Private Sector in Indian Defence Industry

The private sector mainly has been involved in supply of raw materials, semi-finished products, parts and components to Defence PSUs and Ordnance Factories to a great extent and also to Base Workshops of Army and Base Repair Depots of Air Force and the Dockyards of the Navy. Defence PSUs and Ordnance Factories are outsourcing their requirements from private sector (mainly SMEs) in the range of 20-25%. Out of this outsourcing, about 25% requirement is met through small scale sector.

Several hi-tech equipments have also been successfully produced by the private sector. In the quest for self-reliance in the crucial sector of defence, the Government has been continuing its efforts to indigenize defence equipment wherever technologically feasible and economically viable. It has been a part of indigenization efforts to locate and develop broad-based indigenous supply source – both in the public sector and in the civil trade for many complicated and intricate equipments.

After considering the capital intensive nature of defence industry sector as also the need to infuse foreign technology and additional capital including FDI, government decided in May, 2001 to open Defence industry for private sector participation up to 100% with FDI permissible up to 26% - both subject to licensing. Now with this policy change all defence related items have been removed from reserved category and transferred to the licensed category, as a result of which private sector can manufacture all types of defence equipment after getting a license.

Major Public Sector Undertakings in defence Sector

• Hindustan Aeronautics Limited (HAL)
  
• Bharat Electronics Limited (BEL)
  
• Bharat Earth Movers Ltd (BEML)
  
• Mazagon Dock Limited (MDL)
  
• Garden Reach Shipbuilders & Engineers Ltd (GRSE)
  
• Goa Shipyard Ltd (GSL)
  
• Bharat Dynamics Limited (BDL)
  
• Mishra Dhatu Nigam Limited (MIDHANI)

Major Private Players in defence sector

• Tata Advanced Systems Limited (TAS)
  
• Larsen and Toubro
  
• Kirloskar Brothers
  
• Mahindra Defence Systems
  
• Ashok Leyland

Opportunity in Indian Defence industry

The defence opportunity is a win-win situation for the country. With stronger focus on IT, high-tech engineering and research and design capabilities. India can leverage its IT infrastructure and manufacturing potential to be one of the key global sourcing destinations for defence systems and equipment.

Indian industry is upbeat about the opportunities in defence and aerospace with continuous efforts of Government to develop and fine-tune the procurement regime and industry drivers that will enable industry to grow into a robust and sustainable defence industry in India.

Recent Achievements

• Agni, the 3500 km range ballistic missile was successfully launched with user's participation.
• Training flights were held by the users for various missiles that are already inducted. These included two flight tests each of Agni – I, Agni – II and Dhanush (from naval ships) and five flights of Prithvi II (P–II).
• Successful flight tests of Endo-Atmospheric Interceptor for 2000 km class target were carried out. Each flight led to a direct target hit and disintegration of the target.
• Capabilities of NAG, the third generation anti-tank missile, which is a vehicle mounted system was demonstrated in a series of user trials.
• Advanced versions of BrahMos supersonic cruise missile, the only one of its kind in the world, were developed and flight-tested. Thus, BrahMos block II with target discrimination precision strike capabilities was test-fired. Similarly, BrahMos block III with capability for steep diving from high altitudes and high maneuvers at multiple points during supersonic flight.
• Ring Laser Gyroscope (RLG) based Inertial Navigation System was developed, qualified and tested.
• Active Radar Seeker for advanced missions was developed.
• A Fibre Optics Gyro was successfully developed and tested on board.
• In the area of Aeronautics, Tejas, the Light Combat Aircraft (LCA) concluded its extensive flight tests including weapon trials, dropping of bombs, jettisoning drop tanks and night flights; leading to its Initial Operational Clearance (IOC) on 10th January, 2011.
• The first prototype of Light Combat Aircraft (LCA) Navy was rolled out and its induction tests were concluded. In tune with changing war of scenario, major thrust has been given to develop Unmanned Aerial Vehicle (UAV).
• Successful flight trials of RUSTAM-1, a UAV with endurance of 14 hours and altitude ceiling of 8,000 meters demonstrated the capabilities for automated/remotely piloted landing/take-off and associated technologies.
• NISHANT, another UAV developed by DRDO was ready for induction by the Army. A medium sized aerostat based platform was developed for surveillance applications. A novel method was developed and flight-tested for an in-flight structural monitoring of the manned as well as unmanned aircraft structures. The scheme was flight tested on a NISHANT UAV.
• Over 100 test flights of a 3,000 gram Micro Aerial Vehicle (MAV) designed and developed by DRDO were carried out.
• Major milestones in the indigenous development of fighter aircraft engine was achieved with the completion of “Official Altitude Testing” (OAT) of Kaveri Gas Turbine Engine for simulated operating conditions. Subsequently, the flights of Kaveri engine were successfully carried out on a Flying Test Bed (FTB) proving the technological capability and maturity of the indigenous efforts.
• Advanced Active-cum-Passive integrated sonar system HUMSA NG was designed, developed and installed on various ships of Indian Navy. Autonomous Underwater Vehicle (AUV) capable of navigation was demonstrated at sea.
• In the field of electronics and electro-optics, many systems were inducted/accepted by the services. 3D medium range surveillance radar - ROHINI and its naval variant REVATHI were inducted. 3D low-level light weight radar - Aslesha (for IAF) as well as Bharani (for Army) was accepted by the user.

Useful Web links

Ministry of Defence, Government of India - www.mod.nic.in

Defence Research and Development Organisation (DRDO) - www.drdo.gov.in

Defence Ordnance Factories - www.ofbindia.gov.in