Overview of the Defence Sector
India is witnessing huge opportunities for growth in the defence and aerospace sector, for domestic as well as global markets. India is currently the 10th largest defence spender in the world. The defence spending has grown manifold and is estimated at INR 1,450 bn ($31.136 bn approx.) in 2009-10 and this is on an upward trend. The defence industry was opened for 100% private sector participation in May 2001. The role of private sector in India in the defence sector is larger than before and this is attracting increasing attention of the industry. Currently foreign direct investment (FDI) upto 26% is permissible subject to licensing restrictions. The Government is continuing to improve and strengthen the defence procurement process; use of offsets, transfer of technology, FDI and the public-private partnership for developing a strong defence industrial base in the country. Offsets have been recognized as a key driver of defence policy where, in the times to come, public private partnership could be envisaged in a big way. The policy is presently under evolution and could be termed as ‘work in progress’.
It is well recognized that the increasing role of SMEs in the emerging aerospace and defence environment will augment India’s indigenous defence production sustainability. It is important to create a comprehensive vendor database indicating the capabilities of all the SMEs and other companies active in aerospace and defence sector for the benefit of OEMs, prime contractors and Indian Military Services.
Defence Division at PHD Chamber
PHD Chamber has invested in a dedicated manner and has a specialized Defence Committee which is actively involved in synergizing the efforts of the Ministry of Defence, the Services, DRDO, think-tanks, DPSUs and the private sector, thereby promoting industry participation in defence production and contributing towards development of indigenous defence industrial base and modernisation of the Indian Military.
To enhance domestic industry capabilities, facilitate greater private sector participation, promote transfer of technology and its absorption, innovations, realization of offsets, research and development; PHD Defence Committee is engaged in steering policy formulation, defence market development, promoting partnership between defence services and industry to enlarge the role of Indian industry in defence production.
PHD Defence Committee continues to work towards facilitating private sector role in defence acquisitions, to reduce India’s dependence on imports for protecting national security and in this context suggesting required policy initiatives to the Ministry of Defence.
The Committee is dedicated to playing a more active role in creating awareness about existing industry capabilities to the Services for meeting their requirements for technologies and products and vice versa to let the industry know about the current and evolving requirements of the Services.
An important partnership with the Ministry of Defence has been the organising of the Seminar at the DEFEXPO India 2010 at Pragati Maidan, New Delhi by PHD Chamber Defence Committee.
Discussion on ‘Defence Production Policy’
PHD Chamber organized a Discussion on the first ever Defence Production Policy of the Government of India on 20 January 2011 at PHD House, New Delhi. Shri Gyanesh Kumar, Joint Secretary (NS/ Policy), Ministry of Defence (MoD) addressed the members.
Shri Sandip Somany, Sr. Vice President, PHD Chamber welcomed the announcement of the first ever Defence Production Policy by Shri A.K. Antony, Defence Minister of India, on 13 January 2011 which could herald an era of unprecedented defence industrial growth in India.
Shri Bimal Sareen, Chairman, Defence Committee in his opening address said that the success of the policy would largely depend on its effective implementation. SMEs make ideal partners for the government defence establishments and therefore, they should have an explicit preference with the government defence establishments. They should also have explicit preference in the Offset Policy.
Shri Gyanesh Kumar, Joint Secretary (NS/ Policy), Ministry of Defence said that the first ever Defence Production Policy aims to achieve substantive self reliance in the design, development and production of equipment, weapon systems and platforms required for defence in as early a time frame as possible. The Policy aims to create conditions conducive for the private industry to take an active role in this endeavour; and to enhance potential of SMEs in indigenization and to broaden the defence R&D base in the country. The policy lays down that all viable purchases such as formation of consortia, joint ventures and public private partnerships within the government approved framework will be undertaken. The policy states that efforts would be made to identify and address issues that may impact the competitiveness of Indian defence industry in comparison to foreign companies. The government will further simplify the procedures under the ‘make’ category of defence procurement procedures. Further, the government will set up a separate fund to provide necessary resources to public/ private sector, including SMEs to support innovation and R&D activities. Raksha Mantri would hold an annual review of self reliance achieved during the year.
Companies interested to register with PHD Defence Committee are requested to fill-up the proforma given below and submit it to PHD Defence Committee
PROFORMA FOR FREE REGISTRATION WITH PHD CHAMBER DEFENCE COMMITTEE
Company Name:
Name of Head of Defence Business :
(tick whichever applicable)
PHD Chamber Membership Status: Member/Non Member
Sector: Private/Public
Scale: Large/ Medium/ Small Scale
Business Interest in Defence Sector:
Total Turnover (in Rs./ US$):
Turnover from Defence (in Rs./ US$):
Certification:
Name of CEO:
Year of Establishment:
Number of Employees:
Investment in defence R&D (in Rs./ US$):
Manpower in defence R&D (in Numbers):
Brief Description about existing JVs/Technology Tie-ups:
Any other relevant information :
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Contact Address:
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Tel:(O)______________(M)_____________email:_____________________________
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