March 17, 2023
JAKARTA – India-based defense company BrahMos Aerospace expects to close a deal this year to sell Indonesia supersonic cruise missiles worth at least US$200 million, as it looks to expand its presence in Southeast Asia, its chief executive said on Wednesday.
BrahMos, a joint venture between India and Russia, clinched its first foreign deal last year with a $375 million sale of shore-based anti-ship missiles to the Philippines, part of Indian Prime Minister Narendra Modi’s ambitious push to triple defense exports.
The company has been in protracted negotiations with Indonesia, and details about the size and timeline of a potential deal have not been previously reported.
BrahMos Aerospace CEO Atul D. Rane said that the company was in advanced discussions with Jakarta on a deal worth $200 million to $350 million under which it had offered to supply shore-based missiles and a version that can be mounted on warships.
“I have a team right now in Jakarta,” Rane told Reuters in an interview, adding that a deal could be in place within the year. “The defense forces of Indonesia are extremely interested.”
A spokesperson for Defense Minister Prabowo Subianto on Wednesday declined to give immediate comment and said he needed to first check the information.
BrahMos is also aiming to land a follow-on order of around $300 million with the Philippines, where its missiles are scheduled to be delivered to the Philippine Marine Corps starting at the end of 2023, Rane said.
“The Philippines themselves have sort of indicated to us that this is just an ice breaker,” Rane said, referring to the 2022 sale. “They are looking at more systems.”
A spokesperson for the Philippine Department of National Defense did not immediately respond to a request for comment.
In response to a growing Chinese maritime presence in the South China Sea and some surrounding areas, Indonesia and the Philippines have ramped up their spending on the procurement of weapons and other military equipment, according to data from defense intelligence company Janes.
Indonesia’s investment in the acquisition of new weapons grew by nearly 28 percent in 2021 and 69 percent in 2022, while the Philippines saw a rise of 29 percent in 2021 and 40 percent in 2022, far higher than the average in Southeast Asia, the data shows.
“Territorial disputes with China have been a major concern for most of the Southeast Asian countries, which is driving their defense budget to meet their security requirements,” said Akash Pratim Debbarma, an aerospace and defense analyst at GlobalData.
Much of Southeast Asia’s new military purchases come from traditional suppliers, including the United States, France and Russia, but India, the world’s largest defense importer, and BrahMos are trying to make inroads.
“We have got the go-ahead to market to every country in Southeast Asia from both the government of India and the government of Russia,” said Rane.
BrahMos was established through an inter-governmental agreement in 1998 as a joint venture between India’s state-run Defense Research and Development Organization and NPO Mashinostroyenia of Russia.
Western-led sanctions against Russia for its invasion of Ukraine have not impacted BrahMos production or planning, said Rane.
Although BrahMos missiles still depend on Russian parts and raw material, Rane said the percentage of local input had gone up to over 70 percent from around 15 percent at the start of the venture.