Sansad TV: India’s Defence Prowess | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Introduction

• The Indian Prime Minister, Narendra Modi, has expressed his ambition for India to become a leading exporter of military hardware globally. He noted the rejuvenation of India's defence production sector in the past eight-nine years, with defence exports increasing six-fold to over 1.5 billion dollars.
• Modi aims to increase the export of military hardware to 5 billion dollars by 2024-25. The Aero India event showcases India's growing potential and self-confidence, with over 700 exhibitors from India and abroad participating.

New Technologies

• New technologies are emerging that enhance efficiency and security in services, such as the use of sensors and platforms with built-in intelligence to collect and manipulate data.
• These technologies can handle high data rates and have low latency, making them useful for military applications. They can be used in command control applications, enabling commands to be given to UAVs and other devices. The technology has significant potential for military applications.

Status of defence exports

• The country's defence exports have experienced a remarkable growth of 700% from ₹1,521 crore in 2016-17 to ₹10,745 crore in 2018-19. The value of exports of defence items, including major items, in the financial years 2014-15 and 2020-21 were ₹1,940.64 crore and ₹8,434.84 crore respectively.
• India has set itself a challenging goal of achieving a manufacturing turnover of $25 billion or ₹1,75,000 crore, including exports of ₹35,000 crore in aerospace and defence goods and services by 2025.

Need for indigenization of defence

• There are several reasons for the need for defence indigenization. First, it is necessary for self-reliance.
• Second, it is essential to reduce dependency on foreign players and ensure the security of the nation.
• Third, it is important to conserve or reduce the balance of payment deficit. Fourth, it promotes employment and exports.
• Lastly, it helps reduce the cost of production in India and thereby reduce the fiscal deficit.
• According to the Stockholm International Peace Research Institute (SIPRI), India became the third-largest defence spender in the world in 2019.

Government initiatives to promote defence exports

• Streamlined defence industrial licensing process
• Relaxed export controls and issuance of No Objection Certificates (NOCs)
• Establishment of a committee composed of the Defence Minister, External Affairs Minister and National Security Advisor to expedite approvals for the export of major defence platforms
• Providing Line of Credit (LoC) to foreign countries for importing defence products
• Granting more powers to Defence Attaches in Indian missions abroad to encourage defence exports.

Challenges

• Lack of a strong defence manufacturing base in India, with the majority of the sector being driven by government ordnance factories and poor private sector participation.
• Dependence on public sector undertakings (DPSUs/OFs) for large defence purchases, despite their track record of inefficiencies, poor financial performance, and time and cost overruns.
• High costs and lack of an assured market, along with poor technological transfer from foreign companies.
• Inadequate data and no scientific system to assess the level of indigenisation achieved by defence production entities in the country.
• Bureaucratic delays and licensing issues, making investment in the defence sector subject to compliance with licensing requirements mandated by the Department of Industrial Policy and Promotion (DIPP).

Conclusion

India has aimed to achieve a goal of reaching USD 5 billion in defence exports by 2024. To achieve this target, there is a requirement to establish an atmosphere that promotes greater involvement of private industry, and to maintain a stable macro-economic and political environment that encourages fair competition. In order to speed up the process of exporting major defence platforms, a committee consisting of the Defence Minister, External Affairs Minister, and National Security Advisor has been formed. This committee will approve the export of major indigenous platforms to other countries and will examine various available alternatives, including the Government-to-Government route.