Rosoboronexport 20 years of business excellence

Rosoboronexport 20 years of business excellence

Wed, 11/11/2020 - 20:37
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By Rohit Srivastava

On November 4, Rosoboronexport (RoE), part of Rostec Corporation, completed twenty years in global weapons trade. It is the only Russian entity responsible for weapons export. This makes the company central to Russian weapons export business. Before the RoE, Russian weapons export were channelized through export entities like Rosvooruzhenie and Promexport and their numerous weapons manufacturers.

As Russia entered into the new millennia where new sets of market rules required streamlined business processes, creation of RoE made weapons purchase much simpler from Russia. Big customers like India where most of the weapon systems were of Russian make, RoE simplified the weapons purchase from Russia. Earlier, each service was dealing with numerous manufacturers for deliveries. RoE made the purchases from Russia a single-window purchase.

This is a time saving and efficient way of dealing. Over time, RoE representatives developed an in-depth understanding of the Indian system and on the other hand, Indian representatives gathered a better understanding of their Russian counterpart. This came very handy in the long term contracts like aircraft, aircraft carriers and frigates deals.

Rosoboronexport is not a weapons manufacturer but a weapons export intermediary between Russian manufacturers and importer. Since the beginning, it has maintained a high position in the global weapons market. According to the Stockholm International Peace Research Institute (SIPRI) data of 2020, Russian shares in Indian weapons imports market (9.2 per cent of global weapons import) during 2015-19 is 56 per cent. Although Russia has lost the India market by 18 per cent for the same period yet, India remains its biggest and most reliable market.

Since September 2018, India has signed contracts worth more than USD 14 billion which includes five regiments of S-400 long-range surface-to-missile systems for over USD 5 billion.

In the last ten years, Egypt’s weapons import has tripled and Russia holds 34 per cent of market share. So is the case with Iraq. In China and Algeria, Russian share is 76 and 67 per cent respectively. 

According to the company, its order book has increased fivefold since 2000 and has signed more than 26,000 contracts with partners and delivered over $180 billion worth of products to 122 countries around the world.

Till date, the company has sold air force related products worth over $85 billion, air defence and ground force products exceeded $30 billion and naval products worth $28 billion.

These data are just a pointer towards the Russian position in the global defence market and since all these exports are executed through Rosoboronexport which makes it one of the top military contractors in the world.

The Russian defence industry has witnessed the emergence of private players who wants to export their products. Now, RoE is entitled to find markets for Russia’s private manufacturers. And it is making serious efforts in this direction. This makes RoE probably the only government entity to cater to both government and private players. During the DefExpo 2020, RoE pavilion was promoting Russian private players in a big way.

Besides direct sales, RoE also participates as Russian partner in joint programmes like license manufacturing, repairs and overhaul, joint development and co-production with foreign partners.

In India, the company has participated in major projects, such as the licensed production of multirole Su-30MKI fighter jets, the modernization and transfer of the Vikramaditya aircraft carrier, production of advanced stealth frigates, to name a few. At the same time, RoE has provided assistance in the establishment of production, repair and maintenance facilities within India for weapons of all kind.

The Indo-Russia strategic relations are focused on a long-term program of military-technical cooperation in line with the Make in India program. Rosoboronexport is actively working with major Indian industrial companies from both the private and public sector to fulfil the requirements of the programmes to be executed through the Strategic Partnership Model. Some of the major Indian partners of RoE are HAL, OFB, Bharat Forge, Bharat Dynamics, etc.

To coordinate the military-technical cooperation between the two nations, the Indian-Russian Intergovernmental Commission on Military-Technical Cooperation (IRIGC-MTC) was established in 2000, headed by the Defense Ministers of Russia and India. The current program envisages the implementation of more than 200 joint projects.

Rosoboronexport is very bullish on India and is ready to offer India not only modern military equipment but also technologies for its production. The potential for the development of cooperation in this area is huge, and the two sides are focused on its full achievement.

For India, RoE will continue to be central to its weaponisation programs as the contracts signed since 2018 is yet to enter the operational stage. One can easily envisage another decade of excellent business cooperation with RoE. In many ways, RoE plays a significant role in Indo-Russian strategic partnership.

As the dual-use technologies are entering the military arena, RoE is also gearing up for exporting products with dual-use technology in the area of high-tech security equipment, medical equipment, hospitals, and special equipment for public and private buildings.

It has set up a special business unit that will deal only with non-military products and assist companies that have no experience in independent foreign trade activities. This is a new direction that the company is implementing together with enterprises both inside and outside the defence-industrial complex.   This will be a new beginning with massive potential for the Russian giant.