The trajectory of the ‘Make in India’ programme!

To give Indigenous defense industry a push and to establish India as a defense export hub, ‘Make in India’ was launched. The tagline of India’s DefExpo 2018 (the tenth edition of Indian MoD’s biennial Security Systems Exhibition, which will be held from 11^th to 14^th April) is ‘India: the emerging defense manufacturing hub.’ The objective of DefExpo 2018 is to brand India as an exporter of defense systems and components for all three services and showcasing strengths of India’s growing private industry and emerging Defense MSMEs base.

Three years back at Aero India 2015, PM Narendra Modi has said: “I’m confident that India will emerge as a major global centre for the defense industry. We have the basic building blocks for it in India and a large nation requirement. We will build an industry that will have room for everyone – public sector, the private sector, and foreign firms.” The Indian government has presented ‘Make in India’ as a top agenda in all key negotiations on the global platforms. During the last three and a half years, we have seen that India’s key defense partners i.e. U.S., Russia Israel, and France have included ‘Make in India’ as a key memo in their bilateral meetings and statements.

The Defense Industry has a much bigger role to play in the success of ‘Make in India’ programme. To enhance the participation of private sector players, particularly Startups and MSMEs, the Indian government has made some significant policy reforms. On 22nd March, India’s Department of Defense Production has launched the draft of its much awaited ‘Defense Production Policy 2018.’ In the recently released draft of this new ‘Defense Production policy,’ it is mentioned that: Government will bring out the necessary enabling provisions for Startups and MSMEs participation. The condition that the value-addition for Indigenously Designed Developed & Manufactured (IDDM) should be done by one unit will be removed. This will enable the Startups and MSMEs collaboration. A few days back launched Defense Investor cell will facilitate the MSMEs and other defense investors. To increase the participation of Startups a scheme called Innovation for Defence Excellence (iDeX) is proposed, under which government will set up the Defence Innovation Hubs throughout the country to provide necessary incubation and infrastructure support to the defense tech startups. Apart from this an Intellectual Property Cell, policy for startups to monetize the newly developed technologies and Hackathons kind of interesting measures have been included too.

INDIA’S DEFENSE INDIGENIZATION EFFORTS

In India, nearly 6000 MSMEs across the country are supplying the components and sub-assemblies to the DPSUs, Ordnance Factories, DRDO and private industries. Promoting the defense MSMEs/Startups participation in the ‘Make in India’ programme is a top priority of the government.

India’s all 9 Defense Public Sector Units and 41 Ordinance Factories have taken some initiatives to promote ‘Make in India’ among Startups/MSMEs. With a focus on import substitution, India’s public sector units have provided the lists of items and opportunities available to indigenization for MSMEs players and additionally, they are offering their testing facilities to the private entities for the testing of the materials, subsystems, and equipment.

The Federation of Indian Chambers of Commerce and Industry (FICCI) in collaboration with MoD, has launched a platform called “Society for Indian Defense Start-ups,” an institutional-support mechanism for development and funding of defense startups. The DPSUs and DRDO labs will also collaborate with FICCI to nurture the MSMEs with the relevant expertise. The Confederation of Indian Industry has also formed the ‘Society of Indian Defence Manufacturers (SIDM)’, which some of India’s distinguished defense manufacturers have joined.

On 18 January, Indian MoD has launched a Defense Investor cell to promote and facilitate defense manufacturing industry. And two days earlier, the Defense Acquisition Council has announced a revised and simplified “Make II” procedure, in which some special provisions are given to MSMEs.

DEFENSE INDUSTRIAL CORRIDORS

After opening up private investment and liberalizing foreign direct investment (FDI) in defense production, the Indian government plans to establish defense industrial corridors in the country. In the Indian Union Budget 2018-19, the finance minister has made an announcement about establishing the two Defense Industrial Corridors. 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.

The first corridor called Tamil Nadu Defense Quad will extend from Chennai, Hosur, Coimbatore, Salem, and Tiruchirappalli. It will provide a great opportunity to the vibrant manufacturing sector in the State. According to the official press release, the MoD has initiated an exercise of industry interactions at all nodal points for the Quad. The second defense industrial corridor was announced on the occasion of the Uttar Pradesh Investors Summit 2018. The government has decided to extend the Uttar Pradesh’s defense corridor to Agra, Allahabad, Lucknow, Kanpur, Jhansi, and Chitrakoot.

‘MAKE IN INDIA’ AND INDIAN ARMED FORCES

For the first time, we have seen that all three wings of the Indian Armed Forces have taken some steps to promote indigenization too. To boost the indigenous defense development efforts, two years back, the Indian Army has launched the Army Design Bureau (ADB), an interface between the Army, Industry, DRDO, and Academia. This year ADB has published the third volume of the ‘Compendium of Problem Definition Statements’, in which live issues have been compiled, to assist all key stakeholders involved in the process of developing indigenous solutions. The Indian Air Force has published the ‘Indigenization Roadmap (2016-2025)’ to provide the industry a clearer understanding of IAF’s indigenization requirements and the future technologies that IAF is planning to induct in the next ten years. The Indian Navy has published ‘Indian Naval Indigenization Plan (INIP) 2015-2030.’ This year, Indian Ministry of Defense has published the ‘Technology Perspective and Capability Roadmap (TPCR- 2018)’ to provide the defense industry an overview of the equipment that are envisaged to induct into the Indian Armed Forces by 2020. The Ministry of Defense’s frequent engagements with defense manufactures, clearly defined indigenization requirements, transparent processes, and an open environment of discussions are some of the factors which are driving the ‘Make in India’ toward success.

Now if we talk about what the Government is doing, the first thing which comes into the mind is that no private sector entity will join a government’s plan without an enabling environment which comes from a strong leadership commitment and delivery. The Indian Defense Industry has expected EODB measures, infrastructure support, investments and continuous policy reforms from the government and in a short period of three and a half years, the government has shown a strong intention to deliver on all these parameters.

At the Republic Day Parade 2018, India has presented its indigenous defense capabilities before the heads of the ASEAN nations. Some of the indigenous defense products which were put on the show during R-Day parade are: HAL Rudra, HAL Dhruv, HAL Tejas, DRDO Netra (an Indian, light-weight, autonomous UAV for surveillance and reconnaissance operations), BrahMos Missile, Swathi-WLR, Bridge Layer Tank T-72, Akash missile system and Nirbhay Missile system.

FUTURE OF INDIA-ISRAEL DEFENSE PARTNERSHIP

Israeli President Mr. Reuven Rivlin has coined the phrase ‘Make with India.’ During the bilateral visits, Israeli PM Netanyahu has shared that their focus is on the joint defense projects with a special emphasis on ‘Make in India’ and ‘Make with India’ too. The defense and security cooperation is the most crucial strategic asset for both nations. Close to four years of ‘Modi-Netanyahu era’ have passed. In the coming days, it is expected that the engagement between the public and private sectors of both sides will accelerate. On the sidelines of Netanyahu’s visit, the head of SIBAT, the International Defense Cooperation Directorate of Israel’s Defense Ministry and officials from India’s Department of Defense Production held a discussion to explore the possibilities of collaboration in defense manufacturing.

A better understanding of India’s ‘Make in India’ programme, indigenization efforts, and Startups/MSMEs push, can help the Israeli defense industry, to take the forward moves in this partnership. The Indian government is determined to push indigenous defense manufacturing and the MSME sector. This is the right time for India’s defense partner Israel to align its collaborative approach with this new reality. India’s indigenous defense manufacturing push is an opportunity. Israel should improvise creatively to leverage this opportunity.