, export controls, and other international issues. 

Change on the Horizon-Defence Manufacturing Reforms

Several reforms have been taken by the Government of India to address lacunae in defence manufacturing and decrease import dependency. These are as follows: 

• Increased budget allocation: The defence sector has seen a significant increase in budget allocations. For instance, There was a 13% increase in the defence budget from 2022-2023 to 2023-2024 
• Goal to rebalance expenditure: The government aims to reduce revenue expenses and boost capital expenditure to facilitate the modernization of equipment and infrastructure. For this, several steps are taken such as-
  • Introduction of Positive Indigenisation Lists to phase out imports of certain weapons and platforms, aiming to boost domestic production.
  • Reforms in the Defence Procurement Procedure 2020 incentivize investment and technology transfer in defence manufacturing.
• Liberalizing FDI policies: FDI policies have been liberalized to allow up to 74% investment through the Automatic Route and up to 100% through the Government Route.
• Offset policy reforms Ordnance Factory Board (OFB) corporatization: The OFB has been corporatised to increase efficiency and profitability, establishing seven new Defence Companies with improved autonomy.
• Adopting Atmanirbhar Bharat in Defence: The government promotes domestic defence equipment procurement. Private and MSMEs, including startups, are encouraged to participate. It also aims to develop a Military-Industrial complex in India. 
• Defence reforms and transparency: Reforms target faster domestic defence acquisitions.
  • The “Buy Indian-IDDM” category was introduced to prioritize indigenous design and manufacturing.
  • “Buy Global—Manufacture in India” allows foreign procurement with domestic manufacturing.
• Major process reforms for self-reliance: Government initiatives include digitisation and industrial licensing simplification.
  • "Make-I" and "Make-II" procedures are made more industry-friendly.
  • SRIJAN portal launched for indigenisation efforts by private industry.
• Development of defence industrial corridors: Establishment of corridors in Uttar Pradesh and Tamil Nadu for defence industry growth.
• Innovation and R&D initiatives: DRDO focuses on nine thrust areas for defence innovation.
  • DRDO’s Technology Development Fund (TDF) supports industry R&D.
  • The new patent policy gives industries free access to DRDO patents.
  • iDEX platform launched to support defence start-ups and innovation. 

Way Forward

Developing a Military-Industrial Complex in India is the need of the hour as it has both strategic and economic advantages. There are several steps which could be taken to develop a Military-Industrial complex in India such as: 

• Utilisation of national resources: Capitalizing on India's existing resources, expertise, and infrastructure is important to attain self-reliance in defence production.
• Innovation in defence technologies: Advance public-private partnerships and establish joint ventures with international firms that provide cutting-edge technology and manufacturing expertise.
  • Commit to developing state-of-the-art technologies for the ongoing enhancement of military equipment and systems.
• Academic and research development: Invest in the development of academic and research institutions to cultivate a pool of talented individuals skilled in defence technology.
  • Enact government policies that actively support defence research and development and empower private sector participation in advanced defence projects.
• Strategic international acquisitions: Acquire specialized overseas companies in the aerospace and defence sectors to bolster India's capabilities.
• IT Sector skill enhancement: Upgrade the technological proficiency of Indian IT firms within the defence sector.
  • The focus should be on developing tools for the Internet of Battlefield Things or the Internet of Military Things such as Network Weapons.
  • The development of UAVs (Unmanned Aerial Vehicles) and UGVs (Unmanned Ground Vehicles) with AI capabilities should be the goal. 
• Aerospace and defence industry zones: Create dedicated aerospace and defence parks in Exclusive Economic Zones to spur industry development.
• Focus on export capability: Reorient India's position from a defence equipment importer to a prominent exporter.

India’s Defence Import FAQs

Q1. Why does India import defence equipment?

Ans. India imports defence equipment to modernize its armed forces, fill critical capability gaps, and access technologies that are not yet produced indigenously.

Q2. Which countries are the major suppliers of defence equipment to India?

Ans. Russia, the United States, France, and Israel have been major suppliers of defence equipment to India in recent years.

Q3. How has India's defence import strategy evolved?

Ans. India's defence import strategy has shifted from a reliance on a few countries to a more diversified approach, including an increased focus on indigenization and self-reliance through the 'Make in India' initiative.

Q4. What is the 'Make in India' initiative in defence?

Ans. The 'Make in India' initiative in defence aims to boost domestic manufacturing, reduce reliance on imports, and turn India into a global defence manufacturing hub.

Q5. What role does the Defence Acquisition Council (DAC) play in defence imports?

Ans. The DAC, chaired by the Defence Minister, provides oversight and approves policies and capital acquisitions for the Indian military, including imports.