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Editorial (Jan-Feb 2015)

The equipment state with defence services and increasing dependence on imports have been amply summed up by Defence Minister's recent remarks "We are in a mess that I can't spell out". Such desperate utterances are expression of a self respecting and proud Indian and the nation need to deliberate, why is our combat equipment profile and state is not contemporary? Why is it that we are still dependent on imports, despite large industrial base and a huge captive defence market? Why we have not been able to enhance domestic production capabilities? Why the indigenous capability gap, despite hype last few decade? Fact of the matter is the paradoxical situation has been caused by replete with instances of lack of vision, self interest, protecting an inefficiency thus harming national economy. The key challenge is to move away from the present model of production and procurement.  The government also needs to take a hard look at the structure and bring the competitiveness in Govt sector in defence production.

There is realization to change the rules of engagement in defence production, rationalisations of restrictive, protective, superfluous checks and balances. The Defence Minister statement emphasising a renewed vigor with a more liberal policy approach for creating defence industrial capability is a welcome sign. The time has come, when domestic production eco system of defence equipment needs to be seriously incentivized by the government in a time bound manner. To bring in efficiencies and eliminate wasteful investment in duplicating infrastructure, Govt should consider corporatization or even privatization of Govt sector in defence, as recommended by several committees.

Qualitative analysis from developed defence industry across world indicates that 80 percent of parts are sourced through SME value chain. The OEMs are system integrator and this phenomenon is akin to disintegration of production, as sub contractors have major role in Defence industrial sector. They play a vital role to overcome critical shortages by providing assemblies/ components thus saving huge cost. The Govt has to create a vibrant ecosystem where small and medium companies can profitably operate along with large enterprises and bring innovation to the products and solutions.

This issue of Defence ProAc Biz news just before Aero India 2015 focuses on Aero products and long awaited policy reviews. To mark the occasion of Aero- India 2015, Q-Tech Synergy in association with the CII is bringing out “Indian Defence Aero Platforms Production & Procurement Compendium 2015-2016”. Hopefully the publication will serve as a ready reference for those seeking information.

Maj Gen Dr. Bhupinder Yadav (Retd.)

Maj Gen Dr. Bhupinder Yadav (Retd.)

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