While still being a net importer of defence equipment, India has made significant strides as an exporter of arms and ammunition, radars, electronics, rockets, naval platforms, drones and other components to over 100 countries globally. So, who buys Indian defence equipment and why?
Being relatively cheap makes India a natural choice and an alternative to China.
Indian systems like the Akash and BrahMos missiles curated by the Defence Research and Development Organisation (DRDO) are reportedly cheaper than Western and Russian alternatives, often by as much as 30% to 40%. Companies like Hindustan Aeronautics, Bharat Dynamics, Bharat Electronics, L&T, and Mishra Dhatu Nigam contribute to their production.
The Philippines, Indonesia, and Vietnam see India as a counterbalance to China’s influence. Middle Eastern and African countries view India as a non-interventionist and dependable supplier, free from political conditions often imposed by Western nations.
German Chancellor Olaf Scholz has called for deeper defence ties with India as Europe’s biggest economy increased its defence budget and reduced its reliance on Russian weapons. During his October 2024 visit to New Delhi, he highlighted German firms’ interest in joint projects, including submarine construction. “We need more cooperation, not less,” he added.
France is in the advanced stages of negotiations to acquire India’s Pinaka multi-barrel rocket launcher system, marking a strategic shift given France’s traditional role as a supplier to India.
Why is Indian defence equipment cheaper?
Lower labour and production costs in India allow competitive pricing without compromising quality. India offers favourable financing options, including deferred payments and government-backed credit lines. For example, the Export-Import Bank Of India (EXIM Bank) extended a $100 million credit line to Vietnam for defence purchases as part of strategic defence cooperation between the two countries.
Similarly, the Reserve Bank of India (RBI) also supports export credit schemes with competitive interest rates, offering financial feasibility for buyers.
Some steps taken by Budget 2025 to boost defence manufacturing and exports:
₹1.80 lakh crore allocated under the capital budget of the Armed Forces with emphasis on modernisation. Out of this amount, ₹1.12 lakh crore will be spent on procurement from domestic industries. The allocation for DRDO has been increased by 12.5% to ₹26,816.8 crore.
Out of this, a major share of ₹14,923.82 crore has been allocated for capital expenditure and to fund the R&D projects. “The increased allocation under the capital head of DRDO will further provide adequate financial resources in funding the projects to be taken up in collaboration with private parties through flagship scheme of DRDO i.e. Technology Development Fund,” a government of India statement said Feb 1.
The capital budget for the Indian Coast Guard has been raised to ₹5,000 crore for FY26 from ₹3,500 crore a year earlier. ” ICG not only strengthens coastal security but also provides assistance to neighbouring countries and commercial ships during (an) emergency through faster response,” the press note added.
Here’s a list of recent pacts signed by India:
The Philippines agreed to buy BrahMos missiles amid rising regional tensions with China. The deal was valued at $375 Million, according to the press release by BrahMos Aerospace. New Delhi is negotiating a similar deal with Indonesia to sell BrahMos missiles and the talks are in advanced stages.
UAE and Sri Lanka are exploring arms purchases and military cooperation to bolster security ties with India.
India provides military training and conducts joint exercises with African Nations like Ghana, South Africa, Egypt and many others. Italy, Russia, and Maldives have also been buyers of Indian defence equipment.
The push for indigenisation, cost-effective manufacturing, and geopolitical realignments have played a crucial role in expanding India’s presence in the global arms market. With defence exports projected to reach ₹50,000 crore by March 2029, India is positioning itself as a viable alternative to traditional arms suppliers.
However, sustaining this momentum will require continuous investment in research and development, technology transfers, and a stronger global marketing strategy to remain competitive in an evolving defence landscape.