MSME De­f­expo cur­tain-raiser


[ By Sucheta Das Mo­ha­p­a­tra ]

The Na­tional Small In­dus­tries Cor­po­ra­tion (NSIC) is or­gan­is­ing the third MSME De­f­expo at Ben­galuru from De­cem­ber 12-14, 2013, to pro­vide yet again a plat­form to the de­fence orig­i­nal equip­ment man­u­fac­tur­ers (OEMs) across the world to meet the In­dian in­dus­try who could be their po­ten­tial off­set part­ners. A cur­tain-raiser cer­e­mony held at New Delhi on Oc­to­ber 23, wit­nessed many in­dus­try ex­perts throw­ing light on the op­por­tu­ni­ties ly­ing ahead in the de­fence and home­land se­cu­rity mar­ket in In­dia.

The event aims at giv­ing boost to the In­dian Gov­ern­ment’s in­di­geni­sa­tion tar­get as the Min­istry of De­fence (MoD) has set a goal of sourc­ing 70 per cent of de­fence equip­ment from In­dian com­pa­nies, pub­lic, pri­vate and mi­cro, small and medium en­ter­prises (MSMEs), by 2020. Fur­ther, the new pub­lic pro­cure­ment pol­icy re­quires all Cen­tral Gov­ern­ment min­istries and pub­lic sec­tor un­der­tak­ings to source at least 20 per cent of their to­tal an­nual pur­chases from MSMEs.

An in­ter­na­tional MSME sub­con­tract­ing and sup­ply ex­hi­bi­tion for de­fence, aero­space and home­land se­cu­rity, the event is be­ing sup­ported by the Union Min­istry of MSME and the Gov­ern­ment of Kar­nataka. While the first MSME was held at Hy­der­abad in 2011, the sec­ond was held at Ban­ga­lore which at­tracted 240 ex­hibitors and 15,000 busi­ness visi­tors and help fa­cil­i­tate more than 300 buyer-seller meet­ings. This time too there would be del­e­gates from across the globe, in­clud­ing the US, UK and Is­rael, and the MSMEs will get a chance to show­case their ca­pa­bil­i­ties, find new buy­ers, fi­nalise deals and ex­change ideas for de­vel­op­ing new prod­ucts. Among the US com­pa­nies, Honey­well has agreed to be a plat­inum spon­sor.

At the open­ing ad­dress dur­ing the cur­tain raiser cer­e­mony, Colonel (Retd) K.V. Ku­ber, Ad­viser of NSIC high­lighted on the MSMEs role in na­tion-build­ing. Strate­gic af­fairs ex­pert Ma­roof Raza gave de­tailed pre­sen­ta­tion on the se­cu­rity needs of In­dia stat­ing that In­dia should spend more on home­land se­cu­rity as the pos­si­bil­ity of con­ven­tional wars are bleak. Only 0.95 per cent of In­dian GDP is spent on home­land se­cu­rity, he said and pointed at the need to con­cen­trate on how to cur­tail in­sur­gency in Kash­mir, mul­ti­ple se­ces­sion­ist move­ment in the North­east, left-wing ex­trem­ism, etc. Pro­tec­tion of in­dus­trial in­fra­struc­ture, con­struc­tion sites, ex­tor­tion, em­ploy­ees kid­nap­ping for ran­som and mil­i­tant groups like the Na­tional Demo­cratic Front of Bodoland (NDFB) are the other ar­eas to be looked at. He said that both tech­nol­ogy and train­ing are im­por­tant and com­pa­nies should look at the train­ing as­pect too while sell­ing a prod­uct. Raza said there is im­mense scope for OEMs in the home­land se­cu­rity mar­ket in­clud­ing weapons and equip­ment, elec­tronic sur­veil­lance and mon­i­tor­ing, chem­i­cal, bi­o­log­i­cal, re­di­o­log­i­cal, nu­clear ex­plo­sives (CBRNEs) pro­tec­tion, pri­vate se­cu­rity, se­cu­rity of crit­i­cal in­fra­struc­ture, rail­ways, civil avi­a­tion, in­tra-city tran­sit ac­tiv­ity, mar­itime, in­te­grated se­cu­rity sys­tems for busi­ness pro­tec­tion and a lot more.

Ankur Gupta, Man­ager, Aero­space and De­fence, Ernst & Young, made a lu­cid pre­sen­ta­tion on In­dian off­sets and said de­spite for­eign OEMs should have pa­tience as the In­dian de­fence mar­ket is a cake big enough for all to have a pie. He said that there is the need to now look be­yond Rus­sia, move to other ge­ogra­phies and at the same time be self-re­liant. The In­dian Gov­ern­ment, he said, is very flex­i­ble in its off­set pol­icy and ad­vised for­eign OEMs to part­ner with In­dian in­dus­tries as within the de­fence off­set guide­lines, a mul­ti­plier of 1.5 for sourc­ing from SMEs has been an­nounced with the aim to in­cen­tivise global play­ers to dis­charge off­set obli­ga­tions. It may be men­tioned that the 1.5 mul­ti­plier is al­lowed when an off­set in­vest­ment takes place in the form of a pur­chase, for­eign di­rect in­vest­ment (FDI) and in­vest­ment in ‘ kind’ in th­ese en­ter­prises. He con­cluded by say­ing that NSIC will act as an ag­gre­ga­tor in bring­ing to­gether 20 MSMEs to help for­eign OEMs strike a part­ner­ship deal.

Com­modore Aseem Anand, Prin­ci­pal Di­rec­tor, Direc­torate of In­di­geni­sa­tion, said that in­di­geni­sa­tion is not pos­si­ble with­out the MSMEs ac­tive sup­port. In­dian Navy, he said, gets large parts from the MSMEs and the fo­cus now is on long-term re­la­tion­ships. Com­modore (Retd) Su­jeet Sam­mad­dar, CEO, ShinMaywa In­dus­tries In­dia, said that off­sets should be seen as an op­por­tu­nity and not an obli­ga­tion by the for­eign OEMs. Chal­lenges in the form of tax­a­tion, in­dus­trial li­cens­ing and cer­ti­fi­ca­tion are though faced by MSMEs, they are the back­bone. He said ShinMaywa has listed out 115 MSMEs and al­ready vis­ited 47. Ajay Singha, Ex­ec­u­tive Di­rec­tor, Amer­i­can Cham­ber of Com­merce, in­formed that the US in­dus­tries will have a good pres­ence at the event in De­cem­ber and re­quested the or­gan­is­ers to en­sure that the Depart­ment of De­fence Pro­duc­tion is present. Ac­cord­ing to him, the pres­ence of key ad­vance sup­pli­ers who have the band­width with big play­ers is also im­por­tant.

Uday Ku­mar Varma, Sec­re­tary, Plan­ning and Mar­ket­ing, NSIC, pro­posed the vote of thanks and said that In­dia’s tar­get to achieve 70 per cent in­di­geni­sa­tion and the off­set obli­ga­tions for for­eign OEMs will be achieved by the MSMEs.

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