• Saturday, December 14, 2019

India to invest US$ 100 billion in 5 years to replace half of its defence equipment

Discussion in 'Indian Defence Forum' started by SR-91, May 18, 2016.

  1. SR-91

    SR-91 FULL MEMBER

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    India is in the process of replacing 50 percent of its ageing defence equipment, and is expected to invest over US$ 100 billion (Rs 6,700 billion) over the next five years in capital equipment purchases across air force, navy and army. India and other emerging markets are expected to generate aircraft demand estimated at US$ 5 trillion (Rs 335 trillion) in the next 20 years. According to a joint ACMA-KPMG study, 70-80 percent of the defence equipment cost is used in maintenance and upkeep, an opportunity worth Rs 20,000 crore, growing at a CAGR of 9 percent. About 15-20 percent of this will accrue from air force maintenance, repair and operations (MRO) activities covering sub-assemblies, components and spare parts. With the objective of facilitating its members diversify into the fast growing aerospace and defence sectors, the Automotive Component Manufacturers Association of India (ACMA) had organised its second Aerospace and Defence Summit on May 15 in New Delhi. The aerospace and defence sectors tremendous opportunities to the auto component industry in India. Manohar Parrikar, union minister of Defence spoke at the event, “I am delighted that we have been able to meet one-hundred per cent of defence offset obligations last year, and I am setting a target for achieving US$ 2 billion (Rs 130 billion) worth of exports through offset in the next two years. With world-class quality practices and manufacturing capabilities, the auto components industry in India is well poised to partner with the defence sector to achieve this goal. The government will also create the necessary framework by June 2016, to reform purchasing processes of defence PSUs, which would benefit all suppliers, especially the MSMEs. This will help realise the Government’s vision of Make in India for the defence sector.” To help the auto component sector harness the aerospace and defence opportunity, the ACMA-KPMG study recommends the following: – Improve ease of doing business with DPSUs – L1 system of selection of suppliers needs to be revisited. Vendor Selection process as followed in the automotive industry, a combination of technical audits, quality and delivery and cost, could be considered. – Fostering skill development – Government with the support of global aerospace players should spearhead structured skill development programs for SMEs Support MSMEs – A conducive business environment where gestation period should be short and hassle free as MSMEs do not have the resources to invest and wait. Infrastructure – India should have 5 to 6 word class aerospace and defence clusters for key sub systems with plug and play infrastructure Defence offsets – Offset multipliers for sourcing commercial aerospace components from Indian players and MSMEs Other enabling factors – Key policy expectations to boost Make in India for aerospace and defence components would capture: Create SEZs and Clusters that are plug and play model to attract global investments and encourage component players; developing common infrastructure Create a technology development fund – Offset multipliers for the component manufacturing JVs created in India by the global suppliers (both commercial aerospace and defence) – Permit 100 percent FDI for investments by Tier1s and OEMs for setting up their assembly facilities in India – promote local sourcing from SMEs – Right tax and fiscal incentives to defence and aerospace component players – improving their competitiveness vis-a-vis global suppliers. “The vast opportunities offered by the aerospace and defence sectors can be an inflection point in the growth for the auto component industry in India. The Indian auto component industry is well poised to meet the requirements of the global players in this sector who have set up a manufacturing base in the country,” Vinnie Mehta, director general of ACMA added. “The time is ripe for the auto component industry to amplify its defence production capabilities. Joint efforts between the auto component industry and the Ministry of Defence can help enhance India’s self-reliance and conserve foreign exchange. The positive approach displayed by the government, including liberalisation of FDI norms in the defence sector and clearer licensing requirements, will provide a thrust to domestic manufacturing,” summed up FR Sighvi, chairman, ACMA Aerospace, Defence and Railways Committee. –

    ..http://idrw.org . Read more at India No 1 Defence News Website , Kindly don http://idrw.org/india-to-invest-us-100-billion-in-5-years-to-replace-half-of-its-defence-equipment/ .
     
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  2. 1971+

    1971+ BANNED

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    A BJP led government in 2019-24 as well will make this transition corruption free and smooth.

    I guess , duration of government should be decided on the numbers of seats it won. Say 1 year for every 50 seats.

    For 330 seats NDA should have 6.5 years to rule.
     
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  3. LittleFish

    LittleFish FULL MEMBER

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    100 billion $$$$:o::o: And who will enjoy this feast?:p: If possible(though impossible in reality) can we take part in:smitten:
     
  4. Kal Muah

    Kal Muah BANNED

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    Mostly Russia/US, followed by Israel and France, and 50% of this indigenous. I loved how innocently you said can we take part in :D
     
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  5. LittleFish

    LittleFish FULL MEMBER

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    Of course I'm not strict:p: But at least I don't see Russia can swallow most of the pie alone:disagree:
     
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  6. Kal Muah

    Kal Muah BANNED

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    Had you been not cozing up with Pakistan, China-India could have taken the world with storm. Chinese hardware + Indians software vs Rest of the world.
     
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  7. LittleFish

    LittleFish FULL MEMBER

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    Surely we have, though they may not match with those of US or European products but we offer competitive price. To be honest if the customer are Indians then things we can offer are quite limited since they always want top products, which currently are prohibited for exporting (like J-20 or 052D DDG or Type99 MBT) or face same class Russian/Western products that may have better performance (of course much more dear but for big customer like Saudi or India they usually don't care too much about budget).
     
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  8. I M Sikander

    I M Sikander SENIOR MEMBER

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    It seems more like a day dream. Forget about army and navy equipment.

    Only for IAF, indians needs much more budget. 12 IAF squadron will retire till 2020-21, Even 30% of IAF retiring air crafts will not be replaced in next 5 years.

    Only 36 rafale with some 2 dozen LCA are what's will be completed in next 5 years and here we hear tall claims of 50% old equipment replacements.
     
    Last edited: May 19, 2016
  9. Jhon Smith

    Jhon Smith FULL MEMBER

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    It seems India r striping Chines business and trying to get apple plan in India from China!

    Aapple CEO Tim Cook in India to invest and politicians in Pak so sad
    http://www.ndtv.com/india-news/live-...7442?site=full
    Tim Cook reaches Bollywood actor Shah Rukh Khan's residence

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    May 18, 2016
    19:53 (IST)
    Apple CEO Tim Cook at Mehboob Studios in Mumbai

    [​IMG]

     
    Last edited: May 19, 2016
  10. Kal Muah

    Kal Muah BANNED

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    100 billion is a huge number for replacing half of old defence equipments. Why? most of the old equipments are going to be replaced by made in india products. Even if govt gives IAF 30 billion thats a huge amount. Regarding rafale, IAF buy 36 rafales for some 8 billion, with 30 billion the total number stands to 108, if india directly wants to buy off the shelf. Thats how much amount billion is. Another perspective : PAKISTAN ENTIRE DEFENCE BUDGET IS 7.8$ BILLION - INDIA SPENDING TO REPLACE HALF OF ITS OLD EQUIPMENTS 100$ BILLION. So i hope you can understand how big 100 billion $ is
     
  11. bloo

    bloo SENIOR MEMBER

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    No.
    Cook is here to set up the first technology centre outside of US in Hyderabad and a software laboratory in Bangalore.