Sitharaman urges whole-hearted OEM participation

Defence Minister, Nirmala Sitharaman, has underlined the need for revitalizing public sector units (PSUs) in defence sector and ordnance factories for meeting the ammunition needs of India’s defence forces.

“The managements of these organisations need to be ahead of the curve and show dynamism,” as they possess immense and valuable assets that could offer manufacturers huge production opportunities, she said.

Sitharaman was addressing Ammo India 2018, the 1st International Conference on Military Ammunition on the theme, Make in India- Opportunities and Challenges.

It was organized by Federation of Indian Chambers of Commerce and Industry (FICCI) and the Centre fort Joint Warfare Studies (CENJOWS) under the Ministry of Defence on 12 Mar 2018.

The government has opened up private investment in defence production, including liberalisation of foreign direct investment.

It has initiated steps to develop two defence industrial production corridors in the country and also proposes to bring out an industry-friendly Defence Production Policy 2018 to promote domestic production by public sector, the private sector and Micro, Small and Medium Enterprises (MSMEs).

The Defence Minister said that the government expects whole-hearted participation of Indian industry and foreign Original Equipment Manufacturers (OEMs) to leverage the indigenous capability and opportunities for self-reliance in defence production.

She said that Defence Ministry was encouraged by the quantum of outsourced component in defence manufacturing which had risen to 29% in fiscal 2016-17.

This, she said, displayed that Tier-1 Indian companies were up to their task and also serve as an assurance to SMEs that their products would be sourced by big companies.

Sitharaman said that it was in this context that the announcement was made in the 2018-19 Budget that two defence industrial production corridors would be established.

The one between Chennai and Bengaluru via a stretch of ordnance factories was coming up well and it was encouraging that SMEs had started to bring in start-ups to produce for the armed forces.

Coordination between the DIPP and the Home Ministry was being actively pursued and this should give comfort to OEMs that different arms of the government were engaged in a well-oiled effort.

The government was also actively working on the second corridor between Aligarh-Agra-Jhansi-Chitrakoot-Kanpur-Lucknow, she said.

She also said that under the ‘Make II’ initiative, procedure had been simplified and once a prototype was developed and tried out, manufacturers should not worry about orders as these would be forthcoming.

The Defence Minister also released a FICCI-CENJOWS knowledge paper on ‘Ammunition Manufacturing in India: Road to Self-reliance’.

Lt. General, Giri Raj Singh, Director General Ordnance Services, Indian Army, in his address, pointed out that under one of the largest procurement initiatives in arms and ammunition launched by the Defence Ministry, RFPs for eight projects were released for procurement of medium and large calibre ammunition for the Industry private sector.

These projects entail an expenditure of Rs.70,000 crore in 10 years. The final corrigendum, incorporating the amendments, to the RFPs would be out in the next one month.

He said that the vision was complete self-reliance in armament manufacturing and the government’s ‘Make in India’ programme has paved the way for making the vision a reality.

Rashesh Shah, President, FICCI, called for fast-tracking the clearances of licences for production by the private industry, easing of restrictions on the number of contracts a company could bid for and reduction in the requirement of high earnest money for procurement orders.

He also underlined the need for creating a level-playing field for all players to speed up indigenous defence manufacturing. fii-news.com