Explained: Why India's defence industry finds itself at crossroads
The government and the industry must collaborate closely to develop high-quality defence equipment that meets global standards, ensure cost competitiveness, and explore strategic partnerships with foreign companies, says Girish Linganna
India's defence industry is at a crucial juncture. The country is one of the world's largest importers of defence equipment, and its domestic defence industry has been struggling to keep up with the increasing demand for defence products.
Prime Minister Narendra Modi and Defence Minister Rajnath Singh have repeatedly highlighted the need for India to export its defence equipment and manufactured products more and more so that India can become a significant exporter to the global defence industry and market. Currently, India exports about Rs 13,000 crore worth of defence products, but soon it could be hitting a figure of Rs 40,000 crores. It is imperative to explore how India can achieve this target, the support systems that exist, and the limitations.
A Key Strategy for Economic Growth and Security
Defence technology will always remain an instrument of foreign policy. If India wants to occupy a rightful place in the committee of nations, it cannot afford to be an importer of security. The vision of the government is that India should become a net exporter in a reasonable amount of time. The imports have come down from seven billion dollars to five billion dollars, while the exports have shot up from 0.3 billion dollars just five years ago to almost 1.7 billion dollars as of last year. The second reason for this is that India is looking at creating a strong defence industrial base in the country.
However, the government faces a significant challenge in achieving this target. The defence budget only increases by seven to nine per cent yearly. To fill that gap, exports are the only thing that can help the country grow from today's 11 billion dollars to 25 billion dollars in the next four to five years.
The Indian defence industry faces several challenges that need to be addressed to achieve the target of becoming a net exporter. One of the most significant challenges is the lack of a captive market in India itself. As a producer and an exporter, the country should have a good captive market in India, which becomes its selling card to other countries that India's armed forces are buying it.
The Indian armed forces must support the domestic defence industry by purchasing equipment and products manufactured in the country. Another significant challenge is the long gestation period for developing and manufacturing defence equipment. Everything has a cycle; everything has a timeline, and 5, 10, and 15 years later, the country is going into critical stages again and again. The enemy will not wait for the country to be fully armed, and they will attack at the most vulnerable time. History has shown that after 1962, Pakistan tried to do that in 1965.
The Indian defence industry also faces several other challenges, such as a lack of modern technology, insufficient investment, and limited research and development capabilities. The country's defence industry is still heavily dependent on imports, which makes it vulnerable to supply chain disruptions and other geopolitical risks.
Unlocking the Potential
The government has initiated several steps to encourage defence production and exports. The government has laid out strategic guidelines in which light tanks, helicopters, unarmed aerial vehicles, etc., need to be indigenously produced. The challenge is to make up the gap of meeting the requirement with top-of-the-line equipment because the enemy will not wait for you to be fully armed, and he will attack you at your most vulnerable.
The Indian government has taken several steps to overcome the challenges faced by the country's defence industry. One of the most important initiatives was the political resolve to ensure that India becomes self-sufficient in all spheres of critical activities.
The Covid-19 pandemic brought to light that disruptions in the supply chains and changing global orders are going to make the country depend on itself. The policies have worked out well, and the result of the Prime Minister putting out these positive lists, which has been done with a great amount of thinking.
The gestation period for the private and homegrown industry to meet those challenges and develop that equipment has been taken into consideration. The second thing that has happened is that the Army has become more open and interactive with the industry of what it wants and has started getting involved at different stages. The Make in India defence programme has also helped a lot of people who have come at the senior level to put the right direction to the industry.
India's defence exports have both challenges and opportunities. The government has initiated several steps to encourage defence production and exports, and the Army has become more open and interactive with the industry. However, the critical challenge is to bridge the gap in meeting the requirement with top-of-the-line equipment.
This requires addressing various issues such as technology transfer, quality control, and cost competitiveness. To ensure quality control, the Indian defence industry must adhere to stringent standards, and the government must facilitate the development of robust testing and certification mechanisms.
India's defence exports have tremendous potential, but the country must overcome various challenges to realise it fully. The government and the industry must collaborate closely to develop high-quality defence equipment that meets global standards, ensure cost competitiveness, and explore strategic partnerships with foreign companies. By doing so, India can establish itself as a leading exporter of defence equipment in the global market.