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ECONOMY: India’s Growing Merchandise Exports: Has It Entered A Prolonged Phase of Growth?

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ECONOMY: India’s Growing Merchandise Exports: Has It Entered A Prolonged Phase of Growth?

If one solace that India can take from the pandemic, it is the growing number of merchandise exports that the country is witnessing. India’s merchandise exports in April-July 2022 were $130.53 billion, an increase of 73.51 percent over the same period last year, helped by the lower base of pandemic impact.

The growth was still impressive when compared to pre-COVID levels. A comparison on a 2-year CAGR basis suggests that merchandise exports grew by 21.82 percent over $107.15 billion in April-July 2019-20. Total exports in July was at $35 billion, the highest-ever monthly performance.

In a recent event, the commerce minister hailed FY22 as being on its way to be a record-breaking year for exports. And buoyed by these positive signals, the ministry has set the merchandise export target of $419 billion in FY22. It has also prepared a roadmap to the overall exports target of $2 trillion by 2030 (contributed equally by the merchandise and services side).

India’s Export Basket

Historically, Agri and petroleum-based products have been the major components of India’s export basket. But, that basket has expanded over a period of time, led by engineering goods, petroleum products, gems and jewellery, textiles and garments, chemicals and pharmaceuticals.

The total share of petrochemicals in exports has declined to 9 percent in FY21 from 21 percent in FY14. It recovered to 14 percent in the current fiscal in correlation with a spike in crude prices. However, it is again expected to cool off, with global crude prices expected to moderate. Agri based and labour-intensive products like coffee, tea, mate and spices, carpets and footwear are no longer on the list of top exports. Aluminium and floating structures like ships and boats are now part of the top exports.

Electrical and mechanical machinery, vehicles, articles of iron and steel, plastics have also all improved on their base and increased their share in the overall exports. Certain other products like fur skins and artificial fur, arms and ammunition, furniture, aircraft and spacecraft and zinc and their articles are at a primary stage, but they are growing rapidly and showing great promise.

The Policy Support

India has recently launched the Production Linked Incentive Scheme (PLI) intending to promote competition and bring private investment in those sectors showing potential.

It includes sectors like advance chemistry cell (ACC) battery, electronic/technology products, automobiles and auto components, pharmaceuticals drugs, telecom and networking products, textile products (MMF segment and technical textiles), food products, high-efficiency solar PV modules, white goods (ACs & LED) and specialty steel.

The recently announced RoDTEP (Remission of Duties and Taxes on Export Products) scheme in place of the existing MEIS (Merchandise Exports from India Scheme) is also expected to make exports more attractive by offering refunds on the embedded taxes and duties to exporters. It was previously non-recoverable.

The Macro Environment

The environment appears in favour of India’s exports as the countries are looking to rebuild their economies. India’s growing stature as China’s alternative and rapidly expanding foreign investment are the factors in India’s favour.

While there has been a wide debate about India opting out of RCEP, it is a sign of a country growing in confidence in its own capabilities. With its large workforce behind it, India has rejected the second class treatment that it has been receiving across global forums. Instead, the stress is on signing independent free trade agreements which treat the country on an equal footing.

The Commerce Ministry suggested that it has been working on independent FTAs wins deals with several countries like Australia, UK, European Union, UAE, and other middle eastern countries are in the pipeline.

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INS Arihant’s Nuke-Capable K-4 Submarine-Launched Ballistic Missile ‘Ready To Roll’

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INS Arihant’s Nuke-Capable K-4 Submarine-Launched Ballistic Missile ‘Ready To Roll’


NEW DELHI: India tested its nuclear capable K-4 submarine-launched ballistic missile (SLBM), designed to have a strike range of 3,500 km, for the second time in six days on Friday. The missile test, as the one conducted on January 19, was undertaken from an undersea platform in the shape of a submersible pontoon off the coast of Andhra Pradesh according to a report by Rajat Pandit of TOI.

The solid-fuelled K-4 missile is being developed by DRDO to arm the country’s nuclear-powered submarines in the shape of INS Arihant and its under-development sister vessels. INS Arihant, which became fully operational in November 2018 to complete India’s nuclear triad, is currently armed with the much shorter K-15 missiles with a 750 km range.

“The K-4 is now virtually ready for its serial production to kick-off. The two tests have demonstrated its capability to emerge straight from underwater and undertake its parabolic trajectory,” said a source.

India has the land-based Agni missiles, with the over 5,000-km Agni-V inter-continental ballistic missile now in the process of being inducted, and fighter jets jury-rigged to deliver nuclear weapons. But INS Arihant gives the country’s deterrence posture much more credibility because nuclear-powered submarines armed with nuclear-tipped missiles are considered the most secure, survivable and potent platforms for retaliatory strikes.

Once the K-4 missiles are inducted, they will help India narrow the gap with countries like the US, Russia and China, which have over 5,000-km range SLBMs. The K-4 missiles are to be followed by the K-5 and K-6 missiles in the 5,000-6,000 km range class.

The 6,000-ton INS Arihant, which is propelled by an 83 MW pressurised light-water reactor at its core, in turn, is to be followed by INS Arighat, which was launched in 2017. The next generation of nuclear submarines, currently called S-4 and S-4*, will be much larger in size.





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After Upgradation, Sukhoi Su-30MKI Indigenisation To Reach 78%

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After Upgradation, Sukhoi Su-30MKI Indigenisation To Reach 78%


India has received clearance to upgrade 84 Sukhoi Su-30MKI fighter jets, which will result in 78% indigenization after the upgrade

In a significant step towards bolstering its military might with indigenously developed technology, India is poised to witness its Russian-origin Sukhoi Su-30MKI fighter jets evolve into a domestic platform. Speaking at a recent lecture.

The upgrade program is being led by Hindustan Aeronautics Limited (HAL) in partnership with the Indian Air Force and other partners. The upgrade is expected to cost US$7.5 billion.

The Defence Acquisition Council (DAC) granted Acceptance of Necessity (AoN) for the upgrade. The upgrade is part of India’s efforts to improve the capabilities of its primary fighter aircraft, it refers to as the “Super Sukhoi”.

This initiative is a part of a larger effort by the Indian Air Force to modernize its ageing fleet. Air Chief Marshal Chaudhari asserted the critical role of an offensive air force as demonstrated in current global conflicts and emphasized India’s move towards an indigenized arsenal. To this end, the IAF has been proactive, from upgrading its Mirage 2000 to enhancing its MiG-29 fleet.

In summary, the IAF’s commitment to updating their combat forces with the latest technology, including shifting to fifth-generation fighter jets, ensures operational preparedness and a strong deterrence capability. The gradual indigenization of its air fleet marks a pivotal shift in India’s defence landscape, reducing dependency on foreign imports and fostering technological sovereignty.





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Akash Weapon System Exports For The Armenian Armed Forces Gathers Pace

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Akash Weapon System Exports For The Armenian Armed Forces Gathers Pace


According to unconfirmed reports, Armenia is a top contender for an export order for Akash SAM system manufactured by Bharat Dynamics Limited (BDL).

While there is no official confirmation because of the sensitivities involved, documents suggest that the order for the same has already been placed the report further added.
There are nine countries, in turn, which have shown interest in the indigenously-developed Akash missile systems, which can intercept hostile aircraft, helicopters, drones and subsonic cruise missiles at a range of 25-km. They are Kenya, Philippines, Indonesia, UAE, Bahrain, Saudi Arabia, Egypt, Vietnam and Algeria reported TOI.

The Akash export version will also be slightly different from the one inducted by the armed forces. The 100-km range air-to-air Astra missiles, now entering production after successful trials from Sukhoi-30MKI fighters, also have “good export potential”, said sources.

Akash is a “tried, tested and successfully inducted systems”. Indian armed forces have ordered Akash systems worth Rs 24,000 crore over the years, and MoD inked a contract in Mar 2023 of over Rs 9,100 crores for improved Akash Weapon System

BDL is a government enterprise under the Ministry of Defence that was established in 1970. BDL manufactures surface-to-air missiles and delivers them to the Indian Army. BDL also offers its products for export.

Akash Weapon System

The AWS is a Short Range Surface to Air Missile (SRSAM) Air Defence System, indigenously designed and developed by Defence Research and Development Organisation (DRDO). In order to meet aerial threats, two additional Regiments of AWS with Upgradation are being procured for Indian Army for the Northern borders. Improved AWS has Seeker Technology, Reduced Foot Print, 360° Engagement Capability and improved environmental parameters.

The project will give a boost to the Indian missile manufacturing industry in particular and the indigenous defence manufacturing ecosystem as a whole. The project has overall indigenous content of 82% which will be increased to 93% by 2026-27.

The induction of the improved AWS into the Indian Army will increase India’s self-reliance in Short Range Missile capability. This project will play a role in boosting the overall economy by avoiding outgo of precious foreign exchange to other countries, increasing employment avenues in India and encouraging Indian MSMEs through components manufacturing. Around 60% of the project cost will be awarded to the private industry, including MSMEs, in maintaining the supply chain of the weapon system, thereby creating large scale of direct and indirect employment.





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