FY24 Defence Production Grows 17% To Record High: What Defence Industry Wants From Budget 2024?

Summary

In a CNBC TV18 special, industry leaders discuss India's defense sector's budget wish list and strategies to achieve the Ministry of Defense's target of 1.75 lakh crores in turnover by 2025 and 50,000 crores in exports by 2029-2030. Key points include the need for policy operationalization, export promotion, strategic partnerships, and support for startups and MSMEs. The conversation emphasizes the importance of integrating deep tech, capital access, and international collaborations like ISET to boost India's defense manufacturing and exports.

Takeaways

• 🎯 The Indian Ministry of Defense has set ambitious targets for the aerospace and defense manufacturing sector, aiming for a turnover of 1.75 lakh crore rupees by 2025 and export targets of 50,000 crore rupees by 2029-2030.
• 📈 The private industry's contribution to defense exports has been significant, accounting for approximately 65% of the total exports, showcasing the need for continued support and encouragement for the private sector.
• 🛠️ The industry is seeking policy refinements and operationalization of existing initiatives to create a vibrant defense industrial base that meets the set targets.
• 💼 There is a call for a framework to facilitate government-to-government sales, the establishment of a dedicated defense export desk in the EXIM bank, and lines of credit to boost exports.
• 🔧 The need for strategic partnerships and the acceleration of major programs like the P75 I submarine program is emphasized to give a fillip to the industry.
• 🚀 Startups and deep-tech companies are looking for policy incentives, risk appetite from the government, and a national deep-tech research fund to support innovation and long-term investments.
• 🤝 Collaboration between the public and private sectors is crucial for leveraging strengths, understanding customer needs, and promoting 'Brand India' in the global market.
• 💡 The indigenization policy has had a positive impact on reducing import dependence, encouraging local manufacturing, and boosting technological advancement within the country.
• 🌐 International collaborations, such as the ISET framework with the United States, are vital for integrating India's defense industrial base into global value chains and should be expanded with other nations.
• 💼 The startup ecosystem requires policy clarity on funding innovation, especially for moonshot technologies, and a mechanism to match technologies with OEMs for long-term viability.
• 🏢 For MSMEs and startups, access to capital at reasonable rates over a long duration is essential to support growth and reduce the high cost of capital that currently hinders them.

Q & A

What is the target turnover for the Indian aerospace and defense manufacturing sector by 2025?

The Ministry of Defense has set a target of achieving a turnover of 1.75 lakh crore rupees in the aerospace and defense manufacturing sector by 2025.

What is the export target set by the Indian Ministry of Defense for 2029-2030?

The Ministry of Defense has a target of achieving 50,000 crore rupees worth of exports by 2029-2030.

What are the three key areas Mr. Rajid Bata suggests for operationalization in the defense sector?

Mr. Rajid Bata suggests operationalizing policy initiatives, refining existing measures, and focusing on the vibrant defense industrial base to meet the set targets.

What is the current contribution of the private industry to India's total defense production?

Approximately 22,000 crores out of the total defense production of 1,80,000 crores in India is contributed by the private industry.

What percentage of India's defense exports is currently handled by the private industry?

The private industry is responsible for approximately 65% of all defense exports from India.

What measures does Mr. N.J. Gupta suggest to increase India's defense exports?

Mr. N.J. Gupta suggests utilizing defense diplomacy, leveraging India's geopolitical situation, using defense line of credits, investing in R&D, collaborating with academia, offering customized solutions, and adopting international quality standards.

What is the significance of the ISET framework between India and the United States for startups?

The ISET framework is significant as it encourages collaborations like the one between Third IT Tech and General Atomics, promoting the integration of Indian startups into the global defense industry.

What is the role of the 'Make' programs in India's defense sector?

'Make' programs in India's defense sector are aimed at promoting indigenous production and innovation in the defense industry, contributing to the strategic partnership and production ecosystem.

What are the challenges faced by startups in the defense sector, according to Vinda Kapoor?

Vinda Kapoor highlights the need for policy reforms to incentivize large companies to adopt untested technologies, the importance of risk appetite for deep tech, and the need for a national deep tech research fund to support startups.

How does the positive indigenization list impact India's defense sector, as mentioned by Mr. N.J. Gupta?

The positive indigenization list impacts India's defense sector by reducing import dependence, encouraging local manufacturing, boosting technological advancement, enhancing strategic autonomy, and creating economic benefits through job creation.

What is the significance of collaborations like ISET for integrating India's defense industrial base with global value chains?

Collaborations like ISET are significant as they connect India's defense industrial base with global value chains, providing opportunities for Indian companies to participate in long-term defense projects and contribute to the development of critical technologies.