PSU defence-equpiment manufacturer Bharat Electronics (BEL) is ramping up internal R&D efforts and planning to fund advanced systems in a big way to boost exports, which were a modest $42 million in 2013-14.
In 2013-14, the company for the first time exported sonar systems, and now hopes to export coastal radar systems to two nations. For this, it has been in touch with the ministry of external affairs (MEA). With a relatively stronger R&D base and a close collaboration with DRDO, the company relies on indigenous technology for about 75% of its turnover, and on foreign technology for the rest.
The reason behind BEL’s optimism, sources said, is that it is expecting bigger export orders on account of offsets arising from contracts with foreign orginal equipment manufacturers (OEMs). BEL has established MoUs with several companies, including IAI & Elbit Systems of Israel, US-based defence giants Boeing, Lockheed Martin, Raytheon, Northrop Grumman, BAE Systems, for possible offset business arising out of various request for proposal (RfP) issued by the MoD.
Defence minister Manohar Parrikar said, “Several defence PSU and ordnance factories can outsource work to the private sector by identifying the industries, creating clusters, giving them work and increasing productivity. Indigenisation can be increased up to 70% from the existing 30% through this method.”
For this, the defence ministry is also streamlining its policy. “The policy is undergoing a change; it is being streamlined and it is one of our agendas in ‘Make in India’. That at least 8-10 projects are started every year. Once this happens, defence production and development will attain a critical volume which would be able to carry the industry forward,” said G Mohan Kumar, the secretary (defence production) while inaugurating 7th International Conference on Aerospace, Defence & Homeland Security’ organised by an industry chamber on Monday. “The MoD is seriously considering setting up a promotional body which would be able to assess the producers not only in bringing investments but also finding markets,” Kumar said.
Defence ministry officials say there is a need to instill confidence in defence PSUs and the Ordnance Factory Board for competing with the private sector. “PSUs have to leverage on the opportunities available in the private sector; they need to build partnerships with the private sector and become more efficient,” an official who did not wish to be named said.
According to a McKinsey report, for India’s defence export dream to come true, some critical supports are needed— especially talent availability, infrastructure, and sound regulation. The report said India will have to build its aerospace and defence expertise: though India is one of the world’s largest producers of engineers (about 350,000 per year), only about 4,000 or so are aeronautical experts.