The defexpo 2016 held in goa in March saw major participation from 1,000 companies and a few radical announcements
by Jayashree Kini-Mendes
For a sector that is shrouded in much secrecy, the 9th edition of Defexpo India, a biennial exhibition on Land, Naval and Internal Homeland Security Systems, threw open several opportunities to the private sector. It was no surprise, therefore, to see participation from more than 1,000 companies with a majority from the private sector (both Indian and global).
Even more attractive were the announcements made by Defence Minister Manohar Parrikar who inaugurated the expo. The weapons procurement policy, Defence Procurement Procedure (DPP) 2016, is a shift from the past and is geared toward the theme of partnership with Indian defence companies and not mere purchase of weapons. The new DPP will give top priority to a new category of procurement known as Indigenous Design, Development and Manufacturing (IDDM). Products bought under this category would require 40% indigenous content if the design of the product is also indigenous; otherwise it will require 60% indigenous content. Under the new policy, top priority to acquiring weapons will be given to Buy (Indian-IDDM) followed by Buy and Make (Indian), and Buy and Make (Global); the last priority will be given to Buy (Global) category. In another change, foreign companies will now have to transfer technology for providing maintenance infrastructure, even under the category Buy (Global).
Many aspects of the DPP were already cleared by the Defence Acquisition Council (DAC) in February. The new DPP also allows the DAC to take a “fast-track” route to acquire weapons, something which was limited to only the armed forces till now. The DPP document says that defence procurement involves long gestation periods, and delay in procurement will impact the preparedness of defence forces, besides resulting in opportunity cost. The needs of the armed forces being non-negotiable and an uncompromising aspect, flexibility in the procurement process is required, which has also been provisioned for.
The crowd at the expo included components manufacturing companies, plenty of Armed forces, Navy and Air Force personnel attired in all their glory who had come seeking to see some extraordinary equipment and combat and sensor systems.
Rooting for India
For a long time, at least in terms of defence, domestic defence manufacturing continued to be dominated by the defence public sector undertakings and the Ordnance Factories Board, which together command 80-90% share. This will soon change. The show of strength displayed by Indian companies in terms of technology, materials, and composites, only went on to prove that they cannot be undermined anymore.
Kishore Jayaraman, president, Rolls-Royce India & South Asia, said, “We see a huge potential in India and will definitely leverage our strategic partnerships to pursue growth. India’s defence budget allocation is estimated to touch $620 billion by 2022, as per FICCI. However, to bridge the existing defense capability gap, there is a need to look at joint production, joint R&D and, most importantly, the need to move beyond a buyer-seller relationship. The government should also consider establishing dedicated special economic zones (SEZs) to include infrastructure facilities for MSMEs and make the country an important hub in global supply chain on aerospace and defence production.”
Vernon Noronha, VP, defence & government business, Tata Motors, said the initiative by the government to indigenisation will help strengthen the country’s defence manufacturing base. “We have bagged an additional order for 619 units of our Tata 6×6 high-mobility vehicle, which has cleared trials and competed against products from rival bidders. Going forward, we will focus on developing a comprehensive range of defence vehicles in India, including front line combat vehicles such as the FICV, to meet the evolving requirements of defence forces in India, and around the world.”
One of the largest US defence manufacturer, Lockheed Martin, who has a presence in India, is looking to manufacture its Miniature Hit-to-Kill (MHTK) missile in India, one of the smallest missiles in the world, intended to intercept artillery, mortars and rockets and UAVs. The missile will offer counter-rocket, artillery, mortar (C-RAM) and counter-UAV (C-UAV) capabilities. Jagmohan Singh, regional director, India, Sri Lanka & Maldives, Lockheed Martin India, said that the company is looking for an Indian partner who could manufacture the all-important illuminator system which helps track the target missile before launching the MHTK missile.
Display extraordinaire
The expo saw a brilliant display of artillery, guns, models of submarines, multi-level strategic deterrence, ballistic missile defence, nuclear powered submarines, main battle tanks, stealth destroyers, aircraft carriers and 4th generation fighter aircraft. The exhibition also had live demonstration of air display.
Our homegrown companies too displayed a splendid strength of equipment. Bharat Forge showcased an improved version of the homemade Arjun main battle tank and artillery guns besides the ultra-light Howitzer Dhanush artillery gun. Alpha Design Technologies had on show the Hermes 450, a multi role high performance tactical Unmanned Aircraft Systems (UAS), which has highly autonomous operation and ergonomic user interface to enable high mission effectiveness for any mission over land or sea with no piloting skills required. Besides this, the company had on show its indigenised solution for precise ammunitions, Lizard-IN, a part of the family of modular guidance kits used to convert general purpose bombs into precise strike munitions. Alpha Design’s chairman Col HS Shankar said the company would soon strike an agreement with Adani Aero Defence to produce military drones in partnership with Israeli firm Elbit.
BAE Systems showcased the conventional M777. Prateek Dabral, director, business development, said the cannon is one of few forerunners in a competition to sell towed artillery to India. BAE is teamed with Mahindra to carry out the production in India. Ashok Leyland displayed an advanced Truck Driving Simulator for the all-terrain Stallion 4×4 truck. Its other products on display include a Field Artillery Tractor (FAT) 6×6, a contemporary logistics vehicle – Rhino and an Ambulance 4×4. Addressing the crowd, Nitin Seth, president, LCV & Defence, Ashok Leyland, said, “Our vehicles, specifically designed for tough operating environments, offer the latest technology, and extend our legacy of manufacturing innovative and world-class logistics equipment. The FAT 6×6 on Super Stallion platform will function as a Common Gun Tower for all artillery guns. This versatile FAT provides the army flexibility in rapid deployment, and utilisation of artillery resources. We recently bagged orders of over 450 vehicles on Super Stallion platform from the Indian Army.”
Polaris India unveiled the DAGOR (Deployable Advance Ground Off-Road) and MRZR4 vehicles, and the company also showcased the Sportsman Big Boss 6X6 and Ranger 6X6 800.
what lies ahead
US-based companies were the largest participants at Defexpo 2016, with 93 participants, followed by Russia, with 71. Additionally, companies based in France, Germany, Israel, Italy, Russia, South Korea and the UK joined the 490 foreign participants from 47 countries.
Speaking to the media, Baba Kalyani, chairman at Bharat Forge, said that developing products for defence had so many advantages that once a company develops a series of platform technology it can be used for many products. What is important here is innovation. “We have so much of platform technology available, our focus right now is on artillery, armoured vehicles, which is a FICV (fighting infantry combat vehicle) programme and we need to get that through.” The chairman also added that the company is looking at a tie-up with Hunan for fuses and ammunitions. It already has a a tie up with AM General.
There was a general consensus among companies about the benefits they hope to accrue from the DPP announcement. Most Indian companies found themselves stonewalled in the past when they tried to bid for defence contracts. But now there is a way. However, for this sector to grow Indian companies need a bigger playing field than only contracts from the Defence Ministry. Kalyani said that with the new policy, Indian companies have a direction.
Singh of Lockheed Martin said the future in India is great for defence companies. The US giant plans to bring in more technologies to India to be able to make more platforms of artillery.
The deputy director general, Rosoboronexport, part of the Russian delegation, said that the company was ready to put forward its proposal of large-scale projects and was ready to partner with Indian companies coupled with technology transfers and organisation of joint and license productions. It hinted about its keeness to develop the Indian Navy’s Project 75 (I) submarines based on the latest Amur-1650 diesel-electric submarines.
At the Boeing press conference, recent reports have also suggested India is “keen to consider” the offer by Boeing to supply Indian Air Force with F/A-18 Super Hornet fighter jets. The four-day event heard several companies sign deals worth crores either with the government or with other companies they met with at the expo. The government seems to be keeping its part of the bargain when it said that Indian manufacturing is indeed set to take off.