Commander Ramesh Madhavan (Retd) is a veteran of 22 years of service in the Indian Navy. He is a missiles specialist with hands-on experience in maintaining and managing new-generation missiles that were developed in the early 2000s. This includes the maiden BrahMos Installation & Integration, LRSAM and SLBMs. Commander Madhavan (Retd) is an alumnus of IIT Delhi, having completed his Post-Graduation in Controls Engineering.
Remarkably experienced in managing technology initiatives and aiding their strategic development, he is currently Co-founder & Vice President of Tunga Aerospace. Manufacturing Today spoke with him about his views on turning India into a defence manufacturing hub.
India’s Defence Manufacturing Sector: What are the challenges and opportunities?
India has consistently been one the largest importer of arms/ammunition in the world. Currently, India is possibly the 2nd largest military spender in the world. The allocation of India’s defence budget for fiscal 2023-24 has been enhanced by 13 per cent to INR 5.94 lakh crore, with a fair part of it allocated to Indian Manufacturers. The Ministry of Defence estimates potential contracts worth around Rs. 4 lakh crores for the domestic industry in the next 5-7 years, which presents a huge opportunity for the Indian defence manufacturing industry.
We are consistently seeing a strong push by the Government towards making India a Global Drone Hub by 2030. Drone imports have been banned, and the Armed Forces have been asked to look inwards for their requirements. The ongoing Ukraine-Russia war is throwing up plentiful use cases of drones in war. We can be that cost-efficient producer of advanced technology UAVs for the world because of our inherent cost base and availability of talent. But this cannot be done in a silo. There are several challenges ahead ranging from limited research and development investment, limited testing facilities, lack of global quality fabrication facilities especially in carbon fibre materials, no industry support for optical sensors / opto-electronics.
With the launch of the ‘Atmanirbhar Bharat’ initiative, there has been a remarkable rise in the drone manufacturing sector and demand is consistently increasing from all sectors, including the defence. The Army primarily requires drones for Identification, Surveillance & Reconnaissance operations. Drones are also proving helpful in providing logistics support in inaccessible regions. The Indian Army is also keenly looking at Swarm Drones and Loitering Munitions to encounter future security challenges.
What is the need to focus on indigenous production? And what factors are favourable to domestic defence production?
The prime objective of indigenous development is to become self-reliant. Besides reducing our import bill & creating job opportunities, this would help in achieving strategic military superiority because we are no longer dependent on someone for our defence. The Self-Reliance Index Ratio of indigenous content of defence procurements to the total expenditure on defence procurements of India is relatively low at 0.3. India is the second largest defence importer making up 9.2% of global arms imports. This should reduce significantly with indigenous production.
One of the major favourable factors for the domestic defence industry is the volume of the defence sector and potential growth in the coming years. Further, continuous support by the Indian government to the startups and entrepreneurs with helpful programs and initiatives working as a boon for manufacturing growth. As a result, numerous micro and small industries are emerging across the country, extending the potential in defence manufacturing. With a country resourced with inexpensive physical capital and plentiful skilled work force; the ecosystem is favourable for domestic defence production.
What steps have been taken by the Government for the sector?
The Government has taken various initiatives to promote defence manufacturing which also includes establishing Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu. Investments of nearly INR 24000 Crores has been envisaged by the year 2024. To promote the drone manufacturing sector, the Government has taken several steps which includes simplifying Drone Rules 2021, introduction of Production Linked Investment Scheme for drone manufacturing segment and banning of drone imports. The Digital Sky platform launched by the Government has simplified application process for licences to operate and manufacture. The PLI scheme for drones and drone components has been announced with an initial outlay of INR 12 Crores for two years. The Government has launched several schemes such as the Kisan Drone, Drone Shakti, SVAMITVA to promote drone operations in India.
What is the role of Private Participation in Defence Manufacturing?
The Defence Industry sector, which was earlier reserved only for the public sector, was opened up for 100% Indian private sector participation in 2001. Over the years, more than 300 private companies have received industrial licenses and more than 100 of them have commenced large scale operations as well. At present, approximately 68 per cent of capital expenditure budget for the defence sector has also been reserved for domestic procurement.
As far as participation of private firms in the Defence Drone sector is concerned, with the modernisation of the armed forces and emerging security threat across the border line, there is a huge demand of indigenous drones to support the armed forces.
What is the way forward?
To make India a Global Drone Hub by 2030 is already on the agenda of the current Government. The total annual turnover of the drone manufacturing industry is set to increase from ₹ 60-80 crore to ₹ 900 crore by the financial year 2024, which is a green signal for the defence drone manufacturing industry. Moreover, with technological advancement, several niche use-cases of drones can be expected in the security applications. India is yet to see 100% indigenised components being used in the Indian drones, which should eventually happen with increase in demand. Similarly, we can also anticipate competitive prices with increase in volumes and competition.
Please do note that domestic manufacturers of small category drones have already taken the lead to meet the requirement of the armed forces. However, longer endurance & larger drones capable of operating at higher altitudes, are only being developed by the DRDO/Defence PSUs or foreign companies in a tie-up with domestic partners. We are sure that is a matter of time before the Indian Private sector steps into this segment as well.
Can you provide an overview of Tunga System’s role in the defence industry, and how it has evolved over time?
TUNGA was set up by the founders who had a vision to make India a world leader in the UAV technology space. They were inspired by the nation’s clarion call for Atmanirbhar Bharat. Today, we are an OEM delivering top of the class, technologically advanced UAVs for various enterprise and military applications. We are a DPIIT recognized deep technology start-up with core expertise in design, development and manufacture of autonomous drones. Our Centre of Excellence at IIT Madras Research Park has a state-of-the-art design centre and has some of the most talented design engineers. We are DRDO Approved Industry Partners for Design, Development and Product (DDP) of Tactical UAVs. We are DGCA authorized manufacturers of UAV Systems and our production facility is established at One Hub Industrial Part, in the southern suburbs of Chennai.
We believe in understanding the actual need of the armed forces and help them to solve their problem with the latest technology. We collaborate with premier technical institutions like IIT Madras, IISc Bangalore & HCL Technologies to make our drones smarter. Our products are customized for the clients’ requirements, tested rigorously and validated by various labs to ensure quality.
What are some of the challenges and considerations when designing and manufacturing defence and aerospace products, and how do you address them?
The foremost challenge in designing for the defence & aerospace sector is lack of clarity in the requirements of a product. The clients naturally expect specifications that are available in foreign products, while the Indian R&D and manufacturing eco-system is still a few steps behind. In such instances, we approach the user to understand his exact use-case.
Another challenge in this sector, is the limited volumes to manufacture a cost-effective product. I think once the Indian industry is confident of the meeting international competition, then the market size would be significantly larger considering exports.
Last but not the least, it is always challenging for any start up to break-through in a market, which is already used to foreign products, both in terms of features and prices. However, it is only with challenges that winning technology emerges, which is in the best interests of our country.