Kolkata: Once heavily dependent on imports, India’s defence sector is poised to emerge as a global supplier, riding on a plethora of policy reforms, investments and industrial capabilities. With NATO announcing that its member nations will raise defence expenditure to 5% of GDP by 2035, there is a growing optimism in India about making it big in the export of military hardware in the developed world.
One of the bright spots is the achievement of Reliance Defence, which has grabbed an export order of Rs 600 crore from Germany’s major defence manufacturer Rheinmetall Waffe Munition GmbH. Reliance will manufacture and supply ammunition like artillery shells and explosives. These will be manufactured at a new plant in Maharashtra.
The deal between Reliance Defence and Rheinmetall can hopefully become a precursor to the country’s defence manufacturing sector as a whole. The surge in Europe’s defence spending can open the floodgates to export of sub-systems, components, ammunition and other equipment. Incidentally, Reliance Defence, a subsidiary of Reliance Infrastructure, has already struck joint ventures with Dassault Aviation and Thales of France.
NATO goal and India’s hopes
Russia’s aggression in Ukraine has brought deficiencies of defence preparedness of several European nations to the fore. NATO countries are striving for rapid capacity enhancement. Europe does not have unlimited defence manufacturing infrastructure and has limited workforce. If European nations want to build fresh capacity, it could take years and in the interim they could need reliable, cost-effective sources of supply to bridge the gap. India is ramping up its defence manufacturing capabilities, it could serve this need well.
‘Atmanirbhar Bharat’ and defence exports
‘Atmanirbhar Bharat’ has delivered a push to India’s defence exports which in FY25 hit a figure of Rs 23,622 crore. In FY24, the figure was Rs 21,083 crore, which indicates a growth of 12.04%. The Ministry of Defence (MoD) has projected a total export of Rs 50,000 crore to around 80 countries by 2029. Prominent in this performance has been the role of Defence Public Sector Undertakings, the exports of which rose 42.85% FY25. Last year (FY25), private sector contributions to the defence exports amounted to Rs 15,233 crore and the Defence Public Sector Undertakings accounted for Rs 8,389 crore in exports. In FY24, the private sector exported items worth Rs 15,209 crore, while the public sector companies achieved exports of Rs 5,874 crore.
According to the MoD, much of this buoyancy is due to the multiple policy changes by the government. These include streamlining the process of issuing industrial licenses, deregulating components and extending the duration of license validity periods.
While PSUs such as Hindustan Aeronautics and Bharat Electronics have been at the forefront, the entry of L&T, Tata Advanced Systems and Reliance Defence has added muscle, skill and competitiveness to India’s defence manufacturing process.