Experts Optimistic On Defence Manufacturing In India

In the inaugural session of BW Defence Conclave 2021, experts from the world of  aerospace and defence industry put out their thoughts out on the defence manufacturing in India. 

According to Cdr. Gautam Nanda, Associate Partner, Aerospace & Defence, KPMG India, “Defence manufacturing has become an important area for the government. There is a lot of emphasis being laid on ‘Make in India’ and Aatmanirbhar Bharat.”

The industry, as experts agree, looks not only for the incentives but for the whole ecosystem to manufacture goods. The government of India has, recently, created two defence corridors. One of them is in Tamil Nadu and the other is in Uttar Pradesh.

States taking the lead

Telangana government has been offering customised incentives for mega projects in the field of defence manufacturing. It has more than 1000 MSMEs in the field. It also has the largest start-up incubator in the country called T-Hub.

Praveen P. A., Director (Aerospace & Defence), State Government of Telangana says, “We are planning for a drone manufacturing corridor as well.”

Tamil Nadu, on the other hand, has 5 hubs for defence corridors including Chennai, Coimbatore and Selam. Much of the credit goes to the favourable ecosystem in the state.

A case in point is Aerospace Engineers P. Ltd. It established itself as a manufacturing giant in the state. It started by manufacturing equipment as small as the cockpit seal in 1988. Capt. S Chalapathi, (Retd.), General Manager, Aerospace Engineers P. Ltd. believes that the state government, irrespective of the party in power, has tried to build a “friendly environment” for defence manufacturing.

According to Wg. Cdr. P Madhusoodhanan, (Retd.), Vice President (A&D), TIDCO Tamil Nadu, the state government also leverages the PPP model for defence manufacturing. He says, “We are carving out Aerospace and Defence industrial zones based on location.”

Interestingly, the Tamil Nadu government has been planning a new defence electronics facility near Chennai to support ISRO at Sriharikota and various ship-building industries.

Inter-linkages between ministries 

Experts also believe that various ministries including, the Ministry of External Affairs, Ministry of Finance and even NITI Aayog must work in tandem with the state governments to build an overall ecosystem to facilitate defence manufacturing in the country.

“We must also look at a manual for defence exports,” says Sujeet Samaddar, (Retd.) Former Sr. Consultant (Industry) NITI Aayog & Founder (SAMDeS) said, contributing to the discussion on Building Aerospace & Defence Industrial Clusters: Investment Opportunities and Challenges, during the BW Aerospace & Defence Conclave 2021. 

He continues, “It should include procedures for government-to-government contracts, methods of availing various lines of credit and methods of obtaining sovereign guarantees for products being exported.”

Learning from the success of the companies like Boeing and Lockheed Martin, the manufacturers in India need to have more than just the Government of India as their seller, the experts believe.