Category — Defense/ Security
According to a report by Federation of Indian Chambers of Commerce and Industry and financial services firm Centrum Capital Ltd., India’s defense spending is expected to hit $620 billion between fiscal years 2014 and 2022. Driven by both domestic and external demand, the annual opportunity for Indian companies, both public and private sector, is expected to reach $41 billion by fiscal year 2022 .
The report, released this month, noted that the government has consistently underspent vis-à-vis budgets approved, mainly due to procedural delays. The majority of monies spent was for maintenance and paying salaries of the armed forces rather than for buying new equipment. “This anomaly is being taken very seriously by the government, which is planning to shift the current operating expenditure : capital expenditure ratio of 60:40 to 50:50 and eventually take it to 40:60 in the long term. Policy level changes in the past 2-3 years are considered positive by industry players,” the report noted.
The report mentioned key positive factors for the projected growth:
- large and relatively low cost engineering talent pool
- comfort of Western nations with India from a geo-political perspective
- IT sector growth benefits with the nature of warfare becoming more software intensive
- renewed focus from the government on streamlining policies and cultivating a conducive investment climate
- government incentivizing research and development
- promotion of defense and aerospace exports through an export promotion body
“However, India will have to significantly improve on some other factors (technology, lack of a defense manufacturing ecosystem, etc.),” the report added.
Sandeep Upadhyay, senior vice-president and head infrastructure solutions group at Centrum Capital, said he believes the Indian defense sector is at an inflection point and poised to grow at a sustainable high rate in the next decade.
February 27, 2015 No Comments
Reuters, citing defense sources, reported that Prime Minister Modi had summoned a meeting of the cabinet committee on security on 16 February to approve construction of seven frigates equipped with stealth features to avoid easy detection, and the government cleared an $8 billion plan to build India’s most advanced warships.
Under the ”Project-17A” , four stealth frigates will be built at naval shipyards Mumbai and three in Kolkata. “Project 17-A was awaiting cabinet clearance since 2012,” a defense source said, adding the Modi government was moving quickly on a project seen as of critical national importance.
The Times of India said the government had also approved six nuclear-powered submarines for a further $8 billion. After the cabinet committee for security approval, technical parameters or naval staff qualitative requirements (NSQRs) will be drafted for the over 6,000-tonne submarines. These are likely to be constructed at the ship-building center in Visakhapatnam in the eastern coastal state of Andhra Pradesh where India’s first three nuclear-powered submarines with nuclear ballistic missiles are being built.
February 25, 2015 No Comments
Inaugurating US-based General Electric’s first multi-modal manufacturing plant in India, Prime Minister Narendra Modi pitched his Make in India campaign and invited GE to manufacture ships in India. Modi said, “The opportunities for manufacturing in India are immense. We are blessed with demographic dividend.”
The $200 million new plant is as much path-breaking for India as it is for the 136-year-old GE. It is the result of thinking that began within GE about three years ago: How can the company harmonize its various operations for better economies of scale and better use of capital? The answer was a multi-modal facility. The unit will manufacture a range of diversified products for sectors like energy, aviation, and oil and gas transportation.
Salient Features of the Facility
- Employment opportunities for over 1500 people
- Currently comprising over 25% female employees
- Covering an area of 68 acres
- 250,000 square feet, scalability potential to 1 million square feet
Sharing his comments, John G. Rice, vice chairman, GE said, “Today signifies a proud milestone for GE in India and the next step in our technology and innovation partnership, a journey that started over 110 years ago. Our operations here in Pune help us to compete locally and globally and play an important role in the resurgence of India’s manufacturing sector and in the country’s growth and development.”
February 22, 2015 No Comments
In India’s first helicopter competition reserved for domestic defense companies to produce a light utility helicopter (LUH), Larsen & Toubro has teamed up with Airbus Helicopters; Tata Advanced Systems with Sikorsky Aircraft; Mahindra Defense Systems with Bell Helicopter; and Punj Lloyd with Russian Helicopters. State-owned Hindustan Aeronautics also is negotiating a tie up with Russian Helicopters.
When the Modi government came to power in May 2014, it canceled a 2009 global re-tender to purchase 197 LUHs and instead issued the RFI only to domestic defense majors as part its policy to build domestic industry capabilities.
The domestic companies were required to respond by February 17 to a request for information (RFI) they received last October to provide the helicopters on a “Buy and Make” (India) basis in the $2.5 billion tender.
DefenseNews reports that the RFI describes purchase of 197 LUHs — 133 for the Army and 64 for the Air Force — though an air force official said that India required more than 400 light utility helicopters.
February 22, 2015 No Comments
Phil Shaw, chief executive of Lockheed Martin India told Defenseworld.net that tail sections of C-130 aircraft for Lockheed Martin’s global customers are being made in India at the joint venture facility they have with Tata Advanced Systems in Hyderabad.
He further commented that if international companies treated their 100% owned Indian subsidiaries as Indian companies, it would help bring in investment, technology and develop domestic human resources and intellectual capital.
Shaw also disclosed that one of the successful initiatives of Lockheed Martin to develop technology in India was the India Innovation Growth Program, run jointly by Lockheed Martin and India’s Department of Science and Technology, along with FICCI, a trade group. This program aims to enhance the development of India’s entrepreneurial economy by accelerating innovative Indian technologies into markets in the U.S. and around the world.
February 22, 2015 No Comments