The Narendra Modi government’s decision to take the strategic partnership policy route with foreign companies to promote Make in India initiative in defense manufacturing will be to the advantage of Russian companies which already have solid ties in the sector, said experts.
New Delhi (Sputnik) — Unveiling the policy, India’s Defence Minister Arun Jaitley, who also holds the finance portfolio, categorically said the policy is aimed at “encouraging Make in India in relation to defense manufacturing.” The policy will allow Indian private sector companies to form joint ventures with global defense firms.
“The capacity building of the private sector in defense manufacturing will begin now,” PTI quoted Jaitley as saying after the Cabinet meeting.
Experts agreed the new policy will be contrary to the government’s attempts to build a military-industrial complex to boost job creation and spur innovation.
“The Modi government’s emphasis is on employment generation and pushing innovation. Defense is one area where augmenting local capacity under the Make in India project could help the government achieve its social goals as well as promote indigenization of hardware manufacturing. The main thrust of the new policy is on the role to be played by the private sector in creating a military-industrial complex that should help achieve all these objectives and also create globally competing defense firms,” Nandan Unnikrishnan, Vice-President, Observer Research Foundation, told Sputnik.
Many Indian companies — Larsen and Toubro Ltd, Ashok Leyland Ltd, Mahindra and Mahindra Ltd, Reliance Infrastructure Ltd, Tata Group, Punj Lloyd, Adani Group and Bharat Forge Ltd – have created verticals to tap defense manufacturing business as well and they should benefit from the decision. The annual opportunity for Indian companies in the sector is estimated to be around $41 billion by 2022, according to a February 2015 report by industry body FICCI.
Russian firms are uniquely positioned to boost their strategic presence in India’s defense sector due to the no-strings-attached relationship over technology transfer, said an expert.
“Russia definitely is in an advantageous position over others considering our longstanding ties with them. They remain our chief source for defense hardware and for all three wings of the armed forces. We have together built missile systems and working on several other projects. They have entered into joint ventures with players like Mahindra in aerospace as well. These all are right moves,” Unnikrishnan added.
Earlier, during a high-profile panel discussion, both Russian and Indian experts were unanimous that Russia is competing well with others like Israel, the US, and France in supplying defense hardware and equipment. They also outlined the need for more joint ventures between Indian and Russian private sector, which has started to take place in aerospace, oil and gas, and gems and jewelry sectors.
This story first appeared on Sputnik & is reposted here with permission.