US becomes India’s top defence export partner, takes over 50% market share

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US becomes India's top defence export partner, takes over 50% market share

The American Chamber of Commerce in India (AMCHAM), an apex chamber of the US industry in India, has reported remarkable progress in the India-US defence alliance. This advancement underscores the significance of their cooperative efforts in enhancing global security and promoting mutual economic prosperity.

Strengthening the Defence Partnership

The US-India defence partnership spans acquisitions, co-production, and co-development for global markets, joint ventures, training, and innovation, significantly boosting India’s defence exports. India’s defence acquisitions include a diverse range of equipment from the US, illustrating the depth and breadth of this partnership.

Ranjana Khanna, AMCHAM India Director General and CEO, highlighted the evolution of the US-India relationship into a global strategic partnership. “The US-India relationship has developed into a global strategic partnership, based on shared democratic values and increasing convergence of interests on bilateral, regional, and global issues,” she said.

Achieving Milestones

Ms. Khanna emphasized the timeliness of spotlighting the US-India defence partnerships, especially in light of US National Security Advisor Jake Sullivan’s recent visit to India and the Indian Government’s target of achieving $5 billion in defence exports by FY 2024-25. She noted, “Defence exports to the US accounted for over 50% of total exports, strengthening the partnership and exceeding $2.8 billion during the last five years.”

Driving Economic Growth and Innovation

The AMCHAM report, titled “US-India Defence Partnership: Co-Production & Co-Development,” indicates that the US industry in India and their Indian partners have played a pivotal role in making the US the top destination for India’s defence exports. In the financial year 2022-23 alone, India’s defence exports reached $1.6 billion (approx. ₹16,000 crore), a tenfold increase over the past five years.

American companies have established strong partnerships with numerous Indian industrial entities, defence public sector undertakings (PSUs), over 1,000 MSMEs, academia, start-ups, and incubators. This collaboration has naturally fostered economic growth, job creation, and innovation.

Job Creation and Social Impact

The US defence industry in India has been instrumental in job creation through direct investments and collaboration with their network of suppliers and joint venture partners. This has resulted in the creation of over 28,000 direct jobs and gainful employment for an additional 20,000 people. Furthermore, the quality of life for over 2.6 million people has improved through initiatives in STEM education, skilling, nutrition, health, livelihood, sanitation, and sustainability, achieved via partnerships with science and technology institutes and various foundations.

Highlights of the US-India Defence Partnership

  • Top Export Destination: The US has emerged as the number one destination for India’s defence exports, accounting for over 50% of total exports and exceeding $2.8 billion in the last five years.
  • Exponential Growth: India’s defence exports have witnessed a significant rise, reaching $1.6 billion in the financial year 2022-23, marking a tenfold increase over the past five years.
  • Collaborative Ventures: Joint ventures and collaborations between US companies and Indian entities, such as Lockheed Martin-Tata Advanced Systems, Boeing-HAL, BAE Systems-HAL, and GE-HAL, have fostered technology transfer, innovation, and skill development.
  • Economic and Social Benefits: The US defence industry’s efforts in India have resulted in the creation of over 28,000 direct jobs and beneficial employment for an additional 20,000 individuals. Moreover, initiatives in education, health, and sustainability have positively impacted over 2.6 million people.

The US-India defence partnership continues to strengthen, driving forward both nations’ strategic and economic interests while contributing to global security and prosperity.

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