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In a significant move to boost its presence in the global arms market, India is establishing a dedicated Export Promotion Council (EPC) for the defence sector. This initiative, driven by Prime Minister Narendra Modi's administration, aims to dramatically increase India's defence exports, more than doubling the current value of ₹21,083 crore (recorded at the end of March 2024) to over ₹50,000 crore by 2029.
This dedicated EPC signals India's commitment to streamlining and enhancing its defence export capabilities. The council will focus on identifying and capitalizing on export opportunities, addressing exporter concerns, and refining strategies to attract international buyers. This comes as global defence manufacturers increasingly view India as a potential manufacturing hub due to its growing capabilities and skilled workforce.
The Modi government's emphasis on self-reliance ('Aatmanirbhar Bharat') has already yielded impressive results. India's defence exports have experienced remarkable growth, surging from ₹686 crore in 2013-14 to an all-time high of ₹21,083 crore in 2023-24. This growth is attributed to policy reforms and a push for indigenous defence production, including policies like positive indigenisation lists that mandate sourcing from domestic industries.
Currently, India exports a diverse range of defence products, including helicopters, naval vessels, missiles, and armored vehicles, to over 85 countries. Notably, the private sector contributes 60% of these exports, demonstrating a shift from the traditional dominance of Defence Public Sector Undertakings (DPSUs).
The EPC is expected to further streamline the export process, making it more industry-friendly by simplifying procedures, reducing delays, and facilitating ease of doing business through end-to-end online export authorizations. It will also work to enhance India's image as a reliable defence partner globally, potentially leading to more lucrative contracts.
This initiative aligns with broader economic objectives, aiming to increase foreign exchange and position India among the top global arms exporters. Despite being one of the world's largest arms importers, India has significantly reduced its reliance on foreign equipment and enhanced its domestic manufacturing base.
The strategic implications are significant. By focusing on exports, India aims to leverage its defence industry for economic benefits and expand its geopolitical influence. As India strives towards its ambitious export target, the new EPC will play a crucial role in navigating international defence trade, complying with global arms control norms, and fostering partnerships that could redefine India's role in the international defence ecosystem.
Additional Information
- India currently has 14 EPCs under the administrative control of the Department of Commerce. These councils operate as non-profit organizations, performing advisory and executive functions.
- The Ministry of Defence reported domestic defence production worth ₹1.27 lakh crore in the financial year ending March 2024, a 174% increase from ₹46,429 crore in March 2015.
- The government aims to achieve ₹1.75 lakh crore worth of defence equipment production in the current fiscal year and ₹3 lakh crore by 2029.
- Approximately 65% of India's defence needs are now met through local production, a significant change from a few years ago when two-thirds of all weapons and equipment were imported.
