The Bharat Chamber of Commerce (BCC) recently organised a national seminar and exhibition on ‘Defence Production: Public-Private Partnership – Focus Eastern India’, in partnership with the Department of Defence Production, Ministry of Defence, Government of India in the Westin Hotel, Kolkata. The inaugural session was attended by Dr. Ajay Kumar, IAS, Secretary, Department of Defence Production, Ministry of Defence, Government of India, who joined the event through a video conference and delivered the keynote address. The seminar was also attended by Rashmi Sinha, Joint Director, Ministry of Defence, Government of India. Saugata Roy, Member of Parliament (Lok Sabha) and Member, Parliamentary Consultative Committee on Defence also graced the event and delivered a special address on the second day. The other dignitaries who attended the programme included Air Chief Marshal Arup Raha, PVSM, AVSM, VM (Retd.), Former Chairman, Chiefs of Staff Committee and Chief of Air Staff, Vice Admiral Soonil Bhokare, AVSM, YSM, NM, Inspector General, Nuclear Safety, Indian Navy and Hemant Kanoria, Chairman and Managing Director, SREI Infrastructure Finance Limited.
The event was put in perspective by Sitaram Sharma, President, BCC. He recognised the role of the participants from the industry, which included the PSUs, private sector and most importantly the MSMEs in the development of the defence sector. Sharma spoke about the renewed emphasis on indigenisation of defence production and stated that it is a giant leap towards reforming the sector. He stated that this policy framed under the philosophy of ‘Make in India’ had inspired the BCC to organise the event. Outlining the objective of the event, Sharma emphasised that the seminar aims to promote the eastern part of India as a reliable defence manufacturing hub and also a prominent zone for the MSME sector, which is a front runner in the manufacturing of engineering products, leather, and garments. The MSME sector constitutes a major part of defence procurements. He also stated that in spite of India’s colossal expenditure on defence equipment, only a small portion of the existing equipment can be labelled as state-of-art. He observed that the market value of the defence sector is expected to hit`1,80,000 crore in the next five years and in that context, the newly documented policy on indigenisation of defence production through public-private partnership will open a plethora of opportunities for the private sector, especially the MSMEs, in participating in defence production.
Dr. Ajay Kumar, IAS, Secretary, Department of Defence Production, Ministry of Defence, Government of India in his address entitled ‘Building Defence Industry Ecosystem in India’, stated that India is currently the largest arms importer in the world. He felt that the time has come to change that status and informed that it can only be achieved by effective indigenisation of defence production. He highlighted that Mexico is following an assertive policy of exporting 90% of the aero-components produced by it to the US and to other European countries. He observed that India too can move to a specialised approach in producing goods fit for defence procurement. Speaking on the recent perspectives of indigenised defence production, Dr. Kumar stated that more than 170 items has been de-notified in the last four months. He further stated that as many as 50 proposals have arrived from the MSMEs, including startups under the ‘Make II’ Defence Procurement Procedure over the last six months. Speaking on the simplified ‘Make-II’ procedure, Dr. Kumar stated that this procedure, under the ‘Make in India’ programme, was cleared by the Defence Acquisition Council to encourage greater participation of the industry in defence production. He felt that this procedure will be able to usher in innovation and bring down imports simultaneously. Dr. Kumar highlighted that the Innovations for Defence Excellence (iDEX) ecosystem launched by the government is committed to foster innovation and technology development in defence and aerospace by engaging industries including MSMEs, Startups, R&D institutes, etc. He also added that the Defence India Startup Challenge launched by the Indian defence ministry is aimed at increasing greater participation of the startups in defence production. He also informed that Russia is eyeing to set up a facility for producing defence components in India and about 15 companies has been identified by the Russian OEMs for joint ventures (JVs). He further informed that to support investment in the country’s defence industry, a committed investment cell has been assigned to the defence sector.
Hemant Kanoria, Chairman and Managing Director, SREI Infrastructure Finance Limited also spoke in the event. He observed that the private sector has played a pivotal role in revolutionising infrastructure development in India. He stated that in the last three decades, around $ 500 billion has been invested by the private sector in this particular domain. However, he felt that there trust issues which have held both the private sector and the defence department from partnering in defence production and it is high time that both the entities got over the obstacles. Referring to the incidences of indigenisation by the Indian defence sector, Kanoria observed that in a span of seventy years, the Indian Navy has been successful in indigenising most of its equipment. He also added that the Indian Air Force and the Indian Army still depend highly on foreign equipment and should move towards procuring indigenised equipment. Kanoria also referred to his suggestion of a defence offset fund which is being considered by the government for implementation. He stated that setting up a semi-registered offset fund will enable the foreign Original Equipment Manufacturers (OEMs) to transfer a part of their offset obligations to this fund which in turn, will be utilised to provide equity support to the MSMEs. His second suggestion rested on the capacity building initiative of the DPSUs and the ordnance factories in partnership with the private sector. He stated that such an arrangement will further improve the existing capacities and will compensate for the existing capital crunch.
Air Chief Marshal Arup Raha, PVSM, AVSM, VM (Retd.) began his address by highlighting the need for creating and absorbing critical technologies related to strategic industries, especially in defence. Outlining the effort put in making India self-reliant in defence production, ACM Raha (Retd.) stated that in spite of the government’s honest efforts in establishing advanced defence production facilities and labs in the last seven decades, India still continues to import most of its high-end equipment. Speaking about the global distribution of economic and military power, Raha observed that the epicentre of global economic and political affairs has shifted to the south and south-eastern part of Asia from the West. He further observed that in the post-Cold War period, European countries are enjoying more peace and better political stability and hence are reluctant to fund the military aspirations of the NATO. In such a situation, these countries are downsizing their own defence forces and are looking for global partners who can help them build equipment for sale in war-torn countries like Iraq and Afghanistan. He stated that such hotspots are located in Asia and India has been identified as a reliable hub for manufacturing defence hardware and for setting up of Maintenance, Repair and Overall (MRO) facilities.
Vice Admiral Soonil Bhokare, AVSM, YSM, NM commenced his Address on ‘Public-Private Partnership towards a Common Goal’ highlighting the relevance of the ‘Make in India’ initiative in creating a robust and competitive defence industry. Speaking on the importance of a public-private partnership in this domain, Vice Admiral Bhokare stated that co-existence of the public sector’s large infrastructural facilities and the private sector’s corporate acumen and access to global markets is necessary to support this process. Speaking on the indigenisation drives of the Indian Navy, Vice Admiral Bhokare stated that indigenously developed destroyers and submarines are at par with that of the advanced countries and very soon India is going to have an indigenously designed aircraft carrier. He emphasised the need for improving the intellectual domain and creating a sustainable production base for cost effective and timely delivery of defence equipment. He also emphasised the need based delivery of defence equipment and the private as well as public sector’s involvement in modernising the armed forces.
The exhibition which was an integral part of the event drew the attention of the visitors. The programme also honoured war heroes and women relatives of martyrs. War heroes from the Indian Army included Sepoy Nitai Chandra Mandal and Naik Tapan Kumar Sadhukhan. From the Indian Navy, Lt. Cdr Shambhu Biswas (Retd.) and Sub Lieutenant Arup Kumar Bandhopadhyay were honoured. War heroes honoured from
the Indian Air Force included Group Captain Somendra Kumar Roy (Retd.), Wing Commander D J Kler (Retd.) and Ex Sergeant Sukumar Ghosh.