India has launched a new defence export policy aimed at liberalising cumbersome bureaucratic rules in order to triple exports in five years. A Defence Ministry official claimed it would be “easy now for defence exporters to ship select products to select nations on self-declaration”.
A notice published by the Indian Department of Defence Production (DDP) described it as an “issuance of the Open General Export License (OGEL) [scheme] for the export of parts and components”.
The Department will issue OGELs for the export of specific military items to countries including Belgium, France, Germany, Japan, South Africa, Spain, Sweden, UK, USA, Canada, Italy, Poland, and Mexico.
“Exporters shall submit a declaration to the effect that they have internal controls in place to prevent the transfer of goods to countries/ entities facing UNSC sanctions or arms embargo,” the rules clarified.
India’s defence exports had doubled in last few years, jumping from Rs.1,5000 million ($225 million) in 2016-17 to Rs.110,000 million ($1.6 billion) in 2018-19, with 90 percent of the products listed as components. The government figure suggests that the US is the biggest contributor to Indian exports, followed by countries like Israel and many European countries.
RM Shri @rajnathsingh approves 2 Open General Export Licenses for certain parts and components and intra-company transfer. This would facilitate the exporters and enhance the ease of doing business. @DefProdnIndia https://t.co/1ErIodMaI9https://t.co/QcXuB5ZeUI— रक्षा मंत्री कार्यालय/ RMO India (@DefenceMinIndia) October 24, 2019
Last month, Indian Defence Minister Rajnath Singh set a target to achieve a $26 billion defence industry by 2025 with an anticipated investment of $10 billion in aerospace and defence goods and services. The minister also said that the country would achieve a target of $5 billion for defence exports by 2024. However, the policy does not mention what products India will export to achieve the $5 billion target.
In the last few years, the state-owned arms manufacturers have developed over two dozen platforms, like the Arjun tank, the Tejas fighter, the airborne early warning and control (AEW&C) system, an advanced towed artillery gun system (ATAGS), weapons locating radar, high-speed heavyweight ship-launched torpedoes, and an anti-torpedo decoy system which has the potential to attract buyers in in Africa and South-east Asia.
In past few years, the Indian government has taken several steps such as simplification of industry licensing process, and increased the foreign direct investment cap to promote defence exports. Two defence industrial corridors have also been launched in southern state of Tamil Nadu and eastern state of Uttar Pradesh.