As global demand for weapons surges, India is stepping up its ambitions to become a key arms exporter by offering cheap loans and targeting countries that have long relied on Russian military hardware.
Shifting strategy in a changing global landscape
India, the world’s second-largest arms importer after Ukraine, is now aggressively pursuing defense exports. Under Prime Minister Narendra Modi’s broader plan to make India a global manufacturing hub, the government is expanding the Export-Import Bank's (EXIM) ability to offer long-term, low-cost financing to foreign buyers—especially those unable to access conventional loans due to political or credit risks.
The move marks a major shift in Delhi’s approach, with the government taking a hands-on role in arms deal negotiations. According to Indian officials and defense insiders, the focus is on attracting buyers from countries that traditionally depended on Russia.
Russia-Ukraine war opens new doors
The war in Ukraine, which began in 2022, disrupted the global arms market. As Moscow shifted its industrial focus to its own war needs and the U.S. diverted spare stockpiles to Kyiv, countries that had long relied on these powers began looking for new suppliers. India’s unique position—having imported and integrated weapons from both the West and Russia—made it an attractive alternative.
While New Delhi has previously emphasized its own defense needs against China and Pakistan, it now sees opportunity in the global market. India produced $14.8 billion worth of arms in FY2023–24, a 62 percent jump from 2020, with items like Indian-made artillery shells already found on Ukrainian frontlines.
Fast, cheap—and available
India's pitch hinges on affordability and availability. It can produce 155mm artillery shells for just $300–400 each—compared to over $3,000 from European manufacturers. Howitzers produced by Indian firms cost half of European equivalents. While many Western countries are still ramping up defense manufacturing after years of cuts, India maintained production due to its own regional threats.
Modi’s government wants to double arms exports to $6 billion by 2029. Though it missed its recent $3.5 billion annual target, current exports have grown dramatically from just $230 million a decade ago.
EXIM Bank takes the lead
To back its growing defense ambitions, India will increasingly use EXIM Bank to finance foreign arms sales. EXIM’s commercial arm—supported but not fully funded by the state—has a loan portfolio of over $18 billion. Many Indian banks avoid defense-related lending due to political risks, making EXIM’s role vital.
India is also setting its sights on Latin America. It opened an EXIM office in Brazil this year and is in talks to sell Akash missiles and build battleships for Brasília. Bharat Electronics, a developer of the Akash system, also launched a local marketing office to support these efforts.
Expanding diplomatic footprint
A key part of India’s strategy involves increasing defense diplomacy. The government plans to deploy at least 20 new defense attachés to foreign embassies by March 2026. These attachés, posted in regions like Africa, South America, and Southeast Asia, are tasked with promoting Indian-made arms and understanding the military needs of their host nations.
Countries on India’s radar include Algeria, Morocco, Ethiopia, Argentina, and Cambodia—all of which have historical defense ties with Russia. To balance this shift, some attachés stationed in Western nations will be redeployed.
Early wins and future outlook
India’s rising influence is already evident in Armenia. Once a key Russian arms client, Armenia now gets nearly 43 percent of its weapons from India, up from zero before 2018. Delhi sees this as proof that its low-cost, reliable alternatives can displace Russian dominance in former Soviet markets.
While challenges remain—particularly convincing global buyers of the quality of Indian high-end systems—defense analysts say the strategy, backed by financing and diplomacy, could mark a turning point for India’s defense sector on the global stage.
Courtesy: Reuters
Bd-pratidin English/FNC
