Akash, Pinaka, BrahMos, Tejas – India is banking on “big weapons” to become the world's top 10 defense exporter

By Rahul Manohar Yelwe

India is one of the largest arms importers and is now seeking to break into the exclusive club of arms exporters. India's defense exports have crossed ₹21,000 crore ($2.63 billion) for the first time, Defense Minister Rajnath Singh announced recently. India is banking on “big weapons” to double its exports, including LCA Tejas, BrahMos missiles, Light Combat Choppers, Pinaka MLRS, Akash SAMs, etc.

Military exports are a major focus for defense industries around the world. This helps the industry to independently support its defense research, development and production without relying on government funding for its growth, development and expansion.

Therefore, most of the defense industrial base of developed countries is focused on defense exports, with the top 10 defense exporters mainly coming from North America and Western Europe. From 2019 to 2023, the United States and Western Europe accounted for 72% of global defense exports.

Defense exports provide a country with monetary benefits and help strengthen its diplomatic relations with other countries. Countries with domestic defense industrial bases often prefer to export weapons to friendly countries.

The Cold War period witnessed a remarkable example of Soviet arms supply to India, which helped the Soviets strengthen their bilateral ties with India.

According to the Stockholm International Peace Research Institute (SIPRI) 2024 fact sheet, 66 countries around the world currently export weapons. The top five arms exporters are the United States, France, Russia, China and Germany, accounting for 75% of global defense exports.

Over the past decade, several new players, such as South Korea and Turkey, have joined the exclusive group of defense exporters. India is also working to consolidate its position on the global arms export list. As a result, defense exports have been the core of the Indian defense industry since 2015.

In 2020, India is ranked 23rd on SIPRI's list of global arms exporters. In order to further strengthen India's position in the arms export market, the Indian government has taken several policy initiatives. Setting a target of $5 billion in defense exports by 2025 demonstrates the government's commitment to promoting India's defense exports.

In March 2024, the government released defense export figures for the financial year 2023-24. For 2023-24, India's defense exports reached ₹21,083 crore ($2.68 billion). For this year, a growth of 32.6% was recorded compared to the previous financial year. The share of the private sector was 60% compared to 40% of the public sector.

Before 2015, the Indian defense industry was primarily focused on meeting the domestic demands of the Indian armed forces. As a result, defense exports were marginal. For 2013-14, exports stood at around ₹686 Crore, which increased to ₹21,083 for the year 2023-24, almost 31 times in the last decade.

India's defense exports from 2014 to 2024

Source: Department of Defense Production, Ministry of Defence, Government of India.

India currently exports defense products to 84 countries. These include defense equipment such as patrol boats, low-band radars, anti-tank weapons, armored vehicles, torpedoes, body armor, small arms, artillery guns, launchers, rockets, sensors and night vision devices.

As part of the global supply chain, the defense sector also exports critical components to major manufacturers like Boeing and Airbus. Thus, Indian defense exports are largely dominated by non-core technology products. Compared to basic technology products such as fighter jets, submarines and tanks, these systems are inexpensive.

Therefore, to increase the value of its exports, India needs to focus on weapon systems based on high-end technology. So far, India has successfully developed a few high-end technological defense products in all three areas of warfare.

In the air domain, India has developed a Light Combat Aircraft (LCA), the Tejas, an Advanced Light Helicopter (ALH), the Dhruv, a Light Combat Helicopter (LCH), the Prachand and a Light Utility Helicopter ( LUH). In the land domain, it has developed the Arjun main battle tank (MBT) as well as several howitzers and MLRS. Similarly, India has designed and built several ships intended for offensive and defensive roles in the maritime domain.

All these defense products are complete weapon systems, which means their exports include other auxiliary accessories. For example, combat aircraft exports include a complete set of weapons, flight simulators, hangers, line replaceable units (LRU), and maintenance, repair and overhaul (MRO) services.

Exports of complete weapon systems lead buyers to a lifelong dependence on keeping the system operational through its technical lifespan. Thus, these exports ensure long-term income generation, which is not the case with the export of components and assemblies.

Therefore, to become a key defense exporter in the international arms market, the Indian defense industry needs to identify the potential market for its products. This is why emphasis must be placed on the development of such weapon systems.

Apart from developing high-value defense platforms such as tanks, fighter jets and large displacement ships, the Indian defense industry can work on developing weapons and munitions that can be integrated into aircraft, Existing tanks and ships used around the world.

The Israeli defense industry is a notable example. The industry develops different types of weapons and ammunition as a whole, such as armored vehicles, artillery guns, tanks, etc.

However, their defense industry also focuses on the development of sensors, missiles, munitions, combat systems, defensive mechanisms, radars, communication systems and combat management systems that can be integrated into any no matter what platform, whether of Russian or Western origin.

These types of product exports contribute significantly to Israel's overall defense exports. India is a traditional buyer of Israeli-made systems. Several weapons, munitions, sensors, combat, management and communications systems of Israeli origin have been integrated into French, Russian and Indian platforms used by the Indian armed forces.

So, Indian defense industry needs to focus on the potential market and come up with products accordingly.

To strengthen defense exports, the Indian government can explore other policy alternatives such as a line of credit, expanding the role of defense attachés, transfer of technology followed by installation of a production line in the purchasing country, joint development or production.

The Indian government is currently focusing on lines of credit and expanding the role of defense attachés to boost defense exports. Currently, most of the proposed exports fall under the credit line mechanism.

However, Indian-made defense products face multiple challenges in the international arms market, such as competition from established players, reliability and after-sales service.

The sale of the ALH Dhruv helicopter to Ecuador is an epic example of how the Indian defense industry has faced legal challenges from the purchasing country in response to the plane's crashes due to a poor maintenance.

The Indian government must therefore address the main concerns of its defense industry. This includes research and development, production, quality control and after-sales support. Only then can the goal of becoming a major arms supplier to the global market be achieved in the long term.

• Rahul Manohar Yelwe is a Senior Research Fellow and PhD Candidate at the Department of Security Studies, School of National Security Studies, Central Gujarat University, Gandhinagar.
• He can be contacted at [email protected]
• PERSONAL VIEWS