Defence Sector – DPP, Missions, Schemes, Security Forces, etc.

BrahMos Deal and India’s Defence Exports


From UPSC perspective, the following things are important :

Prelims level : Brahmos, MTCR

Mains level : India's defence exports

On January 28, the Philippines signed a $374.96 million deal with BrahMos Aerospace Pvt. Ltd. for the supply of shore-based anti-ship variant of the BrahMos supersonic cruise missile.

Details of the contract

  • The Philippines contract includes delivery of three BrahMos missile batteries, training for operators and maintainers as well as the necessary Integrated Logistics Support (ILS) package.
  • The coastal defence regiment of the Philippine Marines, which is under the Navy, will be the primary employer of the missile system.

What makes the deal special?

  • This is the first export order for the missile which is a joint product between India and Russia and also the biggest defence export contract of the country.
  • This adds impetus to meet the ambitious target set by the Government to achieve a manufacturing turnover of $25 billion in aerospace and defence goods and services by 2025.

What is the BrahMos Missile System?

  • BrahMos is a joint venture between India’s Defence Research and Development Organisation (DRDO) and Russia’s NPO Mashinostroyeniya.
  • The missile derives its name from the Brahmaputra and Moskva rivers.
  • Beginning with an anti-ship missile, several variants have since been developed.
  • It is now capable of being launched from land, sea, sub-sea and air against surface and sea-based targets and has constantly been improved and upgraded.

Its range

  • The range of the BrahMos was originally limited to 290 kms as per obligations of the Missile Technology Control Regime (MTCR) of which Russia was a signatory.
  • Following India’s entry into the club in June 2016, plans were announced to extend the range initially to 450 kms and subsequently to 600 kms.
  • BrahMos with extended range upto 450 kms has been tested several times since.

Deployments in India

  • The missile has been long inducted by the Indian armed forces.
  • The Army has recently deployed the system along the Line of Actual Control (LAC) in Arunachal Pradesh.

Which other countries are in discussion for the BrahMos missiles?

  • While the first export order for BrahMos took a long time, the next order is likely to be concluded soon with negotiations with Indonesia and Thailand in advanced stages.
  • Philippines is also looking at several other military procurements from India and South East Asia as the region has emerged as a major focus area for India’s defence exports.
  • For instance, the HAL has received interest from Philippines Coast Guard for procurement of seven Dhruv Advanced Light Helicopters and eight Dornier Do-228 aircraft under the $100mn Line of Credit.
  • In addition, maritime domain and ship building is another potential area for Indian companies in the Philippines.

What is the status of defence exports?

  • India has put out a range of military hardware on sale which includes various missile systems, Light Combat Aircraft (LCA), helicopters, warship and patrol vessels, artillery guns, tanks, radars etc.
  • From 2016-17 to 2018-19, the country’s defence exports have increased from ₹1,521 crore to ₹10,745 crore, a staggering 700% growth.

Steps taken by the Centre to boost defence production

  • Licensing relaxation: Measures announced to boost exports since 2014 include simplified defence industrial licensing, relaxation of export controls and grant of no-objection certificates.
  • Lines of Credit: Specific incentives were introduced under the foreign trade policy and the Ministry of External Affairs has facilitated Lines of Credit for countries to import defence product.
  • Policy boost: The Defence Ministry has also issued a draft Defence Production & Export Promotion Policy 2020.
  • Indigenization lists: On the domestic front, to boost indigenous manufacturing, the Government had issued two “positive indigenization lists” consisting of 209 items that cannot be imported.
  • Budgetary allocation: In addition, a percentage of the capital outlay of the defence budget has been reserved for procurement from domestic industry.

Issues retarding defence exports

  • Excess reliance on Public Sector: India has four companies (Indian ordnance factories, Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL) and Bharat Dynamics Limited (BDL)) among the top 100 biggest arms producers of the world.
  • Policy delays: In the past few years, the government has approved over 200 defence acquisition worth Rs 4 trillion, but most are still in relatively early stages of processing.
  • Lack of Critical Technologies: Poor design capability in critical technologies, inadequate investment in R&D and the inability to manufacture major subsystems and components hamper the indigenous manufacturing.
  • Long gestation: The creation of a manufacturing base is capital and technology-intensive and has a long gestation period. By that time newer technologies make products outdated.
  • ‘Unease’ in doing business: An issue related to stringent labour laws, compliance burden and lack of skills, affects the development of indigenous manufacturing in defence.
  • Multiple jurisdictions: Overlapping jurisdiction of the Ministry of Defence and Ministry of Industrial Promotion impair India’s capability of defence manufacturing.
  • Lack of quality: The higher indigenization in few cases is largely attributed to the low-end technology.
  • FDI Policy: The earlier FDI limit of 49% was not enough to enthuse global manufacturing houses to set up bases in India.
  • R&D Lacunae: A lip service to technology funding by making token allocations is an adequate commentary on our lack of seriousness in the area of Research and Development.
  • Lack of skills: There is a lack of engineering and research capability in our institutions. It again leads us back to the need for a stronger industry-academia interface.

Way forward

  • Reducing import dependence: India was the world’s second-largest arms importer from 2014-18, ceding the long-held tag as the largest importer to Saudi Arabia, says 2019 SIPRI report.
  • Security Imperative: Indigenization in defence is critical to national security also. It keeps intact the technological expertise and encourages spin-off technologies and innovation that often stem from it.
  • Economic boost: Indigenization in defence can help create a large industry which also includes small manufacturers.
  • Employment generation: Defence manufacturing will lead to the generation of satellites industries that in turn will pave the way for a generation of employment opportunities.

Back2Basics: Missile Technology Control Regime (MTCR)

  • MTCR is an informal political understanding between countries to limit the spread of missiles and missile technology.
  • MTCR was started by like-minded countries to prevent nuclear proliferation.
  • In 1992, the original focus of the MTCR was to prevent the proliferation of missiles capable of carrying chemical, biological and nuclear warheads and as a threat to international peace and security.

Also read:

Growth of India’s Defence Exports


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