India has transitioned from an arms importer and found a place in the list of the top 25 arms exporter nations due to tremendous effort from private sector and Defence Public Sector Undertakings (DPSUs), Finance Minister Nirmala Sitharaman said in the Economic Survey 2023-24 tabled in parliament on Monday.

The boost in defence export was possible, the Economic Survey outlined, because India’s defence production grew substantially from ₹74,054 crore in FY17 to ₹108,684 crore in FY23.

“India held the distinction of being the world’s second-largest arms importer. The narrative, however, has changed. India has transitioned from an arms importer and found a place in the list of the top 25 arms exporter nations,” the Economic Survey read.

In February, Defence Minister Rajnath Singh had talked of this shift from India being a net importer of arms, and said that the annual defence production is expected to reach ₹3 lakh crore, and the export of military systems, sub-systems and assemblies is set to clock ₹50,000 crore by the FY29.

However, as per a report by Stockholm-based defence think-tank SIPRI released in March, India remained the world’s top arms importer. But, its imports declined by 11 per cent between 2013-17 and 2018-22, SIPRI said in the report on global arms trade.

Additionally, the Economic Survey which comes a day before the budget is placed in parliament, said there has been a rise in the number of export authorisations issued to the defence exporters. “From 1,414 export authorisations in FY23, the number has increased to 1,507 in FY24,” the Economic Survey highlighted.

About 100 domestic companies are exporting a wide range of defence products and equipment such as aircraft like Dornier-228, artillery guns, Brahmos missiles, PINAKA rockets and launchers, radars, simulators, and armoured vehicles.

The Economic Survey said to give a push to defence exports, the government has taken several policy initiatives over the past ten years. Export procedures have been simplified and made industry-friendly, with end-to-end online export authorisation curtailing delays and facilitating ease of doing business.

The Aatmanirbhar Bharat initiatives, the Survey observed, have helped the country by encouraging indigenous design, development and manufacture of defence equipment, thereby reducing dependency on imports in the long run.

Enhanced Capital Outlay

The government has also broad based the focus of capex to include defence services into it. The Economic Survey said that along with other sectors such as road transport and highways, railways, and telecommunications, capital infusion into defence services helps “deliver higher and longer impetuses to growth by addressing logistical bottlenecks and expanding productive capacities”.

The Capital outlay in Defence Services went up by 7.9 per cent, from FY23 where it was ₹1,42,900 crores to ₹1,54,300 crores in FY24(PA), pointed out the Economic Survey while suggesting the private sector to come forward and invest in the Indian economy to capitalise on the growth momentum.

The growth in capital outlay in defence sector in FY24 is more than that of in other sectors of Atomic Energy (5.1 per cent), Space (3.4 per cent) and House and Urban Affairs (- 1.6 per cent). But, the growth in the capex in police sector, however, was more than double if compared with that of defence service, as the Economic Survey figures showed that it was 18.7 per cent in the FY24.

Drones is another area that offer vast benefits across sectors like defence, surveillance, agriculture, healthcare, and disaster relief. The government introduced liberalized drone rules in 2021.

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