FDI in defence won't expose India to external threats: Air Chief Marshal (Rtd.) S. Krishnaswamy

Bidhu Bhushan Palo | @TheDollarBiz

Former Air Chief Marshal S. Krishnaswamy (Speaking at the conference); Dr. G. Satheesh Reddy, Outstanding Scientist and Director, Research Centre Imarat, Defence Research and Development Organisation (DRDO) (seated)

  Questions pop up faster than answers when it comes to manufacturing in defence and aerospace in India. However, one theme that brought together all the participants at International Conference and Exhibition on Defence and Aerospace Technologies which concluded in Hyderabad, India yesterday was: “We mean business”. The message was clear even from former Air Chief Marshal (Rtd.) S. Krishnaswamy. Speaking about concerns on national security due to FDI in defence, he told The Dollar Business, “FDI will strengthen India’s defence sector. Indian defence forces are capable of building firewalls to ensure the country’s security.” He added that there are many apprehensions which are unnecessary and FDI is a step in the right direction.

“Let’s provide orders for entrepreneurs and see the difference,” says Ex Air Chief S. Krishnaswamy

Mr. S. Krishnaswamy specialised in Electronic Warfare (EW) and raised and commanded the first EW Squadron of the Indian Air Force. He said that there is a long way to go in developing India’s defence manufacturing capabilities and FDI will help immensely. However, he added that other aspects that are equally important are marketing, and interaction between the industry, research organisations, government and the market. Mr. S. Krishnaswamy also said that most of the fears arise out of lack of communication and appealed to the government to begin an open dialogue and involve all stakeholders in addressing the yawning gap between demand and supply in the defence manufacturing sector in India. Participants from the private sector also welcomed FDI in defence. Comsat Systems Private Limited told The Dollar Business, “It is regulatory procedures at home that we are worried about. Some government organisations import products at a much higher price when a comparable product is available here. We hope the new government changes this soon and encourages MSME companies in this sector.” According to an Ernst & Young report, around 70% of India’s defence equipment is either obsolete or close to it. Moreover, the demand for electronics and other equipment for defence and aerospace is expected to grow exponentially in the coming years. This was reiterated by Dr. G. Satheesh Reddy, Outstanding Scientist and Director, Research Centre Imarat, Defence Research and Development Organisation (DRDO), Hyderabad. According to Dr. Reddy, there is a huge demand for several products and there are very few players (mostly less than three) in such products now. He said that opportunities exist in the development of Inertial Sensors, Hemispherical Resonating Gyros, Very High Accuracy Accelerometers, Navigation Systems, Radome Technology, Embedded Computers, Radar Seekers and High Accuracy Magnets.

(L-R) DRDO's Mr. S.V. Narasaraju (Technical Officer) and Mr. V.V. Subrahmanyam (Scientist) with a scaled down version of BrahMos cruise missile. Some countries are in talks with DRDO on purchase of the missile from India

Dr. Reddy told industry representatives, “There is no competition between DRDO and the private sector. Come to us and we will guide you on developing products. There are also plenty of futuristic plans with DRDO to help grow the sector which we are willing to share.” However, he added that companies should not become mere sub-contractors but develop in-house expertise and capabilities. At present, the demand for defence equipment and products in the Indian market is estimated at around $250 billion, and a much bigger market exists in exports. While these shortages along with regulatory concerns seem overwhelming, it also presents a huge opportunity for manufacturers in India and for the “Make in India” campaign. Experts at the conference said that skills in India are at par with the best in the world and the proposed institute for Aerospace studies by the GMR group will augment India’s efforts to become self-reliant in the sector. P.S. Nair, CEO-Corporate, Airports Sector, GMR Group, said that talks are on to develop a PPP model based on the Moroccan Aerospace Institute (IMA) in Hyderabad. “The institute has helped make Morocco a manufacturing hub for Aerospace industries, with around 100 companies beginning operations in the last 10 years there.” He urged the Indian government to bring the sector under the National Skill Development Corporation (NSDC). This is the first time that such an event has taken place in India, and which saw participation from the government, defence, research and private sectors. The Telangana government has announced that the conference will now become an annual event to help make Hyderabad a Defence and Aerospace manufacturing hub. It has also promised single-window clearance for all foreign companies interested in investing in the state.