Ambitious Indian defence firms for 'long term strategy' to explore international markets for arms

Close to 70 per cent of India’s military hardware requirement is import-dependent and in foreseeable future, its import-export ratio may not get balanced out. However, that doesn’t stop the indigenous defence industry from aiming bigger, their spirits especially fuelled by the high-octane ‘Make in India’ drive of the government.

Besides catering to the needs of country's defence, the Indian firms are also seeking a long-term strategy from the government for identifying international markets for military hardware export from India, on the lines of countries like the USA, Russia, Israel and others. This, they believe can be explored based on country’s national interest and long term strategic partnerships.  

This is one of the elements of the wish- list that the industry has expressed before the senior MoD officials. With the two sides holding regular closed-door meetings ahead of a revised defence procurement procedure (DPP ) being worked upon, at least two people privy to the discussions told dna on condition of anonymity that domestic companies think of  international markets in terms of  a long-term business viability for their investments in production facilities. 

The industry also wants to avail the Defence Research and Development Organisation (DRDO) labs and other state-run facilities for R&D, testing and making prototypes against stipulated payments for using them, to reach to that advanced stage where they could make world class arms. 

Experts believe that products like Airborne Radar systems, missile systems, naval systems, naval ships, armoured protected vehicles are some of the areas where Indian firms can look to work for long term export prospects. They too, however, sound caution over the existing situation where dependence on import is high.

Currently, only a little over 30 per cent of the defence procurement is from domestic industries and the government intends to increase this up to 70 percent in the next five years.

The MoD which  is working on a new ‘simplified and time bound DPP that is due to be released in coming months, has been lending a good ear to industry demands, dna has learnt from sources, but the immediate focus is on other issues. These include easing the blanket ban on blacklisted firms and formalising the engagement of ‘middlemen’ in procurement, to make the process transparent and easy, besides softer offset business obligations for indigenous companies, especially payment terms and conditions.

Besides, the indigenous firms stand to benefit from the government’s preference in procurement being given under the ‘Buy Indian’, ‘Buy and Make Indian’ and ‘Make’ categories of defence industries over ‘Buy Global’ category.