News Desk
NEW DELHI — As India seeks to expand its footprint in the global arms market, it is turning to an increasingly effective tool: credit lines. With a goal of reaching $6 billion in defense exports by 2028-29, the country is using financial incentives to attract buyers in Southeast Asia, Africa, and beyond, positioning itself as a formidable competitor against China, South Korea, and Türkiye.
India’s defense exports have surged in recent years, climbing from nearly zero in 2014 to more than $2.5 billion in contracts last year. The shift is largely driven by government-backed credit mechanisms, which allow cash-strapped nations to acquire Indian military hardware without the immediate burden of high upfront costs.
Vietnam and Indonesia are among the beneficiaries of these credit lines, using them to finance purchases of India’s BrahMos missile, a joint venture with Russia. While not entirely indigenous, the missile is a key export, with advanced sales talks underway. The financial flexibility provided by India’s credit arrangements makes these deals more feasible, strengthening defense ties in the process.
“For developing countries, cost is a significant factor in military procurement,” said Anak Agung Banyu Perwita, a professor at the Republic of Indonesia Defence University. “By offering credit lines, India makes its products more accessible while fostering long-term strategic partnerships.”
The use of soft loans is not new to India. The country has previously extended credit to fund infrastructure projects through IRCON International, a state-run company that has spearheaded railway developments in Nigeria, Algeria, Tanzania, Zambia, and Mozambique. The success of these projects provides a precedent for using similar financial mechanisms in the defense sector.
India’s competitors are also vying for dominance. South Korea has ramped up military exports, leveraging its advanced technology, while China capitalizes on its vast manufacturing capabilities. However, these countries primarily target wealthier clients. India, by contrast, is filling a gap in lower-income markets where financing constraints are a barrier to procurement.
The government is also using international defense exhibitions, such as the recent Aero India show in Bangalore, to showcase its growing capabilities. Demonstrations of indigenous systems like the Advanced Towed Artillery Gun System (ATAGS) and the MBT Arjun tank underscore India’s push for self-reliance in defense production.
Experts argue that increasing domestic research and development is crucial for sustaining India’s defense export ambitions. “If India can further invest in R&D and reduce reliance on foreign technology, it will build credibility and competitiveness in the global arms market,” said Debashis Chakraborty, an economist at the Indian Institute of Foreign Trade.
India’s credit-based approach is proving to be a powerful diplomatic tool. By easing financial constraints for partner nations, it not only expands its defense market but also strengthens geopolitical ties. As competition intensifies, India’s ability to leverage financial incentives may determine its long-term standing in the global arms trade.
