NEW DELHI: India’s defence exports have more than doubled to nearly Rs 11,000 crore on the back of recent policy liberalisation and access to the US market, given a large amount of offsets being executed by domestic companies.
The increase in defence exports — to Rs 10,745 crore in 2018-19 from Rs 4,682 crore in 2017-18 — is expected to move up exponentially, with the Rajnath Singh-led defence ministry going ahead with a new general export licence plan. It will enable Indian companies to export certain equipment to identified nations.
The biggest contributor to Indian exports has been the US, accounting for nearly Rs 5,000 crore worth of exports, followed by old arms partner Israel and the European Union. Officials said the increase in exports comes after recent changes in policy that have made it easier for companies to get official permissions.
A new plan for an ‘Open General Export Licence’ that is likely to be processed over the next weeks will give India further access to the global market as blanket permissions will be given on select items.
The ministry is looking to encourage private and public sectors to go beyond export of components to platforms where large-scale value addition can be done. According to the ministry data, most of the exports are for components, with parts for small arms topping the chart.
“It is important for us to now look at platforms and while looking at these platforms, it is important that we are competitive and able to provide good value for money to the buyer,” said Sanjay Jaju, joint secretary (DIP), Department of Defence Production in the defence ministry, at a Ficci seminar recently
Analysts say exports growth has been boosted by the low cost of production in India and offset obligations being discharged but there is a need for long-term commitment.
“We need to invest in research and development, production facilities and quality standards to compete on platforms globally, coupled with strong export compliance programmes and intellectual property right protection measures to ensure defence exports continue to be a long-term success story,” said Karishma Maniar, associate director at Economic Laws Practice.
Source: economictimes.indiatimes.com