DefExpo 2010: Partnerships towards Self-Reliance

In a greater focus towards capability development in Indian defence industry, the Raksha Mantri, Shri AK Antony has encouraged private Indian industry and foreign defence companies to form partnerships in critical technologies areas. Declaring the 6th edition of the biennial Land & Naval Systems Exhibition – DefExpo 2010 open (15-18 February) the minister said, “DefExpo India 2010 is an endeavour to showcase India’s capabilities in land and naval systems, as well as its emergence as an attractive destination for investment in defence sector. This is a demonstration of our ability to design, develop and deliver a wide range of military and civil products and services to meet stringent specifications at competitive prices. However, we can learn from each other and enter into mutually beneficial arrangements with friendly countries in the field of critical and futuristic defence technology. We welcome and invite support of the best in the world in our endeavour to modernise our Armed Forces.”

Reiterating India’s commitment to self-reliance and indigenisation in defence industrial capability, AK Antony said, “India must achieve a high level of indigenisation in defence. Our quest for self-reliance in defence underlines the importance of private sector participation on the one hand and in revitalising the public sector, on the other. We want the public sector and the private sector to work in close cooperation, as friendly partners. Our defence industry is open up to 100 per cent for Indian private sector, while Foreign Direct Investment is allowed up to 26 per cent.”

The minister added that with India’s defence expenditure about 2.5 per cent of its GDP and the economy expected to grow at 8-10 per cent for the next two decades, expenditure on defence in absolute terms was bound to increase in equal proportion. With industry estimating India’s arms spend at $100 billon (Rs 4,62,850 crore) over the next decade, DefExpo 2010 has reported a marked increase in the number of participants, with 650 exhibitors from 33 countries, a marked increase from 2008 with 447 exhibitors from 29 countries. Indian companies are also making their presence felt with 350 entries as against 208 in 2008.

The focus on indigenisation and capability development of Indian industries in the defence sector has been the consistent pitch of the Minister and his officials in the build-up to the exposition and in their message at the inaugural.

Speaking on the occasion, the Minister of State for Defence, Dr MM Pallam Raju said that the new category of ‘Buy and Make Indian’, introduced in the Defence Procurement Procedure (DPP) – 2009 will facilitate Transfer of Technology. He said that a defence acquisition roadmap with a 15 year future perspective – ‘Technology Perspective and Capability Roadmap’ – will soon be put up on the MoD’s website. The Request for Information (RFI) has been made mandatory for all acquisition cases, Dr. Pallam Raju said. “As a result of the steps that have been taken by the government in the recent past to reform the Indian defence sector, the atmosphere in India is now conducive for attracting more and more investments in Defence R&D”, he added.

The Secretary (Defence Production) Raj Kumar Singh says it all in a nutshell: “In capital acquisition cases categorised as “Buy and Make (Indian)”, the RFP will be issued to those Indian industries that have requisite financial and technical capabilities to enter into JVs, as also absorb technology and undertake indigenous manufacture. The procedure to be followed in this regard will be akin to the existing ‘Make’ procedure with a difference that the production and development by the Indian industry will be through ToT and not through R&D. I would urge the companies present here to use this opportunity to pursue tie ups and joint ventures as ‘Buy Indian’, ‘Buy and Make Indian’ and ‘Make’ will be the preferred categories with option of ‘Buy Global’ being resorted to only where equipment with requisite Qualitative Requirements are not possible to be procured through these methods in the required time frame.”

Earlier, speaking at a press conference ahead of the DefExpo, RK Singh indicated that the government will soon (in about two months) come out with an updated Defence Procurement Policy, under which it will place orders with companies that have invested in R&D, government encouragement coming by way of sharing the cost, a move that they hope will encourage the private sector to devote resources and time to developing important platforms for the armed forces.

The Def Expo was conceptualised in 1998 with an objective to promote defence exports from India and exhibit the capabilities of Indian defence R&D and production. The first exhibition was held in 1999 and subsequently in 2002, 2004, 2006 and 2008. Israel is the biggest participating country in terms of space occupied (1248 sq metres) while the United States is represented with the maximum number of companies – 25 in all. India’s Defence Research and Development Organisation – the DRDO – also has rented 1,400 square metres of display area and is comprehensively showcasing its products. The exhibition area has almost doubled from 17200 sq metre in 2008 to 30100 sq metre this year. Defence Ministers from UK, Bulgaria, Hungary, Nigeria, Turkey, Uganda, Senegal and Suriname along with official delegations from 41 countries will attend the deliberations. Naval Chiefs from Kazakhstan, Mozambique, Brunei, Qatar and Senegal and Army Chief from Mongolia will also attend the exhibition.

DefExpo 2010 has been organised this year by the Defenece Exhibition Organisation in a record two months, the host each edition. The CII, usually the event manager, pulled out citing paucity of time since the use of Pragati Maidan had been under question, what with the preparation for the Commonwealth Games later this year.

With defence offset contracts “valued over Rs. 8000 crores” having been signed so far, the exposition is an excellent platform for meeting prospective offset partners. Facilities for Business-to-Business (B2B) meetings between vendors have been organised. Vendors are expected to launch products too.

A series of seminars have also been scheduled during the exhibition in concert with the CII, FICCI and PHD Chambers of Commerce. The seminar on ‘The Indian Army next generation systems — an evolution’, on 16 February with key officials such as the Secretary, Defence Production; the Vice-Chief of the Indian Army; and the directors of the armoured corps, infantry, artillery and air defence is a highlight. A host of land systems companies, both foreign and Indian are represented at the DefExpo. New product launches such as the MPVI (Mine Protected Vehicle India) by the Defence Land Systems India (Mahindra-BAE Systems JV) have already been unveiled.

(Disclaimer: The views expressed in this article are those of the author and do not represent the views either of the Editorial Committee or the Centre for Land Warfare Studies).