India eyes $5bn defence exports in five years: PM

India wants to double defence exports over the next five years, Prime Minister Narendra Modi said yesterday, as the country seeks to cut its import bill amid a funding crunch that has forced successive governments to go slow on new orders.
“For several years India has been a net importer of defence products. We have taken measures to change it since 2014,” Modi said in the northern city of Lucknow, addressing the inaugural ceremony of India’s 11th defence expo.
“Our aim is to increase exports of defence products to $5bn in five years,” Modi said, adding India exports about Rs170bn ($2.4bn) of defence products.
The prime minister said that the Make in India initiative will increase India’s security at the same time, new employment opportunities will also be created in the defence sector.
“Wherever the 21st century is discussed, attention will be naturally drawn towards India. Today’s defence expo is the vastness of India, its prevalence, its diversity,” he said, adding that those who are aware of subjects like defence and economy surely know that India is not just a market but has an immense opportunity for the whole world.
India’s defence export ambitions are soaring as Asia’s third largest economy suffers its worst slowdown in decades with the country’s economic growth dropping to 4.5% in July-September quarter – its lowest quarterly growth in six years.
Between 2013 and 2017, India was the world’s top arms importer, accounting for 12% of total imports globally, with Russia, Israel and the United States among the top suppliers.
According to government data, India’s major defence export customers include Italy, Sri Lanka, Russia and France.
The exports, primarily made by government ordnance factories and private firms such as L&T, Bharat Forge and Tata group, include offshore patrol vessels, helicopters, coastal surveillance systems and spares for radar.
India’s armed forces, saddled with outdated aircraft and warships, are in dire need of funds for modernisation.
However, with the government possibly set to break its own fiscal deficit target due to slowing growth, funds allocated for modernisation have been barely enough, experts have said.
Laxman Behera, research fellow at Institute for Defence Studies and Analyses, said in a report released on Tuesday that India’s defence resource crunch had been acute in recent years.
India’s budget for modernisation of weapons, aircraft and warships announced by Finance Minister Nirmala Sitharaman last week stood at Rs906bn, out of a total allocated defence budget of Rs3,230.5bn.
With a meagre hike of Rs2.55bn over the revised estimates of last year’s budget, Laxman from IDSA called funding for the country’s military “grossly under-provisioned.”
US ambassador to India Kenneth Juster said lower offset obligations, a mandatory financial commitment locally by global firms partnering with India and less regulations can help India bring in billions of dollars in foreign investment.
The five-day defence expo – which will include demonstrations of land, naval, air and virtual security systems – is being attended by manufacturers from France, the US and Russia, Delhi’s biggest arms supplier.
India wants to bolster its combat capabilities to counter regional rivals including China.
More than 1,000 firms – including 172 foreign companies – are expected to take part in the exhibition, the defence ministry said in a statement.