Export of BrahMos: India's road towards lead defence exporter

The new year ushered with a forward-looking development for the Indian defence industry. The Philippines signed a notice of award on 31 December that it would buy the BrahMos, supersonic cruise missile system jointly developed by India and Russia in a deal worth $374.96 million, an event expected to boost India's quest to become a major exporter of military weapon systems. The contract is for the purchase of a shore-based anti-ship variant of the missile from India. BrahMos missile is capable of being launched from land, sea, undersea and air against a surface and sea-based targets.

The deal with the Philippines could open the door for further sales of the BrahMos, which has a range of 290 km and can carry a 200-kg warhead to other Southeast Asian countries such as Vietnam and Indonesia, which engaged in negotiations for the weapon system for several years.

Possibly, BrahMos has shown the way for high-value weapon exports. The sale of BrahMos missiles to the Philippines is being seen as a game-changer for India's quest to become a credible defence exporter. It is the first major military weapon platform export order as India's defence exports so far have been items such as avionics, coastal surveillance systems, spares for radars, personal protective items, offshore patrol vessels, Advanced Light Helicopters (ALH) and electronic systems.

According to the Ministry of Defence (MoD), policy changes have resulted in defence exports increasing by more than 325 per cent over the last five years. India has set an ambitious target of achieving defence exports of $5 billion (Rs. 35,000 crore) by 2024-25. The country exported defence equipment worth Rs. 8,434.84 crore during 2020-21. In 2016-17, the total defence export from India was only Rs 1,500 crore. In 2017-18, the figure reached Rs. 4,500 crore.

The growth in defence exports was possible due to the government's reforms, which made it easier for private companies to enter the defence sector. One of the reforms that the government has undertaken was making entry into the defence sector simpler for private sector enterprises. Nearly two-thirds of the items have been made licence-free, especially on the component side. In 2019, the government launched the 'Open General Export License' scheme, which allowed the domestic industry to access the international market directly and make the product more competitive.

Currently, 90 per cent of export items are on the component side but the government wants that the Indian exporters must diversify the product line to be internationally competitive. Other major policy initiatives include allowing defence PSUs to deal with foreign customers when it comes to presenting commercial offers and quotes, setting up standard rules for usage of foreign lines of credit and most importantly roping in Indian defence attaches across the world to promote indigenous defence industry.

The government identified 12 categories of military platforms and weapons systems for production through the Strategic Partnership model in India to achieve the objective of "self-reliance". These are fighter aircraft, medium lift and utility helicopters, warships, land combat vehicles, missile systems, gun systems, small arms, ammunition and explosives, surveillance systems, electronic warfare (EW) systems and night fighting enablers, among others. The policy aims to make India one of the top five manufacturers of defence platforms with the active participation of the public and private sectors.

The government has drawn up a list of 85 countries that it would target to promote its defence industry. The countries that have the maximum potential of purchasing military equipment include Vietnam, Thailand, the Philippines, Indonesia, Myanmar, Maldives, Malaysia, Mauritius, Nepal, Bahrain, Bangladesh, Chile, Egypt, Saudi Arabia and UAE.

The Philippines also plans to sign contracts for at least 7 Dhruv Advanced Light Helicopters (ALH) and 8 Dornier 228 aircraft manufactured by Hindustan Aeronautics (HAL), possibly through a Government of India line of credit. This deal will be worth a record Rs 3,000 crore, India's largest-ever export of defence equipment. India's South Asian neighbours including Maldives, Mauritius, Nepal are already operating the Dhruv ALH in small numbers and expressing interest in more. Myanmar wants the HAL's Light Combat Helicopters (LCH).

India's indigenous Light Combat Aircraft (LCA) - Tejas is at the forefront of Malaysia's requirement of 36 low-cost light fighter aircraft for its Air Force. The Royal Malaysian Air Force (RMAF) has floated a global tender for acquiring light fighter aircraft and HAL has responded to Malaysia's proposal. The proposal sent from HAL is expected to find favour as it meets all the parameters. The HAL's LCA export version is the cheapest fighter jet globally. If the LCA gets exported, it will help HAL get international recognition for its capabilities besides the product will also get validated.

India now finds mention in tables ranking major arms exporting countries. Presently, India is exporting defence equipment to around 70 countries. According to the global defence think tank Stockholm International Peace Research Institute (SIPRI) 2020 Report, India is on the list of top 25 countries in defence exports. According to SIPRI, India accounted for 0.2 per cent of the share of global arms exports during 2016-20, making the country the world's 24th largest exporter of major arms. It represents an increase of 228 per cent over India's export share of 0.1 per cent during the previous five-year period of 2011-15. As per the report, Myanmar, Sri Lanka and Mauritius were the top recipients of Indian military hardware.

The Indian defence industry is currently in a tectonic phase. Given the policy changeover in the last five years, the next decade will turn the tide. The present policymakers believe that the target of $5 billion export by 2024 from the defence industry is not impossible to achieve. Government's readiness to offer Line of Credit to targeted friendly foreign countries offers unprecedented opportunity for domestic defence sector to build export.

(The author is a journalist who writes on defence, strategic affairs, security and conflict)