India is the ninth largest aerospace and defence market but the largest importer of capital equipment globally and significantly relies on import to meet 70 per cent of its defence needs. To reverse this phenomenon, efforts are being made by the government to kick off more projects in the last two years. Within the defence sector, defence electronics is becoming a key market to tap. As per estimates, the aerospace and defence electronics market in India will be around $72 billion in 10 years.
Emphasizing the market opportunity in electronics and the dynamics in this space, India Electronics and Semiconductor Association (IESA) president M N Vidyashankar, told Telangana Today, that of the 2,70,000 crore defence budget, defence electronics was allocated Rs 40,000 crore. Government and the industry are looking at more indigenisation to bring down the large import component. This will not happen overnight. But the efforts have begun in this direction already.
The draft recommendations for the Defence Electronics Policy, which were put together by the IESA along with Nasscom had been submitted to the Secretary, Defence Production which has gone through several iterations in the past. In addition, Roland Berger, a global strategy consulting company with expertise in defence, was roped in an as advisors to further fine tune the recommendations based on the feedback of the Defence Ministry and other key industry stakeholders.
With the release of the defence procurement procedure (DPP) 2016, there is also a major shift in the policy thus also impacting the overall supply chain dynamics. From the overriding focus on Offsets in the past, the country is making efforts to improve its manufacturing capabilities through its ‘Make in India’ vision. There are plans to improve the domestic content and manufacturing in the next 5-10 years.
Also the introduction of IDDM (Indigenously Designed Developed and Manufactured) category is creating a fresh wave of efforts from both the government and industry fronts. Efforts to accelerate action to integrate / design / build greater portions of the solutions for modern weapon system have begun. This is believed to result in harnessing India’s strengths in making advancements in defence related technology, indigenous product development and maintenance of highly configurable defence systems leading to increase in volume of defence related Indian software products / services being exported.
By Baishakhi Dutta
