Indian Defence Ministers Hyper Outreach to Defence Industry Across the World
India’s Defence Minister Shri Rajnath Singh has travelled to five countries in the past two months or so and addressed defence industrial honchos in three of these seeking investments -money and technology in India.
He addressed a conclave of ambassadors of foreign countries in Delhi soliciting their active cooperation in collaboration with the Indian defence industry.
While DefExpo 2020 to be held in Lucknow in February seems to be the immediate trigger the larger objective is obviously assistance in building up India’s defence industry in a collaborative manner using foreign technology and funds.
Here is a review of the Outreach by Mr Rajnath Singh in September – November 2019 in the reverse chronological order-
Russian Defence Industry Outreach
The 19th India-Russia Inter-Governmental Commission on Military and Military Technical Cooperation (IRIGC-M&MTC) meeting, co-chaired by Raksha Mantri Shri Rajnath Singh and Russian Defence Minister General Sergey Shoigu was held in Moscow on 06 November. A day prior Shri Rajnath Singh called upon the Russian Defence Industry to jointly manufacture defence platforms and equipment with India that will give a massive boost to the nations’ exports to third countries. Raksha Mantri was addressing CEOs of Original Equipment Manufacturers (OEMs) from Russian Defence Industry after jointly inaugurating ‘India-Russia Defence Industry Cooperation Conference’ with Russian Minister of Industry and Trade Mr Denis Manturov in Moscow, Russia.
In his talks with the Russian Defence Minister Mr Rajnath Singh highlighted the importance of the Inter-Governmental Agreement on manufacturing of spares, components and aggregates in India through joint ventures that would reduce cost, timelines of supply and result in progressive indigenisation. This agreement is expected to provide a major boost to the ‘Make in India’ initiative.Responding to Raksha Mantri’s invitation, the Russian Defence Minister assured robust Russian participation in DefExpo 2020, to be held in Uttar Pradesh capital Lucknow between February 5-8, 2020.
The Russian side affirmed its readiness to operationalise the joint venture lndo-Russia Rifles Private Limited for the manufacture of world class Kalashnikov AK 203 rifles in India at the earliest.Both sides expressed satisfaction on the progress in implementing ongoing contracts concluded in the recent past. General Shoigu agreed to Raksha Mantri’s request to constitute specific working groups for after-sales support of key defence platforms.In his interaction with the Russian Defence Industry, the Raksha Mantri said, Government of India is encouraging OEMs to partner with Indian entities making use of the ‘Make in India’ initiative.
He urged the Industry leaders to make use of the significant economic reforms undertaken by the Government, under the leadership of Prime Minister Shri Narendra Modi, to improve ease of doing business and opening up the defence manufacturing sector for foreign participation.“We have set up defence corridors in Uttar Pradesh and Tamil Nadu and offer attractive terms for investment. India is ready to explore opportunities and co-production of high-end defence equipment with Russia. We want collaboration with you to modernise our defence platforms by advanced and emerging technology. Indian MSMEs seek footholds in the global supply chains with support from Russian and other foreign companies,” said Shri Rajnath Singh. He added that such industrial partnership can also address
‘After Sales Support of Equipment of Soviet or Russian origin’ already in Service with Indian Defence Forces.Raksha Mantri highlighted the Intergovernmental Agreement (IGA) on Mutual Cooperation in Joint Manufacturing of Spares, Components, Aggregates and other material related to Russian or Soviet Origin Arms and Defence Equipment that was signed between India and Russia on September 4, 2019 during the 20th India-Russia Annual Summit at Vladivostok. He said, the IGA defines broad framework of cooperation for manufacturing of spares in India by way of collaboration between Indian Industry and Russian OEMs.
This is an acknowledgement that India does not have the requisite technology base to support indigenisation despite some seminal achievements by the Defence Research Development Organisation (DRDO) in the strategic field.
Envoys Round TableOn 04-November
Raksha Mantri Shri Rajnath Singh chaired Ambassadors’ Round-table on DefExpo 2020 to brief the representatives of foreign missions based in New Delhi about the arrangements being made for DefEpo and elicit suggestions from them to further improve the experience. Heads of Missions and Defence Attaches of over 80 countries participated in the conference indicating the growing stature of the 11th mega biennial event, to be held in Uttar Pradesh capital Lucknow from February 5-8, 2020.Impressing upon the Expo’s sub-theme ‘Digital Transformation of Defence’, Shri Rajnath Singh said, digitalisation is the key to future security scenario as the spectrum of warfare is transiting from land, air & sea to cyber & space.
He said, DefExpo will demonstrate India’s ability in cyberspace and define its needs in the sector. “The challenge is not just to prepare for contingencies but also to repel threats from multiple sources and at the same time possess the ability to respond proactively if needed,” he added.
Raksha Mantri said, due to the policy reforms undertaken by the Government, defence production in both public and private sectors reached a record volume of Rs 80,502 crore in 2018-19. He set the target of Rs 90,000 crore for 2019-20. “We have achieved an export turnover of around Rs 10,700 crore in 2018-19, with the target of this year pegged at Rs 15,000 crore,” he added.
SCO and Uzbekistan
On 02-November speaking at the SCO summit of government leaders Mr Singh voiced the Government’s resolve of providing an enabling economic ecosystem for partner countries to invest and do business in India. He listed out various initiatives taken by the Government in this regard including relaxing FDI reforms, allowing 100 per cent foreign investment in coal mining and contract manufacturing, easing sourcing norms for single-brand retailers and approving 26 per cent overseas investment in digital media.
He invited SCO countries to enter into collaborative joint ventures in India, saying that significant work has already been undertaken towards improving ‘Ease of Doing Business’ in the country. Ironically the only SCO defence industry majors are China and Russia. In his next halt at Uzbekistan in interaction with the Minister of Defence of the country the first-ever Defence-Industry Workshop organised in Tashkent in September 2019 was highlighted amongst other issues.
India has also offered a concessional line of credit of USD 40 million for procurement of goods and services by Uzbekistan from India. The direct exchanges related to training, capacity building and education between the Armed Forces on both sides has also witnessed a significant upswing.
On 09-October, 2019 speaking in France after taking over the first Rafale, Raksha Mantri asked French defence industry to make India their production base and benefit from its vast market as well as export potential. Rajnath Singh said India and France intend to explore ways to strengthen their defence industrial partnership. Shri Rajnath Singh called upon the French companies for collaboration to modernise India’s shipyards and defence platforms by infusion of technology and asked them to make India its base for production of defence equipment not only for India’s large market but also for export to other countries.
“We have undertaken significant economic reforms to improve the ease of doing business and opening up the economy for investments. Our Government under the leadership of our Prime Minister Modi has opened up defence sector manufacturing to a large extent under the ‘Make in India’ initiative”, he said. Raksha Mantri Shri Rajnath Singh underlined the significance of implementation of a single Goods and Services Tax across India, the biggest tax reform since its independence. “We have recently reduced our corporate tax significantly. For ‘Make in India’ in Defence if there is need for further tax rationalisation, it may be considered suitably”, Shri Singh said.
Raksha Mantri applauded the French companies for regularly participating in DefExpos organised in India with great energy and enthusiasm. He extended a special invitation to French firms to participate in DefExpo, which will be held in Lucknow from February 05 to 08, 2020. “Lucknow happens to be a city of rich culture and heritage and the French people are known to be highly appreciative of great cultures. Lucknow is the capital of Uttar Pradesh which is also a land of new opportunities”, he added.
Raksha Mantri Shri Rajnath Singh highlighted India’s substantial requirement of Aero engines both in civil and military domains. He requested French OEMs to consider exploring development of an Aero engine complex on government -to- government basis saying French companies could leverage from advantages in India such as low wages and availability of technical manpower.
On 06 September Mr Rajnath Singh was in South Korea where he invited South Korean Defence manufacturing companies to invest in IndiaHe assured all necessary assistance to facilitate investment and joint ventures India and ROK formulate a roadmap to take bilateral Defence Industry co-operation forwardRajnath Singh invited the Korean Industry to explore the feasibility of local production of items, used in main weapon system, imported by Indian Defence PSUs.
He proposed setting up of a task force which identifies such items which are economically viable and locally produced in India resulting in reduction of import bill.“India offers tremendous business opportunity to Korean defence industries in India with liberalised licencing regime, attractive FDI provisions, strong and skilled industrial work force, single window clearances and establishment of Defence Investor Cell to facilitate investors and various other industry friendly initiatives”, said Shri Rajnath Singh.The CEO Forum was given detailed information about India’s initiatives to attract investments in Indian Defence Corridors from South Korea’s defence industries.
The Forum was jointly organised by Embassy of Indian and Department, Defence Production, Ministry of Defence (MoD).The senior government officials and industry leaders of both sides also held Business-to-Government (B2G) meeting in which they explained various investment opportunities available in defence corridors in Uttar Pradesh & Tamil Nadu and the upcoming DefExpo 2020.
In one immediate outcome of the Korean industry interaction, South Korean company Daewoo Shipbuilding & Marine Engineering responded to Indian Navy’s Expression of Interest (EoI) for six advanced conventional submarines under Project-75I.“ The responses by the Original Equipment Manufacturers (OEM) opened by the Indian Navy on Sept 24 included the Naval Group of France which is already involved in the `Scorpene’ submarine for the Indian Navy under Project-75; Navantia of Spain has offered S-80 (Issac Peral class); TKMS of Germany — Type 218 (Invincible Class), Rosboronexport of Russia for the Amur,” as per Financial Express.