Indian Weapons in Global Market Remain a Distant Goal

Preshit Parihar 

25th July 2018

According to the SIPRI Year Book 2018, global military expenditure in 2017 stood at USD 1,739 billion. United States of America (USA) remains the largest military spender and exporter of weapons in 2017. Other countries exporting significant volumes of military equipment and systems are Russia, China, Germany and France. These countries account for almost a third of the volume of exports globally. United Kingdom (UK), Israel, South Africa and the Republic of Korea also have strong military industrial bases but do not compete for volumes of exports internationally. They predominantly cater to their domestic needs. India with its huge industrial potential aspires to join the exporters group by 2025.

India has been leading the importers list since 2012 (SIPRI Report), accounting for 12 per cent of the total global share. This situation persists even though a major part of India’s domestic defence industrial base was inherited from the British era. The Indian economy has gone through several transitions since Independence.This includes major structural changes made for liberalisation in 1991.However, defence industry remained state controlled through Defence Public Sector Undertakings (DPSUs) and the Ordinance Factory Board (OFB). The policy for allowing private industry participationin defence production was implemented only in 2000-2001, despite which there has not been an increase in participation of private enterprises. High levels of investment required to set up infrastructure and detailed scrutiny of firms are both deterrents to industries taking financial risks in this sector. Leading weapons and military equipment exporters have undertaken policy reforms that are holistic and support the needs of their domestic companies.These include government to government agreements, which allow the manufacturers to sell their products to governments of friendly states.

Entry into the global marketwill depend...

Note: Views expressed in this blog are those of the author.