Why India’s new ban on military imports will see it become a major manufacturer - and supplier - of weapons

India has long been one of the world’s biggest military spenders, investing $71.1 billion annually. But a new ban on some imports means it will now be building – and selling – more equipment of its own. 

India’s Ministry of Defence has released a list of 101 items, including various military platforms, weapons and sensors, that will be progressively banned for import between 2020 and 2024, in line with Prime Minister Narendra Modi's vision to make the country self-reliant or ‘Atmanirbhar’.

Defence Minister Rajnath Singh stated that this was a big step towards self-reliance in defence, highlighting that the aim of the ban was “to apprise the Indian defence industry of the anticipated requirements of the armed forces so that they are better prepared to realise the goal of indigenisation.”

The list has been prepared by the newly-created Department of Military Affairs (DMA) headed by India’s first Chief of Defence Staff, Gen Bipin Rawat, who recently advocated that the armed forces must be weaned away from costly foreign equipment to use functional and cheaper Indian-made equivalents.

India is currently ranked third in military spending by the Stockholm International Peace Research Institute (SIPRI) after the US and China, with an annual defence budget of $71.1 billion. However, since the country’s military industrial capability is relatively underdeveloped, it has limited capacity to produce sophisticated weaponry.

In recent years, the transfer of technology - mainly from Russia - has helped India achieve near self-sufficiency in certain areas, notably shipbuilding and missile technology. But India has always relied upon defence imports from suppliers as diverse as Russia, the US, the UK, France and Israel. Overall, it is estimated that nearly 86 percent of Indian military hardware is of Russia origin.

This lack of domestic defence manufacturing – specifically of high-end systems – has been particularly telling in times of crisis, such as the ongoing border stand-off with China in the Galwan Valley.

In a bid to augment the Indian Air Force’s combat potential, New Delhi was compelled to buy 33 aircraft from Russia, including Sukhois and Mig-29 fighters, five Rafale aircraft from France and a missile defence system from Israel.

Clearly, buying costly military equipment from all over the world is unsustainable in the long term, and poses its own challenges in terms of integrating diverse systems and sourcing spare parts. Modi, speaking at February’s DefExpo, warned that “a country of India’s size cannot entirely depend on imports.”

Since 2014, he has sought to promote the domestic defence industry under the ‘Make in India’ scheme, which aims to transform the country into a defence manufacturing hub capable of meeting not just India’s requirements, but also an ambitious target of $5 billion in exports to smaller Indian Ocean region states over the next five years.

The list of banned items – which will be periodically reviewed - includes not just basic parts and systems, but also high-end weapons systems. It ranges from assault rifles, artillery guns, radar and sonar systems to transport aircraft, light combat helicopters (LCHs) and even space satellites. These are areas where Indian companies have gained considerable expertise in recent years.

Reportedly, the acquisition of items now on the banned list cost the Indian military approximately $50 billion between April 2015 and August 2020, and the government has estimated that as a result of the restriction on their imports, orders worth almost $57 billion will be placed with the domestic industry within the next six to seven years.

Obviously, the government’s decision has pleased the markets, and stocks of Indian defence companies jumped 13 percent following the announcement. It is hoped the boost in manufacturing and increase in exports will stimulate long-term economic growth.

To that end, the import ban already seems to be a step in the right direction.

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