India-Russia Defense Company Eyes Rp. 3 Trillion Missile Deal with RI

India-based defense company, BrahMos Aerospace, hopes to reach a deal for the sale of supersonic cruise missiles worth at least $200 million or around IDR 3 trillion with Indonesia. The move is part of the company’s move to expand its business in Southeast Asia, said the chief executive of BrahMos, Wednesday (15/3).

BrahMos, a joint venture between India and Russia, struck its first overseas deal last year. The company sold $375 million worth of shore-based anti-ship missiles to the Philippines. This is part of Indian Prime Minister Narendra Modi’s ambition to double the value of exports from the defense sector.

The company has been in protracted negotiations with Indonesia. Details of the volume and schedule of potential deals have not yet been reported.

BrahMos Aerospace CEO Atul D. Rane said that discussions between his party and the Government of Indonesia had entered the advanced stage of a bid to supply land-based missiles and warship-mountable versions. The value of the deal is estimated to be between $200 million and $350 million.

BrahMos supersonic cruise missile in New Delhi, India, January 23, 2015. (Photo: AP)

BrahMos supersonic cruise missile in New Delhi, India, January 23, 2015. (Photo: AP)

“My team is now in Jakarta,” Rane told Reuters in an interview. He added that the agreement was expected to be reached this year. “The Indonesian Armed Forces are very interested.”

Defense Minister Prabowo Subianto’s spokesman on Wednesday (15/3) declined to provide direct comment.

BrahMos is also aiming to secure an estimated $300 million follow-on order with the Philippines. The BrahMos missiles are slated to be delivered to the Philippine Marine Corps from late 2023, Rane said.

“The Philippines themselves have shown us that this is just an ice breaker,” said Rane, referring to the 2022 sales. “They are looking at more systems.”

A spokesman for the Philippine Department of National Defense did not immediately respond to a request for comment.

Defense Field Production

Data from defense intelligence firm Janes shows Indonesia and the Philippines have increased their budgets for procurement of weapons and other military equipment in response to China’s growing maritime presence in the South China Sea and some surrounding areas.

The Indonesian Government’s budget for new weapons purchases will increase by nearly 28 percent in 2021 and 69 percent in 2022. The Philippines’ budget will increase by 29 percent in 2021 and 40 percent in 2022. These figures are far higher than the Southeast Asian average.

“Territorial disputes with China are a major concern for most Southeast Asian nations who are pushing for increases in their defense budgets to meet their security requirements,” said Akash Pratim Debbarma, defense and aerospace analyst at GlobalData.

Most of Southeast Asia’s purchases of new defense equipment come from traditional suppliers, including the United States, France and Russia. However, India – the world’s largest defense importer – and BrahMos are making inroads.

“We have received the green light to market to every country in Southeast Asia, both from the Indian government and the Russian government,” said Rane.

BrahMos was founded by an intergovernmental agreement in 1998 as a joint venture between India’s state Defense Research and Development Organization and Russia’s NPO Mashinostroyenia.

Rane said Western sanctions against Russia for its invasion of Ukraine had not affected BrahMo’s production or planning. [ah/ft]

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