Rolls-Royce: “Speeding up indigenisation, Partnering for progress”

2 019 has begun to a splendid landscape in showcasing India’s burgeoning aerospace and defence capabilities: the 12th edition of Aero India show. The tagline for Aero India 2019 “The Runway to a Billion Opportunities”, is apt in conveying India’s growing value proposition to global investors and domestic manufacturers.

India is at the cusp of metamorphosing from an important regional player to one with global presence. As India’s geo-political and economic ambitions grow, it needs to develop robust indigenous manufacturing capabilities and an ecosystem to achieve self-reliance in the aerospace and defence industry.

Currently, the country is one of the largest importers of conventional defence equipment and spends almost one-third of its total defence budget on capital acquisitions. About 60 percent of its defence requirements are met through imports.

Owing to its dynamic security environment, India’s defence requirements are likely to increase in the foreseeable future, making indigenous development of modern defence hardware and technology as top priority for the government.

Sea of opportunity

With the government pledging $250 billion to modernise the country’s military equipment — from fighters to guns and submarines — India is uniquely positioned to create a vibrant defence manufacturing ecosystem that can help achieve self-reliance. It offers tremendous opportunities in engineering, services, supply chain sourcing and associated maintenance, repair and overhaul-related activities. Although the government is taking numerous measures to bolster defence manufacturing, the pace of modernisation must be balanced with both short and long-term initiatives.

Hastening indigenisation

At Rolls-Royce, we believe that co-development and co-manufacturing is the way forward to achieve the vision of turning India into a global high-value manufacturing destination, not just for the home market but also for export.

Foreign original equipment manufacturers (OEMs) have already begun leveraging these benefits and are encouraging Indian industry to adopt best practices for global quality standards in their manufacturing processes so as to nurture a world-class supply chain and defence manufacturing ecosystem in India.

The government is already investing in this area, but the pace of development needs to pick up considerably to not miss opportunities, and public-private participation can go a long way in hastening this process.

Additionally, a strong supply chain is critical for a defence manufacturer. Steadily a handful of Indian small–and medium-sized enterprises (SMEs) are playing a key role in the global supply chain of OEMs. With the government’s offset policies, procurement policies and regulatory incentives spurring the growth of a domestic defence industry, the SMEs need to play a more active role.

Importantly, to be ready for opportunities of the future, industry needs to develop and retain talent through specific training to address growing needs of the market. In addition, academia and industry, backed by government policies, need to forge partnerships to encourage research and technological advancements and create a talent pool that is industry-ready.

With defence being within the government’s high- priority focus area, India should emerge as a preferred partner for co- development and co- creation of an indigenous and self-sufficient defence manufacturing ecosystem.