India sets defence exports target of Rs 35,000 crore, aims to double domestic procurement in 5 years
India aims to achieve a target of exporting defence equipment worth Rs 35,000 crore ($5 billion) by 2025, according to a draft of a major policy prepared by the defence ministry.
According to the draft Defence Production Export Promotion Police 2020 released by the Ministry of Defence, this target is part of the total projected turnover. The government is eyeing a turnover of Rs 1.75 lakh crore ($25 billion) in defence manufacturing by 2025 as it has identified the sector as a potential driver to boost the overall economy.
The policy also looks at doubling domestic procurement from the Indian industry.
The share of domestic procurement in overall defence procurement is about 60 per cent. In order to enhance procurement from domestic industry, it is incumbent that procurement is doubled from the current Rs 70,000 crore to Rs 1,40,000 crore by 2025, the draft policy states.
It is proposed that to achieve this objective, a distinct budget head for domestic capital procurement is needed and to enhance allocation for domestic capital procurement at the rate of minimum 15 per cent per annum for the next five years.
As part of a strategy to increase defence exports, Defence Attachés in all Indian missions have been mandated and are supported to promote export of indigenous defence equipment abroad.
“Export Promotion Cell set up to promote defence exports through coordinated action to support the Industry would be further strengthened and professionalise,” the draft policy says.
There has been a big jump in defence exports recently. The exports increased from Rs 1,521 crore in 2016-17 to 10,745 crore in 2018-19.
However, a lot needs to be done to have a self-reliant domestic defence industry.
So far, more than 460 licences have been issued to private companies for production of defence equipment in the country.
As a big reform to reduce exports, a list of weapons and platforms will be notified with year-wise timelines for placing an embargo on import of these items.
“This list will be updated periodically, without compromising on the operational requirements of the services, to allow lead-time to industry to prepare itself for any such procurement which is likely to come up, subsequent to the indicated embargo date,” the draft policy says.
The vision, the policy states, is to make India amongst the leading countries of the world in defence sector, including aerospace and Naval shipbuilding sectors, from design to production, with active participation of public and private sector and thus fulfilling the twin objectives of self-reliance and exports.