Boost to Make in India: Modi govt awards 56 defence licences to private cos

[Darmashkian]

Boost to Make in India: Modi govt awards 56 defence licences to private cos like Mahindra, Tata & Pipavav

Read more at:
Boost to Make in India: Modi govt awards 56 defence licences to private cos like Mahindra, Tata & Pipavav - The Economic Times

NEW DELHI: The Narendra Modi government has awarded a record 56 defence manufacturing permits to private sector entities in the past year, which is more than the 47 licences its predecessor UPA granted in the preceding three years combined and underlines its determination to have indigenous defence production as a cornerstone of its 'Make in India' drive.

Data released by the Department of Industrial Policy and Promotion (DIPP) shows that a slew of applications, some of which had been pending for more than four years, have been cleared since the BJP government came to power, in what is a major endorsement by it of the Indian private sector's ability to operate in an arena that has until now been the preserve of foreign vendors and state-run entities. The permits are the first step in the process to enable firms such as Mahindra, Tata and Pipavav to set up production units for major military equipment.

The Tatas will now be able to upgrade major fighting units like the T 90 and T 72 tanks of the Indian Army, while Mahindra, which has been steadily expanding its defence business in the past year, has been given permits in a number of areas, including manufacturing naval systems like torpedoes, sea mines and boats.

Subsidiary companies like Mahindra Telephonics Integrated Systems and Tech Mahindra Ltd too have got defence permits.

The permits are not only for the big boys of Indian industry, many of whom have existing defence arms and will be able to diversify their portfolios.. A slew of new small firms are poised to enter the sector based on these clearances. Bullet Proof equipment manufacturer MKU for example will now be able to manufacture night vision devices.

Bangalore-based Dynamatic Technologies has been granted a permit to manufacture Unmanned Aerial Vehicles.Pipavav Defence and Offshore Engineering Company (PDOC), which is now being acquired by the Anil Ambani-run Reliance, has got four permits to manufacture items ranging from medium tanks and howitzers to missiles, sensors and torpedoes. Experts said the government had done its bit and it was now up to the corporate sector to run with the baton.

"It is now up to the private sector to leverage these enhanced flexibilities and deliver on the ground," said Ankur Gupta of Ernst & Young India.

The expedited clearances are part of a series of measures taken by the government over the past year to open up the defence sector.

Since taking charge in May last year, the government has increased the foreign investment limit for the defence sector to 49% and even up to 100% in select cases.

It has already made the process for application online and the validity of the Industrial license has been enhanced to seven years. For smaller items like components, speedy DIPP clearances are already being given.

A new defence procurement policy is expected over the next few weeks that will further clarify complex matters such as the offset policy, blacklisting process as well as a specific route for the Make in India process.

@Abingdonboy @sancho @Dillinger @Chronos @Chanakya's_Chant @anant_s @Bang Galore

 

[Chanakya's_Chant]

Boost to Make in India: Modi govt awards 56 defence licences to private cos like Mahindra, Tata & Pipavav

Read more at:
Boost to Make in India: Modi govt awards 56 defence licences to private cos like Mahindra, Tata & Pipavav - The Economic Times

NEW DELHI: The Narendra Modi government has awarded a record 56 defence manufacturing permits to private sector entities in the past year, which is more than the 47 licences its predecessor UPA granted in the preceding three years combined and underlines its determination to have indigenous defence production as a cornerstone of its 'Make in India' drive.

Data released by the Department of Industrial Policy and Promotion (DIPP) shows that a slew of applications, some of which had been pending for more than four years, have been cleared since the BJP government came to power, in what is a major endorsement by it of the Indian private sector's ability to operate in an arena that has until now been the preserve of foreign vendors and state-run entities. The permits are the first step in the process to enable firms such as Mahindra, Tata and Pipavav to set up production units for major military equipment.

The Tatas will now be able to upgrade major fighting units like the T 90 and T 72 tanks of the Indian Army, while Mahindra, which has been steadily expanding its defence business in the past year, has been given permits in a number of areas, including manufacturing naval systems like torpedoes, sea mines and boats.

Subsidiary companies like Mahindra Telephonics Integrated Systems and Tech Mahindra Ltd too have got defence permits.

The permits are not only for the big boys of Indian industry, many of whom have existing defence arms and will be able to diversify their portfolios.. A slew of new small firms are poised to enter the sector based on these clearances. Bullet Proof equipment manufacturer MKU for example will now be able to manufacture night vision devices.

Bangalore-based Dynamatic Technologies has been granted a permit to manufacture Unmanned Aerial Vehicles.Pipavav Defence and Offshore Engineering Company (PDOC), which is now being acquired by the Anil Ambani-run Reliance, has got four permits to manufacture items ranging from medium tanks and howitzers to missiles, sensors and torpedoes. Experts said the government had done its bit and it was now up to the corporate sector to run with the baton.

"It is now up to the private sector to leverage these enhanced flexibilities and deliver on the ground," said Ankur Gupta of Ernst & Young India.

The expedited clearances are part of a series of measures taken by the government over the past year to open up the defence sector.

Since taking charge in May last year, the government has increased the foreign investment limit for the defence sector to 49% and even up to 100% in select cases.

It has already made the process for application online and the validity of the Industrial license has been enhanced to seven years. For smaller items like components, speedy DIPP clearances are already being given.

A new defence procurement policy is expected over the next few weeks that will further clarify complex matters such as the offset policy, blacklisting process as well as a specific route for the Make in India process.

@Abingdonboy @sancho @Dillinger @Chronos @Chanakya's_Chant @anant_s @Bang Galore

The good thing is the GoI is creating a level playing field for both the sectors - they recently nullified a strategic duty advantage with defence PSUs, which has long enabled them to keep competition at bay and thwarted the country’s efforts to cut arms import.

They withdrew the excise and customs duty exemptions enjoyed by the Ordnance Factory Board (OFB) and defence PSUs (DPSUs).

Centre levels the field for private sector in defence | The Financial Express

 

[Indika]

Good beginning. This is a long drawn process it will take another decade for the private companies to absorb technology and start producing quality products. They start should collaboration with universities for independent research and development. If that happens we can expect our S&T benefits to consumers at a faster and economical cost.

We should also open up the nuclear sector for private research and participation. In coming years students can expect to research on cutting edge technologies in indian private sector. Hope more contracts are given to indian private companies.

 

[anant_s]

Companies like TATA, Bharat Forge (Kalyani Group), Reliance even Godrej and L&T can leverage their expertise in heavy engineering sector to take up manufacturing of defence products in first stage. Once the develop competency, we can have a situation where research sector agencies like DRDO can have choice of picking a vendor to get its product manufactured. In this context, allowing private sector participation even though for smallish tenders can be hugely beneficial.

 

[graphican]

Sincerely saying; there is a reason to worry. Private Companies make money, to them, defence is a profitable Industry and its their cause - but if Indian Government is making something for itself, their defence would be the cause. That is why you see they ambition high and want "state-of-art" for everything they plan.

Look at this news "The Tatas will now be able to upgrade major fighting units like the T 90 and T 72 tanks of the Indian Army,".

To MODI, Tata is more patriotic than DRDO and good luck with this thinking.

 

[magudi]

Sincerely saying; there is a reason to worry. Private Companies make money, to them, defence is a profitable Industry and its their cause - but if Indian Government is making something for itself, their defence would be the cause. That is why you see they ambition high and want "state-of-art" for everything they plan.

Look at this news "The Tatas will now be able to upgrade major fighting units like the T 90 and T 72 tanks of the Indian Army,".

To MODI, Tata is more patriotic than DRDO and good luck with this thinking.

Tata is a parsi, modi only likes gujarati Hindu corporates (ambanis & adanis)

 

[Bang Galore]

To MODI, Tata is more patriotic than DRDO and good luck with this thinking.

Of all the companies that you could have used to make an example, you pick TATA. That is a company that has probably the best ethics in companies anywhere. TATA would be both patriotic & would get the job done.

 

[utraash]

Good move ....

 

[Manindra]

Sincerely saying; there is a reason to worry. Private Companies make money, to them, defence is a profitable Industry and its their cause - but if Indian Government is making something for itself, their defence would be the cause. That is why you see they ambition high and want "state-of-art" for everything they plan.

Look at this news "The Tatas will now be able to upgrade major fighting units like the T 90 and T 72 tanks of the Indian Army,".

To MODI, Tata is more patriotic than DRDO and good luck with this thinking.

If we didn't involve them then we ended up purchasing weapons from abroad and I believe Tata , Mahindra or L&T is more patriotic than Foreign defence contractor.

 

[Indika]

Sincerely saying; there is a reason to worry. Private Companies make money, to them, defence is a profitable Industry and its their cause - but if Indian Government is making something for itself, their defence would be the cause. That is why you see they ambition high and want "state-of-art" for everything they plan.
Look at this news "The Tatas will now be able to upgrade major fighting units like the T 90 and T 72 tanks of the Indian Army,".
To MODI, Tata is more patriotic than DRDO and good luck with this thinking.

Professionalism is the key word not patriotism. Growth of private military industry is surely an issue,like in US they tend to influence or subvert the policies of govt. India needs to have checks and balances to avoid that.

Tatas or ambanis will bid for projects which are only commercially viable and which they think can win. They might go for upgrading a T72 or T90 but not for "State of art technology" in space research/bio-engineering simply because they dont want to invest money from their pockets until they are sure of recovering. These unknown and tough areas should be the focus of DRDO (whether they deliver or not is a different thing.)

Like a military joke goes " Always keep in mind that your weapon was made by the lowest bidder" some times you need to pick least of the worst.