Amit B Kalyani

Ex­ec­u­tive Di­rec­tor of Kalyani Group

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SP’s Land Forces (SP’s): Do you think in­di­geni­sa­tion should be the mantra to take the de­fence pro­duc­tion in the coun­try for­ward? What ini­tia­tives has Kalyani Group taken in this re­gard?

Amit Kalyani (Kalyani): In­di­geni­sa­tion and in­no­va­tion is the only way that our coun­try can be self-re­liant in sup­port­ing the armed forces. Kalyani Group has taken num­ber of steps in the de­fence sec­tor to­wards this end. We have been al­ways sup­port­ing the de­fence forces by meet­ing emer­gent re­quire­ments of am­mu­ni­tion shells for all ar­tillery equip­ment, road wheels and tracks for ar­moured fight­ing ve­hi­cles and also de­vel­op­ing rock­ets, rocket mo­tor tubes wher­ever asked for.

How­ever, we have in the past three years in­vested con­sid­er­ably in de­fence R&D through which we have been able to pro­duce a to­tally in­dige­nously de­signed and de­vel­oped 155/52-cal­i­bre How­itzer gun. We have also de­vel­oped a light weight field gun both of which were on dis­play at De­fexpo 2014. Fur­ther we have de­vel­oped indige­nous un­manned ground ve­hi­cle and for­ayed in to elec­tron­ics prod­ucts that can be used by the de­fence forces. In ad­di­tion, through col­lab­o­ra­tions, team­ing and joint ven­tures we are in the field for man­u­fac­tur­ing mine pro­tected ve­hi­cles soft kill sys­tems and the like. We be­lieve in the adage of ‘part­ner­ing tech­nol­ogy and driv­ing in­no­va­tion’. SP’s: Could you give an up­date on your de­fence R&D ac­tiv­ity? Kalyani: In­vest­ment in R&D and scale is not di­rectly linked. We are pas­sion­ate about de­fence and that is what is driv­ing our de­vel­op­ment ef­fort. We are def­i­nitely in­vest­ing in R&D in cer­tain fo­cus ar­eas. Our R&D is prod­uct based.

SP’s: Kalyani Group is mak­ing its pres­ence felt in the de­fence sec­tor. Is it due to slow­down in other sec­tors that you are in?

Kalyani: For a mo­ment let us for­get about any sec­tor and take a look at our de­mog­ra­phy. In­dia is a coun­try of young people and by 2022 the aver­age age of the na­tion would be 29 years. We need to en­gage this young pop­u­la­tion in use­ful na­tion build­ing ac­tiv­ity. Man­u­fac­tur­ing of­fers a per­fect av­enue for chan­nelis­ing their en­er­gies. We need to give im­pe­tus to man­u­fac­tur­ing. De­fence and aero­space are two sec­tors of­fer­ing great op­por­tu­nity. The ques­tion is whether we as a na­tion will take ad­van­tage of this op­por­tu­nity. Our drive is ini­ti­ated by this need and we strongly be­lieve that man­u­fac­tur­ing in this coun­try needs en­cour­age­ment and de­fence and eerospace can help fill this gap.

SP’s: The group’s busi­ness model is heav­ily de­pen­dent on ex­ports. Does this help the com­pany in the present sit­u­a­tion where do­mes­tic mar­ket is go­ing through a slug­gish phase or does it ex­pose it to the prob­lems be­ing faced in mar­kets in Europe? Kalyani: Our busi­ness model is fo­cused on both ex­ports and do­mes­tic mar­ket. We have a de-risked model that has with­stood many ups and downs in the last few years.

SP’s: The group has joint ven­ture with an Is­raeli com­pany for gun pro­duc­tion. Could you give us a low-down on the same, par­tic­u­larly on the in­ter­est in the prod­uct by the In­dian Army?

Kalyani: The joint ven­ture is a strate­gic part­ner­ship with El­bit Sytems in the high tech­nol­ogy area of the ar­tillery sys­tems. We are part­ner­ing to­gether in a num­ber of pro­grammes. We will be man­u­fac­tur­ing these sys­tems in In­dia with our JV part­ner. The JV is aligned with the govern­ment reg­u­la­tions and is first such JV in this seg­ment. We be­lieve that we will be able to get the sta­teof-the-art tech­nol­ogy to In­dia with this JV. In­dian users tri­als are most chal­leng­ing and

“We have in the past three years in­vested con­sid­er­ably in de­fence re­search and de­vel­op­ment through which we have been able to pro­duce a to­tally in­dige­nously de­signed and de­vel­oped 155/52-cal­i­bre how­itzer gun.

among the tough­est in the world. We are con­fi­dent of fully meet­ing the user’s op­er­a­tional re­quire­ments in all re­spects. It would be pre­ma­ture to com­ment on the out­come of the ten­der but we are hope­ful the best will come through.

SP’s: Any other joint ven­ture or part­ner­ship in the pipe­line?.

Kalyani: We have also ac­quired a do­mes­tic elec­tron­ics com­pany and are in the process for ac­quir­ing some oth­ers both in In­dia and abroad. We be­lieve in both or­ganic and in­or­ganic growth. Our group is suc­cess­fully run­ning many JVs for last three decades and we are al­ways open to ty­ing up with good and re­puted com­pa­nies in In­dia and over­seas. Some agree­ments are in ad­vanced state of dis­cus­sions but it would be im­proper to men­tion them at this stage.

SP’s: What is your view on the cur­rent cap on for­eign di­rect in­vest­ment (FDI) in de­fence?

Kalyani: The cur­rent cap on FDI in de­fence is be­ing de­bated at all lev­els. I do not want to add to the con­fu­sion. We are aligned with the cur­rent pol­icy and be­lieve that pol­icy must keep the na­tional in­ter­est in mind. Like I said ear­lier we are def­i­nitely look­ing for­ward for joint pro­duc­tions of prod­ucts and sys­tems re­quired for the In­dian armed forces by man­u­fac­tur­ing them in In­dia. We have a joint ven­ture with Mer­i­tor and we are cur­rently sup­ply­ing axles to all the leading man­u­fac­tur­ers in the coun­try for all their heavy duty ve­hi­cles which are sup­plied to In­dian de­fence forces.

SP’s: Do you see a pos­i­tive turn in de­fence pro­cure­ment pro­ce­dure, which is very cum­ber­some at the mo­ment?

Kalyani: De­fence pro­cure­ment pro­ce­dure is con­stantly evolv­ing. We now be­lieve that good pro­ce­dure is in place based on a good pol­icy. Need of the hour is to op­er­a­tionalise the in­tent into ac­tion­able process. There are small op­er­a­tional is­sues which need re­solv­ing in re­spect to li­cens­ing, for­eign ex­change rate vari­a­tion and on taxes and du­ties. I am sure all those in­volved are seized of the ne­ces­sity to re­duce the im­ped­i­ments wher­ever nec­es­sary to make it a faster and more trans­par­ent.

SP’s: What is the right way to stim­u­late the man­u­fac­tur­ing sec­tor in In­dia?

Kalyani: Man­u­fac­tur­ing in our coun­try has al­ways been the least glam­orous. We need to bring fo­cus back to man­u­fac­tur­ing. We need to cel­e­brate our suc­cesses in man­u­fac­tur­ing and bring about a change in the way we look at this sec­tor. This sec­tor is im­por­tant for the growth of the coun­try. Coun­try has laid out a tar­get for to in­crease the share of the man­u­fac­tur­ing to 25 per cent of the GDP but we are nowhere near this tar­get value. De­fence and aero­space and cor­rect use of off­sets can help give the re­quired im­pe­tus to man­u­fac­tur­ing. We must put into place a struc­ture which can en­sure we are able to reach this tar­get in a time bound fash­ion.

PHO­TO­GRAPH: KALYANI GROUP

Baba Kalyani, Chair­man, Kalyani Group, and Amit Kalyani, Ex­ec­u­tive Di­rec­tor, proudly dis­play­ing Bharat 52

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