Boosting Indigenous Development in Defence

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Boosting Indigenous Development in Defence

Mr. Kishore Jayaraman

President, Rolls-Royce, India & South Asia

India is at a crucial stage of transforming from a top regional player to one with global clout. Given the country’s geo-political and economic ambitions, it has prioritised indigenous development of modern defence hardware and technology.

To that end, the government has introduced several policy reforms including Strategic Partnership model, 100 percent Foreign Direct Investment (FDI), as well as Defence Procurement Policy (DPP) to promote defence manufacturing and help India meet its emerging defence requirements.

While the government has already set a target to reduce import dependence by at least 40 per cent, it needs to speed up the process of creating robust manufacturing capabilities and vibrant defence manufacturing ecosystem to realise its ambition for self-reliance and indigenisation.

5 steps to boost indigenisation

There is a need to balance the pace of indigenisation with both short- and long-term initiatives. Here are five suggested steps towards enabling long-term indigenisation of the skills, technology and capabilities:

Defined roadmap: Having a clear, consolidated roadmap of hardware requirements in the mid- to long-term would aid the manufacturing industries to scale production to match domestic requirements. This will also help the industries to keep in mind that production does not outrun demand.
Partnering for success: Co-development and co-manufacturing is the way forward for India to evolve into a global hub for high-value manufacturing, both for domestic as well as for export. While the country’s growing Aerospace & Defence industries offer immense potential for forming strategic partnerships across the whole value chain - R&D, manufacturing and supply chain - it will be necessary for the industry to quickly adopt the best practices for global quality standards and adopting emerging technologies.
Skilled talent pool: India is known for being one of the largest importers of defence equipment in the world. Clearly, a significant reduction on import dependence could directly create additional highly skilled jobs at the back of boosting local manufacturing. This calls for creating the requisite training facilities and the right teaching curriculum such that the talent that is recruited performs at an optimal level.
Robust supply chain: A strong supply chain is critical for a manufacturer looking to optimise costs. While few Indian small- and medium-sized enterprises are already participating in the global supply chain of original equipment manufacturers (OEMs), it is imperative for the government to create the enabling policies and regulatory incentives to attract more Indian companies and spur the growth of a robust defence manufacturing industry.
Infrastructure: The lack of adequate infrastructure raises India's logistics costs and reduces its competitiveness and efficiency. While the government is investing actively to improve the infrastructure, the pace of development needs to pick up considerably and public-private participation can go a long way in hastening this process.

Conclusion

It is well established that creating indigenous manufacturing capabilities in defence will not only reduce country’s dependencies on exports, but also encourage growth of allied sectors and enable overall socio-economic development by way of job creation.

While the good news is that India has already started the journey, it is important for OEMs, local industries and the government to work together to boost the process and overcome some of the roadblocks. This will ensure that the goals the country has set for self-reliance and indigenisation are met in a timely manner and to the fullest potential.

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