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Home arrow Defence arrow Govt Committed To Growth Of SMEs In Defence Sector : Pallam Raju
Govt Committed To Growth Of SMEs In Defence Sector : Pallam Raju Print E-mail
Written by Anand   
Thursday, 21 April 2011
New Delhi: Minister of State for Defence MM Pallam Raju assured that the Government is committed to help the growth of SMEs in the Defence sector. The new Defence Procurement Procedure 2011 aims to enhance the Potential of SMEs in Indigenization and to broaden the Defence R&D base in the country.

"We want the Private sector to play a more prominent role in the Defence sector. The Indian Defence Industry should blend creative thinking and Innovative approaches in producing high quality products," said Pallam Raju, Minister of State for Defence.

He was speaking at the 2nd National Manufacturing and Innovation Summit organized by the Indian Chamber of Commerce.

He said that the Defence organisations must work towards reducing the long gestation periods and cut down time and cost overruns. The Public sector should shed its reticence in working along with the Private industry and treat them as prospective partners. There is a need for maximum synergy between the various production agencies.

The value of offset contracts is likely to be more than Rs. 10,000 crores in the 11th plan. Twelve offset contracts valuing Rs. 9,943 crores have already been signed (Indian private industries Rs. 6,464 crores and DPSUs/OF's- Rs. 3,430 crores). More than 35 Indian companies, both in public and private sector, would be involved in getting the offset benefits. In addition, Rs. 4,818 crores are at CNC stage and Rs. 31,839 crores are at TOEC/TEC/RFP stage.

The new Defence Procurement Procedure 2011 aims to create conditions conducive for the Private Industry to take an active role in this endeavour. In addition to the Public sector, it is necessary to leverage technical expertise available in the Private sector towards achieving self-sufficiency in Defence Production.

He said that preference will be given to indigenous design, development and Manufacture of Defence Equipment. Wherever the required arms, ammunition and equipment are possible to be made by Indian Industry within the timeline required by the Services, Procurement will be made from Indigenous sources. In order to enhance the National competence in producing the state-of-art Defence equipment, all viable approaches such as formation of consortia, joint ventures and Public-Private Partnerships etc within the government approved framework will be undertaken.

Policies will be put in place to encourage Ordnance Factories, Defence PSUs and the Private sector to strengthen their Research and Development wings so that constant upgradation and improvement in systems under manufacture is possible. The government will set up a separate fund to provide necessary resources to Public/ Private sector including SMEs as well as academic and scientific institutions to support Rresearch and Development of Defence equipment/systems enhancing cutting edge technology. An annual review of the progress made in self reliance will be held by the Raksha Mantri.

The DPP relating to Ship Building has also been revised with the aim to encourage participation of Private ship Building Industry in India in Defence contracts and promote Indigenisation in warship construction.

The scope of Offset policy guidelines have been expanded to include Civil aerospace, Internal Security & training. The list of eligible Offset obligations will cover most aspects of Civil aerospace including aircraft, air engines, aircraft components, design, engineering services etc. A wide range of weapons & services for counter-terrorism have been included in the list of products under internal security.

"The depth and range of capabilities of the Indian Industry today offers great scope, due to availability of requisite skills and infrastructure for undertaking Defence production and Research & Development. The Private sector in India from being suppliers of raw materials, components and subsystems, have become partners and manufacturers of complete advanced systems. Some of our Private industries have become global players," Raju said.

The Indian aerospace industry is emerging as one of the fastest growing aerospace markets in the world. All segments including civil aviation, military aviation and space research are showing tremendous growth. According to Ministry of Civil Aviation, the Indian aerospace industry needs investment of between US $ 200 to 300 billion over 2009 - 2034.

The thrust now, in view of the tremendous growth of civil aviation sector, is on Modernization of Airports, Communication, navigation and Surveillance systems for Aircraft management and facilities for Maintenance Repairs and Overhaul (MRO) of Aircraft and subsystems.

India also represents a large and growing annual market for Air Defence equipment with major procurement of military Hardware and also for upgrading its Surveillance, Defence & strike capabilities.

"It is increasingly becoming the Ministry’s endeavour to create a level- playing field to both Public and Private sectors leading to an enhanced domestic defence capability and to see that greater opportunities are given to Indian entrepreneurs. The government is taking proactive steps to promote consortiums, joint ventures and public private partnerships with the aim to create better indigenous capabilities and thereby self-reliance in defence technologies," the minister said.

 
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