India is considered to be the world’s largest arms importer. This is the main reason, why so many world top suppliers do not want to miss any opportunity to bag a good deal.
From about half a century, Airbus SE has not won a single military contract. Unaffected by this, the European firm is trying to build a supply chain in the South Asian nation, training and expanding a slew of existent part-makers that are already in touch with the company to build commercial jets. The optimism is that they can easily meet local sourcing norms in the eventuality of winning an order.
Airbus is not the only player. Other big players like Lockheed Martin Corp., Saab AB and Boeing Co – who are also eyeing to get a pie in any of those orders from the world’s biggest fighter jet requirements. These other big players are also looking for more local partners who can cater their needs of building sophisticated parts for defense related products. This is indeed coinciding with India’s insistence on local manufacturing, which makes it mandatory about making 30 per cent of parts in imported defense products are made in India itself.
The attempt by India to become self-sufficient domestic arms industry which was the slogan of the government at the centre to increase the share of manufacturing in the country’ economy will be the forefront of a government organized defense expo near Chennai this week. Many foreign and local companies are hopeful to be present when the Prime Minister addresses the event on April 12, with the aim to win some part of the business for India.
Majority of companies here in India still find it unfit to produce and source locally. Most of the producers of defense goods are in fact assemblers and not manufacturer as it presumed and the issue of setting up shop in India requires not only investing in training to get a local supply chain, but also to convince major global part makers to do the same.
Airbus is a good example for that. Within the two years of the Prime Minister taking power in the year 2016, Airbus appointed Ashish Saraf as its ‘Make in India’ and this was the only company which created such a position. He was assigned to ensure a credible supply base in India that can easily contribute to the company’s defense products. It also conveyed a strong signal to the government about its seriousness to build in India.
“It is a dual industry where people who do defense goods also do commercial aerospace goods,” Pierre de Bausset, managing director for Airbus Group in India, said in an interview in Hyderabad last month. It makes sense to “leverage what we are doing in commercial aerospace to be relevant in defense campaigns — whether they are for helicopters, for defense airplanes.”
There are plenty of opportunities. India is going to set up a budget of USD 620 billion in the eight years to 2033 and local and foreign firms will have good business opportunities of USD 168 billion. These facts were brought by the Federation of Indian Chambers of Commerce and Industry and Centrum Capital Ltd.
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