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How BrahMos Missile and Tejas Fighter Jet exports can be a game changer for Indian economy?

How BrahMos Missile and Tejas Fighter Jet exports can be a game changer for Indian economy?

Relevance:

  • GS 3 || Security || Tackling Security Threats || Nuclear Weapons

Why in the news?

Exporting the BrahMos missile system would be crucial because it will increase India’s reputation as a defense exporter and help it reach its goal of $5 billion in defense exports by 2025.

Recent Development:

  • The “Implementing Arrangement” for “procurement of defense material and equipment procurement” was signed between India and the Philippines. This deal provides the basis for the widely anticipated government-to-government export of the BrahMos cruise missile.
  • Exporting the BrahMos missile system will be crucial because it will increase India’s reputation as a defense exporter, assist it in meeting its $5 billion defense export objective by 2025, and enhance its status as a regional giant. However, there are several obstacles in the way.

About BrahMos:

  • The BrahMos cruise missile systems were first developed in the late 1990s.
  • BrahMos Aerospace Limited is a joint company between the Defence Research and Development Organisation and Russia’s Military Industrial Consortium NPO Mashinostroyenia that manufactures the aircraft.
  • This is the world’s first supersonic cruise missile.
  • It can travel at Mach 2.8 (almost three times the speed of sound) and has a range of at least 290 kilometers (a new version can reach up to 400km).
  • Because of its high speed, air defense systems using surface-to-air missiles would have a hard time intercepting the BrahMos.

Significance of the BrahMos’ Export:

  • Greater Indo-Pacific Presence: The Philippines becoming the first country to import the BrahMos will have far-reaching and significant consequences in the Indo-Pacific.
  • Countering China’s Military Assertion: India’s intention to sell the BrahMos missile system to ASEAN nations such as the Philippines and Vietnam indicates worries about China’s increasing military assertiveness in the region.
  • Broadening India’s Geopolitical Horizons: The BrahMos export would enhance India’s economic, soft, and hard power profiles in the region, as well as give the Indo-Pacific with a powerful and trustworthy anchor with which to defend its sovereignty and territory.
  • From Importer to Exporter: The sale of the supersonic BrahMos missile would signal India’s transition from being one of the world’s largest arms importers to being a major military exporter. It will also help the country become a ‘Atma Nirbhar’ in the military manufacturing industry, bolstering partners’ defenses and boosting profits.

Exporting BrahMos Comes With Its Own Set of Challenges

  • CAATSA: The export of BrahMos is still hampered by unresolved worries about the United States’ Countering America’s Adversaries through Sanctions Act, or CAATSA. The US has been evasive about whether it will impose penalties over India’s procurement of the S-400, licensed manufacturing of the AK-203 assault weapon, and shipment of the BrahMos, despite the fact that India is a key defense partner.
  • Many countries interested in purchasing the BrahMos would find it impossible to do so because of the COVID-19 epidemic.

India as a defense product export:

  • Between 2012 and 2019, Indian defense exports increased significantly, with both governmental and private sector companies contributing.
  • Exports increased by 40% in the previous two fiscal years, from 7,500 crore to 11,000 crore, reflecting a 40% rise. The majority of India’s significant defense exports are small naval boats. Ammunition and weaponry exports, on the other hand, remain modest.
  • Defence-related exports were 0.8 percent and 0.73 percent of overall Indian trade in fiscal years 2017-18 and 2018-19, respectively.
  • Between 2014 and 2013, Russia’s weapons exports to India dropped by 42 percent. India’s arms imports fell by 24 percent during the same time period.
  • Despite this, India has remained the world’s second-largest weapons importer over the previous five years, with Pakistan ranked 11th.
  • India is placed 23rd on the list of major arms exports for 2015-2019, according to statistics provided by the Stockholm International Peace Research Institute, or SIPRI, in March 2020.
  • Two factors appear to be driving this trend in general.
  1. The first is the government’s “Make in India” initiative, which prioritizes a variety of components made by Indian commercial and public sector companies.
  2. The second group of causes is external to India, in the shape of vendor delays in delivering equipment and the Indian government’s outright cancellation of contracts, or at the very least a reduction in current contracts.

Role Make in India and Defence Procurement Procedure (DPP):

  • The Defence Procurement Procedure (DPP) lays out the conditions, laws, and requirements for defense acquisitions, as well as the steps required to grow India’s defense sector, as part of the “Make in India” drive.
  • It included a new procurement category called “Buy Indian Indigenously Designed, Developed, and Manufactured” to the amended DPP of 2016. (IDDM).
  • The ‘Make’ method has been simplified, “earmarking projects not exceeding ten crores” for government-funded projects and three crores for industry-funded Micro, Small, and Medium Enterprises (MSMEs).
  • Furthermore, the government has included measures in the DPP that promote technological transfers.
  • In addition, the government eliminated the former No Objection Certificate (NOC) under the DPP, which restricted exports of aerospace products and a number of dual-use items, as well as two-thirds of all products under these headings.

Public Sector Support:

  • According to government of India data for the financial year 2018-19, the three armed services for their combined capital and revenue expenditures sourced 54% of their defense equipment from Indian industry which in turn helped decrease imports and augment exports.
  • Among arms producers, India has four companies among the top 100 biggest arms producers of the world.
    • Hindustan Aeronautics Limited (HAL)
    • Indian ordnance factories
    • Bharat Electronics Limited (BEL)
    • Bharat Dynamics Limited (BDL)

Limitations in the Defense Sector:

  • Despite ‘Make in India,’ governments, including the incumbent, have tended to favor Defense Public Sector Units (DPSUs) above the private sector.
  • This approach is extremely unbalanced, hurting private sector growth and reducing the strength of research and development, stifling the industry’s development.

Stockholm International Peace Research Institute:

  • SIPRI is an independent international institute committed to conflict, weapons, arms control, and disarmament research.
  • SIPRI, which was founded in 1966, offers policymakers, scholars, the media, and the general public with data, analysis, and recommendations based on open sources.
  • SIPRI, based in Stockholm, is consistently listed among the world’s most renowned think tanks.

Draft Defence Production and Export Promotion Policy (2020):

Aim and Objectives:

  • By 2025, to have a turnover of Rs. 1,75,000 crore, including Rs. 35,000 crore in Aerospace and Defense goods and services exported.
  • To establish a dynamic, resilient, and competitive defence sector, including the aerospace and naval shipbuilding industries, to meet the demands of the armed services with high-quality goods.
  • Using domestic design and development, minimize reliance on imports and advance “Make in India” programs.
  • To encourage the export of defense products and integrate into global defense value chains.
  • To foster a climate that stimulates R&D, rewards innovation, establishes Indian Intellectual Property (IP) ownership, and promotes a robust and self-reliant defence industry.

Conclusion:

Defense manufacturing self-reliance is a critical component of successful defense capacity, national sovereignty, and military dominance. This will assure strategic independence, cost-effective defense equipment, and maybe a reduction in the defense import bill, which can then be used to fund physical and social infrastructure.

Mains oriented question:

Defense manufacturing self-sufficiency is a critical component of successful defense capacity, national sovereignty, and military dominance. Comment. (200 words)