India’s defense exports and humanitarian law

India’s defense exports and humanitarian law

India’s defense exports have been rapidly growing, driven by domestic policy reforms, increased private sector participation, and a focus on indigenous production. As of FY 2024, India has made impressive strides, with defense exports reaching ₹6,915 crore in the first quarter alone, a 78% increase compared to the same period the previous year. India is now among the top 25 arms-exporting nations, supplying defense products to around 85 countries. These products include aircraft, artillery, missiles, radars, armored vehicles, and surveillance systems.

Growth Drivers India’s defense export growth has been fueled by several key factors:

1. Policy Reforms: The Defence Production and Export Promotion Policy (DPEPP) 2020 aims to achieve $25 billion in defense production by 2025, including $5 billion from exports. Additionally, FDI limits have been raised to 74% under the automatic route, and the government has introduced initiatives like Make in India and Atma Nirbhar Bharat to foster self-reliance.
2. Increased Private Sector Participation: The opening up of the defense sector to private companies, supported by initiatives like Innovations for Defence Excellence (iDEX), has encouraged diverse and competitive manufacturing, driving export growth.
3. Research & Development: The Defence Research and Development Organisation (DRDO) has played a key role in developing advanced technologies like the BrahMos missile and Akash air defense system, which have been successfully exported.
4. Strategic Partnerships and Government-to-Government Agreements: India has pursued strategic defense collaborations with countries like Japan and Russia, strengthening its export capabilities.
5. Competitive Pricing: Indian defense products are known for their cost-effectiveness, such as the Akash missile system, which is priced lower than comparable systems from other countries.
6. Offset Policies: India’s offset policy, which mandates foreign companies to invest a portion of defense contract values back into India, has further enhanced India’s manufacturing capabilities.

1. Dependence on Imports: India remains a significant importer of defense equipment, accounting for 9.8% of global arms imports between 2019-2023, according to SIPRI. This continues to strain foreign exchange reserves and presents security risks.
2. Slow Procurement Process: India’s defense procurement process is criticized for being slow and bureaucratic, resulting in delays in modernization efforts and project cancellations.
3. Limited Private Sector Participation: Although private sector involvement has increased, public sector undertakings (PSUs) still dominate, limiting opportunities for private firms.
4. Technology Gaps: India still relies on foreign suppliers for critical components, such as engines for the Tejas fighter jet, indicating technology gaps in areas like engine development and advanced materials.
5. Weak Export Control Legislation: India’s current arms export control framework lacks specific provisions for assessing the International Humanitarian Law (IHL) compliance of recipient countries. This gap became apparent when a case involving arms exports to Israel, amidst allegations of war crimes, was dismissed by the Supreme Court.

1. Enhance International Collaborations: India should pursue more strategic joint ventures with global defense manufacturers to access cutting-edge technologies and expand its export potential.
2. Export Financing Mechanisms: India needs a tailored export financing mechanism to make its defense products more attractive to developing countries, including government-backed loan guarantees and insurance for political and commercial risks.
3. IHL Compliance Framework: Establishing a comprehensive framework to assess and monitor recipient countries’ compliance with International Humanitarian Law would enhance India’s reputation as a responsible arms exporter.
4. Investment in Niche Technologies: Focusing on niche defense technologies, such as AI, hypersonic systems, and quantum computing, could give India a unique position in the global arms market.
5. Streamline Production and Export Processes: India should simplify defense export procedures to improve efficiency, reduce delays, and make Indian products more competitive globally.
6. Offset Policy Improvements: Revamping the offset policy to better align with export-driven projects could enhance India’s manufacturing and export capabilities.
7. Regional Service Hubs: India could establish regional hubs for after-sales support and maintenance of its exported defense equipment, fostering long-term relationships with customer countries.

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