India's growing defence sector

(GS Mains3: Achievements of Indians in science & technology; indigenization of technology and developing new technology.)

Context:

Exporter of military equipment:

• Prime Minister (PM) Narendra Modi recently reiterated the government’s will to prise India out of its addiction to defence imports and turn it into an exporter of military equipment.
• Citing the example of the BrahMos cruise missile, which India is exporting to the Philippines, PM Modi asserted the need for greater acquisition of indigenously-produced defence products by the Indian armed forces to establish the credibility of these products internationally.
• The numbers recently released by the Ministry of Defence (MoD) suggest that the government’s efforts are bearing fruit, with defence exports hitting an all-time high of ~13,000 crore during FY21-22, and the private sector accounting for 70 per cent of the exports.

India's export destinations:

• Approximately half and one-fourth of India’s defence exports between 2017 and 2021, were to Myanmar and Sri Lanka respectively, though exports to the latter have reached a standstill in recent times due to its prevailing economic crisis.
• During FY21 in particular, however, it was the US that was India’s biggest customer. Other major regions to which Indian exports were headed were South-East Asia, West Asia and Africa.
• Indian military hardware exports comprising advanced light helicopters, missiles, offshore patrol vessels, surveillance systems, personnel protective gear, and various types of radars.

Policy based initiative:

• A separate defence export strategy was prepared which broadly focusing on export promotion or facilitation and export regulation.
• The Defence Production and Export Promotion Policy 2020 has also pushed exports by inter alia mandating defence public sector undertakings to derive at least 25 per cent of their revenue from exports, including success fee by 2025.
• Policy further leveraging Defence Expo and Aero India to exhibit India’s defence production capacity with branding of Indian items, achieving time-bound export clearances from the Department of Defence Production, and obtaining active support from the armed forces for exploring opportunities for defence product exports.

Challanges ahead:

• There are various factors that retarding the growth of Indian defence exports and become hurdle in realising the potential of the sector.
• The most important include the absence of critical technologies, the long gestation period involved in creating a capital and technology-intensive production base, difficulties in conducting business operations arising from stringent labour laws and compliance burden, inadequate funding of defence research and development (R&D), and the lack of engineering and research skills.
• Further poor designing capacity in core technologies, insufficient finance of R&D, and the incapability to produce critical subsystems and components have for long hampered indigenous manufacturing in India, while the long gestation periods render indigenous produce outdated by novel technologies.
• To compound matters, the adverse skill gap has persisted due to weak industry-academia interface.

Way forward:

• While it may be prudent to initially focus on certain medium to high technology exports such as the BrahMos cruise missile, Pinaka multi-barrel rocket launcher, the Advanced Light Helicopter Dhruv and the Akash air-defence system, efforts must be targeted at providing end-to-end defence solutions over the longer run.
• These would involve technological knowhow, spare parts provision and training. And though India has embarked on a desirable path of increasing self-reliance in defence, the journey ahead is a long one fraught with difficulties.
• These challenges can only be overcome through focus and persistence in policy and implementation, with increasing participation from the private sector as part of a virtuous indigenous defence manufacturing ecosystem.