Context:
Three Indian companies are among the world’s top 100 for combined arms sales in 2020, said a new report by the Stockholm International Peace Research Institute (SIPRI), which tracks global arms trade.
Relevance:
GS-III: Science and Technology, GS-II: International Relations (International Groupings & Agreements affecting India’s Interests)
Dimensions of the Article:
- About SIPRI
- Highlights of the SIPRI report on arms sales
- India’s Defence Exports
- Factors responsible for this shift
- Defence Production and Export Promotion Policy 2020 (DPEPP 2020)
About SIPRI
- Stockholm International Peace Research Institute (SIPRI) is an independent international think-tank institute dedicated to research into conflict, armaments, arms control and disarmament.
- It was established in 1966 at Stockholm (Sweden).
- It provides data, analysis and recommendations, based on open sources, to policymakers, researchers, media and the interested public.
Highlights of the SIPRI report on arms sales
- The USA has the highest number of companies in the top 100 worldwide.. Together, their arms sales amounted to USD 285 billion, an increase of 1.9 % compared with 2019.
- China was second at 13 %, followed by the UK at 7.1 %.
- Russia and France were fourth and fifth with 5 % and 4.7 % respectively of the combined arms sales for the top 100 companies.
- Indian Ordnance Factories are at the 60th spot, with USD 1.9 billion in sales, up 0.2 % from 2019. HAL is at number 42 and BEL is ranked 66.
- India’s share of arms sales globally in 2020 was 1.2 %. Their aggregated arms sales of USD 6.5 billion were 1.7 % higher in 2020 than in 2019” and accounted for 1.2 % of the top 100 total.
India’s Defence Exports
- According to a report released by Stockholm International Peace Research Institute (SIPRI) for the period between 2009-13 and 2014-18, Indian defence imports fell even as exports increased. This is good for a nation that has had the record of being one of the biggest importers of Defence equipment.
- As per the data published by the Stockholm International Peace Research Institute, or SIPRI, in March 2020, India is ranked 23rd in the list of major arms exporters for 2015-2019 and 19th for 2019.
- The Ministry of Defence’s annual report 2018-19 records that the defence exports were worth Rs 10,745 crore, a growth of more than 100% from 2017-18 (Rs 4,682 crore) and over 700 % since 2016-17 (Rs 1,521 crore). India’s share of global arms exports is only 0.17%.
- The current government has been laying emphasis on defence manufacturing in India to build up the country’s manufacturing base, ensure jobs for its youth and to bring down India’s arms import bill.
India’s target was to export 5 billion USD worth of military hardware by 2025.
Factors responsible for this shift
- In 2020, the Indian Government announced a phased ban on imports of more than a hundred different types of military equipment to support domestic companies and enhance self-reliance in arms production.
- Domestic procurement has helped to shield Indian companies against the negative economic consequences of the pandemic.
- ‘Make in India’ initiative, as part of which a number of components from Indian private and public sector enterprises have been prioritised by the government.
- Extraneous factors in the form of delays in supplying equipment by vendors and the outright cancellation of contracts by the Indian government or at least a diminution of existing contracts.
Defence Production and Export Promotion Policy 2020 (DPEPP 2020)
The DPEPP 2020 is envisaged as overarching guiding document of MoD to provide a focused, structured and significant thrust to defence production capabilities of the country for self-reliance and exports.
Regarding Domestic Production and Defence Exports
- The share of domestic procurement in overall defence procurement is about 60% now, and in order to enhance procurement from domestic industry, it is incumbent that procurement is doubled to RS. 1.4 Lakh crores by 2025 – according to DPEPP 2020’s aims.
- The policy says that Defence Attachés have been mandated and are supported to promote export of indigenous defence equipment abroad, with the efforts in this direction supplemented by selected Defence Public Sector Undertakings (DPSU).
- Subject to strategic considerations, domestically manufactured defence products will also be promoted through Government to Government agreements and Lines of Credit/Funding.
- In addition, with the aim to move away from licensed production to design, develop and produce indigenously and own the design rights and Intellectual Property (IP) of the systems projected in Long Term Integrated Perspective Plan (LTIPP) of the Services a Technology Assessment Cell (TAC) would be created.
-Source: Indian Express
