Indian Defense Industry

Indian Defense Industry

Highlights:

With approx 1.4 million active personnel, India has the world’s 2^nd largest military force.
India’s military is placed fourth on the ranking of Global Firepower 2017 that has ranked 133 countries on the basis of their global military prowess.
In the Defense Budget 2018-19, Rs 2, 95, 511. 41 crore has been allocated for the defense sector. There is a growth of 7.81 percent from the last year’s defense budget.
Out of Rs. 2,95,511.41 crore, Rs. 1,95,947.55 crore has been allocated for Revenue expenditure and Rs. 99,563.86 crore for Capital expenditure for the Defense Services and the Organizations/ Departments under MoD, it includes modernization related expenditure too.
According to a report by Forbes, India is ranked 5th in the world’s top defense spenders list.
India’s key defense partner countries are: U.S., Russia, Israel and France.
At present, around 60% of our defense requirements are met by imports.
During the last three and a half years, the Indian government has taken a number of policy-based initiatives to boost the indigenous defense production, technology upgradation, and defense export capabilities.
In the Union Budget 2018-19, the government has made an announcement about establishing two Defense Industrial Corridors in the country. The first Defense Production Corridor is planned to be established in Tamil Nadu and the second one will be set up in Uttar Pradesh state.
100% FDI – up to 49% under automatic route, above 49% through Government route.
The India’s defense industrial base includes 9 Defense Public Sector Undertakings (DPSUs), 41 Ordnance Factories (an industrial organization under MoD), R&D labs and establishments under the DRDO, private sector players and nearly 6000 MSMEs across the country which are supplying the components and sub-assemblies to the DPSUs, Ordnance Factories, DRDO and private industries.
The Indian Armed Forces consists of three professional uniformed services: the Indian Army, Indian Navy, and Indian Air Force.
Additionally, the Indian Armed Forces are supported by the Indian Coast Guard and paramilitary organizations (Assam Rifles, and Special Frontier Force) and various inter-service commands and institutions such as the Strategic Forces Command, the Andaman and Nicobar Command and the Integrated Defence Staff.
The Indian government has launched the wide-ranging plans for military modernization, police force modernization and border management.
Local manufacturing of defense equipment is at the core of the Make in India program.
In 2016, Government of India has opened up the ammunition manufacturing to the private sector.
In December 2017, India joined the Wassenaar Arrangement, a multilateral export control bloc.
In June 2016, India was admitted to MTCR (Missile Technology Control Regime) too. India has joined two out of four major multilateral export control regimes.
During 2015-16, approximately $317 million of Make-in-India defense platforms, equipment and spares were exported to over 28 countries in the world.

Indian Defense Industry :Recent Developments

The Indian government is working on to bring out an industry friendly Defense Production Policy 2018, for promoting indigenous production by the public and private sectors, including MSMEs.
On January 16, the Defense Acquisition Council, chaired by Defense Minister Nirmala Sitharaman, announced a revised and simplified “Make II procedure”.
The Ministry, in cooperation with the Federation of Indian Chambers of Commerce and Industry, or FICCI, has launched a platform called “Society for Indian Defense Start-ups,” or SIDS, as an institutional-support mechanism for development and funding of defense start-ups.
The DPSUs and DRDO labs will also collaborate with FICCI to nurture the MSMEs with the relevant expertise.
The tagline of DefExpo 2018 is ‘India: The Emerging Defense Manufacturing Hub’, the objective of this year’s DefExpo is to brand India as a defense exporter of defense systems and components.
On 5^thand 6^thMarch, government has organized a ‘Defense Indigenization Expo’ where a number of representatives from MSMEs, Senior Officials from MoD and DPSUs had interactive discussions.
A few days back Department of Defense Production has launched a task force to explore the potential use of Artificial Intelligence for the defense capabilities.
The DAC has fast-tracked the procurement of the assault rifles, sniper rifles, light machine guns and advanced torpedo-decoy systems for warships.
On February 13, the Defense Acquisition Council of India approved capital acquisition proposals of Rs 15,935 crores.

Defense Public Sector Undertakings

There are 9 DPSUs under the Department of Defense Production, Ministry of Defense.

HINDUSTAN AERONAUTICS LIMITED (HAL)

With 20 Production Divisions, 11 R&D Centres and one Facility Management Division HAL is the leargest DPSU of the country. It has so far produced 15 types of aircraft from in-house R&D and 14 types under license. Major aircraft/helicopters in the current production range are SU-30MKI Multi-role Fighter, Hawk – Advanced Jet Trainer, Light Combat Aircraft (LCA), Dornier-228 Light Transport Aircraft, Dhruv- Advanced Light Helicopter and Cheetal- helicopters.

In the month of February 2018, HAL has offered the indigenous ‘Advanced Light Helicopter-Dhruv’ (Civil version) for manufacturing to potential Indian private companies through Transfer of Technology. (Read the Expression of Interest)

For more information visit Hindustan Aeronautics Limited’s Website

Indigenization Opportunities for Industries

Outsourcing Initiatives at HAL

BHARAT ELECTRONICS LIMITED (BEL)

BEL has core competencies in Defense sector in areas of Radars &Weapon Systems, Sonars, Communication, EWS, Electro-Optics and Tank Electronics.

BEL has taken a number of initiatives to promote ‘Make in India’ among private industries and startups/MSMEs.

–Enhanced outsourcing from private industries.

–Collaborative R&D approach

–released a list of item for indigenization

–Procurement from MSMEs and Training Programmes to MSMEs on Quality requirements

–Providing Test Facilities to private entities

–Special preference and relaxed norms for startups to encourage them to participate in supplies for BEL procurements.

For more information visit Bharat Electronics Ltd’s Website

BHARAT DYNAMICS LIMITED (BDL)

A leader in the manufacture of Anti-Tank Guided Missiles (ATGM) in the country, BDL is now involved in manufacturing ATGMs of new generation, Surface-to-air weapon systems, strategic weapons, launchers, underwater weapons, decoys and test equipment. BDL is fully geared up to meet the demands of the Armed Forces by capacity augmentation of all Major projects including ATGMs and SAMs by establishing new units at Amravati, Maharashtra and Ibrahimpatnam, Ranga Reddy District, Telangana State.

BDL has integrated LRSAM missile for Indian Navy for which HOT (Home On Target) test has been conducted and two LRSAM Missiles have been test fired successfully from Indian Warship in Dec 2015.BDL is also the Lead Integrator for MRSAM(Army). Currently Akash Weapons System (AWS) is one of the major products indigenously produced by BDL with DRDO as designer, which is being supplied to Indian Army and Air Force.

For more information Bharat Dynamics Limited’s Website

Items for Indigenization and Outsourcing

Providing BDL’s Test Facilities to Private Sector

HINDUSTAN SHIPYARD LIMITED (HSL)

HSL has built 174 vessels and repaired about 1940 vessels for Defence and Maritime Sector. HSL has been undertaking constructions and repairs of various ships viz. Offshore patrol vessels, Inshore patrol vessels, Survey vessesl, Landing ship tanks, Drill ships, Offshore platforms, Supply vessels, Oil recovery and pollution control vessel, Ocean research vessel, Cargo liners, Bulk carriers, Passenger vessels, Training Ship, Dredgers, Floating cranes, Tugs etc. It has undertaken the MR of the Foxtrot class submarines as well as MR-cum-modernization of EKM class submarines. The yard has also nurtured a strong Design Office which can take up indigenous design of several kinds of ships.

To encourage MSMEs and private sector players, HSL has initiated a number of measures i.e. relaxation of norms (prior experience and prior turnover) for MSMEs and Start-ups in all public procurements, provision of advance payment to MSEs, and identifying Tier I and Tier II vendors, so as to facilitate development of import substitutes along with assurance of orders for future requirement in 5 years on the same Indian firm which executed import substitute order successfully.

For more information visit HINDUSTAN SHIPYARD LIMITED’s Website

GOA SHIPYARD LIMITED (GSL)

According to the official sources, GSL is presently executing export orders worth Rs. 1050 Cr. New business development areas identified under diversification include construction of Hovercrafts for Indian Army. GSL has been selected for indigenous construction of 12 Mine Counter Measure Vessels (MCMVs) under ‘Make in India’ initiative. Accordingly, Yard ‘Infrastructure Augmentation Plan for MCMV’ is being executed,on completion of which GSL will be able to build GRP Hull MCMVs with Transfer of Technology. Simultaneously yard has also worked out manpower augmentation plan to undertake the project. GSL has delivered 17 out of 20 large sized ships, Coast Guard has included in last decade.

For more information visit GOA SHIPYARD LIMITED’s Website

GARDEN REACH SHIPBULDERS AND ENGINEERS LIMITED (GRSE)

GRSE has built and supplied close to 700 vessels, to carry men and materials as well as for surveillance of the Coast Line. Apart from ship building and ship repair, GRSE is one of the few versatile shipyards having its own Engineering and Engine Division. Presently, 14 warships are under construction in GRSE which include two Anti-Submarine Warfare Corvettes (ASWC), eight Landing Craft Utility (LCU) ships and four Water Jet Fast Attack Crafts (WJFAC). The Second ASW Stealth Corvette (INS Kadmatt) was delivered on 26 Nov 2015.

For more information visit GARDEN REACH SHIPBULDERS AND ENGINEERS LIMITED’s Website

MAZAGON DOCK SHIPBUILDERS LIMITED (MDL)

MDL is one of the leading shipyards of the country. MDL is presently constructing Missile Destroyers, Stealth Frigates and Scorpene Submarines in order to achieve self-reliance in warship production for the Indian Navy. Y-702, “INS KOCHI”, 2nd ship of P15A Class delivered on September 09, 2015,, Scorpene class Submarine KALVARI, undocked on April 06, 2015and launched on 29.10.2015, First Destroyer of P15B VISAKHAPATNAM launched on April 20, 2015. MDL has the capability to build warships, submarines, merchant ships upto 40,000 DWT since 1979. For outfitting work, the company has a large number of workshops with sophisticated equipment and machines specific to hull fabrication and ship construction work.

Since 2015, A Make in India” Cell is active in MDL to promote the indigenization efforts.

For more information visit MAZAGON DOCK SHIPBUILDERS LIMITED’s Website

Indigenisation – The Current Status

Outsourcing Initiatives

Test / Calibration Facilities available in MDL for use by Private Sector

MISHRA DHATU NIGAM LIMITED (MIDHANI)

Mishra Dhatu Nigam Limited (MIDHANI) was set up in 1973 at Hyderabad with the objective of providing the nation self reliance in strategic materials. MIDHANI caters to the needs of Defense, space, aeronautics, nuclear power, electronics, tele-communications and many other strategic sectors of the country. MIDHANI has developed, manufactured and supplied more than 105 grades of high performance alloys in different shapes, sizes, forms towards programmes of national importance in the Defense, Space and Atomic Energy sectors.

Most of the alloys/products manufactured in MIDHANI are import substitutes. Some of the recently developed products such as Superni42, Supercast55, steering gear assembly for ARIHANT submarine, Titan 26 discs for Adour engines, C103 sheets for satellite propulsion, etc, were manufactured using innovative manufacturing technology.

For more information visit MIDHANI’s Website

MIDHANI’s Make in India initiatives

Items Identified for indigenization

List of Testing Services to Private Entities

Outsoursing opportunities

List of items/operations identified for MSME start-ups

BEML LIMITED (BEML)

BEML has nine manufacturing units located at Bengaluru, Kolar Gold Fields (KGF), Mysuru and Palakkad and subsidiary steel Foundry – Vignyan Industries Ltd, in Tarikere, Chikmagalur District and engaged in design, development, manufacturing, sales and after sales activities of a wide range of areas of Mining & Construction, Defense and Rail & Metro products. The Company’s International Business covers over 58 countries in Asia, Africa, and Latin America.

To facilitate Make in India initiative, BEML has taken some steps.

BEML has a Vendor Development Cell to work as a single window help desk for new vendors.
New vendors can register through Online / Manual.
New vendors are supported by way of imparting knowledge on manufacturing processes, specifications, quality plans, etc.
BEML also extends its testing facilities to its vendors wherever required.
To attract new vendors, BEML resorts to publishing of Expression of Interest periodically, participation in all vendor development programs organized by MSMEs, CII, FICCI and other agencies.
To enhance transparency in all its procurement processes, BEML has well established eProcurement Portal.

Visit BEML ‘Make in India’

(Source of the facts: official website of DPSUs and Department of Defense Production)

Indian Defense Industry : Ordnance Factories Board

Ordnance Factories Board (OFB) is an industrial organisation, functioning under the Department of Defense Production of Ministry of Defense, Government of India. It is engaged in research, development, production, testing, marketing and logistics of a comprehensive product range in the areas of air, land and sea systems. OFB comprises forty-one Ordnance Factories, nine Training Institutes, three Regional Marketing Centres and four Regional Controllerates of Safety.

OFB is the world’s largest government-operated production organization. It has a total workforce of about 164,000. It is often called the “Fourth Arm of Defense”. It is amongst the top 50 defense equipment manufacturers in the world.

Headquarters

Armoured Vehicles Headquarters, Chennai (AVHQ)
Ordnance Equipment Factories Headquarters, Kanpur (OEFHQ)
Ordnance Factory Cell, New Delhi (OFBDEL)
Ordnance Factory Cell, Mumbai (OFBMUM)
Ordnance Factories Recruitment Board, Nagpur (OFRB)
Ordnance Factory Board, Kolkata (OFBHQ)

Customers of Ordnance Factories

The prime customers of Indian Ordnance Factories are the Indian Armed Forces – Indian Army, Indian Navy and the Indian Air Force.

Ordnance Factories also meet the requirements of the Central Armed Police Forces, State Armed Police Forces, Paramilitary Forces of India and the Special Forces of India in respect of arms, ammunition, clothing, bullet proof vehicles, mine protected vehicles etc.

Customers are in the civil sector, central/state government organisations and departments such as Indian Railways, Indian Space Research Organisation, Defense Research and Development Organisation, Liquid Propulsion Systems Centre, Aeronautical Development Agency, Department of Telecommunications, and State Electricity Boards. Public Sector Undertakings in India (PSUs) such as HMT Limited, Hindustan Aeronautics Limited, Bharat Heavy Electricals Limited, Bharat Dynamics Limited, private companies and individuals etc. who purchase industrial chemicals, explosives, arms, ammunition, brass ingots, aluminium alloy products for aircraft, steel castings and forgings, vehicles, clothing and leather goods, cables and opto-electronic instruments.

Exports

Ordnance Factories have exported Arms and ammunition, weapon spares, chemicals and explosives, parachutes, leather and clothing items to a number of countries worldwide.

Asia: Thailand, Malaysia, Indonesia, Sri Lanka, Bangladesh, Myanmar, Vietnam, Nepal, Singapore

Europe: Germany, Belgium, Cyprus, Greece, Turkey, Russia, Sweden, France, Switzerland, UK

Middle East: Oman, Egypt, Israel, Saudi Arabia, UAE

Africa: Kenya, Botswana, Nigeria

North and Latin America: United States, Canada, Brazil, Chile, Suriname

(Source: Wikipedia)

For more information visit Indian Ordnance Factories website

Ordnance Factories Board’s Make in India initiatives

Test Facilities at Ordnance Factories

Items available for indigenization

Indian Defense Industry : Top Private Sector Players

Tata Power SED