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Indigenous component

7 things you need to know about India’s indigenous defence production and procurement

India’s recent successes in the areas of indigenous design like the recent PSLV -C26 and its continued efforts towards indigenisation of technology, space exploration, missile technology, fighter aircraft, naval destroyers and submarines, etc. have amply demonstrated the excellent skills and capabilities of its scientists and engineers. With the right kind of support and encouragement from the Indian Government as well as the Armed Services, Indian industry is certainly capable of meeting all the needs of the Indian defence forces over time.

The following benefits would accrue over the long term:

  1. Indigenous design and manufacture assures supplies and prompt maintenance support as and when the country requires it.
  2. Indigenous manufacture is always cheaper than imports and leads to a smaller defence budget, allowing the country to allocate higher budgets for education, health and improvement of infrastructure.
  3. Growth of the domestic manufacturing industry(indigenisation of technology) and the creation of a strong defence manufacturing ecosystem.
  4. Growth of design and R&D agencies, both in the private and public sectors, leading to the establishment and growth of a strong technology innovation ecosystem.
  5. Technology spin-offs to non-defence technology areas such as healthcare, medical diagnosis, automotive engineering, inland security, maritime shipping, etc.
  6. Potential for the country to grow into a defence exporter over the long-term.
  7. Overall potential for growth of industry in general leading to employment generation.
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A test equipment for the Sukhoi-30 fighter jet, developed by Radel Advanced Technology

However, one needs to appreciate this from a long term perspective. Defence equipment belong to highly specialised and restricted domains and hence it is not easy for any industry to jump into it. Defence equipment are required to conform to very high degrees of ruggedness, reliability, and quality.  Further, where armaments are involved, issues of safety against accidental ignition also arise. These are issues that are rarely encountered in normal commercial and industrial equipment. It therefore requires an indigenous industry to sensitize itself to these matters before getting involved in the manufacture of defence equipment.

It is evident from the above that the process of indigenisation needs to be implemented in a planned manner with prioritisation based on strategic requirements as well as availability of local talents. Hence, this has to be seen as the long term objective.

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Armouring India: Indigenisation of India’s Defence needs

A look at the feasibility of complete indigenisation of India’s defence needs

India is the largest importer of defence equipment in the world. It is therefore evident that the domestic industry is not being optimally utilized to meet the country’s defence requirement. Currently, the domestic defence production is met by 41 factories of the Ordnance Factory Board (OFB) and nine Defence Public Sector undertakings (DPSUs) under Department of Defence Production with various units across the country. In addition to this 194 industrial licenses have been issued to 121 private sector companies.

The buzzword today is indigenisation but this is more a fashionable word than work-in-progress. While we jump on to the bandwagon of indigenisation let us truly understand the concept. Indigenisation starts with identifying critical equipment and systems that are being imported”, and then to either reverse engineer these products or design them from scratch using our own knowledge and expertise.

Over the last five decades, the Indian Government has been pursuing the acquisition of new technologies as part of manufacturing licenses from foreign companies. While this has resulted in valuable exposure to the manufacture of state-of-the-art products, as in the case of the Mig-21 and Su-30, Transfer of Technologies (ToTs) have rarely included design technologies of the manufactured product. What is transferred is only the manufacturing technology. It is therefore up to the Indian partner to either reverse engineer or decipher the technology behind the design in order to lead to future indigenous designs.

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Technology to manufacture is distinctly different from the technology involved in design. Manufacturing of various parts and systems involves mechanical fabrication and machining, assembly of electronic modules and equipment, testing and qualifying to rigid and stringent quality standards. Very few industries in the private sector have exposures to such specialised standards and processes as are applicable in defence equipment. Hence, the need of the hour is to attract more private sector enterprises, more particularly the MSMEs, to this field.
With the competitive growth of the Indian MSME environment, many of whom have highly sophisticated machineries and equipment, and possess specialised expertise in their own small areas of operation, there are many examples of truly outstanding firms who are now manufacturing industrial parts and equipment not only for Indian consumption, but also exporting them to prestigious companies globally.

The technical competence of Indian MSMEs is therefore no longer under question. What is required is a nurturing environment of trust and support going much beyond the token recognition by way of annual awards by the government or trade and commerce bodies.

Tweet this: “MSMEs need only to be empowered with the right kind of exposure and training to raise their capabilities to the demanding and specialised needs of the defence industry”.

Such MSMEs will then graduate over time to developing their own products and processes that would contribute to the creation of a large matrix forming the supply chain for indigenous integrators such as the Jaguar aircraft. PSUs or even the large private sector organisations in the years to come.

The question of value arising from foreign collaborations and ‘manufacturing under license’ can be answered in comparison to the automobile sector in India. The entry of Suzuki and Honda into the country for license manufacture of their vehicles in a collaborative venture with Indian private companies, introduced not only the Indian consumer to high quality, state-of-the-art, re-liable and trouble-free vehicles, but also to modem manufacturing methods, machineries, human skills and management systems. The Indian private sector companies have proven their mettle in absorbing not only the manufacturing technology but also in developing their own design skills.Thus, resulting in their ability to leap-frog and compete by themselves in the global market. Indirectly, this has also spurred the establishment of a supply chain of ancillaries and parts manufacturers of global standards. Thanks to this, a healthy ecosystem of the indigenous automobile industry is firmly in place. This is what needs to be replicated in the defence sector too.India is, and will continue to be, an attractive market for defence related sales for foreign manufacturers.

However, it is certain that no other country would be willing to transfer critical, cutting edge technology to India, with the risk of losing their de-fence superiority as well as financial returns. The solution clearly lies in factoring in all these aspects, and pooling of all resources and the best minds in the military, the public sector, the private sector, the academia and R&D organisations across the country in a strategically planned and executed partnership. The political leadership only needs to set the rules of the game and a level playing field in a transparent system.

Tweet this: “Innovation and indigenisation are literally two sides of the same coin. Innovation is triggered automatically when one is forced into a corner”.

This was amply proved by both DRDO and ISRO in the manner they overcame sanctions and denials of technology and critical parts for their projects. This should give us the confidence that the same can be replicated in other de-fence and aerospace projects.
The MoD, Government of India, should act as a facilitator and enabler in such a way that it stimulates innovation in both design and manufacture of defence related products. In fact, the establishment of a separate category of “Defence MSME” through a qualification and evaluation process would by itself lead to their entitlement to financial grants, tax rebates and lower lending rates for private players successfully developing indigenous defence projects.

This calls for innovative methods of identifying prospective enterprises, evaluation of their skills as well as growth capabilities, special and exclusive funding schemes, training programmes and other support for rapid growth of such enterprises. In short, such companies need to be nurtured in the interest of the country quickly achieving self-reliance.

Tweet this: “Indigenisation and self-reliance in defence technology is no cakewalk and requires dedicated scientists, technocrats and entrepreneurs”.

The user agencies and armed forces need to appreciate this and lend a very supportive hand even when either the performance is slightly below target or delays are encountered.After all, no organisation takes any pride in failures and would certainly like to take up the challenge to improve further and cross the ‘finishing line’. As India has demonstrated in the automobile sector and space technology, Indian defence industry can not only increase the scale of its operation to cater to the domestic requirement but also export to the global market. The export of the ALH Dhruv helicopters, though limited in number, proves this capability.

The new Government headed by a down-to-earth and highly progressive Prime Minister, Narendra Modi, has shown signs of a few bold initiatives, that have set a clear direction towards massive indigenisation of defence procurements in the years to come. Public-private partnerships should be the best way for-ward to reach a win-win situation for everyone concerned. This will pave the way for the best talent to be attracted towards this industry consequently leading to industry meeting most of the needs of our defence forces.

Aerospace skilling

Defence JVs without indigenous design pointless

For over a decade now, India has shopped all around the world looking for deals for more than US$1 billion worth of helicopters to replace around 200 of its military’s ageing light-utility aircraft.

But in August, Modi’s nationalist government surprised many when it abruptly scrapped the request for global bids to buy the helicopters in favour of manufacturing them in India instead.

In recent months, India has tossed down two more proposals for buying transport aircraft and submarines deciding to indigenise them. It’s part of a push by Prime Minister Narendra Modi’s government to foster a domestic arms industry.

India is one of the world’s largest buyer of weapons, accounting for 14 per cent of global imports, three times as many as China.

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An Akash missile, made by India, is test fired in Orissa. Photo: EPA

Over the next seven years, India is likely to spend more than US$130 billion importing arms, officials say, to upgrade its understocked, Soviet-era arsenal. Modi wants to upend India’s arms-importer tag and turn the country into not only a defence manufacturer but also a major weapons exporter, much like China has become. “Becoming a defence exporter is a noble aspiration but it will take a lot of doing,” said Arun Prakash, a retired navy chief. Admiral. But does that not mean “We aren’t hard working and not capable of it?” Every MSME owner works hard all day and night.

It’s only the PSUs and the Govt. bureaucrats that take things easy and if all the powers of sanction and decision making is in their hands, nobody can work hard and no results can be produced.

The decision to build replacements in India for the Cheetah and Chetak helicopters using JVs in the Private sector, is indeed a good decision. But it must be ensured that the Indian Pvt. Player does not do the same mistakes as HAL in blindly manufacturing just the shell and importing all the contents of the shell. There must be a sincere and genuine effort to indigenise most, if not all, the equipment. And the indigenisation must begin from day 1 of the JV formation.

As far as exports are concerned, I think our primary focus for the next 5 years should be to become self-reliant and meet our own requirements. Exports with then automatically follow.

26 or 49% – Foreign cos. will always want all the controls and will never let us get any modern technology. In my view, ‘hard work and indigenous DESIGN’ is the only way to go.

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Karnataka MSMEs to Capture 20% of the USD 400 Billion Opportunity in Electronics Manufacturing Sector by 2020

Bangalore’s Electronics City MSME cluster receives Rs 120 million from  Central and State governments to design and develop electronic products Monitoring the growing annual demand across India from the current USD 71 billion to USD 400 billion by 2020 in the Electronics Systems Design and Manufacturing (ESDM) sector, a cluster formed by Micro, Small & Medium Enterprises (MSME) from Electronics City, Bangalore is aiming to cater to at least USD 80 billion of this domestic demand over the next six years.

This newly formed cluster in Bangalore’s Electronics City has raised Rs 140 million from both central and state governments as well as its own members, to support start-ups and SMEs to design, test and develop electronic products.  The state government has sanctioned additional funds to boost the growth of the industry and address the prevailing challenges. At present, hurdles faced by the industry ranging from power and water shortage, lack of R&D and testing facilities, bad road conditions to hindrances at check posts are contributing to an unfavorable ecosystem which the state government is likely to address.

Speaking while inaugurating the ELCIA EXPO, Sri. S R Patil, Minister of IT, BT and ST, Government of Karnataka, conveyed, “MSMEs are a crucial segment in the manufacturing landscape of the state and have significantly contributed to Karnataka’s economic growth. If the ESDM sector in Karnataka is equipped to capture even 10% of the total domestic market of US$ 400 billion, it would be an achievement in itself.”

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“The Government of Karnataka has augmented the number of incentives to home-grown companies to enter into electronics manufacturing, particularly in electronics hardware, aerospace and defence sectors by leveraging the growing talent. Nevertheless, focus should certainly be on R & D, innovation, collaboration and partnerships at all levels.” he added.

With the Government of India’s strong emphasis on promoting Indigenization and opening up of the defence segment to FDI at 49%, Indian MSME segment will be playing a critical role in the entire supply chain for the Aerospace and Defence sector (A & D sector).

Echoing on the developments in the ESDM sector, G. Raj Narayan, President, ELCIA Cluster and CEO, Radel Advanced Technology Pvt. Ltd. said, “India has a vast pool of quality scientists and engineers, which is predominantly leveraged by the growing number of multinational OEMs who have set up their engineering and design centres here. Indian MSME’s in the A & D sector are now offering tremendous opportunities for such talent to develop in all fronts and in the process empower India as well.”

Electronic clusters and Industry bodies are increasing playing a vital role in setting up and sustaining an ecosystem that is critical for the electronics industry’s growth.

The original article appeared on ThisWeekBangalore.


Bangalore-based Electronic Cluster Raises Rs 14 Crore

 A new cluster in Bangalore’s Electronic City has raised Rs 14 crore from the central and state governments to help start-ups and small enterprises design, test and develop electronic devices.

The electronic manufacturing cluster has received Rs 10 crore from the central government and Rs 2 crore each from its 25-odd member-companies and the state government.

Spread over 30,000 square feet, the common facilities will include equipment to test products for their tolerance in temperature and humidity, and will be made available to the member-companies at a discounted price.


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“The facilities will be up and running in December. We will see a much faster turnaround of products,” said Raj Narayan, president of the micro, small and medium enterprises cluster.

That is because prior to this, small enterprises had to go to government funded labs like Electronics and Radar Development Establishment (LRDE) at Defence Research & Development Organization and private institutions like Wipro and L&T to test their devices, said Narayan. “It used to be very difficult. It’s prohibitively expensive in private companies and in government ones, we used to get time slots only after a week or two,” said Narayan, who also heads Radel Advanced Technologies.

The original article appeared on EconomicTimes.