February, 2014 “Another DEFEXPO is upon us”


It is often stated that the Indian IST time zone stands for “Indian Stretchable Time”, the question posed by the armed services is, how long can you keep stretching timeframes before you end-up with such an ill-equipped military that they are not able to cope with the demands being placed upon them. The last 24 months have seen little progress on procurement and timeframes have been extended so much that once again another DEFEXPO is upon us. Two years ago however, India's defence market was not in question in terms of its growth/potential, as various large ticket items were close to contract finalisation etc. The question now is will India's defence market actually materialise with large programmes such as MRCA, M777, FICV etc. all stalled. It is a valid question, and with home defence markets shrinking and along with them budgets, companies are reviewing where they should target their activities, and whether it is worth continuing to invest and participate investing in large defence shows such as DEFEXPO.

This year's attendance at DEFEXPO will be revealing as to an organisation's commitment to the Indian market. One point of view is why one should spend money when there is nothing new to display and there has been no progress or new developments over the past 2 years. FICV is one such programme, last DEFEXO in 2012 the four major players displayed their concepts for FICV, this DEFEXPO, it is not expected that any FICV concepts will be displayed as there has been no practical progress on the programme.

Two years ago the US were in attendance in numbers, represented by senior members of the armed forces etc… this year, the plan was also to support DEFEXPO in large numbers, however the current diplomatic spat between the US and India may well cast a shadow. Many US officials are doubtful of getting any meaningful meetings at DEFEXPO, as India flexes its political might during this current pre-election period. If US officials do not attend as a result of this view, this simply further worsens a difficult diplomatic situation. Those who understand both sides of the culture, know that a simple apology from the US to India would have put the issue to rest, instead of allowing it to escalate. We all know this apology will not be forthcoming so we watch and wait to see how this impacts DEFEXPO this year.
Those who are in India for the long-haul, will continue to make progress where possible with their Indian partners, and continue to position themselves for the eventual opening up of the market and the awarding of procurement contracts.

On the positive side, hotel room rates are much lower than 2 years ago when a DEFEXPO room was approx. $300+. This year we are looking at $230+ a 20% reduction, mainly due to the exchange rate weakening and also lower take-up for DEFEXPO.

Comments are closed.