India's Defense Export Surge: Key Insights and Industry Growth

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[Music] this is an unusual episode of K I will have SNES Alex philli who's our defense

editor joining with me and this is to talk about a really interesting story that he's done showing how India's

defense exports have gone up for years India has been among the topmost military importers in the world very

often cpri that is the Swedish think tank that does this Bean counting very often it lists India's

number one sometimes it's Saudi Arabia and India's number two just the scale of Indian armed forces and the Indian

Imports are that high so it is counterintuitive that India is also now become becoming a significant defense

exporter how how significant I will tell you two things but I will not tell the third the first thing I will tell you is

that over the last 10 years India's defense exports have gone up 31x 31 times albe beginning with a small base

of 686 crores or at that point about $110 million that said now the amount is high

so that's the first point the second point is that this is rising year upon year so last year the growth was

32.5% over the previous year that is year 2002 2023 was 32.5% higher than the preceding year in

fact if this rate of growth continues then what was set as a Target of5 billion which in 2020 was 35,000 cres it

will go up now because the value of dollar keeps changing that Target set in 2020 to be achieved in

2025 does not look unreal in fact if anything it looks very possible particularly with multiple Wars going on

and people needing B besides other things besides Hardware Etc people also needing consumables like rockets

missiles and and simple artillery shells and bullets now we get SNES Alex Phillips to join us SNES tell us what is

inside the story I have given some of the basic figures the rate of increase and the fact that we are now exporting

to 90 countries but I said there is one point that I am keeping back tell us that point U that's a very surprising

point also because when I found out I was myself surprised is the fact that you know while we are are uh selling

defense products to over 90 countries now the biggest customer for Indian defense Goods as of today is the US

that's just a little above 50% of all our defense exports are to America this is co carrying coold to

Newcastle or as we say in Hindi taken to another extreme it's absolutely counter you know

that us would us has traditionally been known as the defense exporter we've bought multiple systems from the US and

for us to turn out to be the biggest customer for Indian defense goods and what's the reason behind that well

largely uh largely the reason is because of India's offset policy uh so under deals that have been done in the past by

the UPA and also by uh the Modi government uh because of the offsets policy the US has been in a way forced

to Source from India obliged to set up production facilities or help set up production facilities absolutely for

example you know the one of the biggest client uh is the Boeing you know now Boeing in 2016 had set up a joint

venture called the Tata boing Aerospace Limited in Hyderabad uh and this particular joint venture now makes the

fusiles for the Apache helicopters now for example the Indian army will get the uh the six Apache helicopters now the

entire Fus of the Air Force has already got 22 the Air Force already has the has the Apaches the the Army is getting the

six of them the fuselages of all the Army ones not the Air Force Ones will be made in India and it is now the Sole

Provider of aache f fuselages across the world eight according to your story this company is now making eight

Apache fusiles every month it has the capacity to make eight Apache fusiles every month uh but uh so far theyve

they've exported over 200 of these Apache Fus lares right and similarly you know uh it's not just the Apaches the

the Boeing is sourcing from multiple companies in India uh various systems which uh you know small parts components

which make up into which make their way into their chinuk which make their way into their uh super Hornets which make

their way into the F-15 various aircraft programs and not just on the defense side but also on the commercial or the

civilian side of it also we are now making wings for fighter aircraft as well yes and that is again interesting

because that is been uh done by the Boeing's rival which is loid Martin uh which also incidentally has a tie up

with uh Tata and uh and this was a time you this was a joint venture that was set up in the up era but now for example

uh locked Martin and Tata uh this joint V is the sole uh source for the uh engages for the C130 uh uh special uh

Transport Aircraft or special Mission aircraft uh that is used which means that any C130 sold anywhere in the world

the empen of that is made in India so empen I see it's spelled EMP e n a GES but for non-sp Specialists like all the

rest of us please explain what are empan well the fuselage would mean the main structure of the uh of the aircraft or

the helicopter the the aircraft without the wings right uh that's a the mid structure that you see and then the

empanadas are the tail section you know so that's the EMP so c130j is fuselage is not made in India the ERS Are Made in

India yeah and that and and that's a major project as well Indian compan is partners with both American tribals

absolutely and that's again very interesting uh also at the same time there is also the s92 helicopter

you know these helicopters are used by the US president right the presidential Fleet the US Presidential Fleet so any

future s92 helicopter used anywhere in the world including by the US president the body uh of that helicopter is made

exclusively in India by the same joint venture so next time you should the president this one or whoever comes

whoever wins this election and you see them taking off to go to Camp David you should presume that if it's a new

helicopter the fuselage came from India from an Indian manufacturing facility absolutely the cabin comes from India

yeah so this Tata having a partnership with boing and lock heat it's a bit like somebody from outside would have

partnership with Amani and adani in in some area where they would both be competing although right now I don't see

any such major area but it would be it would amount to that true because uh while both of them are American

companies they both in the Aerospace sector and they are both competing yeah and tatas have then B more with Airbus

as well the tatas also have a joint venture with another the European Ral of both Boeing and the air uh Boeing and

loid which is Airbus uh now under this uh joint venture for the first time a private uh company that is a tatas is

manufacturing this c295 Transport Aircraft uh for the Indian Air Force uh in India the final

assembly line right basically they'll be replacing the hs748 they would been flying forever yeah so they would be

replacing that interestingly what this what uh we are told is that you know once the orders for the Air Force is

done there are more orders which are supposed to come from the co guard there would be orders that will come in from

uh from uh the Navy and well as well as because of the maritime version and possibly from the BSF but then this

particular joint venture can also cater to any orders that might come in from across the world especially civilian

orders especially Civ it's a dual Ed system it's a dual use can customize it to either yeah and then you also uh then

you also the Tata also has a now has is now partnered with Airbus to set up a helicopter the commercial helicopter

Wing in India uh to manufacture that so that particular joint venture when it comes into place in the next two years

would cater not only just to the Indian demands but will cater to a global demand so not just these components you

also talk about sniper rifles I thought we were hunting for sniper rifles all over the world to we are still hunting

for sniper rifles and exporting them as well but uh an Indian company it's a Bangalore based company called Trip s

defense which is exporting them but why isn't India buying from them well you know that's a that's a million dollar

question that's a question that even I often ask might be a few hundred million dollar worth of question absolutely but

interestingly is one of the companies that I mentioned is Tombo Imaging now Tombo Imaging makes the specialized side

systems now the story of the Tombo Imaging is also very interesting because it was somewhere in 2014 when the Indian

army had gone in for a joint excise with the US in the US with the US Army in the US and one officer from The inami

observed this uh lovely looking side system that the Americans were using so he wanted to know know more about the

site systems and that is when the American Soldier officer turned to him and said boss dude this is this is from

India Made in India and that is how Indian army discovered this small company in Bangalore which is already

exporting items to the US called Tombo Imaging now of course there are multiple products of the Tombo Imaging which is

in use with the Indian army but uh I think that answers your larger question on why is the Indian military not using

some of these components yet still Scouting For if you want to sell to Indian Armed Forces first sell to

American armed forces and make sure that Indians see those systems during their exercises absolutely of course this was

said in a lighter way yes this is in a light ve but only in a semi light ve absolutely only a semi- light ve because

this is a serious issue as well now you say bulletproof jackets helmets uh these are these are explosion proof helmets

what do you call them or ballistic yeah ballistic helmets these are these are these are mostly been exported by a

compo based company called mku and that's a private company that's a private company again yeah and armored

vehicles armored vehicles Mahindra are into armored vehicles uh then you have the Kalani Group which is into armored

vehicles so the armored not Vehicles as a whole uh you but Parts but parts of it the armor plating of it uh but uh in

future in the coming years you I was speaking to uh the SK the sky of the Kalani family uh earlier uh this year

and I did an interview with him and he mentioned for the fact that you know one of the key areas or where he sees India

as a manufacturing Hub is going to be armored vehicles and artillery guns and these are the two areas that the Kalani

group is investing heavily into so Kalani group in fact I had visited their their headquarters uh in uh in Pune uh

to record a BTO talk interview with Baba Kalani the founder we'll share a link with you with the description please do

watch it there are also pictures from that trip I will try and find those pictures and you can see those as well

on your screen Kalani has also if I may say so use that expression also probably has had the most the biggest of the big

ticket export orders now that is for artillery guns because these are really uh large caliber uh guns yes and these

guns were sold to Armenia interestingly again the Indian army is still scouting for arery New Generation artillery guns

but the Armenians have gone ahead and bought this from from the Kalani group and the Kalani group is already in talks

with two to three other countries for the same guns yeah but but they are also biders for the Indian Army's orders yes

and and we also have Laron in Tu bro and some others making artillery guns as well so the artillery code seems to have

been cracked because for almost 40 years now we've been living on bers guns yeah bers are being upgunned bers have been

upgunned danush has comeing the attacks is there uh the attacks uh is something again which is a join it's it's a it's a

unique product where both Kalani Kalani group as well as tatas are involved uh but the Army is not really happy with

the attacks for whatever reasons uh the reasons have been mentioned in stories done in the past now they're looking for

a new generation toad gun for which the RFP has been sent out companies would start bidding yeah so Armenia that's one

big deal and the other big deal is the continuing export of brahos missiles to Philippines yeah so the brahmos deal

with Philippines the Standalone deal which is which is a huge uh defense export so that's I would consider those

two as one of the major defense exports so another that you're talking about is dynamatic Technologies what are they

doing and for who uh dynamatic Technologies does for a multiple other organizations including for Boeing now

they make uh they make uh you know certain components and parts for Boeing besides other uh besides other companies

so there are not just dynamatic Technologies which are there which is a private company there are multiple other

uh you know you mention you mentioned Rosel Texas and sasos H yes so these are these are one of the major suppliers for

uh the Boeing uh products but uh you know in terms of you know in terms of MSM

msmm there are in action there are over 300 of such companies which are supplying to multiple uh foreign but

then these are all in numbers wise they should be small because these are all components and parts but they're all

developing capabilities yes they are all developing capabilities and then you have the larger public sector companies

like be bat electronics and H good old H and they H is making gun bay doors for fa

fa18 supernates and uh and bat Electronics limited that seems to be manufacturing some sensitive products

tell us about that see the BL manufactures the if that is the identify friend and for combat identification

system and speed secrecy systems for the P TI now these systems are installed on the P TI which are operated by the

Indian Navy now what happens that in case if there is let's say an X country buys a You Know Places an order for the

pis it has then the option of using what the Boeing offers or going in for this system that the Indian Navy operates

with so that is also a it's a significant step up as in say as you mentioned earlier that the capabilities

are been developed so PTI is a maritime reconnaissance aircraft anti submarine warfare also carries sophisticated

Torpedoes and missiles as well so it's a very versatile Force multiplier in fact for any navy uh other interesting

company you mention is something called indom MIM so what is mim and this has a very interesting history well Indo MIM

was actually a surprise for me too just like how the US was a surprise for me Indo MIM was a surprise because I would

have expected that the India's biggest defense exporter would be one of those big companies out there t

mahra adani for that matter but India's top exporter private exporter is actually this company called indom MIM

now what is indom mim indom MIM is a Bangalore based company which does metal injection molding that is the m m m

where it comes from now you you you mentioned that it has a very interesting history it indeed has because uh the

company's Roots date back to 1997 right uh when you know when AF Technologies India was founded as a

50/50 joint venture with a North American MIM company called the Precision cast components and by uh an

indo-american for that matter uh Krishna chivukula yes Dr uh Krishna chivukula and uh in 2001 he took the 100%

ownership of this uh company and this is now making specialized components tools uh catering not just to the Aerospace

Industries but also to other Industries including automobile industry which brings us to a fascinating company so

fascinating that for a moment I was also thrown as to what is this company it's a public sector company but you know it

occurred to me that I had not heard of it and I'm not sure many of few also might have so just think about it do you

know a company called Munitions India that is the largest armorment exporter now from India it exported by itself

worth 17726 cres last year ammunitions and explosives and now its order book is

running upwards of 6,000 crores so what is Munitions India and where did it come from well Munitions India came into

being in 2021 uh following the corporatization of the earthqu ordinance Factory board now

ordinance Factory board consisted of these you know manufacturing facilities factories that they were clubbed

together based on their specialization and were divided into seven entities corporate entities and Munitions inia

limited was one such entity which as the name suggest would uh you know makes a variety of rockets including the pinaka

uh systems artillery shells other Munitions and ammunition for the Indian army Indian military for that matter so

among the ammunition being sold in fact the hot selling item right now is also 155 mm artillery because that seems to

be the most in demand thing and it's a consumable so people buy it and burn it so on a day on any

given day Ukraine uses about 7 to 8,000 shells of this and Russia about three times as much and both are scouring the

world markets willing to buy up anything of course India is not selling to either of them but maybe others buy and make up

for their stocks in any case there is demand for 155 mm shells also for Armenia uh other countries also so as I

you you know earlier mentioned about the fact that now they this particular company Munitions India limited has a

order book of about 6,000 crores which have to be delivered over the next 3 years so it's not some long-term

contract which is there and what do the what do this company specialize in this company specializes in Rockets artillery

shells including 150 mm shells so which means that given how the global conflict is there are multiple countries in the

world who are beefing up right baing up its Arsenal for itself and for whatever other purpose and one of the key

companies which is contributing to this is this Munitions India limited and now in there are several other indian

private companies also which are now looking at striking deals when it comes to ammunition and Munitions because if

you see Modern Warfare now it's mostly about long range artillery and drones and there also India has some strength

because I see some drones drone Parts being exported particular to the Israelis the Israelis have joined

ventures in India one is with the adani group and then it also has a tie up with one of the Israeli Aerospace Industries

are a t the adani one is the elbit and then you of course have the Israeli Aerospace Industries with a TP with a

different company canu based company in which they were initially sourcing the you know the composite structures for

the drones right uh I can say for the fact that we have done the story about a year back that in the azaran Armenia War

many of the drones that have been used the Israeli drones that have been used both attack uh you know suicidal

kamikazi drones and otherwise their structures came from India you know uh so now the Israelis are of course

sourcing this through the joint ventures and also now certain technology certain electronic items certain site systems uh

from India for their I think the best thing in this is this is just the beginning but the best thing is that a

defense ecosystem is being is being built that it defense manufacturing and development ecosystem is being built so

I think there'll be lots of stories going ahead SNES you're going to be busy thank you very much thank you

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