India targets traditional Russian arms customers with cheap loans, Reuters reports

India is developing a new strategy to boost its defense exports, offering long-term, low-cost loans through its state-owned Export-Import Bank to foreign buyers, including those traditionally reliant on Russian arms, Reuters reported on April 16, citing officials familiar with the plan.

As global demand for military equipment rises, New Delhi aims to position itself as a low-cost, alternative supplier. The initiative includes dispatching more defense attachés to embassies in Africa, Southeast Asia, and South America, and having the Indian government directly negotiate some arms deals, multiple Indian officials told Reuters.

The initiative is focused on countries that have historically purchased Soviet or Russian weapons and whose military standards are often more compatible with Indian equipment than NATO systems. These countries include Brazil, Algeria, Morocco, Guyana, Tanzania, Argentina, Ethiopia, and Cambodia.

Prime Minister Narendra Modi’s administration is looking to double defense exports to $6 billion by 2029. Though India fell short of its $3.5 billion export target last fiscal year, defense sales have climbed sharply from $230 million a decade ago.

The expansion comes as many countries are reevaluating their defense suppliers following Russia’s 2022 invasion of Ukraine. Moscow has redirected much of its arms production toward its war effort, while Western stockpiles have been supplied to Ukraine, creating a global supply gap.

With its history of importing and adapting Russian and Western technology, India has started receiving more inquiries, an Indian official told Reuters.

Artillery shells produced domestically in India sell for roughly $300 to $400 apiece, a fraction of the $3,000 cost of European-made equivalents. Domestic firms also offer howitzers for about $3 million each, while the European version costs twice as much.

On April 7, Ukraine’s military intelligence (HUR) reported that an Indian-made component was identified in a Russian weapon system for the first time. According to HUR, a clock buffer produced by Indian Aura Semiconductor was found in Russian equipment.

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