India needs to take bold steps in FDI policy for the defence sector. Additionally offsets obligation should be instrumental in inviting technology to India, said Air Marshal PK Barbora PVSM VM ADC, Vice Chief of the Air Staff He was speaking at the 4th international Conference on Energising Indian Aerospace Industry: Partnerships, Opportunities & Challenges organised jointly by the Confederation of Indian Industry (CII) and Centre for Air Power Studies. He further stated that India needs national defence policy wherein global interdependence can be leveraged in the most optimal way. The private sector must be allowed a freer hand with accessible overseas market with a few regulations. A consortium approach must be formulated to facilitate global partnerships and Joint Ventures.
 
He added that hurdles in the system should be curtailed by having an indigenous approach towards development of defence industry. Initial steps can be taken by establishing MRO facilities, strengthening intellectual property rights, streamlining support infrastructure, quality controls and facilitate technology transfers, etc.
 
Marshal of the Indian Air Force Arjan Singh, DFC released a report titled, ‘Enhancing role of SMEs in Indian Defence Industry’, prepared by CII and Ernst & Young. As per report, currently there are over 6,000 SMEs supplying around 20–25% of components and sub-assemblies to Defence Public Sector Undertakings, Ordnance Factories, DRDO and the armed forces. With opening up of the defence sector and the leading industrial houses such as the Tata Group, Godrej & Boyce, Bharat Forge, Larsen & Toubro, the Mahindra Group, Kirloskar Group , Samtel and other companies ramping up their aerospace and defence capabilities, its likely that there would be increased opportunities not just for the existing SMEs to scale up but for new SMEs to explore business opportunities in this sunrise sector.

Marshal of the Indian Air Force Arjan Singh outlined that Coordination between industry and air force has been lacking, and the manufacturers and designers must be apprised about user success-ability. Expressing need for an effective defence sector, he further stated that India is in a peculiar position, as the forces surrounding us are building against us, and combination of these forces shows a bigger problem. Thus peace can be achieved by building defence and ensuring security for the people.

Mr. Ashok Nayak, Chairmal, Hindustan Aeronautics Limited (HAL) said that HAL aspires to be listed amongst the top twenty global defence companies with a turnover of $6 billion in the coming 10 years. This would call for a five fold increase in production requirements as the company at present holds 34th position with a turnover of $2 billion. The growth in India’s aviation sector will act as an opportunity for HAL to meet its growth objectives.

Mr. William Cohen, Former Secretary of Defence, United States of America stated that the first step towards modernisation is to determine the systems needed in the backdrop of existing and future threats. India needs to construct an architecture that can help establishing its defence capabilities.

Air Commodore Jasjit Singh AVSM VrC VM (Retd), Director, Centre for Air Power Studies stated that the conference provides a strategic opportunity for the industry to partner, and the foreign companies to explore opportunity for working with Indian counterparts.

Mr. Satish Kaura, Co Chairman, CII National Committee on Defence & Aerospace, Chairman and Managing Director Samtel Group stated that Indian Defence budget for 2009-10 is $31 billion, and expected to reach $100 billion mark in the next ten years. The Government of India has been undertaking initiatives to encourage participation by the private sector. The recent amendments to the DPP 2008 is a welcome step. Apart from defence, as the India economy grows, civil and cargo aviation has recorded CAGR of 18% and 9.9% respectively. Huge opportunities exist for maintenance and repair, avionics, communication systems, control system design, software design among others.

New Delhi
19th November 2009