Global supply chain can de-risked dependence on a single source
An ASSOCHAM-EY report has recommended that major defence platforms be placed under the ‘negative list’ of imports to make India strategically independent.
“As a nation, we would have more leverage to be able to shape perceptions and provide market access to Indian manufactured goods across the globe. A strategically independent country can be considered as self-reliant,” said the report, lauding the recent landmark reforms in the area of defence production, technology up-gradation and development of indigenous platforms.
As a medium-to-long-term objective, major defence platforms should be brought within the negative list, stressed the report.
Other key recommendations included:
faster implementation of defence corridors scheme and investing in different infrastructural interventions required to boost indigenous manufacturing;
establishing engine development ecosystem, technical textiles and electronic warfare systems hub via technology transfer across the land, air and naval platforms;
and identifying aluminium, composites, titanium and FAB as buyers’ nominated equipment and material for all future defence procurements.
“Even as India is the world’s second-largest importer of defence equipment and platforms, we have the potential to emerge as a significant defence exporter. The trend has already begun, as highlighted in our report,” ASSOCHAM secretary general Deepak Sood said on 6 Oct 2020.
India’s defence exports had risen from Rs.1,500 crore in 2016-17 to Rs.10,740 crores in 2018-19. Primary growth drivers are the policy liberalization and reforms that the government has carried out in making the entry into the defence sector simpler for private companies.
Nearly two-thirds of the items have been made license-free, especially on the detailed parts and component side.
“There is a great potential market for the indigenous systems that we have developed through our defence public sectors units. India’s diverse geographical conditions – deserts, coastal line, mountain ranges and semi-arid regions have allowed us to be mindful of specific equipment that caters to these unique conditions,” said the well-researched ASSOCHAM-EY report.
“Our existing indigenous platforms and systems will find great potential for such regions as they have been developed keeping such environmental conditions in mind,” it said.
Having examined the defence industries of the top global players, the report found that even top exporters do depend on imports as well, which highlights the importance of interdependence.
The US, which is the leading arms exporter, is also ranked 13 in the list of global arms importers.
No nation has industries depending solely on the domestic supply chain. There is a fair share of imports taking place within the top defence nations of the world, the report pointed out.
“Top defence industries have displayed how dependency on the global supply chain can be de-risked by shifting from single sourcing to adopting multiple sources. Such redundancy further reduces the risk quotient of their dependency on global markets,” noted the report. #manufacturing #makeinIndia #defence #imports #exports #technologies #expertise /fiinews.com
