This work analyses the recent statement of the Defence Minister wherein, on 04 Oct 2024, while speaking at the 7th Annual General Meeting of the Society of Indian Defence Manufacturers (SIDM), the Minister stated the Govt is committed to make defence industry ‘export oriented’.

On Targets and Figures

Following closely behind the release of the document ‘Defence Acquisition Procedure (DAP)’ in Aug 2020, the Ministry of Defence (MoD) in Sep 2020, came out with another significant Policy titled Defence Production and Export Promotion Policy in short, the DPEPP.

It was this policy that set the goal of achieving a Defence turnover of 175,000 Cr in defence production to include 35,000 Cr in defence exports. In the Financial Year 2019-20 when this Policy came into being, the total value of defence exports was a meagre 9115.55 Cr^[1]. To aspire to climb to a target of 35000 Cr in a matter of just four years was indeed a daunting target. If the reference year is shifted just six years back, the target would look even more skewed since the total value of defence exports then (2014) was a measly 1940.64 Cr^[2]. Cut to FY 2023-24, the value of defence exports has risen to 21,083 Cr. In a matter of just one FY, the exports have surged an impressive 32.5%^[3]. Compared to 2013-14 the rise of defence exports has been a whopping 31 times^[4].

Recent reports indicate that the defence exports in the first quarter of FY 2024-25 have gone up by a huge 78%. According to a latest assessment in Aug 2024, the country is on track to achieve a target of 50,000 Cr in defence exports in the next five years. This will be well past the DPEPP projections^[5].

Why are the Defence Exports Rising?

Why India’s defence exports are rising at such an impressive pace? Here is the author’s take on the poser.

The most quoted reason doing the rounds has been that the two ongoing wars, namely the Russo-Ukraine war and the Israel’s war with multiple adversaries in West Asia and prior to this, the Armenia- Azerbaijan war are said to be the main reasons for pushing Indian defence exports.

The logic of this assertion is rather simplistic. It is to state that since the war clouds are eclipsing ever greater part of our planet, countries around the world want to strengthen up their military muscle. Many of these find Indian defence goods checking both the boxes of ‘cost’ and ‘quality’, hence such countries are buying defence goods from India pushing up its export volumes. This claim is briefly examined.

• India now exports to more than 100 countries in the world which is quite some number to start with. In all these, Armenia (Armenia-Azerbaijan duels) indeed stands apart^[6]. Some details:-
• As per a recent report dated 12 Sep, India has become the largest defence partner of Armenia in 2024. Riding on its high value export of big-ticket items such as Akash 1S Short Range Air Defence SAM (SRSAM), Pinaka multi-barrel rocket systems, artillery howitzers, anti-tank rockets, Anti-drone systems and more, the value of defence exports to Armenia has reached $2 Bn^[7].
• India is planning to leverage its strong bilateral connect with Armenia to build multilateral co-operation with countries like France, Iran and Greece to undertake strategic connectivity projects in the south Caucasus region. This will open up new avenues for defence exports^[8].
• India’s exports to Israel however, (especially post the Gaza war) are not without controversy of its potential to worsen relations with the friendly Arab countries especially Saudi Arabia. That aside, there were some reports that claimed that the missile debris after Israeli bombing in Gaza had a ‘made in India’ mark^[9]. Some reports also claim the export of UAVs and surveillance equipment from the Israel-India JV based in Hyderabad (Adani-Elbit UAV facility)^[10]. India has rubbished these reports and has claimed that it maintained a strict neutral position in this war. In short, Israel’s contribution to pushing up our defence exports are not much quantitatively^[11].
• As regards the Russo-Ukraine war, there have been allegations of Indian Artillery shells sold by Indian OEMs to European customers are finding their way to Ukraine either as arms sale or as grants. The conduit countries named are Italy, Czech and Spain. Names of some Indian OEMs are doing the rounds. India has denied any direct exports to Ukraine. It has maintained that its export regulations limit exports to such purchasers who pose the risk of unauthorised transfer. Govt of India (GoI) has been monitoring the situation closely as such transfers may risk its ties with its strongest and time tested partner, Russia. Therefore, Russo-Ukraine war also does not really qualify as the catalyst for Indian defence exports^[12]. Then how come the exports are surging?

A Look at Africa

India’s defence exports to the African continent are rising steadily. Here are some relevant inputs

• Starting in1956, when India set up its first training institute in Ethiopia, defence co-operation with the continent has seen very many different shades; 1. Setting up training facilities and Academies (Ethiopia), 2. Sending Indian Army Training Teams (IATTs) to train foreign armies at their own facilities ( Nigeria, Botswana); 3. Holding joint drills and exercises (currently with 18 nations out of 54 in the Continent), defence dialogue, consultation and co-operation at the highest echelons of respective leaderships and more, and finally the direct sale of defence equipment.
• To get the latest flavour of this relationship, let’s cut to 2023. It was the year when the Chiefs Conclave took place on 28th March. This was the first such event and featured two verticals; 1. Exploring the key pillars of India-Africa partnership in defence and 2. The outreach of Indian defence Industries to Africa. A lot of good has since flown out from this symbiotic relationship^[13].
• In the recent years again, several arrangements have been forged out that provide a boost to defence ties with Africa in more ways than one. Some of these include the recurring event of Africa India Field Training Exercise (AFINDEX), military-to-military training co-operation under Indian Technical and Economic Co-operation (ITEC) programme, institutional arrangements like the India Africa Defence Dialogue (IADD), and the India Africa Defence Ministers Conclave (IADMC) and more^[14].
• There has been a significant growth in the Indo-African maritime domain over the years. In that, besides training, rescue missions, vaccine maître during Covid etc., defence supplies are catching up steadily. During 2017-2022 some countries where the defence exports have happened are Mauritius, Mozambique and Seychelles. The supplies included patrol vessels, interceptor boats and land warfare related equipment including armoured vehicles.
• As of June 2023, the level of defence exports to Africa took a share of 15% of our total exports. What the future holds can be judged by the ever increasing Indian defence engagement with Africa. In the recently concluded Africa Aerospace and Defence Expo (18-22 Sep 2024) eight public sector and two private sector companies participated. Confident about their products that included tanks, armoured vehicles, UAVs, mine-protected vehicles, engines, simulators and more, the future looks promising^[15].
• What could be better than culminating the African side of analysis with the unprecedented news of India setting up its first ever defence manufacturing plant in any nation. That nation happens to be Morocco in Africa. The country has signed a deal with Tata Advanced Systems Ltd ( TASL) to set up a Final assembly line for the production of 8x8 Wheeled Armoured Platform ( WhAP).
• This proud venture is not only first for India but also happens to be the first defence manufacturing plant for Morocco.

So that is the scene from the African continent and the obvious deduction is that this multi-national partnership is indeed catalysing our defence exports.

Towards ASEAN

The defence exports to ASEAN countries have been picking up momentum too. This is in total consonance with the views of the PM, when during the recently concluded 21st India-ASEAN summit he said that “21st Century is the era of India-ASEAN”^[16]. Also, marking the completion of 10 years of Act East Policy, one of the points in his 10-point plan with ASEAN countries is co-ordination, co-operation and dialogue in the conflict-ridden world. Some salient points as related to defence exports are noted:-

• The early success came sometime in Jan 2022 when India concluded a deal worth USD 375 million for exporting the sea variant of the anti-ship BrahMos supersonic cruise missiles to the Philippines^[17]. On 19th Apr 2024 the first batch of these missiles was delivered^[18].
• In addition to the above deal, the Philippines land forces have also shown interest in two land (coastal) version of the BrahMos Batteries. The deal has not yet being inked.
• Besides the Philippines, other countries like Vietnam, Malaysia, Thailand, Cambodia and Laos are other promising future partners for defence exports. Out of these Malaysia, Thailand, the Philippines and Vietnam have already expressed interest in the import of the Akash Weapon System. Such an export already stands cleared by the Cabinet Committee on Security way back in Dec 2020^[19].
• Apart from big ticket items hoped for the future, many a smaller components are already on roll. For instance Vietnam has Indian High speed patrol boats besides submarine batteries and accessories. Philippines, besides BrahMos is also getting weapon components and combat over vests and bullet proof jackets.

It is the sense of the author that defence exports to AEAN nations are destined to catch both speed and momentum as it continues to propel forward.

A Look at Middle East

Talking of Middle East - the part of the planet offers India a unique chance to build its export foot prints.

• According to the Export Book 2024 prepared by Department of Defence, Israel is one destination of India’s defence exports for radar spare parts, electronics and sub-components of some weapon platforms. On the big-ticket items, we (DRDO-IAI) jointly produce the Barak- 8 (named Lightening) SAM system^[20],^[21].
• Other promising countries where defence exports have a great potential are Saudi Arabia, UAE and to an extent Oman.

India’s Defence Exports Going Global

GoI published defence export details in a 2024 report with a caption ‘Indian defence goes global’^[22]. This was followed up with another latest report released on 29 Oct 2024 titled ‘Marching towards Atmanirbharta’^[23] . A combined reading of these two reports brings out the following salient points related to defence exports:-

• Our exports are now going to over 100 nations in the world.
• The top three countries receiving Indian defence equipment are Armenia, France and the US.
• The export basket now has a number of advance defence equipment. Besides the big tickets (BrahMos cruise missile, Chetak Helicopters , Dornier aircrafts, artillery guns, radars, Pinaka multi-barrel rocket system, interceptor boats and may be Akash Weapon System in near future), some other notables are bulletproof jackets (going to 34 countries), armour shielding, boots ( Made in Bihar boots to Russia!) radar spare parts, electronics parts and more.
• Even supplying the sub components for major defence contractors is giving a big boost to exports. Some examples- Tata facility in Hyderabad doing the fuselage and secondary structures for Apache attack helicopter; Tata Advance Systems manufacturing the C-295 military transport aircraft in a joint venture with Spain; Adani-Elbit Advanced Systems a JV for manufacturing UAVs. The list has more serials.
• While the FY 2023-24 saw the defence exports rise to 21,083 Cr, the stated vision of GoI to scale this up to 50,000 Cr by the year 2029 does not appear a ‘flight of fancy’.

Some Final Reflections

The preceding content of this work gives a sense as to why the defence exports are steadily rising. Here are some final reflections:-

• The rising defence exports have a direct co-relation with the growing muscle of domestic defence manufacturing capability in India. Some details:-
• Rising from 46,429 Cr in 2014-15 to a whopping 1, 27,265 Cr in 2023-24 the total value of indigenous defence production has shown a surge of 174% in the last 10 years. The great news is that some 21% of this pie comes from the private defence industry. Further, the Govt claims to be on track for reaching 1.75 lakh Cr by the end of this FY^[24]. Seeing the track and pace this seems possible indeed.
• Liberalised FDI policy (74% through the automatic route and up to 100% through the Govt route), has been a good catalyst for pushing up exports.
• Some other key initiatives of the Govt have helped the defence exports to register a massive year-on-year growth. This was revealed in the Economic Survey 2024 published in Jul 2024. Initiatives like efforts to simplify export procedure, introducing end-to-end export authorisations on line, significantly reducing delays and lags in the loop have been mentioned in the survey as positive energisers^[25]
• Another important change that has given impetus to defence exports is a change in the basic procedure itself. Prior to 2014 defence exports used to be executed under the aegis of Foreign Trade Policy after obtaining an NOC (No Objection Certificate) from the MoD. This arrangement was very time consuming and long winded. MoD in 2021 promulgated a document titled Strategy for Defence Exports. This policy put out the framework for single-ministry clearance for defence exports^[26]. This has helped a great deal positively.

Two Relatively New Fields of Defence Exports

Besides the traditional big tickets like the BrahMos, Akash, and more, two new and promising fields are emerging as avenues for defence exports. These are Combat Training Solutions (Simulators) and counter drone solutions.

With the GoI coming out with its important Policy initiative in Sep 2021 titled Framework of Simulators in Armed Forces there has been a steady rise of simulator culture and simulator awareness in the Forces. Also world over, the virtues of simulation-based training are being recognised.

Whether it be the conduct of realistic and effective training in drastically reduced time and costs or the need to battle the sky-rocketing costs of live ammunition that is so badly impacting the training scales and its ground availability for day-to-day training, there is a wide acceptance that simulators are the go-to machines when it comes to conducting realistic two-way opposed training without expending live ammunition.

With the world embroiled in hundreds of conflicts and two major wars, the requirement of simulators especially to achieve quick combat readiness is like never before.

Same holds true for the counter drone capability. Drones (especially the small drones) are proving to be effective ‘little monsters’ that can cause disproportionate casualties, especially on the defenders that do not possess specific and tailor-made counter drone weaponry. This has been shown again and again. Right from the first documented swarm drone attack on Russian air base at Khmeimim and Naval Base at Tartus, both in western Syria in Jan 2018, swarm drone attack on Saudi oil fields in Sep 2019, Azerbaijan-Armenia conflict in 2020 and now in the Russo-Ukraine war, all have proved one thing – drones have arrived and arrived in a big way. Resultantly, countries round the world are now doubling down to build their counter drone muscle^[27].

Taking advantage of this trend is the Indian Defence Industry. In that a Private Sector Company based in Hyderabad; Zen Technologies Limited, actually finds itself in the sweet spot with core-competencies exactly in the very two verticals mentioned above, i.e. simulators and counter drone solutions. For the former, the Company is exporting various types of training solutions comprising Live Firing ranges, Live simulation Force-on-Force solutions, Virtual training simulators and constructive and war gaming solutions to several countries globally^[28].

On the counter drone front the, the DRDO-BEL anti Drone system (ADS) based on Electro-optical detection of drones and RF based soft-kill is a promising product. Zen Technologies has also developed its anti-drone System (Zen ADS) based on soft-kill of drones. The Company also has hard-kill solution based on guns/physical netting of drones.

And now with the successful trials of Vajra-shot, the lightweight, mobile and hand-held anti drone gun a few days ago, the public sector has added one more potential customer in the exportable list^[29].

It is the sense of the author that in the days to come, defence exports in the above two relatively new fields is going to see a substantial surge.

Some Sign off Points

While things seems to be going the right way as regards defence exports here are points worthy of note:-

• Maintenance of most stringent ‘quality’ in exportable products is a must. Recall is not only a NO SHOW but also a national embarrassment. The case of the export of ALH Dhruva helicopters to Ecuador way back in 2015 still haunts the country where two of the exported machines crashed after induction, leading the balance to be put on the ‘restricted operations’ by the recipient country^[30].
• It is the big-ticket items that will tilt the scales. This must drive our strategy.
• The biggest and the strongest testimony of equipment worthy of export is its successful induction in Indian Defence Forces. No half-baked equipment or items un-proven on the Indian soil must ever be put up on the export list. It is better late than sorry.

That is the export scene now – well poised, looking up and resurgent.

Endnotes

^[1]Defence exports for the last three years” at www.ddpdashboard.gov.in. Accessed on 09 Oct 2024.
^[2]“Status of defence exports-PIB.” at www.pib.gov.in press release share. Accessed on 09 Oct 2024.
^[3]From importer to exporter, India’s defence exports jump 30 fold,” at www.m.economictimes.com. Accessed on 10 Oct 2024.
^[4]ibid
^[5]“India’s defence exports skyrocket by 78% in Q1 FY 2024-25..” at www.m.economictimes.com. Accessed on 10 Oct 2024.
^[6]“Yes India’s defence exports are booming, but guess who is the biggest importer,” at www.theprint.in. Accessed on 10 Oct 2024.
^[7]“India becomes Armenia’s largest defense supplier,” at www.jamestown.org. Accessed on 11 Oct 2024.

^[8]ibid
^[9]“What has India risked by exporting arms to Israel?” at www.m.thewire.in. Accessed on 11 Oct 2024.
^[10]ibid
^[11]“India took a policy stand not to supply arms, shells to Israel,” at www.the hindu.com. Accessed on 12 Oct 2024.
^[12]“India made ammunition enters Ukraine, irks defence partner Russia, “at www.the hindu.com. Accessed on 12 Oct 2024.
^[13]“India Africa’s deepening defence partnership and avenues ahead,” at www.icwa.in. Accessed on 14 Oct 2024.
^[14]ibid
^[15]“India defence industry optimistic about collaboration in Africa,” at www.theweek.in. Accessed on 16 Oct 2024.
^[16]PM Modi announces 10 point plan to strengthen India-ASEAN ties,” at www.ctimes-com.cdn.ampproject.org. Accessed on 23 Oct 2024.
^[17]“Philippines envoy hails BrahMos missile as a game changer,” at www.thehindu.com. . Accessed on 23 Oct 2024.
^[18]“India’s increased defence and security engagement with Southeast Asia,” at www.iiss.org. . Accessed on 23 Oct 2024.
^[19]“Why Akash missile system has generated interest..” at www.firstpost .com. . Accessed on 23 Oct 2024.
^[20]“Barak 8,” at ww.en.m.wikipedia.org. Accessed on 30 Oct 2024.
^[21]“India took a policy stand not to supply arms, shells to Israel,” at www.thehindu.com Accessed on 30 Oct 2024.
^[22]“Export Book 24” at www.mod.ddp.gov.in. Accessed on 30 Oct 2024.
^[23]“Marching towards atmanirbharta”, at www.pib.gov.in. Accessed on 30 Oct 2024.
^[24]Ibid.
^[25]Economic survey 2024: India’s push for defence exports: A decade of Policy reforms.,” at www.financialexpress-com-cdn.ampproject.org. Accessed on 01 Nov 2024.
^[26]From importer to exporter: India’s defence exports,” at www.m.economctimes.com Accessed on 01 Nov 2024.
^[27]“Emergence of drones as effective air threat vehicles-a case study approach,” at www.cenjows.in. Accessed on 01 Nov 2024.
^[28]“Zen Technologies,” at www.zentechnologies.com. Accessed on 01 Nov 2024.
^[29]“Vajra-shot” –the Indian-made handheld anti-drone gun..” at www.ndtv.com Accessed on 01 Nov 2024.
^[30]“Another bolt to export of Dhruv choppers,” at www.timesofindia.indiatimes.com. Accessed on 01 Nov 2024.

(The paper is the author’s individual scholastic articulation. The author certifies that the article/paper is original in content, unpublished and it has not been submitted for publication/web upload elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct). (The paper does not necessarily represent the organisational stance... More >>