Leveraging the liberalised defence production policy and the offsets clause governing imports of military hardware, micro, small and medium enterprises (MSMEs) can look at making components for the sector provided they are in it for the long haul and adopt disciplined manufacturing processes, experts said here on Friday.
“In the last two years, the government has initiated real process of facilitating entry of private sector into defence production like allowing foreign direct investment upto 49 per cent,” Sanjay Garg, joint secretary, Department of Defence Production, Ministry of Defence said.
He was here to inaugurate the conference on Defence Manufacturing Technologies -Defence Indigenisation – Window of Opportunities organised by the Confederation of Indian Industry (CII).
According to Garg, a lot of processes had been simplified and offsets were an opportunity for MSMEs to cash in on.
He said exports of defence components have grown.
Speaking at the event, Jayakar Krishnamurthy, Conference Chairman and Chairman and Managing Director of UCAL Fuel Systems Ltd said the defence sector offers a great opportunity for Indian industry as the spend on this sector is around $50 billion.
He said the country’s defence budget has grown 12 per cent in the last eight years.
According to Krishnamurthy, domestic production assumes importance now since the days of a foreign company being a strategic partner for an Indian company are over.
He said Japan will be a major force in the international defence market.
According to S. Rangarajan, CEO, Data Patterns (India) Ltd, defence production is a long-term game that needs lots of discipline on the part of MSMEs.
“The order size may be small and may be irregular. Further there is no compromise on quality. The MSMEs should be process and systems oriented,” he said.
Expressing his dismay at institutes of higher education not showing great interest in defence research, P. Sivakumar, director, Combat Vehicles Research and Development Establishment said the industry is also reluctant to support research owing to small orders.
This, he said, was one of the stumbling blocks for increased localisation of defence components.