70 % of Defence Machinery imported

Discussion in 'Defence & Strategic Issues' started by rock127, Feb 18, 2013.

  1. rock127

    rock127 Maulana Rockullah Senior Member

    Joined:
    Aug 12, 2009
    Messages:
    8,938
    Likes Received:
    10,290
    Location:
    India
    70 per cent of defence machinery imported while Indian defence companies find government a hindrance

    [​IMG]

    When drones, or unmanned aerial vehicles, of the US Army fly over enemy territory, they use a technology developed by a little-known Bangalore company to send back crystal clear images to their command centre. This technology is used by armed forces around the world, except in India — the home of its developerArvindLakshmikumar, who founded Tonbo Imaging four years ago.

    Tonbo developed this technology for Europe’s biggest defence company which, in turn, sold it to various armed forces. Lakshmikumar, 36, had been keen to sell such innovations to the Indian armed forces, but gave up after he realised the futility of trying to convince the authorities here that his products were among the best in the world.

    He shifted his headquarters to Singapore, as he felt that he could crack the global market for his technologies better from the Southeast Asian city state. Lakshmikumar’s ordeal is just another example of the difficulties and frustrations that small Indian aerospace and defence companies have to go through, facing a hostile bureaucratic set up on the one side and a colonial mindset on the other.

    “There is a serious colonial hangup for foreign products,” says Lakshmikumar. “For an Indian bidder they have millions of questions.” The milieu is skewed so against the local players that while an Indian bidder is asked to pay a security deposit, a foreign bidder is not.

    “The system is structured in such a way that even if we need a pin, we prefer to import it rather than make it ourselves,” says Smita Purushottam of the New Delhi-based think tank Institute of Defence Studies & Analyses.

    India imports more than 70 per cent of its weapons and technology for its defence needs, making it a sitting duck for security threats during wars. In contrast, even Pakistan has a more proactive policy that encourages domestic manufacturers. China is in a different league altogether. The mindset of those in power is also hurting the economy. India will spend $100-150 billion (about Rs 5.4-8.1 lakh crore) on defence modernisation programmes by 2022, according to consulting firm Frost & Sullivan. It will also become the fourth biggest defence spender in the world by 2020, behind the US, China and Russia, according to IHS, a US-based information and analytics provider.

    A number of Indian companies have developed advanced technologies for the defence sector but find that the government is being a hindrance, not a help, say Peerzada Abrar and Biswarup Gooptu.“The best of our minds are utilised by other countries for their progress,” says A Sivathanu Pillai, a scientist and CEO of BrahMos Aerospace, the maker of BrahMos missile. “Put them on the same level field, and they will compete.” The government said its intention was to promote local companies when it unveiled its offset policy in 2005-2006, requiring foreign firms winning defence contracts to ensure that at least 30 per cent of the contracted value is invested in India. But most of it is still on paper.“As of today not a single offset contract has been fulfilled,” says S Ravinarayanan, chairman of Axis Aerospace & Technologies. He points out that of the 18 offset contracts worth $15 billion that have been signed since 2006, offset commitments were made for deals worth $4.62 billion. “Original equipment manufacturers have repeatedly defaulted in discharging their offset obligations,” he says, suggesting that it is the responsibility of government to ensure that the obligations are met.

    The government says it will take more time to see the effects of the new policies. “Rome was not built in a day,” Defence Minister AK Antony told reporters recently at Aero India 2013 in Bangalore. Text messages and phone calls to Jitendra Singh, minister of state for defence, were not answered. Small companies also complain that the government is doing little to encourage them, unlike in the United States or in Israel, where grants are given for companies with promising technologies.

    “We are made to compete directly with multinationals for projects. A small entrepreneur cannot beat multinationals,” says Siddharth Amin of Swallow Systems which makes unmanned aerial vehicles. “The government procedure is so long, cumbersome.”

    An engineer, Amin, 43, shut down his profitable computer hardware business to pursue his passion for making unmanned aerial vehicles. After more than a decade of research, he launched Swallow. But despite having cutting-edge products, his company is yet to find any takers in the government. On the other hand, Amin’s counterpart, Integrated Dynamics, in Pakistan, started about the same time as he did and has thrived due to government support. “It now makes combat drones,” says Amin, who now earns his living by providing mapping services to mining companies in India and overseas. “We have not lost hope,” he insists.

    Tonbo’s Lakshmikumar, an alumnus of BITS Pilani and Carnegie Mellon University, worked at Intelligent Automation and HoneywellBSE -1.38 % in the US before returning home in 2003. There, he built various imaging technologies for major defence contractors such as Lockheed Martin. He was also a part of government-funded programmes like Future Combat Systems intended to prepare the US Army for modern warfare.

    Lakshmikumar soon realised that India still does not have an ecosystem like the US or Israel, where government-run organisations fund young companies to develop new technologies. Indian entrepreneurs also face delays in payments. A foreign bidder gets a “letter of credit” before shipping the products, but an Indian bidder’s payment gets delayed for months on end.

    Captronic Systems, a Bangalore-based venture that makes test equipment, had to face payment delays of over 120 days more than once. As a result, Vinod Mathews, 44, who runs Captronic, was forced to take a loan of Rs 2.2 crore to pay his vendors. Many small hi-tech companies are also facing intellectual property issues. If they co-develop a product with Defence Research and Development Organisation, they are asked to share their intellectual property. “It is like, if you are making a camera, you are asked to give its design as well,” says an entrepreneur who did not wish to be identified. “It does not happen in other countries like the US.”

    Rajiv Chib, associate director of the aerospace and defence practice at PricewaterhouseCoopers, says that Indian entrepreneurs have already overcome challenges on a global scale. “However, doing business is still not easy for them due to certain India-specific practical challenges.” Also, regulatory hurdles are time-consuming and can lead to missed opportunities.

    Captronic Systems developed an indigenous in-flight data recorder at one-tenth the cost of imported ones. It offered the equipment to state-run Hindustan Aeronautics. Mathews was shunted between HAL and The Center for Military Airworthiness & Certification before giving up. Mathews, an electronics engineer who founded Captronic almost a decade ago, is finding interest in markets like Israel, Spain and France for his product.

    “I applied for funding from Technology Development Board and found myself competing with a firm which makes detergent,” says Mathews.

    Indian companies are capable of providing the bulk of the country’s requirements if they find the right environment and bold reforms are initiated. “Look at the talent pool. Many of them have done post-graduation related to this industry, but end up with sub-optimal employment as sales clerks. This needs to be urgently addressed,” says Purushottam of IDSA.

    “No country has become a major technological power without nurturing an innovative, fast-growing manufacturing foundation.”
     
    SPIEZ likes this.
  2.  
  3. rock127

    rock127 Maulana Rockullah Senior Member

    Joined:
    Aug 12, 2009
    Messages:
    8,938
    Likes Received:
    10,290
    Location:
    India
    :tsk:

    Despite India having so much talent its not utilized.Indians are making high tech stuff for the world but not for us due to stupid govt policies.

    I remember an article where a bolt used in tank was ordered for Rs 5000 from Poland which could have cost under Rs 500 if made in house.
     
  4. SPIEZ

    SPIEZ Senior Member Senior Member

    Joined:
    Sep 24, 2011
    Messages:
    3,507
    Likes Received:
    1,009
    I was searching for this article for a very long time :okay:
     
  5. Daredevil

    Daredevil On Vacation! Administrator

    Joined:
    Apr 5, 2009
    Messages:
    11,613
    Likes Received:
    5,670
    The problem with defence establishment and armed forces is that they will lose the comissions/bribes/kick-backs if they support local companies and shunt out foreign companies. Take the example of TATRA trucks scam, AugustaWestland Helicopters scam, T-90/Arjun tanks etc etc.

    The solution should come from the top in establishing a good ecosystem as well as checks and balances. Just making laws and policies is not enough, execution of laws is the most important. And we lack sorely in that part.
     
    rock127 likes this.
  6. rock127

    rock127 Maulana Rockullah Senior Member

    Joined:
    Aug 12, 2009
    Messages:
    8,938
    Likes Received:
    10,290
    Location:
    India
    The issue is lack of nationalism as well in the top guys in establishments... they need to take decisions in localizing defense products so that in the long run it reduces import cost and creates lakhs of jobs.Though as Antony says Rome was not built in 1 day he needs to work upon these.

    btw is there any list where we can see what are we producing locally? the 30% :hmm:
     
  7. no smoking

    no smoking Senior Member Senior Member

    Joined:
    Aug 14, 2009
    Messages:
    3,172
    Likes Received:
    422
    Maybe not! Only got a single high technology is not good enough! Yes, maybe your image solution is brilliant, but without super-high quality camera and electronic equipment, your invention doesn't work as good as it is suposed to be. And there are where core technologies are: it cannot be made up by some talents in short time, instead they need decades of R&D.

    Well, based on my experience, when you buy a foreign product priced at Rs 5000, the actually quality may be between Rs 1000 to Rs 2500.
    And your domestic product's quality should still be Rs 500, which means short life time, high maintenance expenses, etc.

    Just remember you got what you paid.
     
  8. LETHALFORCE

    LETHALFORCE Moderator Moderator

    Joined:
    Feb 16, 2009
    Messages:
    20,543
    Likes Received:
    6,547
    What happens to all the TOT that the government pays extra for?? Is there any accountability
    or is everyone to busy lining their pockets?
     
  9. satish007

    satish007 Senior Member Senior Member

    Joined:
    May 7, 2011
    Messages:
    1,458
    Likes Received:
    202
    Location:
    China
    just bullsh1f, Indian have nuke weapon, who have gut to attack the sitting or sleeping duck.
    on the contrary, China has so many enemies, once it has war with Japs, US.
    Indian weapons are far more than enough to occupy Tibet,East Turkestan, sichuan.....
    but Chinese are not fool. we will not do that. so Indian and Chinese will bhai bhai forever.
     
  10. average american

    average american Senior Member Senior Member

    Joined:
    Aug 28, 2012
    Messages:
    1,540
    Likes Received:
    434
    Not so sure of that Chinese are sitting on some 36,000 sq KM of Indian terroritory and claiming more. I doubt if India or China either are going to push the nuclear button..
     
  11. Bhadra

    Bhadra Defence Professionals Defence Professionals Senior Member

    Joined:
    Jul 11, 2011
    Messages:
    6,687
    Likes Received:
    2,357
    The headline should be " 80 per cent invented by DREDO and manufactured by PSUs" that is they claim...

    It is an industry which claims indegeniousness over 80 per cent import even after 60 years of existance...

    Their scientists are more interested in discussing who is a Brahmin and who is shudra rather than discuss Science !
     
  12. Payeng

    Payeng Daku Mongol Singh

    Joined:
    Mar 7, 2009
    Messages:
    2,521
    Likes Received:
    767
    Location:
    Neistan
    Indigenous (so called) equipment:
    Late Combat Aircraft - mk-II
    INSAS Rifles(almost obsolete),
    Arjun MK-II Tank :dude:
    Akash SAM under consideration after long debate on range and guidance, hence DRDO thinking for a mk-II version
    Astra BVRAAM yet to see daylight MK-II under consideration :dude:


    ALH Dhruv is cool but Helicopter - Engine = Bathtub :bathbaby:
    BrahMos same story as Dhruv with a Russian Father

    to be introduced
    IAC-I MK-II Aircraft Carrier :truestory:

    These are the story of Indigenous equipment :bplease:
     
  13. marshal panda

    marshal panda Regular Member

    Joined:
    Dec 19, 2010
    Messages:
    163
    Likes Received:
    44
    Some people in the decisions making loop think that even the enemies can be bribed away !
     

Share This Page