The Rs 40,000-crore defence challenge

Source– The post is based on the article “The Rs 40,000-crore defence challenge” published in the Business Standard on 21st October 2022.

Syllabus: GS3- Security

Relevance– Defence manufacturing

News- The article explains the steps taken by the Indian government to boost defence and aerospace exports.

Prime Minister Modi gave a call to the aerospace and defence industry to achieve an annual export target of Rs 40,000 crore.

Defence Production Policy of 2018 aims to increase defence exports more than 10-fold from the existing level of Rs 2,000-3,000 crore annually to over Rs 35,000 crore.

Defence exports have multiplied eight times in the past five years. It has reached to 13000 crore this year.

What steps have been taken by the government?

The government has created a policy framework for boosting aerospace and defence exports.

Defence attaches posted at Indian embassies abroad have been tasked with seeking opportunities for military exports to their host countries.

The government has created a liberalised trade environment for defence exports by eliminating structural obstacles to trade in arms.

India has already obtained entry into three of the four global export control regimes: The Missile Technology Control Regime, the Wassenaar Arrangement, and the Australia Group. It is making efforts for entry into NSG.

It has offered some neighbouring countries like Myanmar, the Maldives, and Sri Lanka credit lines to purchase Indian defence equipment.

Defence PSUs are now required to have 25% of their turnover in exports.

A nodal agency, the Indigenous Defence Equipment Exporters Association has been set up  for processing defence export inquiries from prospective customers across the globe.

What is the way forward?

Instead of focusing on the export of low-value consumables such as ammunition, spare parts and aerospace components, India needs to concentrate on high-value, complex combat platforms.

Defence forces should take a lead in inducting indigenous weaponry like Tejas fighters, the light combat helicopters, Dhruv and Rudra helicopters, the Arjun tank, Akash air defence systems.