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India’s Defence Export Surge: Leveraging AI to Navigate Geopolitical and Compliance Challenges


India’s Defence Export Surge: Leveraging AI to Navigate Geopolitical and Compliance Challenges
India’s Defence Export Surge: Leveraging AI to Navigate Geopolitical and Compliance Challenges

India’s defence exports have surged 34-fold over the past decade, from ₹686 crore (2013–14) to ₹23,622 crore (2024–25), driven by policy reforms, private-sector innovation, and global demand. However, this growth faces headwinds from geopolitical volatility and trade tariffs, necessitating advanced solutions to sustain momentum. This article examines India’s export trajectory, the impact of global trade dynamics, and the role of AI platforms like Liquidmind.ai in streamlining compliance and mitigating risks.


Sectoral Growth: Private Sector Dominance and Global Reach


Private Sector Leadership


Private enterprises contributed 64.5% (₹15,233 crore) of India’s defense exports in 2024–25, led by firms like Tata Advanced Systems and Bharat Forge. Their success stems from integrating into global supply chains-for instance, manufacturing fuselages for Boeing’s Apache helicopters and components for Lockheed Martin’s F-21 jets.


DPSU Resurgence

Defence Public Sector Undertakings (DPSUs) achieved 42.85% YoY growth, exporting ₹8,389 crore in 2024–25. Key exports include the Akash missile system and Dornier aircraft, with Armenia’s $720 million Akash-1S order marking India’s emergence as a full-system supplier.


Global Footprint

India now exports to 85+ countries, including the U.S. (aerospace parts), France (electronic systems), and Estonia (artillery shells). NATO’s push to produce 2 million shells annually post-Russia-Ukraine war has opened opportunities for Indian manufacturers47.


Geopolitical and Trade Barriers


Russia-Ukraine War: European Demand Surge

The conflict has driven NATO nations like Poland and Estonia to seek Indian artillery and ammunition. Estonia proposed co-producing 155mm shells, aligning with its goal to reduce reliance on Russian supplies. However, heightened scrutiny under the Uyghur Forced Labor Prevention Act (UFLPA) demands rigorous supply chain transparency-a challenge for SMEs.


U.S. Tariffs: Disrupting Aerospace Exports

The 26% tariff on Indian imports (April 2025) threatens $2 billion in aerospace exports, including components for Boeing and Lockheed Martin. This has accelerated diversification into markets like France and Russia, though supply chain fragmentation risks persist.


Automating Compliance and Documentation

Liquidmind.ai addresses critical pain points in global trade through its AI platform TradeVeda, which reduces documentation errors by 30% and ensures compliance with evolving regulations. Key features include:

  • Automated Certificate of Origin (CoO) Validation: AI algorithms cross-check CoO data against global databases, reducing mismatches flagged by regulators like U.S. Customs.

  • Risk Scoring: Machine learning models assign risk scores (0–100) to shipments based on parameters like supplier sanctions and transshipment routes, enabling proactive mitigation.


Strategic Outlook

 

  1. Adopt AI Compliance Tools: Utilizing platforms such as Liquidmind.ai can help minimise errors and penalties, which is crucial for maintaining access to markets like the EU and the U.S.


  1. Diversify Export Markets: Use AI-driven analytics to identify demand in Southeast Asia and Africa, which can help mitigate the impact of tariffs.

 


India’s growth in defence exports demonstrates a strategic alignment with global opportunities. Although geopolitical shifts and tariffs present challenges, AI solutions like Liquidmind.ai are crucial for ensuring compliance, optimising supply chains, and reaching the ₹50,000 crore export target by 2029. By integrating these technologies, India can reinforce its status as a reliable global defence partner while successfully navigating a complex trade landscape.


Sources:


Authored by Kevin_R


 
 
 

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