🤔 Why is India Dependent on Defence Imports?

India is the second-largest importer of weapons in the world. Which means we are still dependent on other countries for our safety. Here's why.

$100 billion.

That’s the amount India has spent in importing new weapons in the last 10 years.

We are currently the third-largest military force in the world. But this military strength mainly comes from being the second-largest importer of weapons.

However, things may be turning around for India, with exports now also rising 325% in the last 5 years.

Wondering what took so long for this change to come?

Well, here’s us spilling the tea about India’s defense industry.

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🤺 Why Does India Import Its Weapons?

It may surprise you, but the India-China conflict is not new.

Yes, the two countries were once friends, and coined the phrase “Hindi-Cheeni bhai bhai.”

But things changed when India opposed China’s occupation of Tibet.

This prompted the Dalai Lama (religious leader of the people of Tibet) to flee to India in 1959, which made China angry.

Thus began a series of attacks on India, which ultimately led to a full-on war in 1962.

And India was caught unprepared. 

We lost over 4,000 soldiers in one of our most humiliating defeats.

And the situation could have been worse. China had also invited Pakistan to attack India from the other side.

Had that happened, we would be worse off. But thankfully Pakistan refused.

However, India learned a valuable lesson: always be prepared for war.

Our newly independent country had already been importing some weapons from Russia to ensure safety before our weapons manufacturing units were set up.

But we rapidly increased imports after this war because we needed to be prepared.

However, this early reliance on easy imports was not good for us. 

We began neglecting in-house manufacturing because we were getting better quality weapons from other countries.

And this is the reason why we still have not been able to reduce our import burden.

But things are changing.

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📉 Why Imports Are Now Declining

You see, one of the major reasons we had to continually rely on foreign weapons was the lack of innovation in India.

Why was innovation lacking?

Because only the PSUs (public service undertakings) were involved in defence manufacturing.

The private sector wasn’t even involved till 2000.

And even then the private sector has had a very small role in weapons manufacturing.

However, the government is trying to change this by making it easier for private companies to get licences for defence manufacturing.

It has also launched several lists stating what imports need to stop so as to boost local manufacturing.

Just in 2020, the government banned the imports of over 101 weapons.

It has also introduced many incentives and schemes for increasing weapons manufacturing.

For instance, the government has set aside 25% of the defense budget for the private sector.

It has reduced the GST on weapons' maintenance, repair and overhaul services from 18% to 5%.

What's more, it has launched product linked incentive schemes for producing drones.

Thanks to this 70% of India's weapons exports now come from the private sector.

However, it isn't just the private sector that is booming.

Defense PSU Hindustan Aeronautics Ltd. is also making some headways in this space.

It recently set up an office in Malaysia, possibly to launch maintenance, repair and overhaul operations there.

And in more exciting news, it could also win a tender to provide the Malaysian government with our Tejas fighter aircrafts.

This would be our second major export item apart from the BrahMos missile.

So, all's good with India's defense sector then?

Well, you already know that we would not be writing this article if it was.

You see, our exports may have gone up. But we still mainly export small-ticket items like light helicopters and components and parts.

To truly boost exports we need to start exporting big ticket items like the Tejas fighter jets and the BrahMos missile.

The problem with this is, despite all the headways, we ourselves don't make a lot of big ticket items in-house.

The new policies are revolutionising this space, but change needs to come fast.

Especially now, when geopolitical conditions are so fraught and India's foreign exchange reserves are going down every day.

We simply cannot be spending more and more of our precious forex on importing weapons.

But the Indian government is very optimistic about our chances.

It has set a target of Rs. 35,000 crores in defense exports by 2025. Do you think we will be able to achieve this?

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⚡In a line: India is very dependent on imports to secure its borders but things may be changing because of new government schemes.

💡Quick question: Do you think India can become aatmanirbhar in the defence space any time soon?

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