Indian private sector involvement in defence R&D and defence production

[Arnab Banerjee]

Friends, our govt. has opened up many sectors to private competitors. Why not open up or privatize the defense sector? There are following benefits of privatization:

1] Improvement in quality of weapons due to competition this means Indian army will buy advanced technology weapons.

2] Reduction of price of weapons due to competition. This will save a lot of the defense budget. Indian army will buy weapons at a cheap rate.

3] Our enemies will be warned.

What do you think friends?

 

[Yusuf]

Eureka!!!!!!

 

[H.A.]

Eureka!!!!!!

Don't tell me you ran naked in the market shouting that....

 

[Yusuf]

Don't tell me you ran naked in the market shouting that....

OP did i guess.....

 

[H.A.]

What do you exactly mean by "privatise the Defence sector"?

Do you mean privatise DRDO, HAL, etc? Then let me tell you this, it doesn't work that way, because a lot, i repeat, A LOT of money has to be invested to develop new products and technologies with a high possibility of a failure, private organisations unlike PSU are profit oriented rather than service oriented, hence in the event of a failure they may scrap a product because it failed to delivery rather than find out as to why it failed and refine the product.

On the other hand, private players like TATA, BHARAT FORGE, MAHINDRA, L & T etc, are being allowed to participate / bid for the tenders floated by the MoD, for the products that they have the capability to develop / or have successfully developed.

Hence it is more of a mutual co-existence that is the best bet rather than only PSU or Private players.

 

[H.A.]

OP did i guess.....

......OP means?

 

[Yusuf]

......OP means?

opening post........

 

[Arnab Banerjee]

i mean that let the private companies manufacture and sell arms to indian army. in india now only one company, indian ordinance factory is doing it. but if we let private players in, then we have better guns at cheap price.

 

[pmaitra]

What do you think friends?

I think we need to quit worrying about the Defense Sector and focus on the Education Sector, so that people learn to capitalize.

 

[Ray]

It is being opened.

 

[Arnab Banerjee]

It is being opened.

what do you mean? how many competitor do you have in arms sector? what are their names?

 

[Ray]

Vehicles.

Ancillaries.

 

[Twinblade]

Friends, our govt. has opened up many sectors to private competitors. Why not open up or privatize the defense sector? There are following benefits of privatization:

1] Improvement in quality of weapons due to competition this means Indian army will buy advanced technology weapons.

2] Reduction of price of weapons due to competition. This will save a lot of the defense budget. Indian army will buy weapons at a cheap rate.

3] Our enemies will be warned.

What do you think friends?

Check out the last 7-8 minutes of this video where Dr V.K Saraswat tells you exactly why private sector isn't churning out weapon systems.

Walk The Talk with DRDO chief VK Saraswat - Yahoo! News

 

[drkrn]

first private sector needs commitment from govt or after they develop a weapon and army says no we want changes its a nightmare for private sector

 

[smanekshaw]

First reduce purchasing times. No one will wait 20 years to sell a product.

Remove that shit called DRDO from the loop. Deal directly with the armed forces.

Clear up the tendering process

 

[Bangalorean]

first private sector needs commitment from govt or after they develop a weapon and army says no we want changes its a nightmare for private sector

Nightmare? How have the Lockheeds and Boeings and BAEs of the world grown then?

The returns are so high that the private sector will manage. The Army will certainly check out the weapon, suggest changes, or request a "better version" in the next batch... actually that is how everything in life works - all businesses. Not just this one.

 

[warriorextreme]

our army people constantly deny using home grown systems by government organizations..may be because they do not get their "share" in deals...
private sector will indeed increase quality and also their "share" in these deals..

 

[no smoking]

Nightmare? How have the Lockheeds and Boeings and BAEs of the world grown then?

They grew up in a time that was completely different from today: globalization hasn't hit every country; R&D was not much more expensive than civilian industry; the price advantage of local products was good enough to cover its relatively poor quality; the last but most important, everybody started his develpment almost at the same time, while today your local producers are just kids comparing to those mature companies in US, UK and Russia.

The returns are so high that the private sector will manage. The Army will certainly check out the weapon, suggest changes, or request a "better version" in the next batch... actually that is how everything in life works - all businesses. Not just this one.

Before you are able to produce any acceptable products, you have to invest billions of dollars into research equipments, test equipments and production equipments. With such an investment, you may not see any profit in 30 years. It is impossible for any private company to do that without the financial support from government!

 

[drkrn]

They grew up in a time that was completely different from today: globalization hasn't hit every country; R&D was not much more expensive than civilian industry; the price advantage of local products was good enough to cover its relatively poor quality; the last but most important, everybody started his develpment almost at the same time, while today your local producers are just kids comparing to those mature companies in US, UK and Russia.



Before you are able to produce any acceptable products, you have to invest billions of dollars into research equipments, test equipments and production equipments. With such an investment, you may not see any profit in 30 years. It is impossible for any private company to do that without the financial support from government!

exactly. indian companies cannot invest huge money without committment from govt.

 

[cobra commando]

NEW DELHI: The government's decision on deregulation will give private companies the right to manufacture a number of defence goods. Till 1991 when economic reforms were initiated, the government licensed a bulk of industrial products, including automobiles and white goods. Over the years, the list has been pruned, and now only a handful of industries such as defence, cigarettes, explosives, distillation and brewing of alcoholic drinks and hazardous chemicals require licences. In all other sectors, companies can freely enter and manufacture whatever they want without any restriction on quantity. So far, all defence items required licences, which were tough to come by. The ministry has for long been accused of sitting on applications for years. "Often it took up to five years to get a licence. But those days are over as 55% of the items have been removed from the list," a senior official said. Now, companies won't need a licence to manufacture components, castings and sub-assembly, the official added. In his speech to both Houses of Parliament earlier this month, President Pranab Mukherjee had spoken about encouraging private investment in defence, a theme that ran through the BJP's election campaign. "It shows the government is serious about involving the private sector. There will be more competition, but it gives a chance to many companies to participate in the defence spectrum.


Read more here:
Nod for private companies to make defence goods - The Times of India