India’s defence exports have been steadily growing, reflecting the country’s rising capabilities in manufacturing advanced military equipment. As India strengthens its position in the global defence market, it must also navigate the responsibilities that come with these exports, particularly in relation to international humanitarian law. This body of law sets the standards for the ethical use of military equipment, ensuring that it is not used in ways that violate human rights or harm civilians during conflicts. Balancing the growth of defence exports while adhering to these legal and moral obligations is crucial for India’s reputation and global standing.
Tags: GS – 3, Achievements of Indians in Science & Technology- Defence Technology- Indigenization of Technology
Context:
- The expansion of India’s arms industry, dominated by domestic manufacturing and consumption, has led to its entry into the global arms market, creating legal and ethical concerns.
- The SC dismissal of a case on arms exports to Israel despite war crimes charges highlighted a gap in India’s legal system, not required by international humanitarian law (IHL).
Current Status of Indian Securities Exports
- Updated Performance: India’s defence exports stood at ₹6,915 crore in the first quarter of FY 2024-25 (April–June 2024), up 78% compared to ₹3,885 crore in FY 2023-24.
- Growth Path: Defence exports grew 17 to 12 times in FY17 and 31 times in FY13-14, making India the largest global arms market.
- Global rankings: India is now one of the top 25 arms exporters, supplying raw materials to around 85 countries.
- Exports: Dornier 228 aircraft, ammunition, BrahMos missiles, Pinka rocket launchers, radar simulators, armoured vehicles, personal protection equipment and systems.
What are the Growth Drivers of India’s Defence Exports?
- Policy Reforms and Government Initiatives:
- The DPEPP 2020 aims for a defence manufacturing turnover of USD 25 billion by 2025, with exports of USD 5 billion.
- Increased FDI limits to 74% under the automatic route, and initiatives like ‘Make in India’ and ‘Atma Nirbhar Bharat’ promote indigenous manufacturing.
- In FY 2023-24, 75% of the defence capital procurement budget was allocated to domestic industry, up from 68% in FY 2022-23, with domestic production reaching ₹1.27 trillion.
- The fifth Positive Indigenisation List (PIL) includes 346 items to boost domestic manufacturing.
- Increased Private Sector Participation:
- The government encourages private sector involvement through initiatives like the Innovations for Defence Excellence (iDEX).
- The number of defence licences issued surged from 215 until 2014 to 440 by March 2019, Tata Advanced Systems Limited exporting aerospace components to Boeing.
- The establishment of two Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu fosters a competitive defence manufacturing ecosystem.
- Focus on Research and Development (R&D):
- The DRDO’s budget for FY 2024-25 is ₹23,855 crore, resulting in exportable products like the BrahMos missile and Akash air defence system.
- A notable deal was the $375 million contract with the Philippines for BrahMos missile systems.
- Strategic Partnerships and Government-to-Government (G2G) Agreements:
- India pursues strategic partnerships and G2G agreements to enhance defence exports, facilitating collaboration in defence production.
- The India-Japan Acquisition and Cross-Servicing Agreement (ACSA) signed in 2020 , along with agreements with over 53 countries.
- Competitive Pricing and Quality:
- Quality at competitive prices like the Akash surface-to-air missile system is significantly cheaper than similar systems from other countries, attracting buyers like Armenia.
- Offset Policies and Technology Transfer:
- India’s offset policy requires foreign defence firms to invest in India, fostering joint ventures and technology transfers Tata-Lockheed Martin joint venture for F-16 wing enhance manufacturing capabilities.
What are the Major Issues Related to India’s Defence Sector?
- Depending on imports:
- India remains one of the largest arms importers, accounting for 9.8% of global arms imports from 2019 to 2023 ( SIPRI).
- The $5.43 billion contract for the S-400 air defence system from Russia in 2018, confirm this belief, that foreign investment will be made in 2010, geopolitical conflict and threaten national security
- Purchase Chain: The procurement of 126 medium-sized combat aircraft (MMRCAs), begun in 2007, was finally halted in 2015 due to complications.
- Private sector: Although private sector participation has increased, it is still low, with the private sector contributing only 22% in FY24.
- Insufficient research and development: Defence spending is expected to grow by 4.2% by 2023, but critical projects are facing delays and cost overruns, an example being the Cauvery Engine project.
- Technical differences: While the Tejas fighter is being manufactured domestically, India still imports its engines (GE F404) from the US. occurs, affecting its autonomy and limiting the export of power
- System implementation: Only ₹11,396 crore has been identified in 46 offset contracts worth ₹66,427 crore (2005–2018), the Comptroller and Auditor General (CAG) reported.
- Lack of strict arms export laws: India’s arms export policy, governed by the Foreign Trade Act 1992 and the Arms Destruction Act 2005, lacks mechanisms to monitor recipient countries’ human rights records or IHL compliance
Measures to Revamp India’s Defence Sector:
- Establish a Robust Export Financing Mechanism: Develop a dedicated export financing mechanism with government-backed loans, credit lines, and insurance for defence exports.
- IHL Compliance Framework: Create a dedicated body toMonitor end-use and include provisions to suspend or cancel contracts for violations and International Humanitarian Law (IHL).
- Niche Technologies and Indigenous Innovation:
- Focus on emerging technologies like AI, quantum computing, and hypersonic systems, increasing R&D and supporting defence startups.
- Leverage success stories like the BrahMos missile to promote advanced niche products in the global market.
- Defense Production and Export Processes: Establish a single-window clearance system, create dedicated export promotion cells within defence PSUs and private firms, reduce testing and certification timelines to enhance efficiency.
- Regional Service and Maintenance Hubs: Set up service and maintenance hubs in strategic locations like Vietnam and the UAE for after-sales support, maintenance, and upgrades of Indian defence equipment.
UPSC Civil Services Examination, Previous Year Questions (PYQs)
Prelims
Q1. Which one of the following is the best description of ‘INS Astradharini’, that was in the news recently? (2016)
- Amphibious warfare ship
- Nuclear-powered submarine
- Torpedo launch and recovery vessel
- Nuclear-powered aircraft carrier
Ans: (c)
Q2. Consider the following in respect of Indian Ocean Naval Symposium (IONS): (2017)
- Inaugural IONS was held in India in 2015 under the chairmanship of the Indian Navy.
- IONS is a voluntary initiative that seeks to increase maritime co-operation among navies of the littoral states of the Indian Ocean Region.
Which of the above statements is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Ans: (b)
Mains
Q:1 Foreign Direct Investment (FDI) in the defence sector is now set to be liberalised: What influence is this expected to have on Indian defence and economy in the short and long run? (2014)
Q:2 What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region. (2020)
Source: TH
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