India Offers Cheap Defence Loans To Woo Russia’s Traditional Buyers (Image- X/ @dauntless_ops)
India plans to expand cheap loans targeting Russia’s traditional customers. Under Prime Minister Narendra Modi, India has already begun selling billion-dollar low-cost iPhones and pharmaceuticals, and now expanding the cart, it has added missiles and battleships.
“India is marching towards achieving the target of increasing defence exports,” Defence Minister Rajnath Singh wrote on X this month.
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India had previously focused on buying fighter aircraft from Russia’s Sukhoi and howitzers from the United States to ward off neighbouring countries. Though it had a small-arms production sector, its private firms have recently begun to make higher-end munitions and equipment.
The turning point occurred after Russia’s invasion of Ukraine in 2022. When Western countries, including the US and its allies, began sending in their extra weapons to aid Ukraine, Russia had no option but to resort to its own weapons. And thus, other countries who depended on the US or Russia for buying weapons then had to find other alternatives. And this is when India began to receive more inquiries.
As per a Reuters report, all these instances led to talks of joint production of weapons for third-party states who are classified as “Russian-friendly.”
India produced $14.8 billion worth of arms in the 2023–2024 fiscal year, up 62% since 2020, government data show.
Modi’s government has set a target of doubling arms-and-equipment exports to $6 billion by 2029. It hopes sales will go beyond the ammunition, small arms, and defence-equipment components that currently compose much of its military exports, reports Reuters.
The Western countries, which had reduced their artillery production, are now rushing to restart factories, while India, on the other hand, had no cuts in production capacity. Private manufacturers like Adani Defence and Aerospace and armor-and-ammunition maker SMPP are beginning to produce 155 mm artillery shells, which they said had already been ordered by foreign governments.
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India now aims to boost its arms exports by using loans from EXIM Bank (Export-Import Bank of India), which already handles a large amount of loans. However, most of the domestic banks in the country are hesitant to provide loans for arms exports due to the high political and credit risks associated with some foreign buyers, and this had limited its ability to compete with countries like France, Turkey, and China.
Apart from this, India plans to dispatch at least 20 new defence attachés to foreign embassies by March 2026, three Indian defence officials said. And India has already eroded Russia’s monopoly over arming Armenia, which was part of the Soviet Union but has since said that it cannot rely on Moscow.
