Shailesh Kumar, National Defence
New Delhi, 20 November 2017
Quoting the 2015 statement of the Prime Minister Narendra Modi who had said that the Government was spending tens of billions of dollars on acquisitions from abroad and 20 to 25 per cent reduction in imports could directly create additional jobs in India, Dr Bhamre said, “This is why defence is at the heart of our ‘Make in India’ programme. We have reformed our defence procurement policies and procedures. There is now clear preference for equipment manufactured in India. Our procurement procedures will ensure simplicity, accountability and speedy decision making.”
Elaborating on the issue of ‘Make in India’, Dr Bhamre further said, it provides a wide opportunity and the Government would like to invite global defence companies to take advantage of India being a huge market while simultaneously sharing their technology with us. The Defence Procurement Procedure 2016 and its Chapter on Strategic Partnership provides the necessary methodology for such partnerships to flourish.
Defence Minister Nirmala Sitharaman in a video message to Defence Attaches and Industry leaders said, “Government through its Defence Procurement Procedure or DPP-16 has come out with clear ideas as how its want to increase Indian production, the Indian Technology from abroad how OEM come to India, find partners and start their own production centres in India and also look at market outside”.
She said, “Several countries are keen to have India sell them products for defence preparedness. We are now as much becoming known for credible high quality goods that we can sell under the defence banner”, she added.
“So at this time when defence procurement policy is looking towards encouraging lot of manufacturing in India; the IDDM goods and Make In India goods, so given emphasis on IDDM and Prime Minister as you know is very keen on pushing Make In India, that has to have the big impact on defence industry”, she explained.
Lt Gen Satish Dua, Chief of Integrated Defence Staff to the Chairman Chiefs of Staff Committee (CISC) said, “Bulk of the contracts have been awarded to Indian entities. The figures are 141 contracts have been concluded over the last 3 years, 91 have gone to Indian vendors; 136 cases have been accorded AON (Acceptance of Necessity), out of which 96 are under Buy Indian IDDM or Buy Indian or Buy & Make In India categories. That clearly shows that increasingly our preference acquisitions are going to be the products that are designed and manufactured in our country. Clearly collaborations hold the deal and that is the way forward” Gen Dua said.
Speaking in a panel with Vivek Lall (General Atomics Electromagnetic Systems), Nic Khanna (BAE Systems), Emmanuel De Roquefeuil (Thales) and Jan Widerstrom (SAAB) on ‘defence technology and models abroad’, Pratyush Kumar, President of Boeing India said, “How do you actually build a scenario where multiple private enterprises can compete with public sector with the scale that India has and sustain that model for long term, that is something the policy makers has to take into consideration as this journey progresses”.
“The private sector has shown remarkable growth in the last three years wherever they have come under Make In India. Some of the private sector defence companies have shown figures of market capitalization, compound annual growth of 34%”, Gen Dua said in his address.
“Government test facilities have now been open to the private sector on annual payment. To incentivize or to encourage import substitution, the Ordnance Factory Board (OFB) have opened up display rooms where you can get access to samples, drawings, technical specifications”, he said.
“If a vendor is registered with one of the concern, you are deemed to have registered with all others in that product range”, Gen Dua informed.
“Letter of Credit facilities of the global tenders are now also extended to the private sectors. The ERV protection is also extended to the private sector. Public sector is now also paying custom and excise, so that field is also leveled. To encourage the MSMEs, the PSUs and OFB are mandated or allowed to pay upto 90 percent of the cost of the stores and material within 30 days to the vendors. They are also allowed to pay 50 per cent of advance to MSMEs”.
“There is will on the part of the Government to close the gap. For several decades, we have been leaning on the public sector, now there is thrust to get the private sector involve; to get themselves involve by themselves or in collaboration with foreign OEM”.
“Our export in the defence sector has more than doubled in last 3 years. Collaboration here holds the key. First mover will always stand to gain. India is modernizing our armed forces as never before. We are going to be spending perhaps 200 billion dollars approximately in next a year or two”.
“Manufacturing executives increasingly view India as a place where they can design, develop and manufacture high technology”, Rajinder Bhatia, President and CEO, Defence & Aerospace, Bharat Forge sited a research study while speaking on ‘Is India Ready to Absorb High-End Technology’.
Shailesh Kumar is an independent journalist with over 15 years of experience in crime, political and defence reporting for leading media brands including Star News, India TV and NewsX. He is the founder editor of defence and security news portal, National Defence.