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India's defence exports booming, but who's buying the most?

The Indian defence sector, which now caters to over ninety countries worldwide, has been buoyed by the government’s strategic initiatives to streamline licensing processes and extend its reach in the global arms market.

News Arena Network - New Delhi - UPDATED: August 30, 2024, 09:11 AM - 2 min read

India’s defence exports have surged more than 30 times in the past 10 years. Image for representative use only.


India’s defence exports have witnessed an unprecedented surge, increasing more than thirtyfold over the past decade. The ongoing conflicts such as the Russia-Ukraine war and the Israel-Hamas clash have catalysed this growth, as nations globally scramble to bolster their arsenals.

 

The Indian defence sector, which now caters to over ninety countries worldwide, has been buoyed by the government’s strategic initiatives to streamline licensing processes and extend its reach in the global arms market.

 

With the United States emerging as the largest importer of Indian defence equipment, India is set to make a significant mark in the global defence landscape.

Surge in defence exports

Defence ministry data reveals that exports have skyrocketed by an astonishing 78 per cent in the first quarter of the 2024-2025 fiscal year. The leap from Rs 3,885 crore to Rs 6,915 crore from April to June 2024 underscores the sector’s robust growth trajectory.

 

In the fiscal year 2023-2024, India’s defence exports reached a record Rs 21,083 crore (approximately $2.63 billion), marking a 32.5 per cent increase from the previous year’s Rs 15,920 crore.

 

The remarkable growth is attributed to both the expanding international demand and the government's proactive approach to promoting Indian defence products.

 

In 2020, the Narendra Modi administration set an ambitious goal to achieve Rs 35,000 crore ($5 billion) in aerospace and defence exports over a five-year period.

 

This target is part of a broader vision to attain a turnover of Rs 1.75 lakh crore ($25 billion) in defence manufacturing by 2025.

 

The government’s strategy includes easing export regulations, enhancing the efficiency of licensing systems, and broadening the scope of Indian defence products in international markets. These measures have effectively positioned India as a key player in the global arms trade.

US: The largest importer

While India’s defence exports span a wide array of products, the United States stands out as the largest consumer of Indian military goods.

 

Nearly 50 per cent of India’s total defence exports are directed towards the US, which sources over a billion dollars worth of systems, subsystems, and parts annually from Indian manufacturers.

 

The US demand for Indian defence products primarily stems from its need to integrate these components into its extensive global supply chain.

 

Indian exports include a range of items such as ammunition, small arms, electronic systems, armoured vehicles, drones, and fast-attack vessels.

Key players

Among Indian defence manufacturers, several key players have established a prominent presence in the international market. Notably, the Tata Group’s collaboration with Boeing through the Tata Boeing Aerospace Ltd (TBAL) joint venture has made a significant impact.

 

The Hyderabad-based facility produces aero-structures for Boeing’s AH-64 Apache helicopter and has delivered over 200 fuselages and numerous components for Boeing’s 737 family of aircraft.

 

Similarly, Dynamatic Technologies, based in Bengaluru, manufactures components for the Chinook heavy-lift helicopters and the P-8 Poseidon maritime reconnaissance aircraft.

 

Rossell Techsys and SASMOS HET Technologies, both Bengaluru-based firms, supply critical components for various Boeing Defence, Space & Security platforms, including the F/A-18 Super Hornet and the F-15 Strike Eagle.

 

The state-run Hindustan Aeronautics Limited (HAL) and Bharat Electronics Limited (BEL) are also crucial contributors. HAL produces F/A-18 gun bay doors, while BEL manufactures combat identification systems and speech secrecy systems for the P-8I aircraft.

Indo-MIM: The top private exporter

Interestingly, the top private exporter of defence goods is Indo-MIM, a Bengaluru-based firm specialising in metal injection moulding (MIM) technology.

 

Indo-MIM has emerged as a global leader in precision-engineered MIM products, serving clients in over 50 countries. 

 

The company’s expansion into the US and UK markets underscores its significant role in the global defence supply chain.

Munitions India: Leading state-run exports

Among state-run enterprises, Munitions India, which was established following the corporatisation of the Ordnance Factory Board (OFB) in 2021, leads in defence exports.

 

The company’s order book stands at about Rs 6,000 crore for the next three years, with an export milestone of Rs 1,726 crore achieved in 2023-24.

 

Munitions India’s products include a variety of rockets, artillery shells, and other munitions. Although the specifics of the export destinations are not disclosed, sources indicate that the company’s clients include nations in the Middle East and Europe.

 

India’s defence export strategy has evolved significantly over the years. Historically, the country’s defence exports were sporadic and limited. However, since 2014, when the Modi government introduced a comprehensive Defence Export Strategy, the sector has seen substantial growth.

 

The strategy focused on export promotion, regulatory facilitation, and strategic partnerships, which have significantly enhanced India’s export capabilities.

 

Government sources suggest that while the current export surge is impressive, the full impact of these policies will become more evident in the coming years.

Expanding global reach

India’s defence industry is also working to expand its global footprint further. The government is actively engaging with countries in Africa, the Middle East, and the Asia-Pacific region, which are keen to enhance their defence capabilities.

 

These nations are often looking for high-quality, cost-effective alternatives to Western defence products.

 

In addition to direct exports, India is developing its defence ecosystem to support global demand.

 

This includes setting up private assembly plants for military transport aircraft and commercial helicopters, and establishing itself as a Maintenance, Repair, and Overhaul (MRO) hub.

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