Indigenisation, the Mantra at Defexpo 2012
As the Indian defence forces and homeland security acquisition needs are growing, there is enhanced momentum in defence production and procurement. Hence, the at the seventh edition of Defexpo India 2012 was to enhance private sector participation and rev
THAT INDIA WILL CONTINUE to be one of the biggest defence markets for some time to come is obvious to the world. Original equipment manufacturers (OEMs) heading to India in droves is a natural corollary and Defexpo 2012 made an emphatic statement to that effect.
Defexpo 2012, jointly organised by the Ministry of Defence and the Federation of Indian Chambers of Commerce and Industry (FICCI), brought 567 exhibitors from 32 countries (up from 412 in 2010) for the country’s biggest-ever land, naval and homeland security systems exhibition at Pragati Maidan, New Delhi, from March 29 to April 1.
The 32 countries included Russia, France, Israel, Belgium, Bulgaria, Canada, Cyprus, Czech Republic, Finland, Germany, Greece, Hungary, Italy, Japan, Republic of Korea, Netherlands, Norway, Panama, Poland, Singapore, Slovak Republic, Spain, Sweden, Switzerland, South Africa, Turkey, USA and the UK. There was strong presence from Israel which had taken the most space at the show with 1,293 square metres and Russia had the highest number of companies (37). The US and France had considerable representation.
As the Indian defence forces and homeland security acquisition needs are growing, there is enhanced momentum in defence production and procurement. Hence, the mantra at the seventh edition of Defexpo India 2012 was to enhance private sector participation and revitalise the public sector to accelerate defence production in India. The agenda for this was set by Defence Minister A.K. Antony who inaugurated the event.
The editorial team of SP Guide Publications, which spoke to a number of OEMs and defence officials, found that they were not only enthused by the market prospects, but also were ready for the long haul. Importantly, they found that Defexpo had matured over the years and the quality of exhibition and conferences had ‘upped’ considerably.
Though a substantial number of foreign OEMs were present, the refrain was to increase the level of indigenisation, with or without transfer of technology. Antony was emphatic that India’s thrust area was high level of indigenisation in defence. “Our emphasis is on public-private sector part- nership in the defence industry. Enabling policy framework has been put in place to develop indigenous capabilities through harnessing the potential and utilising the resources available both in the public and the private sector. Our defence industry is now open up to 100 per cent for Indian private sector participation, while foreign direct investment (FDI) is permissible up to 26 per cent.”
Defence Outsourcing Hub
With the introduction of the Defence Offset policy, India is gradually becoming a key outsourcing hub for the global defence industry. “Defexpo demonstrates our capability to design, develop and deliver a wide range of military and civil products and services to meet the stringent specifications and that too at the most competitive price. We are open to enter into mutually beneficial agreements with friendly countries in the field of critical and state-of-the-art futuristic defence technologies. We would welcome all such proposals in our endeavour to modernise our armed forces.”
The Minister of State for Defence Dr M.M. Pallam Raju said that the introduction of the new category of acquisition, ‘Buy and Make (Indian)’, is a major shift enabling Indian industries to enter into joint ventures with foreign OEMs. The route opened up ways for technology transfer.
Launches, MoUs, JVs and Mega Deals
Defexpo 2012 presented a perfect platform for companies to showcase their capabilities and further their business. The seventh edition saw a slew of launches, memoranda of understanding, joint ventures and other mega deals.
Here we present some of the major announcements at the show. India’s Defence Research and Development Organisation (DRDO) launched about 70 products (some of which had dual application). It had on display its well-known missile systems, unmanned aerial vehicles and soldier support systems, explosive detection kits, etc. The country expects more from DRDO and there seems to be some promise on that front.
DRDO signed a memorandum of understanding with the Bharat Electronics Limited (BEL) for development of Indian automatic identification system (IAIS) for coastal security. It is a satellite data terminal which will be jointly developed by the Defence Electronics Applications Laboratory (DEAL), Dehradun and BEL.
Mahindras Enter into JVs
Private sector is making fast inroads into defence production and many big players are betting big on it. Mahindra & Mahindra Limited announced two joint ventures— first with Israel’s Rafael Advanced Defense Systems and the other with Telephonics Corporation, a subsidiary of the North America’s Griffon Corporation.
The Tatas had many products on display including the LPTA 5252 12X12 Prahaar missile system, the 8X8 Pinaka container, the 8x8 and 6x6 carrier and the mine protected vehicle (MPV). However, the showstopper was the Xenon Recce 4X4, a multipurpose vehicle that will serve as a general service, troop carrier, escort, recce or a weapon mount vehicle.
MKU Ties Up with German Firm
MKU, India’s leading manufacturer and supplier of ballistic protection and surveillance equipment for armed forces, paramilitary forces and police worldwide announced a 50:50 joint venture with EIS Electronics GMBH from Germany to form EIS Electronics India Pvt. Ltd. The companies will invest $5 million (`25 crore) to manufacture cable harness products.