The growth of India’s defence exports
Context:
India’s defence exports have increased from ₹1,521 crore in 2016-17 to ₹8,434.84 crore in 2020-21.
Relevance:
GS-III: Indian Economy, GS-III: Internal Security Challenges
Dimensions of the Article:
- India’s Defence Exports
- ‘Make in India’ initiative
- Defence Production and Export Promotion Policy 2020 (DPEPP 2020)
- More about the Change in Defence Exports and Imports in India
India’s Defence Exports
- India’s defence exports have increased over 5 times between 2016-17 and 2020-21. The defence exports are valued at around ₹8,434.84 cr in 2020-21.
- The Government has set an ambitious target to achieve exports of about ₹35,000 crore ($5 billion) in aerospace and defence goods and services by 2025.
- India has been exporting to over 40 nations and is emerging as a global defence exporter. India figures in the Top 25 defence exporters.
- Indian Ocean Region nations have emerged as a major destination for Indian defence exports.
- According to the latest report of the Swedish think tank Stockholm International Peace Research Institute (SIPRI), three Indian companies figure among the top 100 defence companies in the 2020 rankings — Hindustan Aeronautics Limited (HAL), Ordnance Factory Board and Bharat Electronics Ltd (BEL).
- India has the capacity to supply different types of missile systems, LCA/helicopters, multi-purpose light transport aircraft, warships and patrol vessels, artillery gun systems, tanks, radars, military vehicles, electronic warfare systems and other weapons systems.
Factors responsible for this shift
- ‘Make in India’ initiative, as part of which a number of components from Indian private and public sector enterprises have been prioritised by the government.
- Extraneous factors in the form of delays in supplying equipment by vendors and the outright cancellation of contracts by the Indian government or at least a diminution of existing contracts.
‘Make in India’ initiative
Under the Make in India initiative, the Defence Procurement Procedure (DPP) lays out the terms, regulations and requirements for defence acquisitions as well as the measures necessary for building India’s defence industry.
- A new procurement category called ‘Buy Indian Indigenously Designed, Developed and Manufactured’ (IDDM) has been created in DPP of 2016
- The ‘Make’ procedure has undergone simplification “earmarking projects not exceeding ten crores” that are government funded and Rs. 3 crore for Micro, Small and Medium Enterprises (MSMEs)
- The DPP has provisions that make private industry production agencies and partners for technology transfers.
- Small and Medium Enterprises (SMEs) share in Indian Defence market was 17.5% in 2016, now 54%.
Defence Production and Export Promotion Policy 2020 (DPEPP 2020)
The DPEPP 2020 is envisaged as overarching guiding document of MoD to provide a focused, structured and significant thrust to defence production capabilities of the country for self-reliance and exports.
Regarding Domestic Production and Defence Exports
- The share of domestic procurement in overall defence procurement is about 60% now, and in order to enhance procurement from domestic industry, it is incumbent that procurement is doubled to RS. 1.4 Lakh crores by 2025 – according to DPEPP 2020’s aims.
- The policy says that Defence Attachés have been mandated and are supported to promote export of indigenous defence equipment abroad, with the efforts in this direction supplemented by selected Defence Public Sector Undertakings (DPSU).
- Subject to strategic considerations, domestically manufactured defence products will also be promoted through Government to Government agreements and Lines of Credit/Funding.
- In addition, with the aim to move away from licensed production to design, develop and produce indigenously and own the design rights and Intellectual Property (IP) of the systems projected in Long Term Integrated Perspective Plan (LTIPP) of the Services a Technology Assessment Cell (TAC) would be created.
More about the Change in Defence Exports and Imports in India
Public sector driven
Among arms producers, India has four companies among the top 100 biggest arms producers of the world. The largest Indian arms producers are:
- Indian ordnance factories (37th rank)
- Hindustan Aeronautics Limited (HAL) (38th)
- Bharat Electronics Limited (BEL)
- Bharat Dynamics Limited (BDL)
All four of these companies are public sector enterprises and account for the bulk of the domestic armament demand.
Explaining falling imports
Growing indigenization is not the sole reason for falling imports. Its is also because of the cancellation of some big-ticket items
- India cancelled the India-Russia joint venture for the development of the advanced Su-57 stealth Fifth Generation Fighter Aircraft (FGFA) in 2018 due to delays and not having the actual “5th gen” capabilities
- In 2015, we also reduced the size of the original acquisition of 126 Rafale Medium Multi-Role Combat Aircraft (MMRCA) from Dassault to 36 aircraft
- Delays in the supplies of T-90 battle tanks, and Su-30 combat aircraft from Russia and submarines from France, in 2009-13 and 2014-18, also depressed imports.
SMEs not the favorites
SMEs still face stunted growth because India’s defence industrial model is at odds with global trends in that it tends to create disincentives for the private sector.
- Governments, including the incumbent, have tended to privilege Defence Public Sector Units (DPSUs) over the private sector, despite ‘Make in India’.
- This model is highly skewed, undermining the growth of private players and diminishes the strength of research and development.
Export trends
The trends look positive on the export front. Between 2012 and 2019, Indian defence exports, both Public and private, have seen a surge
The sharp rise in defence export products can be attributed to the measures introduced by Government
- In 2014, the government delisted or removed several products that were restricted from exports.
- It dispensed with the erstwhile No Objection Certificate (NOC) under the DPP restricting exports of aerospace products, several dual-use items and did away with two-thirds of all products under these heads.
- Small naval crafts account for the bulk of India’s major defence exports. However, export of ammunition and arms remain low.
Speaking of volume
- As a percentage of total Indian trade, defence-related exports for the fiscal years 2017-18 and 2018-19 were 0.8 and 0.73%, respectively.
- Thus, from a volume and value standpoint, Indian defence exports, while showing a promising upward trend, still remain uncompetitive globally.
-Source: The Hindu
Cabinet approves ₹76,000-crore push for semiconductor makers
Context:
The Union Cabinet approved a ₹76,000 crore scheme to boost semiconductor and display manufacturing in the country, taking the total amount of incentives announced for the electronics sector to ₹2.30 lakh crore.
Relevance:
GS-III: Industry and Infrastructure
Dimensions of the Article:
- Indian electronics sector
- Trend in importance of semiconductor chips
- About the PLI scheme for semiconductor and display systems
- Significance of the PLI Scheme
Indian electronics sector
- The Indian electronics sector is tremendously growing with the demand expected to cross USD 400 billion by 2023-24.
- Domestic production has grown from USD 29 billion in 2014-15 to nearly USD 70 billion in 2019-20 (Compounded Annual Growth Rate of 25%).
- Despite the impressive growth of electronic production in India, the net value added by production units is very low. The net value addition ranges between 5% and 15%, as most components are imported rather than locally sourced.
- In the era of global supply chains, the value addition at the final stages of production is very low, especially in electronics because the more complicated processes, involving greater value addition, occur prior to assembly, in ‘upstream’ industries.
- Currently, these imports nearly constitute 80% of these components, with approximately 67% of the imports coming from China alone.
- In the absence of foundries (semiconductor fabrication plants where microchips are produced), India has to rely on foreign contractors to produce microchips. –[ There are about 170 commercial foundries globally but India does not have a single one.]
- Chip manufacturers like Intel, TSMC and Samsung choose other countries instead of India citing uncertain domestic demand and poor cost efficiencies here.
Trend in importance of semiconductor chips
- The number of transistors mounted in IC circuit chips has doubled every two years.
- Notably, the increase in chip consumption over the last decade is also partly attributable to the rising contribution of electronic components in a car’s bill of materials.
- Electronic parts and components today account for 40% of the cost of a new internal combustion engine car, up from less than 20% two decades ago. Chips account for a bulk of this increase.
About the PLI scheme for semiconductor and display systems
- The scheme has been provided with a budget of around ₹76,000 crore scheme to boost semiconductor and display manufacturing in the country.
- The programme aims to provide a globally competitive incentive package to companies in the sector.
- The scheme would provide fiscal support of up to 50% of the project cost for setting up semiconductor and display fabrication units.
- The government will work towards setting up high-tech clusters with the required infrastructure in place.
- Also, a specialised and independent ‘India Semiconductor Mission’ will be set up under the leadership of global experts in semiconductor and display industry. It will act as the nodal agency for efficient and smooth implementation of the schemes on semiconductors and display ecosystem.
Significance of the PLI Scheme
- The scheme will provide an impetus to domestic electronic design and production capabilities. Electronics manufacturing in the country had increased to $75 billion over the past seven years and is expected to reach $300 billion in the next six years.
- The programme will help make India a global hub of electronic system design and manufacturing. The scheme is expected to attract investment of ₹1.67 lakh crore and lead to production worth ₹9.5 lakh crore.
- The programme will also help create highly skilled employment opportunities in India. The entire programme would lead to 35,000 high-quality direct jobs and indirect employment for 1 lakh persons. This would provide an opportunity to harness the demographic dividend of the country.
- The programme would propel innovation and build domestic capacities to ensure the digital sovereignty of India.
- Domestic production will help uphold trust in digital devices. This has gained utmost importance in the current geopolitical scenario where the security of critical information infrastructure holds immense strategic importance.
-Source: The Hindu
Durga Puja in Kolkata: UNESCO Intangible Cultural Heritage
Context:
Durga Puja in Kolkata, one of largest cultural carnivals and street art festival of the country, received an important international recognition by making it to UNESCO’s Representative List of the Intangible Cultural Heritage of Humanity.
Relevance:
GS-I: Art and Culture
Dimensions of the Article:
- What is Intangible Cultural Heritage (ICH)?
- About Durga Puja
- Citation for the UNESCO tag
What is Intangible Cultural Heritage (ICH)?
- ICH means the practices, representations, expressions, knowledge, skills – as well as the instruments, objects, artefacts and cultural spaces associated with them that communities, groups and, in some cases, individuals recognize as a part of their cultural heritage.
- Furthermore, its importance is not in the cultural manifestation itself, but in the wealth of knowledge, know-how and skills that are transmitted from one generation to the next.
- Also, India is a signatory of the 2003 UNESCO Convention which aims for the Safeguarding of the Intangible Heritage along with traditions and living expression.
About Durga Puja
- Durga Puja, also known as Durgotsava or Sharodotsava, is an annual Hindu festival that reveres and pays homage to the goddess Durga.
- It is an important festival in the Shaktism tradition of Hinduism.
- It is celebrated because of Durga’s victory over Mahishasur.
- It is particularly popular and traditionally celebrated in the Indian states of West Bengal, Bihar, Jharkhand, and Odisha among other states.
- It is a ten-day festival, of which the last five are of the most significance.
Citation for the UNESCO tag
- The UNESCO Committee commended its initiatives to involve marginalized groups, and individuals as well as women in their participation in safeguarding the element.
- The festival is also marked by scripture recitations, performance arts, revelry, gift-giving, family visits, feasting, and public processions.
- Durga Puja not only is a celebration of the feminine divinity but is a consummate expression of dance, music, crafts, rituals, practices culinary and cultural aspects.
- The festival transcends the boundaries of caste, creed and economic classes and joins the people together in its celebration.
-Source: The Hindu
U.S. tests laser weapon in West Asia
Context:
The U.S. Navy announced that it tested a laser weapon and destroyed a floating target in West Asia, a system that could be used to counter bomb-laden drone boats deployed by Yemen’s Houthi rebels in the Red Sea.
Relevance:
GS-III: Science and Technology
Dimensions of the Article:
- About the Laser weapon
- What Are India’s Plans for Directed Energy Weapons?
About the Laser weapon
- By focusing a powerful beam of light steadily on an object, the laser can burn through it, given enough time and enough power.
- Laser weapons, more than any other kind of directed energy weapon, come with big promises and lofty expectations. Lasers have up-front development costs and require substantial electrical power to become a weapon. Once those two hurdles have been cleared, a laser potentially offers an extremely favorable cost-per-shot ratio, with the intense beams of light burning through more expensive targets.
- Formally called the “Distributed Gain High Energy Laser Weapon System,” or DGHELWS, the weapon is billed as a protective tool, a kind of defense between soldiers in the field and weapons that mean them harm.
- A 300 kW HELWS [High Energy Laser Weapon System] allows for successful engagement of a wide variety of [air and missile defense] threats ranging from cruise missiles, manned aircraft, unmanned aircraft and rockets/artillery.
- Many of the lasers already developed and tested by militaries are focused on the smaller end of this threat spectrum.
- The Laser Weapon System, which the US Navy deployed in the Persian Gulf in 2014, reportedly had a beam strength of 30 kW. In demonstrations it used that beam power to burn through the metal exterior of rockets, the wings of small flying drones, and the engine casing on a little boat. (And in 2020, the Navy demonstrated a 150 kW laser weapon on a ship).
What Are India’s Plans for Directed Energy Weapons?
- India’s Defense Research and Development Organisation (DRDO) announced in 2020 that it plans to develop directed energy weapons (DEWs) using high-energy lasers and microwaves.
- DEWs are emerging military technologies that are yet to be deployed by any military force but are seen as critical in future warfare. According to media reports, India has developed a national plan with short, medium and long term goals to develop a series of DEW variants with up to 100 kilowatts of power.
- This is being planned in a collaborative mode, to eventually partner with and benefit from the domestic private sector. While India is still in the early stages of developing this technology and nowhere near possessing an operational capability, advances in such technologies will have implications for both national and regional security.
- Development of DEWs is seen as particularly important in the context of India’s worsening security environment, especially its ties with China.
- The continuing military confrontation in eastern Ladakh is a reminder of the challenges that China poses to India.
- Beijing’s growing military power, including in space, cyber and electronic warfare domains, can inflict significant damage on its adversaries, including India. China is also developing DEW technologies. Indeed, India is probably developing its own DEWs as a response.
SOURCE:https://www.thehindu.com/
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