Source: Global Times
[Global Times Comprehensive Report] India, which plans to become a developed country in 2047, also plans to become a "global defense manufacturing center." With the support of the Modi government's "Made in India" plan, the country's defense industrial production and export have achieved many achievements, including a 334% increase in weapons exports in the past five years, a US$375 million contract with Philippines for the sale of the "Bramos" supersonic anti-ship missile system, and a top 25 global weapon exporters for the first time in 2020. India hopes to become a powerful weapon manufacturing and export power, but the reality is that the country has long been the first international weapon importer, and only about 30% of the defense equipment is "made in India". On the one hand, the government is constantly increasing its promotion measures, and on the other hand, it is a dilemma of difficulty in short-term changes. How far is India from a major weapon exporter?
"India has become an emerging arms exporter"
India's defense department is now at the "point of the storm" - On September 25, the Indian News and Information Bureau released a message saying that New Delhi defense exports have increased sharply, and now they have exported defense products to more than 75 countries. By comparison, two years ago, India exported weapons to only 42 countries.
In recent years, good news seems to be frequent in India's defense industry. In July this year, the Indian defense department said that in 2021-2022, India's total exports of defense products and technologies reached 13,000 crore (1 yuan is approximately 11.4 INR), setting a record high in history, nearly 8 times that of five years ago. According to India's live mint news network, 70% of these exports are contributed by private enterprises, while the remaining 30% come from state-owned enterprises. Although India's Wire News Network doubts the reliability of this data, a reporter from the " Global Times " who has been stationed in India for a long time believes that it is a fact that India's weapons exports have increased significantly.
The purchase contract for the "Bramos" supersonic cruise missile system signed with the Philippines in January this year is called India's "mileway" weapon export project for many years. The system was jointly developed by India and Russia. According to the plan, New Delhi will provide Manila with 3 sets of the above systems and related training and logistical support. Before this order was met, India's most promising defense equipment export contract was the contract worth US$50 million in 2009 with Ecuador . However, after a series of crashes, Ecuador canceled its purchase plan in 2015. In addition to the Philippines, countries such as Vietnam and Indonesia have also expressed their interest in the Brahmos missile system.
"In the past five years, India (defense exports) have been impressive," the US Foreign Policy magazine said that Indian government data showed that from 2016 to 2021, India's arms exports quadrupled, from US$275 million to US$1.13 billion. SIPRI) data from the Stockholm International Peace Institute (SIPRI) shows that by 2020, India has become one of the world's top 25 arms exporters for the first time. The Tribune of India believes that the country has become an emerging arms exporter, and the "Made in India" in the field of defense equipment manufacturing is no longer an out of reach mirage .
According to the New India Express, the United States is the largest importer of India's defense products in 2021-2022. In addition, Southeast Asia, Middle East and Africa are the main areas for importing defense equipment from India. SIPRI data also shows that from 2017 to 2021, nearly 50% of India's defense exports went to Myanmar , followed by Sri Lanka (25%) and Armenian (11%).
Indian Defense Minister Bart once said that for strategic reasons, the names of the major defense product exporters cannot be disclosed. However, SIPRI's report shows that among the top 100 defense companies in the world in 2020, three Indian companies were selected, including Hindustan Aeronautics Co., Ltd. , Ordnance Factory Committee and Batra Electronics Co., Ltd. "In 2020, the combined arms sales of these three companies were US$6.5 billion, accounting for 1.2% of the top 100 defense companies in the world."
India's export weapons and equipment to other countries include missile systems, fighter jets, warships, , etc.India's Deccan Herald said that in addition to the Brahmos missile, India's "Akash" missile system is also very popular, and Saudi and the UAE have shown strong interest in the system. In June this year, an Armenian defense delegation visited India, and drones occupy an important position on their "shopping list".
Modi government launches a strong stimulus plan
South Asia expert and director of the research department of Tsinghua University's National Strategy Research Institute, Qian Feng, said in an interview with the Global Times that Modi 's "Made in India" plan is an important reason for the rapid development of the country's defense industry. The plan aims to boost the shortcomings of India's economic development - manufacturing, and defense and military industry account for a large part of the manufacturing industry.
According to media reports such as the Hindu newspaper, Modi launched the "Defence Excellence Innovation" (iDEX) program in 2018 as a flagship project of the Indian Ministry of Defense Production. The program is implemented by the Defense Innovation Organization, which is affiliated with the Defense Production Department of the Ministry of Defense, aims to encourage start-ups and other entities to engage in defense research and development innovation, providing them with a platform for common development.
In order to boost the local defense manufacturing industry, the Indian government has issued two localization lists, stipulating that 209 military products are not allowed to be imported and can only be purchased from domestic defense companies. Over the past eight years, the Indian government has not only increased its defense budget, but has also taken measures to ensure that a certain proportion of defense spending is used to promote the development of the local defense manufacturing ecosystem. Data released by Stockholm International Peace Research Institute (SIPRI) shows that in 2021, India is the world's third largest defense spending country after the United States and China, with defense spending of US$76.6 billion, an increase of 33% from 2012. Indian media said that in the fiscal years 2021-2022, 63% of India's defense budget expenditure was used to purchase products from domestic defense companies. In the fiscal budget for the 2022-2023 fiscal year, the Modi government reserves a 68% share of defense capital procurement expenditure to the local military industry.
Qian Feng said that with the support of Modi government policies, Indian private enterprises are more motivated to participate in defense production. India's Tribune said that Indian private enterprises can now produce complete weapon systems and spare parts for the Indian army and global military manufacturers. Power Technology Company located in Bangalore manufactures aviation parts for multinational companies such as Airbus , Boeing , etc.; Idea Builder recently obtained orders for small tactical drones from Indian Army ; Lasen Tubo is producing warships and nuclear submarine shells, while New Space Technology Company has signed a contract with the Indian Ministry of Defense to produce high-altitude communication equipment for the latter.
In addition, Indian private enterprises join forces with foreign manufacturers to reintegrate global supply chains. India Tata Group cooperated with Airbus to produce C-295 transport aircraft in India, established a joint venture with Boeing to manufacture aviation components for helicopters, and jointly produced fighter wings with Lockheed Martin . The Indian Adani Group manufactures all-carbon composite components of the "Hermes 900" drone for Israel Elbit Systems, while the Indian automaker Mahenda cooperates with British BAE system company to produce the M77 howitzer. Hindustan Airways and France's Safran Group have formed a joint venture to manufacture helicopter engines.
While the local defense industry is developing, the Modi government has taken a series of measures to increase military exports, including simplifying the defense industry licensing system and relaxing export controls. India has also introduced specific stimulus measures based on foreign trade policies, and the country's foreign ministry is also pushing to provide credit lines for some countries to import Indian defense products. In addition, military officers from Indian embassies overseas were also authorized to promote defense exports.
As stimulated by a series of measures, India's defense exports have increased sharply and imports have steadily declined. Compared with 2012-2016, India's defense imports fell by 21% from 2017-2021. In 2021, Indian Defense Minister Singh delivered a speech on the theme of "India 75 years later", emphasizing that he hoped that India would become a global defense manufacturing center in the future and create a strong self-reliant defense industry. If India achieves its goals, New Delhi's political influence around the world will be further enhanced.
Only 30% of national defense equipment are manufactured in China
Although India's defense industry has made considerable development, data from the Stockholm International Peace Institute (SIPRI) shows that in terms of weapon imports, New Delhi has long been ranked first in the world, and has only "belowed" Saudi Arabia in the short term.
Indian Prime Minister Modi said that "self-reliance" in national defense is very important to India in the 21st century, and "the supply of (weapons) from India to the world is strategically indispensable." According to US media reports, according to Modi's plan, 30% to 60% of Indian defense equipment components should be domestically produced, but the Economic Times of India disclosed in April this year that only about 30% of India's defense equipment is made in its own country.
So, what is the true realization of India’s defense industry? Qian Feng, an expert in South Asia and director of the Research Department of the National Institute of Strategic Studies at Tsinghua University, told the Global Times reporter that after years of development after India's independence, the military manufacturing industry has a complete range of categories, and the localization rate of key weapons has been continuously improved. However, it is highly dependent on foreign countries in some key technologies, and some large-scale equipment manufacturing requires imported parts. Bloomberg pointed out that India cannot produce complex military equipment such as diesel-powered submarines and twin-engine fighters.
Inadequate R&D funds and defects in production systems are a major obstacle to the development of India's defense industry. Radwig, senior lecturer in international relations at King's College London and associate researcher at the Royal Joint Services Institute, said that in terms of R&D and production, Indian private enterprises may be more flexible and innovative, and the Modi government also attaches more importance to private enterprises and provides incentives to them than previous governments, but these enterprises have been involved in defense production for a short time and cannot be compared with state-owned enterprises that have been supported by government funds for decades, and the capabilities of state-owned enterprises are uneven. In addition, the Indian state-owned military enterprise has long been engaged in license production, using foreign-made components to assemble tank and fighter jets. Although it has decades of experience, it may not be able to successfully move upstream of the value chain.
India has set a "small goal" for its defense production and exports - by 2025, the GDP of domestic defense will reach US$25 billion per year, and defense exports will reach US$5 billion per year. Can India achieve this and become a global defense manufacturing center? Qian Feng told the Global Times reporter that India has good relations with many countries in the world, which is conducive to promoting weapons exports to New Delhi. However, India's manufacturing industry is weak, which will restrict the increase in India's arms exports.
India's Financial Express analyzed that whether the country can achieve the above goals depends largely on what products New Delhi can provide to buyers, the number of products it can provide, and other complex factors that affect international arms trade. For example, the Russian-Ukrainian conflict may stimulate the expansion of the US and European defense industries. India lacks major defense equipment and systems that can be used for export indigenous design, development, manufacture and proven. A large number of defense manufacturing industries in India are licensed to produce, or import key spare parts and reassemble them. Indian Defense Minister Bart said in August last year that India's defense exports include weapon positioning radar, high-frequency radio equipment, etc. This product list sounds very powerful, but Bart also admitted that the so-called export of these products is actually just accessories and parts for exporting these products.
In some low-value military products, "Made in India" is not a representative of "good quality and low price". In 2005, Nepal criticized the poor quality of Indian rifles, causing casualties to Nepal soldiers. Indian soldiers also often complain about the country's rifle stuck in the shell and magazine rupture in the low temperature environment. India does not even export consumables, such as ammunition. The US Foreign Policy magazine also stated that India's state-owned defense companies left a bad impression on the outside world - they were unable to deliver products on time and at the original price.
Even if the above factors are not taken into account, it will not be easy for India to break the current situation of international arms trade. A report released by SIPRI last year showed that from 2016 to 2020, the world's top five arms exporters accounted for 75.9% of the global arms export market, with the United States and Russia accounting for the top two. It is not easy to "grab business" from these countries.In addition, the biggest beneficiary of India's defense exports are Myanmar, Sri Lanka and other countries, which do not provide sustainable market prospects.
