Philippines and India have signed an Implementing Arrangement for Procurement of defence material – through which BrahMos missile is slated to happen through the Government-to-government (G2G) route.
BrahMos
· Manufactured by BrahMos Aerospace – a Joint Venture between DRDO of India
· Type: Supersonic cruise missile.
· Interception by air defence systems is difficult due to its high velocity of travel.
· Launch: Naval, Land and Air launchable.
Significance of the Export Deal
· For India: BrahMos export deal would help India to meet its target of 5 Billion USD defence exports by 2025.
o This could help India to become a Key Defence Exporter – thereby help elevate its stature as a regional superpower.
o An export sale by India would boost its economic, soft and hard power profile – making it a reliable partner in Indo-Pacific.
· For Philippines: Purchase by Philippines (1st country to do so), a key member of ASEAN, creates a deterrent effect on China’s aggressive posturing.
o It would encourage other ASEAN countries as well as nations threatened by China, to pursue procurement of BrahMos and other such system from India.
Key Challenges
(1) Threat of CAATSA
· USA is imposing Countering America’s Adversaries Through Sanctions Act (CAATSA) on individuals and entities who engage in a significant transaction with a listed entity.
o Russia’s NPOM is one such entity listed under CAATSA.
· Hence, BrahMos sale also faces threat of CAATSA imposition, as 65% of its components are provided by NPOM.
· Though, India is a major defence partner of US, ambiguity exists over its exception for CAATSA – for export of BrahMos.
· This could have a discouraging effect on potential customer countries who are
contemplating to purchase BrahMos.
(2) Financing Issue
· BrahMos – with its four missile-launcher vehicle, missile carriers, missiles – costs around 275 Million USD (Rs. 2000 crore).
· Facing COVID-induced economic slowdown, this huge cost becomes a hurdle in reaching a deal with Philippines and others.
o India, to overcome this, has already announced a 100 Million USD line of credit to Philippines.
