DefExpo to showcase manufacturing prowess: SIDM

Tamil Nadu and UP have already been categorised as the upcoming defence manufacturing corridors of India. “TN is full of industries run by technocrat-entrepreneurs with small, medium and larger than medium enterprises in the fray,” noted the SIDM chief, who also spearheads the Pune-based Bharat Forge. 

Kalyani said there were two distinct differences between this expo and the ones held earlier. From being completely perceived as an importer (62 per cent import dependent), it was time to showcase the country’s advanced status in the field of defence. The total defence procurement is to the tune of $ 28 billion with 95 per cent of the domestic requirement produced by public sector undertakings. 

India is 10 to 15 years behind every procurement programme albeit the defence budget being $60 billion. In an era when the volatility of technology change revolved around AI, IoT, a perceptible change in the defence procurement cycle was needed, he added. To address some key challenges, a liberalised FDI policy had been put in place by the government and a lot of transparency had been brought into defence deals. The previous limit of 26 per cent had been hiked to 49 per cent through the automatic route. Now, the new draft policy has allowed 74 per cent through the same route for niche technologies. The strategic partnership policy had been promulgated last May, said Lt Gen Subrata Saha (Retd), DG, SIDM. 

If the earlier Manohar Parikkar-led Defence Ministry saw the thrust given to the procurement policy with emphasis on ‘Make in India,’ the current dispensation under Nirmala Sitharaman seeks to lay focus on the defence production policy. In this way, the procurement and production policies are expected to give fillip to the defence sector, Kalyani sought to point out. A few major elements were in place to help realise the aspirational goals set by the ministry which included a timeline for attaining self-sufficiency status for the country and the targeted $5 trillion economy size. These included targets, dates, products and processes, making these goals achievable, he added.

Saha said the financials were also given focus with Rs 1.7 lakh crore as the target by 2025 with an envisaged investment of Rs 70,000 crore and an employment generation of about 3 million jobs. Admitting the technology gaps in terms of missiles, large guns and other advanced defence equipment, he said despite the country’s success in weapon-locating equipment and light combat aircraft, the defence policy had reasonably articulated the challenges. A target of Rs 35,000 crore of defence exports had been set, he said adding the current exports stood at $300 million. Though the defence policy was ambitious, it was comprehensive with defined timelines, Kalyani said, adding “there is a certain amount of certainty” from the government’s side. For developing the twin defence corridors in TN and UP, the Centre is prepared to invest Rs 3,000 crore and 50 per cent of maximum limit with the rest of the equity to be brought from the state and other stakeholders. For this, a special purpose vehicle for defence corridor was proposed. 

The Centre would also facilitate the availability of trial, testing and certification facilities especially for SMEs. For this, the Centre would bear 75 per cent of the investment with a Rs 150 crore cap for each facility. Such a comprehensive production policy was aimed at supporting the procurement policy of 2016. 

In this regard, Coimbatore and Kanpur were being evaluated while destinations such as Tiruchy and Chennai too were on the radar, they said. Also, as part of boosting the defence initiatives and moving towards self-reliance, the ‘most preferred category’ status was given to the Indigenously Designed Developed and Manufactured (IDDM) equipment. To encourage defence activities, the DRDO was allowed to decide on private collaborations so that the development initiatives could gain momentum.