India wants to double defence exports over the next five years, Prime Minister Narendra Modi said on Wednesday, as the country seeks to cut its import bill amid a funding crunch that has forced successive governments to go slow on new orders.
“For several years India has been a net importer of defence products. We have taken measures to change it since 2014,” Modi said in the city of Lucknow, addressing the inaugural ceremony of India’s 11th defence expo.
“Our aim is to increase exports of defence products to five billion dollars in five years,” Modi said, adding India exports about 170 billion rupees of defence products.
India’s defence export ambitions are soaring as Asia’s third largest economy suffers its worst slowdown in decades with the country’s economic growth dropping to 4.5% in July-September quarter – its lowest quarterly growth in six years.
The exports, primarily made by government ordnance factories and private firms such as L&T, Bharat Forge and Tata group, include offshore patrol vessels, helicopters, coastal surveillance systems and spares for radar.
India’s armed forces, saddled with outdated aircraft and warships, are in dire need of funds for modernisation.
Laxman Behera, research fellow at Institute for Defence Studies and Analyses, said in a report released on Tuesday that India’s defence resource crunch had been acute in recent years.
India’s budget for modernisation of weapons, aircraft and warships announced by Finance Minister Nirmala Sitharaman last week stood at 906 billion rupees, out of a total allocated defence budget of 3,230.5 billion rupees.
U.S. ambassador to India Kenneth Juster said lower offset obligations, a mandatory financial commitment locally by global firms partnering with India and less regulations can help India bring in billions of dollars in foreign investment.