a) V. Narasimhan, Executive Director, Brakes India Limited said The total offset opportunity in India is expected to surpass $12 billion over the next ten years mainly driven by increasing defence spend which is expected to touch $44 billion in 2016. Defence aerospace sector will see more offset opportunity than commercial segment.
b) Air Marshal J. Chandra, Air Officer Commanding-in-chief (Maintenance Command) stated that "Strategic self reliance is a key result area for defence sector in the years to come and also he said the Indian private sector can look at areas like reclamation of parts, training, designing of distance learning packages and other areas.
c) Rajinder Singh Bhatia, Executive Vice President and CEO (Defence and Aerospace) Bharat Forge Ltd said that "The only alternative is to develop the needed technology within. The self reliance index of India's defence needs is just 0.3. He also said that though offsets have costs attached to it there are advantages like the development of defence industrial base in the country.
d) Wing Commander D.K. Sharma , Indian Air Force Maintenance Command said that India need not be apologetic about its offset clause as some developed nations have stipulated 100 percent offset condition in their defence imports. However, there are several challenges before the Indian defence industry - Long term military needs are not known; valuing the offset contract; preference given to Indian defence PSUs; rigid tax regime are some of them
e) Vinod Surana, CEO, Surana and Surana International Attorneys stated that "The offset contracts are complex and companies face issues in the areas of co-production, licensing, technology transfer, technical valuation and others and he also said the contracts should have suitable clauses where there is no domestic legislation covering certain issues and dispute resolution experts should be involved when the offset contract is being drafted.
Indian Air Force has a large and varied inventory sourced from different countries around the world. A large variety results in complex maintenance situation wherein the spares are required to be imported from OEM. At times, due to political and economic constraints, it becomes difficult to get timely supply of
spares. High dependence on OEM (foreign vendors) is considered not a viable option for sustained operational preparedness and self-reliance is the answer.IAF has been striving to overcome this problem by indigenising foreign origin spares. Indian Industry has been more than willing to join IAF in its efforts and has been contributing immensely for country's self-reliance efforts.
There are many large scale procurement, up gradation and repair-overhaul contracts being inked in defence aviation. Offset policy of Ministry of Defence with a minimum offset of 30% and a trigger level of Rs 300 Crores contract value has provided immense offset opportunities to Indian industry. The industry can partner with defence suppliers/ OEMs in areas of maintenance, overhaul, up gradation, life extension, engineering, design, testing, defence related software or quality assurance services for existing equipment.
The Industry has to understand that the quality requirements of IAF are extremely high so as to ensure safe and successful operations. At times, the spares are obsolete and not used in other commercial applications. Occasionally, there is a requirement to reverse - engineer and manufacture spares to the precise dimensions at minimal cost.
At the same time, IAF has to consider industry's requirements. At the basic, the concept that the industry has to generate atleast minimal profits for its stakeholders has to be clear. Factors like high cost, cost and time over-runs are likely to be regular features. Similarly, industry has to take care that these are kept to bare minimum. In the past, it has been experienced that minimum order quality for the spares development is generally an obstruction.
It is also proposed that IAF will provide all available facilities (test benches, endurance run, functional testing etc.) to facilitate share of burden during development processes in case of requirement.
The Conference had plenary sessions covering:
· Technical Procedure of Indigenisation in IAF
· Financial regulations governing process of indigenisation
· Spares requirement in IAF
· Business Opportunities by Indian Companies through Indigenisation & Offsets
· Indigenisation in armed forces : Indian Industry Perspective
· Modern Maintenance and overhaul facilities available with Indian Industry
· COTS application/usability in IAF
Surana & Surana and Qmax Test Equipments Pvt Ltd were the sponsors of the conference.
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