CII Media Releases
Defence and Aerospace will be Key Drivers for Make in India: Mr AK Gupta, Secretary, Defence Production
Feb 16, 2016

While delivering the keynote address at a seminar on Make in India – Defence and Aerospace, Mr AK Gupta, Secretary (Defence Production), Ministry of Defence, emphasized that Defence and Aerospace are going to play a significant role with regard to Make in India initiative which lays adequate emphasis on manufacturing sector. The seminar was organized jointly by Confederation of Indian Industry (CII) and the Department of Defence Production, Ministry of Defence, as part of Make in India Week in Mumbai.  

Referring to the positive environment which currently prevails in India, Mr Gupta highlighted some of the key growth enablers which have promoted indigenization are simplification of procedures in defence production and procurement. Defence Procurement Procedure in India categorically lays down the order of preference for domestic sourcing over direct purchase from abroad. Also, Department of Defence has come out with guidelines for outsourcing and vendor development, which would help streamline existing procedures. He stated that involvement of private sector is a crucial aspect for realizing full potential of Make in India.  

Lt Gen Subrata Saha, UYSM, YSM, VSM, expressed that SMEs have a bigger role to play in Defence and Aerospace sector. In order to upscale the sectoral competitiveness, he proposed to seek capacity development, modernization and focus on big ticket items like large gun system, future combat vehicles, etc. delving upon the aspect of high technological requirement, he said that solutions should be designed keeping in view the nature of requirement.  

Earlier, in his opening remarks, Mr Baba N Kalyani, Chairman, CII National Committee on Defence, and Chairman, Bharat Forge mentioned that Indian industry is awaiting the Defence Procurement Procedure (DPP) policy 2016. Briefly outlining the agenda of the seminar, Mr Kalyani said that issues which need to be addressed are pertaining to how to enhance growth of SME players; Promote private sector participation; Substitution of imports through vendor development; Drive growth of defence industry through outsourcing; and Capacity building of SME industry.  

Mr T Suvarna Raju, Chairman, Hindustan Aeronautics Ltd, said that HAL is involved in a vast gamut of activities ranging from making components to integration to selling. Though Tier 1 and Tier 2 players are involved with HAL by providing products to front end HAL, which HAL then brands and sells, there is need to usher involvement of Tier 3 players. Mr Raju emphasized upon the aspect of upscaling localization, since currently there prevails high percentage of import content in aeronautics (light combat aircrafts, light combat helicopters, etc). On a positive note, he said that HAL would be happy to handhold SME players till participation in design approval stage.   

Highlighting the existing paradigm shift, Mr Ashwani Kr. Prabhakar, Director General Ordnance Factory & Chairman, Ordnance Factory Board, said that while they are dealing with large scale of product range, they have changed the strategy by moving from non-core to core areas. Engagement with private players especially SMEs has not only helped them attain a desired level of indigenization, but has also helped establish long-term partnership for procurements.  

Mr Sunil Kumar Sharma, CMD, Bharat Electronics Ltd. (BEL), reflected upon the capacity building aspect in SME sector and said that BEL has gradually transformed from components manufacturing company towards system integration. Adopting well formulating outsourcing policy and collaborative R&D with small niche players, has helped BEL achieve competitive advantage in terms of cost. 

Drawing a comparison between supplier/vendor and OEMs relationship in context of innovation, Mr Satish Kaura, CMD, SamtelColor Ltd, said that Centres of Excellence should be established to develop core competencies and indigenous capability. Additionally, liquidity support should be granted to SME units in defence and aerospace sector.

16th February 2016

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