India’s evolving defence landscape is undergoing a transformative phase, marked by a significant rise in the production of defence equipment and systems. This development is reshaping the country’s image from being the world’s second-largest arms importer to an emerging exporter of defence goods. The Economic Survey 2024 presents a detailed account of this transition, showcasing substantial growth in India’s defence production from Rs 74,054 crore in FY17 to Rs 108,684 crore in FY23, alongside a remarkable increase in defence exports.
Between 2015 and 2019, India held the position of the world’s second-largest arms importer. The primary sources of its defence imports were Russia, the United States, and Israel, providing a wide array of equipment, including aircraft, missiles, and surveillance systems. India’s dependence on these nations for its defence needs underscored a strategic vulnerability, compelling the country to rethink its defence procurement policies.
The Economic Survey 2024 heralds a new chapter in India’s defence narrative. It highlights India’s transition from an arms importer to securing a spot among the top 25 arms-exporting nations. This shift is attributed to concerted efforts by the defence industry, involving both private players and Defence Public Sector Undertakings (DPSUs). The survey reports, “India has transitioned from being an arms importer to securing a place in the list of the top 25 arms-exporting nations,” marking a significant milestone in the country’s defence capabilities.
Rise in Defence Production
The data presented in the Economic Survey 2024 illustrates a robust growth trajectory in India’s defence production. The production value surged from Rs 74,054 crore in FY17 to Rs 108,684 crore in FY23. This growth has been instrumental in boosting defence exports, contributing to India’s enhanced global standing.
The survey also notes a substantial increase in the number of export authorizations issued to defence exporters. In FY23, there were 1,414 export authorizations, which further increased to 1,507 in FY24. This rise indicates a thriving defence export sector, supported by approximately 100 domestic companies exporting a diverse range of defence products and equipment. These exports include aircraft like Dornier-228, artillery guns, BrahMos Missiles, Pinaka rockets and launchers, radars, simulators, and armored vehicles.
Government Initiatives: Driving Growth and Innovation
To bolster defence exports and promote self-reliance, the Indian government has implemented several policy initiatives over the past decade. These measures are aimed at simplifying export procedures, making them more industry-friendly, and fostering an environment conducive to business.
One of the key reforms has been the introduction of end-to-end online export authorization. This system has significantly reduced delays and streamlined the export process, thereby facilitating ease of business for defence manufacturers. The government has also allocated funds to support private manufacturers in the defence sector, encouraging innovation and production.
Aatmanirbhar Bharat Initiative
The Aatmanirbhar Bharat (Self-Reliant India) initiative has been pivotal in promoting indigenous design, development, and manufacture of defence equipment. This initiative aims to reduce dependency on imports in the long run by encouraging domestic production capabilities. The policy push towards indigenization includes lists of items that will cease to be imported over a staggered timeline, further supporting the growth of the domestic defence industry.
Recognizing the critical role of the private sector in achieving self-reliance, the government has introduced several measures to support private manufacturers. These include financial incentives, easing of regulatory norms, and facilitating collaborations between private companies and DPSUs. This collaborative approach has resulted in significant advancements in defence technology and production capabilities.
India’s Defence Landscape
Despite the remarkable progress in defence production and exports, India remains the top arms importer. This duality reflects the complexities of India’s defence needs and strategic priorities.
According to the Stockholm International Peace Research Institute (SIPRI), India’s arms imports increased by 4.7 percent between 2014-18 and 2019-23. Although Russia remains India’s main arms supplier, accounting for 36 percent of its arms imports, this period marked the first time since 1960-64 that deliveries from Russia (or the Soviet Union prior to 1991) constituted less than half of India’s arms imports. This indicates a diversification of India’s arms procurement sources, including increased imports from countries like the United States and Israel.
The need to balance imports and exports in the defence sector is a critical challenge for India. While the country is making significant strides in boosting its defence exports, the demand for sophisticated and high-tech defence equipment often necessitates imports. This dynamic underscores the importance of continued investment in research and development to enhance domestic production capabilities.
Future Prospects: Towards a Self-Reliant Defence Ecosystem
The road ahead for India’s defence sector is paved with opportunities and challenges. Achieving a self-reliant defence ecosystem requires sustained efforts in multiple areas, including technology development, manufacturing capabilities, and policy support.
Investing in research and development (R&D) is crucial for the growth of India’s defence sector. Strengthening R&D capabilities will enable the country to develop cutting-edge technologies and reduce dependency on foreign suppliers. Collaborative initiatives between academia, industry, and government institutions can drive innovation and create a robust ecosystem for defence technology development.
Building a strong manufacturing base is essential for achieving self-reliance in defence production. Encouraging the participation of small and medium enterprises (SMEs) in the defence sector can enhance manufacturing capabilities and create a diverse supply chain. Additionally, leveraging advanced manufacturing technologies, such as additive manufacturing and automation, can improve efficiency and reduce production costs.
Continued policy support and industry collaboration are vital for the growth of India’s defence sector. The government must ensure that policies are aligned with the needs of the industry and facilitate ease of doing business. Collaborations between private companies, DPSUs, and international partners can enhance technology transfer, knowledge sharing, and market access.
To sustain the growth of defence exports, India must focus on expanding its global market reach. This involves identifying new markets, building strong bilateral ties, and participating in international defence exhibitions and trade shows. Showcasing India’s defence capabilities on global platforms can attract potential buyers and enhance the country’s reputation as a reliable defence exporter.
India’s rising production of defence equipment and systems marks a significant shift in its defence narrative. The country’s transition from being the world’s second-largest arms importer to an emerging exporter of defence goods reflects the success of policy initiatives, industry efforts, and a strategic vision for self-reliance. While challenges remain, the future prospects for India’s defence sector are promising, driven by innovation, collaboration, and a commitment to achieving a self-reliant defence ecosystem.
