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$100 billion investment opportunities in Indian defence industries
Written on May 29, 2008 8:55 am | by FIDSNS | The Indian Armed Forces forthcoming modernisation programme will make India the Asia Pacific regions second highest defence spender within the next five years, and the seventh largest globally by 2016. To examine where short, medium and long-term investment growth opportunities exist for European companies and to explore future procurement plans for the Indian defence sector, Frost & Sullivan held a briefing on Market Growth Opportunities in the Indian Defence Industry.
Organised by Frost & Sullivans Aerospace & Defence practice, the seminar offered an in-depth view of the significant business opportunities within the Indian defence industry and particularly within the Indian Armed Forces. Frost & Sullivan estimates that the total spending for the Indian defence market will reach USD 36.2 billion by 2013. The total opportunities for procurement are forecast to exceed USD 100 billion by 2022, including the maintenance, repair and overhaul (MRO) market, while the offset potential during the forecast period is expected to reach USD 10 billion by 2013.
The event held last week in London was attended by over forty representatives from leading defence organisations including Raytheon, EADS, Lockheed Martin, Thales, QinetiQ, General Dynamics, SAAB, RBS and GE. Also present at the seminar were top-level institutional representatives from the United Kingdom Trade & Investment organisation as well as the naval adviser from the High Commission of India, among others.
Keynote speakers at the seminar were Commodore AJ Singh, Naval Adviser, High Commission of India; Dr Pracheesh Mathur, MD, Raytheon India; Malcolm Haworth Operations Director, UKTI Defence & Security Organisation; and Ratan Shrivastava, Director of Frost & Sullivans Aerospace & Defence practice, South Asia and Middle East.
Summarising the mood of Indian Defence procurement Commodore Singh said, We want all this, now! He highlighted briefly some of the salient points of the countrys huge procurement programme, in which indigenisation is the new mantra, indicating that the Air Force is the biggest deal for the international defence market, and that the Navy also has an ambitious expansion agenda, with nearly 40 ships under construction. Mr Haworth examined the topic from a UK perspective. He mentioned that India is the UKs third largest customer for defence exports, after Saudi Arabia and the USA, and gave a quick impression of the Indian defence procurement process.
Dr Mathur examined what he called the Indian Defence Procurement Panorama in which, although there are bureaucratic tangles, funding is not an issue. He pointed out that the end-user is very tech-savvy and always looking for hi-tech solutions. He stressed the advantages of local involvement: of having an Indian footprint and that relationships tend to trump contacts although the rule of law prevails. His talk also touched on the Indian Civil Security market, saying that, although this was now something of a mystery to the outside world, it was worth getting to know the people involved: a good relationship could reap significant rewards since this was an area of significant future spending.
All delegates, including Frost & Sullivans own Ratan Shrivastava, drew attention to the significance in the procurement process of Indias mandatory offset conditions in military contracts and the cap on foreign direct investment (FDI) in Indian defence industries.
Nevertheless, Ratan suggested treating offsets as an investment opportunity and emphasised the importance of the after-market support as an important, steady revenue stream over the longer term. He also pointed for the need to develop partnerships with the Indian defence industry and establishment, where total imports are worth an estimated USD 12 billion in 2008 alone.
This popular seminar is the first in several briefings lined up by Frost & Sullivan which will be investigating the growth potential of various aerospace & defence markets across the globe. These events bring together the best from the industry and government institutions, providing a unique forum both for personal interaction as well as the opportunity to explore strategies together and to set the course for future action.
Written on May 29, 2008 8:55 am | by FIDSNS | The Indian Armed Forces forthcoming modernisation programme will make India the Asia Pacific regions second highest defence spender within the next five years, and the seventh largest globally by 2016. To examine where short, medium and long-term investment growth opportunities exist for European companies and to explore future procurement plans for the Indian defence sector, Frost & Sullivan held a briefing on Market Growth Opportunities in the Indian Defence Industry.
Organised by Frost & Sullivans Aerospace & Defence practice, the seminar offered an in-depth view of the significant business opportunities within the Indian defence industry and particularly within the Indian Armed Forces. Frost & Sullivan estimates that the total spending for the Indian defence market will reach USD 36.2 billion by 2013. The total opportunities for procurement are forecast to exceed USD 100 billion by 2022, including the maintenance, repair and overhaul (MRO) market, while the offset potential during the forecast period is expected to reach USD 10 billion by 2013.
The event held last week in London was attended by over forty representatives from leading defence organisations including Raytheon, EADS, Lockheed Martin, Thales, QinetiQ, General Dynamics, SAAB, RBS and GE. Also present at the seminar were top-level institutional representatives from the United Kingdom Trade & Investment organisation as well as the naval adviser from the High Commission of India, among others.
Keynote speakers at the seminar were Commodore AJ Singh, Naval Adviser, High Commission of India; Dr Pracheesh Mathur, MD, Raytheon India; Malcolm Haworth Operations Director, UKTI Defence & Security Organisation; and Ratan Shrivastava, Director of Frost & Sullivans Aerospace & Defence practice, South Asia and Middle East.
Summarising the mood of Indian Defence procurement Commodore Singh said, We want all this, now! He highlighted briefly some of the salient points of the countrys huge procurement programme, in which indigenisation is the new mantra, indicating that the Air Force is the biggest deal for the international defence market, and that the Navy also has an ambitious expansion agenda, with nearly 40 ships under construction. Mr Haworth examined the topic from a UK perspective. He mentioned that India is the UKs third largest customer for defence exports, after Saudi Arabia and the USA, and gave a quick impression of the Indian defence procurement process.
Dr Mathur examined what he called the Indian Defence Procurement Panorama in which, although there are bureaucratic tangles, funding is not an issue. He pointed out that the end-user is very tech-savvy and always looking for hi-tech solutions. He stressed the advantages of local involvement: of having an Indian footprint and that relationships tend to trump contacts although the rule of law prevails. His talk also touched on the Indian Civil Security market, saying that, although this was now something of a mystery to the outside world, it was worth getting to know the people involved: a good relationship could reap significant rewards since this was an area of significant future spending.
All delegates, including Frost & Sullivans own Ratan Shrivastava, drew attention to the significance in the procurement process of Indias mandatory offset conditions in military contracts and the cap on foreign direct investment (FDI) in Indian defence industries.
Nevertheless, Ratan suggested treating offsets as an investment opportunity and emphasised the importance of the after-market support as an important, steady revenue stream over the longer term. He also pointed for the need to develop partnerships with the Indian defence industry and establishment, where total imports are worth an estimated USD 12 billion in 2008 alone.
This popular seminar is the first in several briefings lined up by Frost & Sullivan which will be investigating the growth potential of various aerospace & defence markets across the globe. These events bring together the best from the industry and government institutions, providing a unique forum both for personal interaction as well as the opportunity to explore strategies together and to set the course for future action.
