Technoglitch
Core Member
Indian companies—big and small, known and unknown—want a piece of the defence equipment business and have applied for industrial licences from the ministry of commerce to locally manufacture military equipment, including airplanes and warships.
The list of companies, now up on the website of the ministry, makes for interesting reading.
For instance, among the applicants is telecom infrastructure company Himachal Futuristic Communications Ltd (HFCL), as famous for its outrageous bids for telecom licences in the late 1990s as for its run-ins with the stock market regulator. Both are now behind the company, which is seeking an industrial licence to make airplanes, weapons and ammunition.
Anil Ambani’s Reliance Group and the Adani Group’s Adani Defence Systems and Technologies Ltd are the latest to enter the race.
The scramble is partly the result of Prime Minister Narendra Modi’s emphasis on defence equipment as part of his Make in India campaign.
“We are reforming our defence procurement policies and procedures. There would be a clear preference for equipment manufactured in India… We are expanding the role of the private sector, even for major platforms,” he said in February.
India is the world’s largest importer of defence equipment, according to Stockholm International Peace Research Institute. It spends around $24 billion a year on defence equipment.
Another reason for the rush is offsets—a policy that requires any foreign arms manufacturer securing an order worth more than Rs.300 crore from India to source components worth 30% of the value of the order from India.
The offsets opportunity is expected to be worth $15 billion in the next 10-15 years, assuming that several proposed purchases are completed on time, according to KPMG.
Tata to Tebma, everyone wants a piece of India’s defence business - Livemint
The list of companies, now up on the website of the ministry, makes for interesting reading.
For instance, among the applicants is telecom infrastructure company Himachal Futuristic Communications Ltd (HFCL), as famous for its outrageous bids for telecom licences in the late 1990s as for its run-ins with the stock market regulator. Both are now behind the company, which is seeking an industrial licence to make airplanes, weapons and ammunition.
Anil Ambani’s Reliance Group and the Adani Group’s Adani Defence Systems and Technologies Ltd are the latest to enter the race.
The scramble is partly the result of Prime Minister Narendra Modi’s emphasis on defence equipment as part of his Make in India campaign.
“We are reforming our defence procurement policies and procedures. There would be a clear preference for equipment manufactured in India… We are expanding the role of the private sector, even for major platforms,” he said in February.
India is the world’s largest importer of defence equipment, according to Stockholm International Peace Research Institute. It spends around $24 billion a year on defence equipment.
Another reason for the rush is offsets—a policy that requires any foreign arms manufacturer securing an order worth more than Rs.300 crore from India to source components worth 30% of the value of the order from India.
The offsets opportunity is expected to be worth $15 billion in the next 10-15 years, assuming that several proposed purchases are completed on time, according to KPMG.
Tata to Tebma, everyone wants a piece of India’s defence business - Livemint
