Hitting the Mark On Defence Exports : Daily Current Affairs

Relevance: GS-3: Investment, Technology, Indigenization of Technology, Developing New Technology, Economic Development,

Key Phrases: Naval Innovation and Indigenisation Organisation, Swavlamban, Defence Exports, Make in India, Aatm-Nirbhar Bharat, Self Reliance, Department of Defence Production, DefExpo, Aero Show

Why in News?

Speaking at the recently-concluded Naval Innovation and Indigenisation Organisation (NIIO) seminar Swavlamban in New Delhi, PM reiterated the government’s will to take India out of its addiction to defence imports and turn it into an exporter of military equipment.

What have been the latest achievements of India in Defence Exports?

Indian defence exports were worth ₹8,434 crore in the pandemic-affected FY21, ₹9,115 crore in FY20, and ₹2,059 in FY16.
The Government set a five-year defence exports target of ₹35,000 crore in 2020.
As per the latest figures released by the Ministry of Defence, the defence exports has hit an all-time high of ₹13,000 crore during FY21-22.
The share of private sector accounts for 70 per cent, while remaining 30 percent of the defence exports comes from Defence Public Sector Undertakings.
Approximately half and one-fourth of India’s defence exports between 2017 and 2021, have been to Myanmar and Sri Lanka respectively.
During FY21, US was the 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 comprised of advanced light helicopters, missiles, offshore patrol vessels, surveillance systems, personnel protective gear, and various types of radars.

What have been the drivers of India’s defence exports?

Simplified industrial licensing, easing of export restrictions, and issuance of no-objection certificates are the drivers of Indian defence exports.
A separate defence export strategy has been prepared, broadly focusing on export promotion or facilitation and export regulation.
The Ministry of External Affairs has been tasked with supporting the creation of lines of credit for countries to import Indian defence products, and the EXIM Bank with financing defence exports where feasible.
Defence attaches in Indian missions abroad have been authorised to encourage Indian exports.
The Defence Production and Export Promotion Policy 2020 has also pushed exports by mandating defence public sector undertakings to derive at least 25 per cent of their revenue from exports, including success fee by 2025.
Flagship exhibitions like Defence Expo and Aero India has exhibited India’s defence production capacity with branding of Indian items, achieving time-bound export clearances from the Department of Defence Production.

What are various factors that hinder the growth of India's defence exports?

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.
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.
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.
Given these challenges, it would appear that the ₹35,000 crore export is an ambitious one.

What are the various steps that India can take to become a major power in defence exports?

By tapping the right opportunities and smartly utilising our existing competitive advantages.
The prevailing cost advantages in various lines of indigenous defence production enable India to explore export opportunities in African countries like Algeria, Morocco and Angola, which are heavily reliant on imports from the US and Russia.
Indian arms exports should be targeted to West Asian countries like Saudi Arabia, the UAE and Qatar.
India’s stature should also be consolidated in the Indian Ocean Region via exports majorly enabled through lines of credit to its sea and ocean-faring neighbours like Maldives, Bangladesh and Myanmar, largely as part of the Neighbourhood First policy.
Shedding its inhibitions in defence engagement, New Delhi’s foreign policy priorities in the Indo-Pacific should be aimed at making full use of the growing regional wariness about China’s aggressive intent.
The initial focus should be 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.
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.
The ministry is preparing to launch 75 items in the fields of unmanned systems, robotics, intelligent surveillance and more to achieve the defence exports target.
There is a need for greater acquisition of indigenously-produced defence products by the Indian armed forces to establish the credibility of these products internationally.

Source: ORF-Online

Mains Question:

Q. What are the factors that have led to India’s growth in defence exports? Examine the major obstacles that still exist in the India’s way to become net exporter.