In its largest ever export order, the Ordnance Factory Board (OFB) will supply 50,000 artillery shells used with the Bofors guns to the United Arab Emirates (UAE). A contract worth Rs 315 crore ($45.75 million) contract was signed last month, adding to an earlier order for 40,000 shells that finalized in 2017.
The contract has been described by the defence ministry as the `largest ever single export order’ to the state owned OFB that manufactures a bulk of the ammunition in used by the Indian armed forces. In particular, the OFB will supply 50,000 numbers each of the 155 mm HE ERFB BT Shell and Primer M19l-A2 to UAE.
The order comes as a boost to Indian plans to promote defence exports, with a target to reach Rs 35,000 crore annually by 2025. Among other nations, UAE has been identified as a key partner to promote arms exports as the Rajnath Singh led defence ministry has unveiled a series of policy initiatives that range from easing norms to get export licences to financially empowering defence attaches across the world to promote Indian military equipment.
The OFB order comes two years after it signed a deal with UAE to supply it with 40,000 units of the artillery shells. The repeat order, with an increased number, is considered to be an endorsement of the quality and delivery schedule followed by OFB.
As reported by ET, Indian defence exports have zoomed to almost Rs 11000 crore - more than twice from a year ago - on the back of recent policy liberalization. The hike in defence exports – from Rs 4682 crore in 2017-18 to 10745 in 2018-19 – will likely grown faster with a plan for a new general export license to enable Indian companies to export certain equipment to identified nations without restrictions.
Latest government data shows that in the current financial year, exports worth Rs 3323 crore have already been processed, with a bulk of these being by the private sector. Of the Rs 11,000 crore odd worth of exports last financial year, the private sector contributed to over Rs 9812 crores, according the data.
The government plan is to give the defence sector a $ 25 billion pie in the $ 1 trillion Indian manufacturing economy that is targeted for 2025. Out of this, defence exports by Indian companies is targeted at $ 5 Billion.
As reported by ET, the government has drawn up a list of 85 nations that it wants to promote its defence industry. Defence attaches are being given an annual budget of up to $ 50,000 each for promoting exports of Indian made defence products from both the public and private sector by participating in exhibitions, conducting market studies, organizing seminars and distribution of publicity material.
The nations that India believes have the maximum potential of purchasing military equipment include Vietnam, Thailand, Bahrain, Bangladesh, Afghanistan, UAE and Malaysia. Even western nations with a developed defence industry like UK and USA are on the list due to the increasing ecosystem of sub system manufacturers in India that have access to technology thanks to defence offsets programs of the past.