As India pushes for being atmanirbhar in Defence manufacturing, it remains the world’s top arms importer

India’s ambitions to be self-reliant (atmanirbhar), especially in defence manufacturing are well known. A recent report released by the Stockholm International Peace Research Institute (SIPRI) highlights the pointed relevance of the goal and the urgent need to fasten the pace of local manufacturing.

India was the world’s top importer of arms between the period 2017-21. India accounted for 11% of the world's arms imports, similar to that of Saudi Arabia. Egypt, Australia, and China made up the remaining of the top 5 arms importers in the world during the period.

In terms of the volume of imports, India imported USD 10.3 billion worth of arms between 2017-20 while Saudi Arabia’s arms import bill was USD 13.1 billion (the import data for 2021 has yet not been published by SIPRI). India’s total volume of imports between 2017-21 fell by 21% from 2012-16 indicating a gradual push to manufacture arms and weapons systems locally.

Russia is the largest supplier of major arms to India since 2012. However, the percentage of arms imports from Russia dropped from 69% during 2012–16 to 46% during 2017–21 as several large programs for Russian arms wound down. In parallel, India also increased its efforts to diversify as a result of which India’s arms imports from France increased more than tenfold, making it India’s second-largest arms supplier between 2017–21.

The race for arms imports in Asia and Oceania

Asia and Oceania remained the largest recipient region, accounting for 43% of global arms imports. Of the 10 largest importers during 2017–21, 6 are in Asia and Oceania: India, Australia, China, South Korea, Pakistan, and Japan. For most states, the growing perception of threat from China is the main driver of arms imports. As per SIPRI, the current known orders indicate that arms imports by states in Asia and Oceania will remain at a high overall level for at least the coming five years.

China, being an exporter of arms too, supplied arms to 48 states between 2017–21. However, 47% of its arms exports went to just one state, Pakistan, its closest ally and a proclaimed all-weather friend.

Push for Local Manufacturing

India’s capital expenditure in defence has been increasing year on year. Rs. 1.52 lakh crore is budgeted for capital expenditure in 2022-23 which is 68.5% higher than the actual spend in 2017-18. The allocation for the domestic industry too is increasing to reducing imports and promoting ‘atmanirbharta‘ (self-reliance) in equipment for the armed forces. 68% of the capital procurement budget was earmarked for the domestic industry in 2022-23, up from 58% in 2020-21.

In her Budget speech for 2022-23, Finance Minister Nirmala Sitharaman said that defence research and development (R&D) will be opened up for industry, start-ups, and academia, with 25% of defence R&D budget earmarked for them. The move was welcomed by Defence Minister Rajnath Singh as a much-needed boost for ‘Vocal for Local’ initiative in defence.

The growing threats from China’s territorial claims in the northeast and the omnipresent threat from nuclear-armed Pakistan (also supported by China), necessitate a robust defence capability for India. Accordingly, this calls for a faster push for localization in defence manufacturing if we are to reduce our arms import bill. While the government has taken many positive steps towards achieving that objective, its success will only be measured through the tapering of the arms import bill in the coming years.