One of the big focus areas in the recently concluded Aero India — the biennial airshow held in Bengaluru — was to showcase India as an emerging defence manufacturing hub. The idea was to present India’s changing position and role in the global defence market — from being one of the largest importers, the nation is now manufacturing defence equipment that can be sold to ‘friendly countries’.
‘Friendly countries’ was a buzzword at the Aero India because almost every Indian defence PSU, the DRDO and Indian private firms spoke about India’s export potential. And as part of India’s outreach, Defence Minister Rajnath Singh hosted the Indian Ocean Region (IOR) Defence Ministers’ conclave. Twenty six out of the 28 countries from the IOR attended the conclave, either physically or in virtual mode.
As a journalist, the Defence Ministers’ Conclave for me was singularly the most important event during Aero India because it came at a time when India and China are engaged in a faceoff in Ladakh for over nine months now.
India’s export ambitions in IOR
India considers the IOR as its backyard but the region is also eyed by China. Even countries outside the IOR such as the US keep a close watch on it. The US’ Pacific Command is now known as the US Indo-Pacific Command.
The IOR, bound by Africa to the West, Asia to the North and East, and Australia to the South East, produces more than 40 per cent of the world’s offshore petroleum, and is home to rapidly growing economies.
This open offer to sell weapons is a marked difference from India’s earlier policy of focusing on its soft power alone. Till now, India has shied away from exporting weapons and believed in creating strategic heft through soft power.
As the Indian Embassy in Afghanistan, a country which India is heavily invested in, notes, “the Ministry of External Affairs operates and coordinates with other government organisations extensive bilateral and multilateral programmes for economic cooperation, development projects, upgradation of skills, student exchanges and scholarships…”
I am not trying to underplay the importance of soft power. But soft power alone can’t get you strategic heft.
“When you sell a weapon, you are not just selling a system but actually buying yourself a strategic heft,” a senior government official told me recently while we were talking about the export potential of Indian defence equipment.
He added, the reason why Russia or the US have a lot of depth and influence in many countries, including in India, is because they remain tied up in a complex web of defence purchases, upgrades and so on.
And this is what India is focusing on. India is seeking to become a defence partner for countries in the IOR by offering them fighter aircraft, helicopters, air defence systems, corvettes and supersonic missiles like the BrahMos.
Defence Ministry figures show that India has doubled its defence exports between FY18 and FY19, from Rs 4,682 crore to Rs 10,745 crore. Now, it is setting a target of $5 billion worth of exports over the next five years.
The Indian alternative
India has defence products that can be very attractive to foreign buyers who cannot afford expensive Western platforms. But to leverage this, India needs to make a concerted effort to ensure that export orders are bagged.
While the Narendra Modi government has set tough targets for defence PSUs, asking them to ensure 25 per cent of their turnover comes from exports by 2022-23, I would be surprised if they manage to achieve this.
But then, steps are being taken. India had last year managed to bag a $40 million deal from Armenia for four weapon locating radars, beating bidders from Russia and Poland. A proud moment for India because about two decades back, it was importing such equipment.
How India can join the export league
What is important to understand is that just wanting to export is not enough. India will have to think out of the box and go the extra mile to ensure that exports do happen.
Decision-making has to be fast and coherent to grab international opportunities. If the bureaucracy works as per the ‘Indian Standard Time’, export orders won’t come in. After all, India is competing against countries like China that has made deep inroads into the African defence market and is now seen by many as a global exporter of weapons.
Exports cannot be driven by the defence PSUs. It has to be driven by the private industry and this is where the government needs to play an active role.
The defence attaches posted abroad should also be tasked with finding potential business for the Indian industry (both private and government owned) and handhold them if the need arises. India has to actively engage with export potential countries and offer them an attractive line of credit, if required.
The long talked about plan to export BrahMos supersonic cruise missiles to the Philippines hit a roadblock late last year with Manila citing budgetary limitations caused by the Covid-19 pandemic.
Also, India has to realise that achieving export orders is just half the job done. Providing a rich after-sale service and maintenance of the equipment is equally important.
In 2009, India achieved an important milestone — the state-run Hindustan Aeronautics Limited (HAL) managed to bag a mega-contract for seven Dhruv helicopters from Ecuador. Four of the seven helicopters crashed and Ecuador has retired the rest, and gone for the Airbus choppers. The South American nation blames the crashes on poor servicing and spare parts issues, a claim denied by the HAL officials.
We hope such complaints do not arise in future from other buyers. The Indian industry will have to understand that for the buyers, it is their national security that will be at stake when they engage in equipment purchase from India. Hence, maintaining trust and quality of equipment supplied should be top priority for manufacturers if India wants to play the game for long.
As defence analyst Angad Singh wrote, “managing military procurement, production and development needs greater attention than ever before, not just to secure India’s future position as a major exporter, but also to enable modernisation in a period of economic uncertainty and flat budgetary growth.”