 "Defence Economics")
The Ministry of Defence is increasing its oversight of defence equipment manufacturing in India and emphasising strict adherence to end-user certification rules for exports, following reports of defence equipment ending up in unauthorised hands, according to a report by The Economic Times (ET).
In recent years, India's defence sector has experienced a significant surge in arms and weapons production for both domestic use and international export.
This uptick in oversight also aligns with global trends driven by conflicts like the Ukraine-Russia crisis, which have led to weapons appearing on both sides of such conflicts without proper authorisation from the originating country.
Defence manufacturing in India
According to data from Invest India, at the end of financial year 2023-24, a total of 606 industrial licences have been issued to 369 companies operating in the defence sector. This aligns with the Ministry of Defence's set target of achieving a turnover of Rs 1.75 trillion in aerospace and defence manufacturing by 2025, which includes exports of Rs 35,000 crore.
In the financial year 2022-23, India's annual defence production by value surged to Rs 1.09 trillion. The private sector's contribution was valued at Rs 21,083 crore, with the remainder coming from public sector entities. Exports also saw a notable rise, reaching Rs 21,083 crore in the financial year 2023-24, with the private sector being the major contributor.
New monitoring measures
In response, the ministry is planning to establish an internal portal to monitor the consumption patterns of imports by defence companies, focusing on critical items like explosives and primers.
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"We are looking at an internal portal so that when things are imported, we can also monitor them because these should not go into the wrong hands. There are instances we have come across where reports are there that it has gone into the wrong hands," a senior defence ministry official was quoted by ET. The official, however, did not provide specific details on the reported lapses.
Export regulations and compliance
The official stressed the importance of careful management of arms exports, urging industry players to ensure that purchasing countries certify they will not transfer the weapons to third parties.
Due to the present geo-political scenario, the defence manufacturing industry must have an entire chain of end-users and governments of countries purchasing arms must declare that they will not send the exports to any other country, the official said.
While the Indian government encourages arms exports, stringent regulations remain in place for certain nations. Currently, Indian companies are prohibited from exporting weapons to Ukraine, and most companies avoid direct dealings with Russia to evade Western sanctions.
Other countries with export restrictions include Turkey, China, and Pakistan.
