Highest Ever Defence Export from India

Defence Export from India: Relevance

• GS 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Defence sector in India: Context

• India’s defence export has touched a record Rs 13,000 crore in the 2021-2022 fiscal with the private sector playing an important role in aerospace manufacturing.

Record defence export from India: Key points

• The highest ever export is “eight times” of what it was around five years ago.
• The U.S. was a major buyer, as also nations in Southeast Asia, West Asia and Africa.
• The ratio of exports between government-owned defence public sector undertakings (PSU) and private firms stands at 30:70 from the earlier 10:90.
• The rise in the defence export of PSU from 10 per cent to 30 per cent is the nearly Rs 2,500 crore deal that India made with Philippines for the BrahMos missiles.
• A majority of the country’s defence export is in the aerospace sector, where Indian firms have been manufacturing several parts, including fuselage for foreign companies.

Defence export from India

• According to Stockholm International Peace Research Institute (SIPRI) data on international arms transfer trends, roughly 50 per cent of India’s defence exports from 2017 to 2021 were to Myanmar, followed by Sri Lanka at 25 per cent, and Armenia at 11 per cent.
• In 2020, the Union Government had set a target of Rs 35,000 crore ($ 5 billion) export in aerospace, and defence goods and services in the next five years.
• This was part of the turnover of Rs 1.75 lakh crore ($ 25 billion) in defence manufacturing by 2025 that the government is aiming to achieve.

Steps taken to increase defence export from India

• Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) Category 6 titled “Munitions List” that was hitherto “Reserved” has been populated and Military Stores list stands rescinded.
• Standard Operating Procedure (SOP) for the export of munitions list items have been simplified and placed on the website of the Department of Defence Production (DDP).
• A completely end-to-end online portal for receiving and processing export authorisation permission has been developed.
• The Government has notified the Open General Export License (OGEL) – a one-time export license, which permits the industry to export specified items to specified destinations, without seeking export authorisation during the validity of the OGEL.
• Scheme for Promotion of Defence Exports has been notified to provide an opportunity to the prospective exporters an option to get their product certified by the Goverment and provides access to the testing infrastructure of Ministry of Defence.
• A separate Cell has been formed in the DDP to co-ordinate and follow up on export related action including enquiries received from various countries, sharing the leads with private sector & public sector companies and facilitate exports.
• To enhance functional autonomy, efficiency and unleash new growth potential and innovation in Ordnance Factories, the Government has converted 41 Ordnance Factories into seven Defence Public Sector Units (DPSUs), 100% Government owned corporate entities.

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