Ten Fold Increase In Defence Exports Since 2016-17 — How India Managed To Achieve This Feat

India's defence exports have seen a ten-fold jump since FY 2016-17 to an all-time high of Rs 15,920 crore in the financial year FY 2022-23.

Last year (FY 2021-22), the defence exports were Rs 12,814 crore.

These expanding exports are in line with the Narendra Modi government's target of exporting Rs 40,000 crores of defence equipment by 2026.

One of the many initiatives taken by the government to promote defence exports is to provide Line of Credit (LOCs) to various countries.

India has exported a variety of weapons, including torpedoes, Dornier maritime patrol aircraft, helicopters, guard boats, offshore patrol vessels, and ammunition, to several friendly countries using these LOCs.

In 2022, India used a $100 million Line of Credit to deliver 12 Guard boats to Vietnam. Shyena Advanced lightweight torpedoes worth $37.9 million were exported under another LOC given to Myanmar.

Hindustan Aeronautics Limited has also exported Do-228 Maritime Patrol Aircraft and Advanced Light Helicopter Dhruv helicopters to Mauritius and Seychelles, two Indian Ocean countries with close defence ties to India.

India has extended a line of credit of nearly $14 billion to 42 nations in the African Union, a part of which is meant for defence purchases.

"As of December 2020, $930.48 million out of $4.3 billion of EXIM Bank pipeline LoCs relate to procurement by other countries of indigenous defence equipment," Dr S. Samuel C. Rajiv, an Associate Fellow at the Manohar Parrikar Institute for Defence Studies and Analyses based in New Delhi, pointed out in a recent analysis.

In addition to using LOCs to export weapons, India has also promoted defence exports by facilitating private sector involvement.

Moreover, the GOI has also established an Export Promotion Council (EPC) to further promote defence exports.

Private firms were permitted to use the government's testing and quality control facilities, making it easier for them to obtain product certifications.

These certifications allowed firms to enhance their competitiveness in the defence export market. According to a report, in FY 2019-20, the GOI has awarded ten certificates to four private sector companies (Bharat Forge, JCB, L&T Defence and Tata Motors) to certify their products as 'fit for Indian military use'.

Moreover, the MoD empowered Defence Attaches (DA), attached in various Indian Embassies to promote exports to their host countries.

These Defence Attaches were given financial support for outreach activities. Till 2020, funds were allocated to DAs attached to 34 countries.

The Defence Minister Rajnath Singh, while announcing the creation of additional DAs hoped that the Defence Attaches will use this fund “judiciously to promote defence exports”.

“An export promotion and investor cell has been set up under the Department of Defence Production to facilitate Indian companies’ efforts for exports,” Singh said while adding that Defence Public Sector Undertakings (DPSUs) have also opened their liaison offices in Vietnam, Singapore, Myanmar and Oman among others.

Some innovative schemes like Technology Development Fund (TDF) and iDEX (Innovations for Defence Excellence) challenge have allowed small start-ups and MSMEs to come up with advanced high-tech products.

Under the iDEX scheme the MoD gives challenges to start-ups, individual innovators, MSMEs, etc and provides them funding to do high-end research and development (R&D) activities.

The export of the Indo-Russian Supersonic Anti-Ship BrahMos Missile to the Philippines worth $375 million has also contributed to a significant increase in exports. The Philippines is also reportedly considering a follow-on order of around $300 million. 

India is in talks with countries like Malaysia, Indonesia and UAE for the export of BrahMos missile as well. It is expected that BrahMos exports will have a significant portion in the defence export pie.

The successful export of the BrahMos missile has paved the way for India to explore new markets and expand its defence exports, especially in the wake of external factors such as the Russia-Ukraine conflict.

As a result of the economic sanctions imposed on Russia by Western nations, countries that previously relied on Russian defense equipment are now seeking alternatives from other countries, such as India.

For instance, Armenia, which uses Russian hardware, turned to India to fulfill its defence needs amid tensions with Azerbaijan. In 2020, India exported Swathi Weapons Locating Radars to Armenia.

The country bought Pinaka MLRS and Anti-tank guided missiles worth $250 million in 2022, and reportedly signed a deal for 155 mm artillery guns from Kalyani Defence worth $155 million.