India targets 4-fold growth in defence exports by FY25

Indian defence exports have been building heft over the last few years on a consistent basis. Now the Defence Ministry plans to go for the jugular. After registering defence exports of Rs8,000 crore in FY22, the target is to reach defence exports of Rs35,000 crore by FY25. That translates into a growth of more than 4 times in a span of just 3 years. Would it really be feasible, considering that the total defence exports achieved by the Indian government in the last 8 years is just about Rs30,000 crore. However, the government is quite confident that the government would be able to achieve these targets, despite appearing steep.
In a sense, the defence minister, Rajnath Singh is right. Over the last few years, India has been making rapid strides on the path of achieving global standards of design, development and manufacturing of defence equipment. Pointing to the huge progress in the last 8 years since the Modi government had taken charge, Rajnath Singh pointed out that defence exports used to be a paltry Rs1,200 crore prior to 2014. Post the current government taking charge, there had been a big thrust on indigenization of defence production, farming out larger orders of Indian defence forces to Indian companies and also on defence exports.

Rajnath Singh also added that in the first 6 months FY23, the Indian economy had already registered exports to the tune of what it had done in the whole of FY22. In short, by FY25, defence would become a serious part of the Indian export basket. Speaking at the Defence Expo in Gujarat’s capital city of Gandhinagar, Rajnath Singh underlined that during the expo, more than 450 agreements related to the defence sector had been sealed entailing a proposed investment outlay of Rs150,000 crore. That just goes to show the potential that defence exports and how India is prepared to take on the challenge.

Rajnath Singh also pointed out that it had been an absolutely transformational journey for the Indian nation from being a net defence importer to becoming a net defence exporter. This not only saves foreign exchange, but also ensures that the world comes to know about the indigenous defence manufacturing and design capabilities of the Indian companies. Today, there are several government companies and private companies that are executing big defence orders. These include companies like BEL, BEML, HAL, Mazagon Docks, Cochin Shipyards, Larsen & Toubro, Tata Advanced Systems, Bharat Forge etc.

One of the biggest boost to defence in India came from the PLI (production linked incentive) scheme which not only encourages India to manufacture defence products internally but also acts as an incentive for global companies to set up base in India and make it a hub for global defence manufacture and exports. Rajnath also underlined that today India had emerged among the 25 top defence exporting countries in the world. Currently, there is a positive indigenisation list of over 410 items and more than 3,000 components which India will only manufacture domestically and not import. That is surely a good starting point.