INDIA’S DEFENCE SECTOR (Syllabus: GS Paper 3 – Security)

Context: India achieved record arms exports of $2.5 billion (Rs 20,915 crore) in 2023-24, marking its highest-ever figure and securing a spot among the top 25 arms exporter nations, thanks to rising defense production.

India’s Defence Sector

• Record-High Production in FY 2023-24: The value of defence production reached ₹1,26,887 crore, marking a 16.7% increase from the previous fiscal year.
• Contribution Breakdown: DPSUs and other PSUs contributed 79.2%, while the private sector contributed 20.8% to the total defence production in 2023-24.
• Growth Since 2019-20: Defence production has grown by over 60% in 2023-24.
• Defence Exports Surge: Defence exports in FY 2023-24 reached 32.5% increase from the previous fiscal year, demonstrating robust growth.
• Range of Products Exported: Around 100 domestic companies are exporting a diverse array of defense products and equipment, including Dornier-228 aircraft, artillery guns, BrahMos supersonic cruise missiles, Pinaka multi-launch rocket systems, radars, simulators, and armored vehicles.
• Major Destination for Exports: While the survey did not specify the exact nations, the former Soviet republic of Armenia has become a significant destination for Indian defense exports, with agreements for Pinaka rockets and Akash air defense missiles.

oRussia continues to be India's main weapons supplier accounting for 36% of its arms imports

• Record Domestic Production: According to the defense ministry, India achieved its highest-ever annual domestic defense production in 2023-24, reaching a value of Rs 1.26 lakh crore, which is 16.7% higher than the previous fiscal year.
• Strategic Import Reliance: India continues to be the world’s largest arms importer, accounting for 9.8% of total global arms imports from 2019 to 2023, reflecting its strategic vulnerability.

Government Initiatives to Boost Defence Exports

• IDR Act Reform: Rationalization of Defence Products list for Industrial License and extended validity from 3 years to 15 years.
• iDEX and DTIS Schemes: Initiatives like iDEX and DTIS foster innovation and strengthen defence testing infrastructure to enhance defence manufacturing capabilities.
• FDI Policy Enhancement: FDI limits in the Defence Sector increased up to 74% via Automatic Route and up to 100% via Government Route to attract foreign investments.
• Defence Industrial Corridors: Established in Tamil Nadu and Uttar Pradesh to promote local defence manufacturing clusters leveraging existing infrastructure and human capital.