Building a Military Export Ecosystem: The Key to Strengthening India’s Defence and Economic Future
Much as I hate to utter it, war is booming business for the multi-use technologies and services. Not just for munitions and military contractors, but for support services across the world. Take this Turkish private company for instance. They have 7000 MW under their management that range from ship-based thermal to LNG-powered energy plants.
In January 2019, Karpowership signed a contract with Electricidade e Aguas da Guiné-Bissau (EAGB) to deploy a Powership with a 35 MW capacity. Karpowership has been operational in Guinea-Bissau since 2019 and supplying 100% of Guinea-Bissau’s total electricity demand.
In January 2022, Karpowership signed a 4-year contract with the State of Ivory Coast to provide 100 MW capacity. Arriving Abidjan in 20 days following the contract signature, Karpowership has been operational in Abidjan since 2022 and supplying 7,5% of Ivory Coast’s total electricity demand.
In November 2021, Karpowership signed its first LNG-to-Power contract in the transatlantic continent with Brazil. The company has been operational in Sepetiba Bay, Brazil since 2022 and currently operates with 4 Powerships and 1 FSRU (Floating Storage Regasification Unit), generating 560 MW of electricity.
In April 2024, Karpowership signed a trilateral agreement with Guyana Power and Light Incorporated, and UCC Holding, a Qatar-based infrastructure company to meet the urgent energy demand in Guyana. The Project involves two separate contracts, under which, UCC Holding leases a Powership from Karpowership to provide energy to Guyana Power and Light Incorporated, supplying 27% of Guyana’s total electricity demand. Karpowership provides UCC Holding with leasing, operation, and maintenance services for a Powership with an initial capacity of 36 MW for two years.
In March 2018, Karpowership signed a contract with Mozambique’s electricity utility company, Electricidade de Mozambique (EdM), to deploy a Powership with 125 MW capacity. Karpowership has been operational in Mozambique since 2018 and working with EdM to convert the operations into LNG. This will be the first LNG-to-Power Project in Sub-Saharan Africa via Karpowership’s own LNG asset (FSRU).
Karpowership has been supplying 10% of Mozambique’s total electricity demand. Every project has generated several thousand local jobs and brought in foreign investment in difficult and remote terrain. Not a single country has defaulted on contractual payments to this Turkish company and its collaborators. Evidently, people long deprived of a basic amenity are willing to pay for energy, hence, default is minimal.
Similarly, temporary desalination plants for military use and disaster relief. These include advanced lightweight water treatment units for US defence services, transportable skid-mounted water treatment systems, seawater desalination RO plants, containerized seawater desalination and purification plants, etc.
Then there are truck-based cementitious mixtures, sand, mortar, cold asphalt and concrete from recycled materials, portable prefab shelters, heavy duty corrugated paper boxes and allied packing material, logistics containers, specialized packaging materials such as for missiles and ammunition, deployable climate-controlled field hospitals for up to 200 patients and incl. critical care & surgery, and more.
There are also airdroppable lightweight bulldozers (6.5T), military road construction materials such as polymeric alloys to harden and stabilize dirt road surfaces and compaction equipment, pneumatic-tyred lightweight rollers, aluminium alloys, alloy and high-nitrogen steel, etc.
The list of military stores includes high-altitude lightweight coveralls, heated tentage, small tracked vehicles, snow and mud tyres, parachutes, and million more items. Processed and canned food and pharma (incl. surgical gloves, gowns, sheets, etc) for military use are more value-added areas.
India already possesses much of the above enumerated technologies and production facilities at manifold lower costs. However, the biggest limiting factor of scale production is imposed by the fact of many items being dependent on the defence services that are severely constrained for want of funds.
What is even more surprising is the fact that although India has a rich mineral base, it still imports finished products, owing to the unavailability of ore-processing facilities of military grade. A KPMG study showed that HAL, alone imported Rs. 3629.4 crore (USD500 million) worth of raw materials in financial year 2018. Indian defence manufacturers imported high-end alloy steel to the tune of Rs. 5250 crore (USD700 million) in financial year 2018-19.
India is the fifth largest supplier of ilmenite, a black iron-titanium ore and has 18 per cent of the total global reserve. Similarly, India is the fourth largest supplier of bauxite, the aluminium ore, with 13 per cent share of global bauxite production and the fourth largest supplier of iron ore with annual production of more than 200 million tonnes.
Yet, in 2018-19, India imported Rs. 37000 crore of aluminium alloys. In non-metallic materials, India has developed capabilities in composite components based on glass, carbon and aramid fibres, but apart from glass fibre, the manufacturing capabilities for aramid fibres such as Kevlar and aerospace grade carbon fibre are absent.
The MoD’s TPCR document, 2018, shows India’s ambitious defence modernization plans that include 150 AMCAs, 314 single-engine planes, 350 UAVs, 6850 missiles, 120 MBTs, 2160 ICVs, 6.70 lakh small arms, 171 ships, 3250 special vehicles and 1.50 crore ammunition rounds. As on date, the condition of the IAF is that it will be short of 13 squadrons by end-2025 (195-260 aircraft).
What India’s defence planners and political leadership fail to understand that there is no way our own defence modernization can take wings without very liberal financial support; the Union Budget is not even a pittance. India possesses a very substantial production base that can be ramped up, relatively fast, only if export orders for dual/multi-use goods and services (as described in the preceding paragraphs) are available.
Such diverse large-scale production should be actively encouraged by GOI by relaxing private and foreign investment limits and approvals, import of materials and sub-assemblies, removing limits on existing production capacities and licensing for newer lines, providing captive industrial estates to process materials for final assembly, easier institutional commercial lending with in-built interest subsidy (to be classed as incentive) matched by suitable power, tax and energy incentives, improve road connectivity to and from manufacturing and assembly points, skills training centres, a network of QA, Indian missions overseas for marketing these products (presently they are no better than LDCs/UDCs, irrespective of rank), and the like.
In fact, there is no reason why these industrial estates cannot be declared Free Trade Zones with attendant financial benefits to operators therein.
In turn, the cumulative effect would be to generate very substantial payroll and contract/job work opportunities for our young population. A recent report says that just 66 corporates have about Rs. 99000 crore in cash on their balance sheets. If a tea-garden company can branch into a global concern (Obetee) by organizing Mirzapur carpet weavers to weave world class carpets, surely many others with financial heft can follow in its wake?
If Kalyani Defence can turn out quality specialized military vehicles on a small scale surely, they can ramp up production to produce hundreds for export? And why is Vizag Steel Plant proposed to be sold to the Adani empire for a song when it is a steel alloy plant that could be modernized with a private collaborator in management position?
Similarly, why does India export iron and bauxite ore, ilmenite, et al when, by creating infra to process them into value-added resources for export is far more paying? Likewise, what steps have been taken to stop large-scale pilferage of thorium sands in Kerala? Why produce a SLR that weighs 11 kg and bogs down an infantry man with a 30-35 kg backpack and heavy poor-quality livery on a lithe 45 kg body skeleton?
There are no ways our creaking defence services can be financed without a balancing and profitable export market. Look at Turkey, Iran, North Korea, Pakistan, Vietnam and many others (outside the Western world) that have created military support industries in their respective countries. The valour of our servicemen (and women) is no substitute for modern equipment. Nor will India become a rogue state or a full-time war monger if it produces goods and services for military use.
Part of such goods will remain eligible for civilian use exports too that will add to the volumes of scale. Finally, military grade exports will generate resources for our rail and road infra, public state and health facilities, expansion adding to job availability, either as payroll, job work or contract basis. The GOI would no longer have to spend a quarter of its annual budget on free rations for two-thirds of a famished population. In course of time, state revenues too would rise as would a honest GDP in real terms.
Sadly, corruption in imports has come to such pass that screwdriver technology is being passed off as evidence of indigenization with hardly any new jobs being created. Unless these white lies cease and honest efforts are made, our defence services would remain hostage to foreign aggression on our international borders. A decade later, Atmanirbhar Bharat is a cruel joke but a great slogan to allow more imports that is nothing short of perversity of a noble cause.
In the event of a full-scale war against a way more powerful enemy, our valiant soldiers and civilians would be sitting ducks. And politicians will blame generals and the axe will finally fall on puny battalion commanders and LDCs in MoD; the rest are but the holiest of cows.
A country cannot be run exclusively on corruption, fostering of communal disharmony, coercion, e-eavesdropping, contracts for cash, white lies, unprecedented profligacy and winning elections (often by very dubious means) to perpetuate a regime’s monumental incompetence in power; it needs a government that has the intellectual depth to understand mega crises (such as the one our defence services currently face), face harsh realities and the willingness to address them.
Till then our valiant soldiers must suffer and die for the incompetence of their generals and their political bosses while their Raksha Mantri asks his servicemen to be ‘ready’ (a most laughable proposition). 
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Shantanu Basu
Writer is a retired senior civil servant, public policy analyst, author and commentator.
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