Following Prime Minister Narendra Modi’s vision to make the country a global manufacturing hub, India aims to become a major player in the defense industry after its successful forays into the electronics and pharmaceutical sectors. To this end, India plans to export to countries that have long been dependent on Russia for their defense needs by offering long-term, low-cost loans.
Under this strategy, the state-owned Export-Import Bank (EXIM) is increasing its capacity to provide long-term, affordable financing to clients whose credit risk profiles may make it difficult to access traditional financing. New Delhi also plans to significantly increase the number of defense attachés at its foreign missions under a new program under which the government will directly negotiate some arms deals, Reuters reported, citing four Indian officials. Two of the officials said India was particularly targeting countries that have long been dependent on Russia for arms supplies.
The plans, which have not been made public before, mark an unprecedented effort by the Indian government to attract and finance foreign buyers at a time when the global arms race is accelerating and geopolitical relations are being reshaped, Reuters reported. India’s ministries of defence and external affairs, as well as EXIM, did not immediately respond to requests for comment.
Indian officials have historically focused on procuring advanced weapons systems, such as Sukhoi fighter jets from Russia and howitzers from the United States, to counter nuclear-armed neighbors China and Pakistan. While India has long had a small arms industry, private sector firms have recently begun producing more advanced ammunition and equipment.
The Russia-Ukraine war that began in February 2022 was a turning point in this strategy, an Indian official tasked with boosting arms exports told Reuters. With Western countries sending their spare arsenals to Ukraine and Russian factories only being able to produce enough ammunition to meet their own needs, other countries historically dependent on the world's two biggest arms exporters, the United States and Russia, have been looking for alternatives.
In this context, the Indian official stated that India, which has experience in purchasing and assimilating weapons technology from both the West and Russia, has started to receive more demands in this new period. Russian state arms exporter Rosoboronexport had previously stated that it was in talks with India on joint production and promotion of equipment to “Russia-friendly” third-party countries. India’s new strategy demonstrates its potential to become a major player in the global defense market.
