Centre to encourage government-to-government deals to meet $5 billion military export target

NEW DELHI: In order to meet an ambitious target of $5 billion worth of military exports annually by 2025, the Centre will encourage government-to-government deals, using lines of credit to friendly foreign nations and branding of home developed products at international shows.
Spelling out its export promotion strategy, the defence ministry has marked out a target for Defence PSUs and the Ordnance Factory Board achieve 25% of their revenues from exports within the next five years in a draft policy.

The targets would be difficult to meet, specially for PSUs that depend on the Indian armed forces as their only customer, necessitating a series of steps that have been spelled out, including an even more proactive role for Indian missions abroad and an aggressive marketing campaign.

An active campaign to push through direct government deals would go a long way, along the model used by top exporters like Russia and the US. "Subject to strategic considerations, domestically manufactured defence products will be promoted through government-to-government agreements and lines of credit or funding," the draft policy reads.

The government is also looking to position some PSUs as export promotion agencies for specific nations, with their earnings directly linked to the business generated, incentivising performance. These PSUs are yet to be identified but would be companies that have exposure in the identified nations.

Among major systems India is looking at offering through direct government talks are the Brahmos cruise missile system, the Akash air defence system, the Tejas Light Combat Aircraft and a range of choppers manufactured indigenously. Other products include torpedoes, fast attack craft and a range of naval systems. Achieving the $5 billion target is an uphill task, given that exports last year were pegged at $1.2 billion - a huge jump from the past.