The IDS deputy chief urged industry to develop
SMEs, to produce the components going into larger and more complex system.
The new
DPP is likely to liberalise defence procurement further. This conformed to
industry expectations, as it has been the trend in successive modifications to
the DPP in 2005, 2006, 2008 and the currently valid DPP-2011.
Matheswaran, the IDS Dy Chief, urged private industry to focus less on the high
value, high technology weapons platforms (eg, aircraft and tanks) on which the
big defence money is spent. Instead, he suggested, private industry should
emulate the automobile parts industry by setting up manufacturing units that
were part of a global supply chain. These small units would form the backbone
of a countrywide defence industrial base.
In the MoD’s planning,
such a defence industrial backbone is crucial for maintaining, repairing,
overhauling and upgrading the complex defence platforms that are currently
being bought from abroad and manufactured under licence in India.
“Rather than focusing on
large weapons systems integration and manufacture as the only way, I think we
need to break down the supply chain into many component parts, so that you
become part of a global supply chain. If you look only at the Indian military
as the only source of your order book, then you’re not going to have continuous
orders for any length of time,” said Matheswaran.
The IDS deputy chief
urged industry to develop small and medium enterprises, to produce the
components going into larger and more complex system that would eventually be
built by large conglomerates like the Tatas, L&T and the Mahindras.
Highlighting the
“enormous” opportunities for private industry, Matheswaran pointed out the
scope for India’s
capital expenditure to grow from its current Rs 80,000 crore. “Our defence
budget is still much less than the global average of three per cent of GDP. We
haven’t exceeded even two per cent of the GDP,” he said.
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