A defence ministry official announced last month that India’s defence export had zoomed to Rs 13,000 crore in the Financial Year 2021-22 (FY22), of which 70 percent was by the private sector companies. This upward swing of 55 percent over the preceding year’s exports is commendable, but the scanty information released by the Ministry of Defence (MoD) from time to time does not give a clear picture of defence exports. If anything, it points to the need for a transparent reappraisal of the existing approach to boosting export.
First, let us talk about the data. Going by the annual reports of the Ministry of Defence (MoD)- the last one available on the official website being for the FY19, the value of defence exports calculated is based on the “No Objection Certificates” (NOCs) or export authorisations issued to the Indian public and private sector companies for export. However, the value of exports for which the NOC or authorisations are issued cannot be the true indicator of actual export during a particular year as it does not equal the revenue earned by the companies from exports during that year. There could be several reasons for the goods not getting physically exported even after the NOC is issued or the contract signed.
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