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From Importer to Exporter- India Rises As A Defence Exporter Under Modi-Government

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The year 2020 marks a five-fold increase over the value of export approvals secured by the Ministry of Defence according to the latest figures published by the MoDs Department of Defence Production (DDP) on April 14.

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The data researched by the EurAsian Times shows that India registered record-high defense export approvals worth USD1.1 billion in fiscal year (FY) 2019–20, which concluded at the end of March. The online dashboard shows that the value of defense export approvals in FY 2019–20 was INR 8620.59 crore, a yearly increase of 4%, compared with the INR 8320.09 crore recorded in FY 2018–19, which represented a 78% increase over the INR 4682.36 crore in approvals registered in FY 2017–18.

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From being one of the biggest net importers of defense hardware, India is well on its way to becoming an exporter of the same. The latest data by the Ministry also shows that India’s private sector has recorded a majority of defense export approvals.

In FY 2019–20, the private sector was attributed with 93% of defense export approvals in terms of value, an increase of 4%, with the remainder secured by state-owned defense public sector undertakings (DPSUs).

Compared to last year according to data compiled by the EurAsian Times, the private sector secured 89% of all export approvals. In FY 2017–18 and FY 2016–17 the private sector was attributed with 68% and 13% respectively. Export by DPSUs/Ordnance Factory Board (OFB) has come down from Rs 1327.51crores in FY 2016-17 to just Rs 403.94 crores in fiscal 2019-20.

India’s emergence as a defense exporter can be linked to the ‘Make in India’ initiative by Indian PM Narendra Modi. The provision of ‘Make’ category of capital acquisition in DPP is a vital pillar for realizing the vision behind the ‘Make in India’ initiative of the Government, by fostering indigenous capabilities through design & development of required defense equipment/product/systems or upgrades/sub-systems/components /parts by both public and private sector industry/organization in a faster time frame.

There are two subcategories in this project: Make-I (Government Funded) and Make II. The latter will involve prototype development of equipment/ system/ platform or their upgrades or their subsystems/ sub-assembly/assemblies/components, primarily for import substitution/innovative solutions, no Government funding will be given for prototype development purpose, while the former will involve Government funding of 90%, released in a phased manner and based on the progress of the scheme, as per terms agreed between the MoD and the vendor.

In the last two years, the Mod government has taken positive steps and decisions that have contributed to India achieving its current position.

These include liberalizing industrial licensing for Indian manufacturers, revision of FDI policy that allows foreign investment under automatic route up to 49% and above 49% through government route thus allowing access to modern technology.

This also includes the revision of DPP to promote indigenous design and development of defense equipment, launching of Innovations for Defence Excellence (iDEX) framework to become self-reliant and to foster innovation and technology development in Defence and Aerospace Sector by engaging Industries including MSMEs, startups, individual innovators, R&D institutes and academia.

The establishment of defense corridors to serve as engines of economic development and growth of defense industrial base in India and setting up testing facilities available to the private sector with the aim to assist them in the design and development of defense systems.

As the EurAsian Times reported earlier, the Defence Investor Cell was also developed in the ministry to provide all necessary information including answering queries related to investment opportunities, procedures and regulatory requirements for investment in the sector.

The process for export clearance was also moved to an online platform and made transparent and streamlined. Offset guidelines have been made flexible by allowing change of Indian Offset Partners (IOPs) and offset components, even in signed contracts.

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The government has signed Agreements on Defence Cooperation with Argentina, Russia, Serbia, Myanmar, Indonesia, Comoros, Jordan, Madagascar, Uganda, Zambia, Saudi Arabia, and Finland.

The major defense items being exported are Personal Protective items, Offshore Patrol Vessels, ALH Helicopter, SU Avionics, Bharati Radio, Coastal Surveillance Systems, Kavach MoD II Launcher, and FCS, Spares for Radar, Electronic System and Light Engineering Mechanical Parts, etc.

The major export countries include Italy, Maldives, Sri Lanka, France, Nepal, Mauritius, Sri Lanka, Israel, Egypt, the UAE, Bhutan, Ethiopia, Philippines, Poland, Spain, and Chile.

Compiled By: Armaan Srivastava, New Delhi

South Asia

Galwan Valley Clash: Top Indian General Decodes Why India Lost 20 Soldiers In India-China Border Conflict

India lost 20 soldiers in the Galwan Valley Border Clash. An unconfirmed number of Chinese PLA troops also were killed. Who is to be blamed for savagery border conflict between India and China?

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India’s former military intelligence chief talking about the Galwan Valley clash said that New Delhi should review the role of its intelligence agencies and improve their shortcomings when the India-China border crisis ends.

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General (retd) Amarjit Bedi told BBC in an interview that Indian soldier who fought the Chinese troops in the Galwan Valley should have received prior intelligence (about the impending attacks).

He said – Indian soldiers should have got the news about the movement of Chinese PLA troops beforehand. I think after this crisis is over, there should be a comprehensive inquiry on the matter.

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It is also vital to improve the intelligence gathering in future. This investigation should not only be within the army but also within other agencies including the intelligence agencies. We did such an investigation even after the Kargil war for which a special task force was created. 

General Bedi believes that the aggressive approach by China and the manner in which Indian soldiers were killed in the violent conflict in Galwan Valley, shows that Beijing has worked on all these things in a planned manner.

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I think China was working on it for a long time. It is quite possible that they would have started all these preparations from March-April.

After the attack in Galwan Valley, the Indian Foreign Ministry itself described the attack as ‘planned’ and ‘pre-planned’. So why the Indian intelligence agencies do not have the capability to alert the army about ‘planned’ and ‘pre-planned’ attacks, questions the BBC.

General Bedi said — I cannot say that this is a failure of our intelligence agencies. We were also ready but we thought that China would act according to the provisions of the bilateral treaty which was clearly not done.

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On prior information on Chinese activities, General Bedi also said — We knew about all kinds of activities happening inside China, such as infrastructure build-up, military exercises or some other activities. By March, we knew about the war-drills by the Chinese PLA troops and we had communicated the information to senior authorities.

The retired general also adds – China has unquestionably increased its resources and capabilities. Over time, China has considerably increased its military capability. China has three to four times more satellites than India. So it is clear that their capabilities are ahead of India at the moment but then India is not far behind.

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The General also says that our geospatial capabilities have significantly increased in the last eight-nine years, however, we have not reached the level where we want to. We need advanced satellites that can relay ground information in every season, despite the weather the conditions.

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South Asia

CPEC Project A ‘Trillion-Dollar Blunder’, Pakistan Calls It ‘Outstanding Initiative’

The debt outcome of the CPEC project is about $80 billion, 90% of which will be paid for by Pakistan in the form of the national debt. Islamabad knows that it will not be able to pay China back and will eventually lose the sovereignty of its own land.

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Pakistan PM Imran Khan pledged that his government would complete the CPEC project (China-Pakistan Economic Corridor) at any cost and pass its benefits to the country despite media reports calling it a Trillion-Dollar Blunder.

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“The corridor is a manifestation of Pakistan-China friendship and the government will complete it at any cost and bring its fruit to every Pakistani,” Khan said.

Terming the CPEC project as an outstanding initiative for the country’s socio-economic development, Khan said the enormous China-Pakistan project joint would assure a bright future for the country.

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The China Pakistan Economic Corridor, according to some experts, could become a “trillion-dollar blunder.”  The CPEC, a collection of infrastructure projects that are currently under construction throughout Pakistan, which were originally valued at $46 billion is now estimated to be $87 billion and only a quarter of which have been completed, according to The Jerusalem Post.

JPost says that CPEC was planned to rapidly upgrade Pakistani infrastructure and stimulate its economy by the construction of modern transportation networks, energy projects and special economic zones (SEZs).

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However, in recent years the CPEC has proved to be based on a bogus assumption that a nation needs these massive economic projects to be flourishing. It is now self-evident that no one is willing to pay for these projects in the end, as they will never make any profit from it.

The debt outcome of the CPEC project is about $80 billion, 90% of which will be paid for by Pakistan in the form of the national debt. Islamabad knows that it will not be able to pay China back and will eventually lose the sovereignty of its own land says JPost.

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The CPEC project has been facing a lot of scrutinies like economics, trade asymmetries, opposition from Baloch rebels, concerns of citizens near Gwadar Port and the resistance of locals whom this rollout may directly impact. A verdict was even passed against the CPEC by the Provincial Assembly of Khyber Pakhtunkhwa in which the projects are to be built.

Last month, Husain Haqqani, Pakistan’s former ambassador to the US had written an article in ‘The Diplomat’ stating that Pakistan’s desire to maintain strategic relations with China has resulted in the construction of $62 billion worth of CPEC, which includes a set of infrastructure projects, being mired in insufficient transparency.

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“China’s consistent strategic support, including help with Pakistan’s nuclear program, is often held out by Pakistan’s military establishment favourably in contrast with the more conditional Pakistani alliance with the United States. But it seems now that China is not in Pakistan to help its people but rather as a predatory economic actor”, he said.

Meanwhile, a new concern has now started to worry China. According to international law, China will not be able to develop anything in Pakistan-administered Kashmir as it is technically a part of India despite being administer by Pakistan. Even the accepts that this is Indian land, as per its 1948 resolution on Kashmir, writes the report.

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On the other hand, Aksai Chin, a region that India claims is also an obstruction. China is expected to face obstacles in the region which probably explains the recent India-China border clash in Galwan Valley. During the recent border face-off, India had clearly stated that it will not accept any infiltration into its territory and has the capability to deal with infiltrators.

Hence, as the experts say, the CPEC will soon be known as the “trillion-dollar blunder” as here China sets the price, Pakistan gets the bill and ends up with substandard infrastructure it cannot service.

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South Asia

China, Pakistan Top Ministers Hold ‘Crucial Discussions’ Amid Flaring India-China Tensions

Indian Army Chief, General M.M. Naravane recently admitted that there is a threat of possible collusion between China and Pakistan against India which could lead to a two-front war.

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China and Pakistan are considered ‘all-weather friends’ and both these nuclear-armed nations are the biggest neighbours of arch-foe – India. At a time of heightened tensions, are China and Pakistan working closely to check-mate India?

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Recently, Chinese Foreign Minister Wang Yi held a tele-conversation with his Pakistani counterpart, Shah Mahmood Qureshi, and discussed a wide range of matters including the regional tensions with India, the Kashmir issue, Afghanistan, CPEC and COVID-19, China’s Foreign Ministry said in a statement.

Wang said China and Pakistan should collaborate to tackle hurdles and defend common interests and regional peace and stability. Along with other 52 nations, Pakistan backed China’s national security law for the Hong Kong Special Administrative Region at the 44th Session of the United Nations Human Rights, and China profoundly values that. Such action shows international society’s support for international justice and international norms, Wang added.

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Wang called for the two nations must fasten projects under the China-Pakistan Economic Corridor (CPEC) and increase collaboration in health and medical care, training the workforce, poverty alleviation and agriculture to help with the economic recovery in Pakistan.

As for the terrorist attack in Karachi, Wang said China resolutely supports Pakistan to tackle terrorism and hopes that Islamabad will provide more protection for Chinese organisations and nationals working in the country.

Qureshi echoed Wang over the dynamics of international concerns, saying that Pakistan is ready to strengthen coordination and cooperation with China to maintain regional stability. Qureshi also highlighted the significance of the China-Pakistan Economic Corridor.

Qureshi also said Hong Kong (affair) is China’s internal affairs, and Pakistan firmly opposes any foreign interference in China’s domestic issues, and Pakistan stands firmly with China on issues concerning China’s core interests.

Pakistan, China Collaborating Against India?

Earlier, as ET reported, while India and China are engaged in an intense border standoff, Indian media quoting their sources claim that Pakistan has started moving its soldiers along the Gilgit-Baltistan area to open another possible front against India.

IndiaToday, quoting its sources writes – Pakistan has moved almost 20,000 additional troops in the northern Ladakh region to match Chinese deployments.

The report further says that Pakistan is looking at an opportunity to open a two-front attack on India. It also claims that Pakistan’s ISI and Army has started deploying battle-hardened terrorists and even planning BAT operations against Indian Army soldiers.

The report also claims that Islamabad could also be organising an “internal sabotage” with the nearly 100 Pakistani-backed militants inside Jammu and Kashmir. It also indicated that Pakistan could incite attacks against Indian army personnel deployed in J&K.

Indian Army Chief, General M.M. Naravane recently admitted that there is a threat of possible collusion between China and Pakistan against India which could lead to a two-front war.

Pakistan Army dismissed Indian media reports that it had deployed additional forces in Pakistan-administered Kashmir amid India’s standoff with China or permitted Beijing to use a key airbase in the region.

The official Twitter handle of the Inter-services Public Relations wing tweeted, “News circulating in Indian electronic and social media claiming additional deployment of Pakistan Army troops along #LOC in GB and alleged use of Skardu Airbase by #China is false, irresponsible and far from truth.” The ISPR Twitter handle added, “No such movement or induction of additional forces has taken place. We also vehemently deny presence of Chinese troops in Pakistan.”

There were reports that Pakistan had permitted the Chinese Air Force to deploy fighter aircraft to its bases at Skardu and Gilgit. Both bases would help Chinese fighter jets reach Ladakh faster in the event of war than is possible from the PLAAF’s existing airbases in Tibet.

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