There has been a significant increase in India’s defence exports in the last 10 years. In 2013-14, defence exports were worth only 686 crores of Indian rupees. By 2022-23, they are estimated to reach 15,918 crores of Indian rupees, a 23-fold increase. The government has set a target of achieving $5 billion in defence exports by 2025.
This increase is due to a number of factors, including the Make in India initiative, which has encouraged the development of a domestic defence manufacturing industry. The government has also been providing financial incentives to defence exporters, and has been working to improve the ease of doing business in the defence sector.
Promotion of Defence Exports
The government has taken a number of steps to promote defence exports in recent years. These include:
• Streamlining export procedures: Export procedures have been simplified to make it easier for companies to export defence equipment and technologies. This includes reducing the number of approvals required, and making it easier to obtain export licenses.
• Providing financial incentives: A number of financial incentives have been introduced to encourage defence exports. These include the Scheme for Promotion of Defence Exports (SPDE), which provides financial support for attending international defence exhibitions, marketing, and publicity of Indian defence products abroad.
• Encouraging partnerships with overseas firms: Indian defence companies have been encouraged to form partnerships with overseas firms. This can help Indian companies to access new markets, and to gain access to foreign technology and expertise.
• Promoting India’s defence manufacturing capabilities: The Make in India initiative has promoted India’s defence manufacturing capabilities by attracting foreign investment in the defence sector, and encouraged the development of a domestic defence manufacturing industry.
The government is also working to improve the ease of doing business in the defence sector. This includes simplifying the regulatory environment, and providing better infrastructure and support services to defence companies. The government is also working to promote India’s defence exports to countries in the Indian Ocean Region (IOR).
Streamlining Export Procedures
A number of steps have been taken to streamline export procedures for defence equipment. These include:
• Establishing a single-window clearance mechanism: A single-window clearance mechanism has been established for defence exports. This means that all approvals required for export of defence equipment can be obtained from a single agency, the Department of Defence Production (DDP).
• Introducing an online export tracking system: An online export tracking system has been introduced for exporters to track the progress of their export applications, and to get updates on the status of their applications.
• Simplifying the export documentation: The export documentation required for defence exports has been simplified to reduce the time and cost involved in obtaining export licenses.
• Providing online training on export procedures: The government provides online training on export procedures to defence exporters to help exporters understand the export procedures, and to comply with the export regulations.
Financial Incentives
A number of financial incentives have been introduced to encourage defence exports. These include:
• The Scheme for Promotion of Defence Exports (SPDE): The SPDE provides financial support for attending international defence exhibitions, marketing, and publicity of Indian defence products abroad. The scheme also provides financial assistance for the development of new defence products, and for the testing and certification of defence products.
• The Defence Export Promotion Capital Goods (DEPCG) Scheme: The DEPCG Scheme provides financial assistance for the purchase of capital goods by defence exporters. This can help exporters to upgrade their production facilities, and to improve the quality of their products.
• The Defence Export Promotion Rebate (DEPR) Scheme: The DEPR Scheme provides a rebate on customs duty for imported components used in the manufacture of defence exports. This can help to reduce the cost of production for defence exporters.
The SPDE is the main financial incentive for defence exports administered by the Department of Defence Production (DDP). It is a centrally-sponsored scheme, which means that the central government provides the funding.
The SPDE provides financial support for a variety of activities related to defence exports. These activities include:
• Attending international defence exhibitions
• Marketing and publicity of Indian defence products abroad
• Development of new defence products
• Testing and certification of defence products
The SPDE is a competitive scheme. Exporters must submit a proposal to the DDP, and the proposals are evaluated on a number of factors, including the commercial viability of the project, the export potential of the product, and the benefits to the Indian economy.
In addition to the SPDE, there are a number of other financial incentives available to defence exporters. These incentives are available from the central government, as well as from state governments and from financial institutions.
Defence Manufacturing
A number of steps have been taken by the government to promote India’s defence manufacturing capabilities. These include:
• The Make in India initiative: The Make in India initiative was launched in 2014 to attract foreign investment and to encourage the development of a domestic manufacturing industry. The initiative has been successful in attracting foreign investment in the defence sector, and has helped to boost the growth of the Indian defence manufacturing industry.
• The Defence Production Policy 2020: The Defence Production Policy 2020 was released in 2020. The policy aims to promote self-reliance in defence manufacturing, and to increase the share of domestic production in the Indian defence market. The policy includes a number of measures to promote defence manufacturing, such as increasing the FDI limit in the defence sector, and providing financial incentives to defence manufacturers.
• The Strategic Partnership (SP) Model: The SP Model was introduced in 2017. The model allows Indian companies to partner with foreign Original Equipment Manufacturers (OEMs) to develop and manufacture defence products in India. The SP Model has helped to attract foreign investment in the Indian defence sector, and has helped to boost the growth of the Indian defence manufacturing industry.
• The Defence Innovation and Research (DIR) Fund: The DIR Fund was launched in 2018 to promote innovation and research in the defence sector. The fund provides financial support to start-ups and small businesses that are developing new defence technologies.
Defence R&D by Private Sector
A number of steps have been taken to enhance defence research & development (R&D) by Indian private sector companies. These steps include:
• The Defence Research and Development Policy 2018: The Policy was aims to promote private sector participation in defence R&D. It includes a number of measures to promote private sector participation, such as providing financial incentives, and setting up defence R&D parks.
• The Innovations for Defence Excellence (iDEX) scheme: Launched in 2016, the iDEX scheme is designed to promote innovation and R&D in the defence sector. The scheme provides financial support to start-ups and small businesses that are developing new defence technologies.
• The Defence Technology Development Fund (TDF): The TDF was launched in 2016 to promote defence R&D by Indian companies. The fund provides financial support to companies that are developing new defence technologies.
• The Defence Innovation and Research (DIR) Fund: The DIR Fund was launched in 2018 to promote innovation and research in the defence sector. The fund provides financial support to start-ups and small businesses that are developing new defence technologies.
Some of the specific incentives and schemes that are available to Indian private sector companies for defence R&D are:
• Financial incentives: The government provides financial incentives in the form of grants, loans, or tax breaks to companies that are involved in defence R&D. These incentives can take the.
• Access to government facilities: The government provides access to its facilities like laboratories, test ranges, and other infrastructure to companies that are involved in defence R&D.
• Collaboration with government agencies: The government collaborates with companies that are involved in defence R&D. This collaboration can take the form of joint research projects, or the sharing of information.
• Access to foreign technology: The government provides access to foreign technology to companies that are involved in defence R&D. This can help companies to develop new technologies that are not available in India.
Comments
The increase in defence exports is also a reflection of India’s growing military power. India is now one of the world’s largest arms importers, and is increasingly looking to develop its own defence capabilities. This has led to an increased demand for Indian-made defence equipment, both from the Indian military and from foreign buyers.
The growth of India’s defence exports is helping to boost the economy, create jobs, and enhance India’s global standing. It is also helping to reduce India’s dependence on foreign arms imports.
The steps taken to boost exports have helped to streamline export procedures for defence equipment, and have made it easier for companies to export defence equipment from India.
The government is also working to improve the infrastructure and support services available to defence manufacturers. This includes providing better training and education facilities, and improving the availability of raw materials and components. The government is also working to promote defence exports, and to create a more favourable environment for defence manufacturing in India.
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Based on data presented in parliament and published through the Press Information Bureau India’s defence exports record is as follows:
Year Rs in crores
2013-14 686
2014-15 794
2015-16 1,056
2016-17 1,521
2017-18 4,682
2018-19 10,746
2019-20 9,116
2020-21 8,435
2021-22 12,815
2022-23 15,918 (est)
