DTN News - INDIA DEFENSE NEWS: India Shifts From Importing Weapons To Exporting Them
World's biggest weapons importer is fostering home industry in bid to become major exporter.
Source: DTN News - - This article compiled by K. V. Seth from reliable sources Washington Post(NSI News Source Info) HONG KONG - December 4, 2014: For more than a decade, India shopped around the world in search of a deal for more than US$1 billion worth of helicopters to replace about 200 of its military's ageing light-utility aircraft.
But in August, the new nationalist government surprised many when it abruptly scrapped the request for global bids to buy the helicopters in favour of manufacturing them in India instead.
In recent months, India has reversed two more proposals for buying transport aircraft and submarines and decided to make them at home. It's part of a push by Prime Minister Narendra Modi's government to foster a domestic arms industry.
India is the world's largest buyer of weapons, accounting for 14 per cent of global imports, three times as many as China.
Over the next seven years, India is likely to spend more than US$130 billion importing arms, officials say, to upgrade its understocked, Soviet-era arsenal.
India's military modernisation can generate billions of dollars worth of business for American companies, but it also helps strengthen the nation's strategic role in the region - at a time when the Indian and US militaries are conducting more and more joint exercises. The massive buying spree coincides with India's growing border tensions with China and Pakistan.
In the past three years, India spent nearly US$14 billion importing weapons, of which more than US$5 billion worth were from the United States.
Now, Modi wants to upend India's arms-importer tag and turn the country into not only a defence manufacturer but also a major weapons exporter, much like China has become.
"We dream of making India strong enough to export defence equipment to the world," Modi said in August after christening India's largest home-built warship. "Instead of having to import every little piece of defence hardware, we want India to become an exporter of such equipment over the next few years."
To realise this goal, the government removed the laborious licence requirements on almost 60 per cent of defence products for private manufacturing companies. This year, the government raised the limit on foreign investment in the defence industry from 26 per cent to 49 per cent to encourage more partnerships with foreign investors.
"We want the global defence companies to come to India not merely to sell to us but also to manufacture here and export to other countries," said Amitabh Kant, secretary of the Department of Industrial Policy and Promotion in New Delhi.
But that still may not be enough to bring critical defence technologies to India.
"Qualitatively, nothing changes because [49 per cent] doesn't give control to the foreign investor," said Pratyush Kumar, president of Boeing India.
Critics say India is being torn by two competing goals: the nationalistic aspiration to produce weapons locally and the urgent need to fix the crippling shortages in the military.
Despite the push, many defence experts say India is not ready to make a giant leap like China's - from being the largest arms importer in 2006 to becoming the world's sixth-largest defence exporter by 2011.
"Becoming a defence exporter is a noble aspiration but it will take a lot of doing," said Arun Prakash, a retired navy chief. "Given the current state of our defence research and industrial base, it is not something that will happen overnight."
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