Modi booster for Indian defence companies-247 Billion in three years!!

Discussion in 'Defence & Strategic Issues' started by mikhail, Jun 16, 2014.

  1. mikhail

    mikhail Senior Member Senior Member

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    Indian defence companies have cause to cheer with Prime Minister Narendra Modi asserting on Saturday that the country would be encouraging local companies in sectoral production, and that India should be exporting defence equipment.

    Experts say even if the government gives part of its estimated purchase orders worth $247 billion in the next three years to Indian companies, it will change the dynamics of these firms.

    Companies in the sector (Bharat Electronics, BEML, Pivavav Defence) have already seen a boom in their share prices (see chart) since Modi won the general election. The shares of Larsen & Toubro, also investing in the sector, are also up 23 per cent.

    Indian companies are vying for orders for trucks, jeeps, submarines, frigates, aircraft carriers, offshore patrol vessels, corvettes, missile systems and other military hardware as well as software.

    [​IMG]


    "National security is on top of the Modi government's priority list and manufacturing military hardware in India, with a liberalised FDI (foreign direct investment) regime, in this vital sector will make India self-reliant and it will become a global production hub," says Nikhil Gandhi, chairman of Pipavav Defence, which builds ships for the navy and coast guard.

    A number of majors such as Mahindra, Reliance and the Tatas are eyeing the sector. The country's largest corporate group, Reliance Industries, tied up with Dassault Aviation after the government ordered 126 fighter jets from the French company. Dassault makes the Rafale and and Falcon business jets, and the Reliance Industries joint venture will enter into both these sectors.

    Ajay Shriram, president of the Confederation of Indian Industry says, "The time has come for India to project itself as an ideal destination and attract foreign manufacturers to set up defence manufacturing facilities in India for global defence markets. India's own defence procurement will act as an incentive for foreign equipment manufacturers to set up facilities in the country. This should catalyse both the development and influx of high-end technologies and efficiencies, which can be used to pioneer innovations across multiple sectors and help create new jobs."

    He says small and medium enterprises (SMEs) will be the biggest beneficiaries of increased defence production in the country. Huge supply chains, complying with world-class standards, will come up around the manufacturing facilities. This would also help Indian SMEs to enter the global supply chain of manufacturers.
    Modi booster for Indian defence companies | Business Standard

    Guys is this possible?I mean our current defense budget is somewhere around $37 billions($1=60 INR),so how on earth are we planning to spend such enormous amount of money in the next 3 years??Does it mean that our defense budget will increase substantially in the current fiscal budget? @Kunal Biswas sir, @arnabmit, @shayareakd sir @p2prada sir, @Ray sir, @LETHALFORCE sir, @pmaitra sir @rock127
     
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  3. pmaitra

    pmaitra Moderator Moderator

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    Re: Modi booster for Indian defence companies-247 Billion in three yea

    This is excellent news.

    This is what is needed.

    Also, there are components in some of our indigenous products that are imported, because, they are cheaper if imported.

    I would like those components made in India, even if they are more expensive. We need to be self sufficient and isolate ourselves from the "sanctions itch" of western countries, to borrow Mr. Sergei Lavrov's words.
     
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  4. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: Modi booster for Indian defence companies-247 Billion in three yea

    Possible.

    JV with established western defence equipment manufacturing companies will give a greater boost in technology.
     
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  5. rock127

    rock127 Maulana Rockullah Senior Member

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    Re: Modi booster for Indian defence companies-247 Billion in three yea

    Those parts would be less expensive for sure once there is a significant demand and supply chain and things made in India.Lakhs of jobs would be created and we can cater to many countries.

    I remember there was a nut in one of our tank and it was imported from Poland for Rs 5000 and the original cost if made in India would be Rs 500!! Now why should we pay 10 times?

    If the economy is stabilized India can get enough money for defense.As a fact significant amount is not even used each year.Indian habit of relying on others for it's own defense is NOT a good sign if it wants to be a major military force in the world.
     
  6. SilentKiller

    SilentKiller Regular Member

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    Re: Modi booster for Indian defence companies-247 Billion in three yea

    Bring jobs to india, always in favor of FDI, yes in start u won't find its benefits but in long rule u will like and and india will benefit, hope its implemented correctly and in phase...
     
  7. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    Re: Modi booster for Indian defence companies-247 Billion in three yea

    This has to be the largest defense budget for an importing country.
    Too bad this money will leave the country. An enormous amount.
     
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  8. Kunal Biswas

    Kunal Biswas Member of the Year 2011 Moderator

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    Re: Modi booster for Indian defence companies-247 Billion in three yea

    Cooperation between Gov and Private should also increase in every aspect not just in case of Arjun and Tejas ..

    Private sector need boost and it should be in control and bugs and moles in PSU needed to be wiped out ..
     
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  9. power_monger

    power_monger Regular Member

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    Re: Modi booster for Indian defence companies-247 Billion in three yea

    With the current fiscal deficit and subsidy budget(Modi will not be able to remove complete subsidies either),I do not think that India can afford or will spend 247 billion dollars in next 3 years. We all need to wait till this new government euphoria comes down and see the government response then not now.
     
  10. nirranj

    nirranj Regular Member

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    Re: Modi booster for Indian defence companies-247 Billion in three yea

    Even if it is not possible to spend 247 Billion dollars, It will be a great deal to boos domestic economy if we can spend at least 50% of our yearly defense equipment bill on indigenous equipment... That will alone create more jobs directly and Indirectly and in long run earn Forex through the export of tried ans tested equipment made in India!
     
  11. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    Re: Modi booster for Indian defence companies-247 Billion in three yea

    247 seems a lot. If they do that in the next 5 years I will be happy. In 3 years, that's asking a lot. Our defence budget will have to climb quite a bit making it unrealistic.
     

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