The $5 billion defence exports target

What’s in today’s article?

• Why in news?
• Defence exports
• What are the current export figures?
• Which defence equipment does India export?
• What are the major defence platforms India is looking to export?
• Major export destinations
• What are the steps taken by the government to achieve self-reliance in defence?
• Conclusion 

Why in news?

• The defence ministry has set a target to raise India’s annual defence exports to $5 billion by 2024-25, from the $1.5 billion currently.
• This was also reiterated by PM Modi at the recently concluded Aero India 2023 in Bengaluru earlier this month.

 

What are the current export figures?

• As per government data, India’s defence export value till December 2022 had reached Rs 6,058 crore.
• India’s defence exports have grown by 334 per cent in the past five years. They touched nearly Rs 13,000 crore in 2021-22.

 

Which defence equipment does India export?

• The major defence items being exported are Personal Protective items, Offshore Patrol Vessels, ALH Helicopter, SU Avionics, Bharati Radio, Coastal Surveillance Systems etc.
• In December 2022, the government told Parliament that major items exported by India in the last three years include: 
  • lightweight torpedoes, weapon locating radar, fast patrol vessels, 120 mm mortar armoured protection vehicle, 0.338 Lapua magnum sniper rifle, and simulators.

 

What are the major defence platforms India is looking to export?

• India is in talks with Argentina and Egypt, among other countries, to export its indigenous LCA Tejas.
• According to the government officials, the LCA Mk 2 has seen interest from nearly 16 countries and efforts are on to identify private production agencies to ramp up manufacturing of the jet.
• India is looking to export the indigenous Advanced Light Helicopter to several countries.
  • India has signed a contract with Mauritius for the export of one Advanced Light Helicopter (ALH Mk III) for Mauritius Police Force.
  • Mauritius already operates the ALH and Do-228 aircraft, which is a multi-purpose light transport aircraft.
• India is also in talks with Guyana to export the Dornier 228 and fast patrol vessels.
• Last year, India signed a $375 million contract with the Philippines to export the BrahMos supersonic cruise missile.
  • India is looking to export the weapon system and its lighter next generation version (BrahMos NG) to over 10 countries, including South Africa, Egypt, UAE, and Saudi Arabia.
• In 2022, Armenia inked a government-to-government deal to buy the DRDO-developed Pinaka multi-barrel rocket launchers, rockets and ammunition.

 

Major export destinations

• India’s private companies and Defence PSUs currently export defence equipment to over 75 countries.
• Major countries:
  • Italy, Maldives, Sri Lanka, Russia, France, Nepal, Mauritius, Sri Lanka, Israel, Egypt, UAE, Bhutan, Ethiopia, Saudi Arabia, Philippines, Poland, Spain and Chile are some of the major export destinations.
• Top customers for India’s defence export
• A report released by India Exim Bank stated that Mauritius, Mozambique, and Seychelles have been among the top customers for India’s defence exports between 2017 and 2021.
• India is among the top 25 exporters of major arms
  • According to a Stockholm International Peace Research Institute (SIPRI) report released last year, India is among the top 25 exporters of major arms. 
  • Myanmar has been the biggest importer of Indian arms at 50 per cent during the 2017-2021 period, followed by Sri Lanka at 25 per cent and Armenia at 11 per cent.

 

What are the steps taken by the government to achieve self-reliance in defence?

• Change in Defence Procurement Policy
  • The policy increased the Indigenous Content stipulated in various categories of procurement by about 10% to support the ‘Make in India’ initiative.
  • It added an additional category Buy (Indian-IDDM) as the most preferred way of defence goods acquisition.
    • IDDM - Indigenously Designed, Developed and Manufactured.
  • Preference has been given to 'Buy (Indian)', 'Buy & Make (Indian)' & 'Make' categories of acquisition over 'Buy (Global)' category.
• Budget 2023-24 
  • Government has earmarked 75 per cent of its defence capital budget for 2023-24 towards procurements from domestic sources.
• Negative import list/positive indigenisation list
  • So far, three positive indigenisation lists of 3,738 items have been released.

 

• The items mentioned on the lists cannot be imported by the Services and should be sourced from within the country

• Defence industrial corridors
  • Two defence industrial corridors are being set up in Uttar Pradesh and Tamil Nadu.
  • Also, there is an ongoing simplification of processes for ease of doing business aimed at boosting defence exports.
• Defence research
  • Steps to encourage defence research are also being undertaken.
  • E.g., earmarking 25 per cent of the defence research budget for the private sector in 2022-23, for newer innovation and developing niche technology.
• Space created for private players
  • Government has incentivised the private sector to invest in defence manufacturing. 
  • In this direction, it has relied on transfer of technology, providing a platform for handholding etc.
  • The government recently corporatised the Ordnance Factory Board and converted it into seven DPSUs.

 

Conclusion 

• There has been a strong government push towards achieving self-reliance in defence, which is subsequently expected to increase India’s defence exports as well.

 

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Q1) What is Positive Indigenisation List?

The positive indigenisation list essentially means that the three-armed services – Airforce, Army and Navy – will not import the items mentioned on the lists. These items should be sourced from within the country.

 

Q2) Where are the Defence Industrial Corridors (DIC) in India?

Government of India has established two Defence Industrial Corridors (DICs) in the country, one in Uttar Pradesh and other in Tamil Nadu. 

06 (six) nodes viz. Agra, Aligarh, Chitrakoot, Jhansi, Kanpur and Lucknow have been identified for developing Uttar Pradesh Defence Industrial Corridor (UPDIC). 

Similarly, 05 (five) nodes viz. Chennai, Coimbatore, Hosur, Salem, and Tiruchirappalli identified for developing Tamil Nadu Defence Industrial Corridor (TNDIC).

 

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Source: Decoding the $5 billion defence exports target, which PM Modi spoke of at Aero India 2023 | PIB | Indian Express