DEFEXPO 2020: PUSH FOR MAKE IN INDIA


DefExpo 2020 was held in Lucknow over a five day period beginning on 5 February 2020. The theme chosen most appropriately was ‘India: The Emerging Defence Manufacturing Hub,’ which fitted in well with the Prime Ministers ‘Make in India’ programme. This was the 11th edition of the biennial mega defence exhibition.

Since its inception in 2000 CE, till 2014, the DefExpo was held in Delhi. The Vajpayee government first enunciated the need for such an event to showcase both India’s defence production capability as also to determine what other nations had to offer in terms of advanced technologies.

The aim was to get all the major manufacturers of weapon systems and platforms under one roof, to provide an opportunity to both the Indian public and private sector as well as military officers with opportunities to assess what technologies were available and what would best suit India’s defence needs.

In 2016, for the first time, the venue for the DefExpo was shifted to Goa by the then Raksha Mantri, the late Shri Manohar Parrikar. Having set a precedent for a change in venue, the next DefExpo, in 2018 was held in Chennai when Smt Nirmal Sitharaman was the Defence Minister. Now, when Shri Rajnath Singh is the Defence Minister, the event is being hosted in Lucknow.

A change in venue comes with administrative challenges, but it also brings about great opportunities for the host city. An added advantage is that the public is sensitised to the needs of defence when the DefExpo is hosted in their city.

This is an intangible benefit whose price cannot be determined. Goa made eminent sense as a location to host the event as it had a sea coast from where naval and missile capability could be demonstrated. Similarly, hosting the event in Chennai in April 2018, generated positive vibes, especially as the defence manufacturing corridor was coming up in the region.

The Tamil Nadu defence industrial corridor is a quadrilateral extending from Chennai to Hosur, Coimbatore, Salem, and Tiruchirappalli, opening new opportunities for the industry. DefExpo 2018 sent a message across the world that India has attained significant manufacturing capabilities but at the same time, big players in the defence field were also welcome.

In a statement, India’s Ministry of Defence proudly proclaimed that “While showcasing the strengths of India’s public sector, it will also uncover India’s growing private industry and spreading MSME base for components and sub-systems”. DefExpo 2018 saw the participation of around 700 exhibitors, of which 523 were Indian companies and the rest were international companies.

For DefExpo 2020, a record number of over 1000 exhibitors, including 174 foreign companies, showcased their products. This marked a quantum increase from the DefExpo held in Chennai. The Chief Minister of UP, Yogi Adityanath, at the Closing ceremony of the DefExpo, said that defense ministers of 40 countries and over 3,000 delegates from 70 nations attended the event, adding that through this event, a strong base for the defence corridor has been laid and Uttar Pradesh will now become a “new hub” of defence production.

“Through this event, everyone witnessed and felt the pride of India. This was the Mahakumbh of defence manufacturing companies,” the chief minister said. Besides the foreign delegates, the event was attended by over 1000 delegates from India.

The theme of DefExpo 2020, as stated earlier was ‘India: The Emerging Defence Manufacturing Hub,’ with the sub-theme as ‘Digital Transformation of Defence’. This aligned well with the concept of the future battlefield.

The revolution in military affairs is a product of the digitisation of the battlefield, improved communications and sophisticated battlefield weapon systems, which has enabled the engagement of targets at longer ranges with pinpoint precision and in real-time. DefExpo 2020 accordingly showcased the latest technologies of the major weapon and equipment producers from across the globe as also Indian capability in the defence sector.

The focus was given to manufacturing for the aerospace and defence sector through the application of newer technologies. Besides the exhibition of products and technologies, DefExpo 2020 also had, like in previous events, live demonstrations by the Services, Defence Public Sector Undertakings (DPSUs) and industry to showcase land, naval, air and internal security systems.

A major policy initiative that has taken place in India over the last decade is the gradual opening up of defence to the private sector. The Defence Procurement Procedure which was revised in 2016, has been further amended up to 01 November 2019.

DefExpo

The aim is to reduce delays and bring about greater transparency in the procurement process. This has led to greater jointness between the public and private sector, including Small and Medium Enterprises (SMEs)/Micro, Small and Medium Enterprises (MSMEs) and innovation eco-system.

The ‘India Pavilion’ in DefExpo 2020 exclusively showcased the above, which is reflective of current and future policies of the government for this sector, where ‘Make in India’ will see both the Public and Private sector, including foreign manufacturers getting together for manufacturing in India. This will provide myriad opportunities to the government, private manufactures and startups, covering the entire spectrum of the country’s aerospace, defence and security interests.

Why is the world so interested in India’s defence sector? The answer has much to do with the emergence of India as a powerful and growing economy and the growing needs of India’s defence. The allocation for defence announced by the Finance Minister in the Union Budget on 1 February 2020 is to the order of 3.37 lakh crore rupees, of which the revenue head is Rs 2.18 lakh crore, the remainder Rs 1,18,555 crore being allocated for capital outlay.

This marks but a nominal increase of 5.6 percent over the allocation for defence over the previous year, and is perhaps not enough to oversee the modernisation drive of the Armed Forces. However, as India’s economy grows to a five trillion USD economy over the next few years, there would be a proportional increase in the defence budget, which would cater for the big-ticket items required by the military.

The roadmap finalised by the armed forces seeks a spend of USD 130 billion over the next five to seven years, which would average yearly spend of 26 billion USD for a five year period or 19 billion USD over a seven-year period. While the shortfall in the current budget for capital expenditure is evident, the

spend being budgeted at 16.5 billion USD, there is every likelihood that this will be made up in the coming years, as the Indian economy surges towards a USD five trillion economy over the next five years and then seeks to become a USD 10 trillion economy. Even at the current rates of allocation for defence, as a percentage of GDP, this would be a very significant sum.

India’s procurement plans for military hardware includes a range of weapon platforms, missiles, air defence systems, fighter jets, submarines and warships, drones, surveillance equipment and developing infrastructure for extensive use of artificial intelligence. It is vital for India to upgrade her defence capabilities, seeing the threat she faces from her two neighbours on her Western and Northern flanks.

India also has to be mindful of the security of her coast and island territories and the vital importance of keeping the sea lanes in the Indo-Pacific free and open for the safe movement of maritime traffic.

The necessity for improving naval capability, as also the need to protect India’s land and air space, would define the course of India’s modernisation program. While Pakistan is no longer a conventional military threat to India, China remains a long term strategic challenge.

It is evident, therefore, that India will invest in capabilities so that the armed forces can effectively deal with any possible threat from either China or Pakistan. Towards this end, India now has, for the first time in her history, a Chief of Defence Staff, for boosting coordination among the Army, the Indian Air Force and the Navy. The CDS, undoubtedly, will play a key role in implementing the modernisation drive of the armed forces.

In this backdrop, the Def Expo 2020was held in Lucknow. It gave an opportunity to arms vendors from across the world to showcase their products which would suit the requirements of India’s Armed Forces.

It also gave an opportunity to India’s defence public sector as also the private sector in India, which is now gradually entering the defence market to showcase their products, both for the home audience as well as for external markets.

The focus area for India’s military is as under:

  • Establishing India as a military power in outer space.
  • Procuring 2,600 infantry combat vehicles.
  • Procuring 1,700 future-ready combat vehicles for the Indian Army
  • Procuring 110 multirole fighter aircraft to the Indian Air Force.
  • The Indian Navy plans to have 200 ships, 500 aircraft, and 24 attack submarines in the next 3-4 years. At present, the Navy has around 132 ships, 220 aircraft and 15 submarines.

For the military, the focus remains to be prepared for a two-front war. The possibility of such an occurrence is low, but if India is unprepared for the same, the possibility will increase dramatically. The stronger India’s strength, the less likelihood of conflict. There is thus a need to ensure that India remains military capable of giving a befitting reply to any external threat. The Government and the military is aware that Infantry modernisation is a key focus area.

Both the IAF and the Government are also determined to significantly enhance IAF’s overall combat capabilities, for which a detailed plan is being finalised. In addition, the government is also working on a mega defence project to make the airspace over almost all its major cities, including Delhi and Mumbai, virtually impregnable.

This would entail a ballistic missile cover to guard against hostile aerial threats from fighter aircraft as well as from long-range missiles. Global conglomerates in the defence sector who came for DefExpo 2020, thus had an opportunity to showcase their products to the Indian military and political leadership as also to Indian entrepreneurs who may seek to tie up their own expertise with that of the foreign arms and equipment manufacturers.

For India, having Lucknow as the venue to host DefExpo 2020 made eminent sense as the state of Uttar Pradesh has been nominated as India’s second defence industrial corridor.

Six nodes had been identified for this defence corridor which are Lucknow, Jhansi, Chitrakoot, Aligarh, Kanpur and Agra. However, seeing the interest that the DefExpo has generated, three additional nodes—Meerut, Ghaziabad and Gautam Buddha Nagar have been identified, which will now also form part of the defence corridor, making nine nodes in all.

The UP Government has plans to build the defence manufacturing corridor from Aligarh to Lucknow along with the proposed Bundelkhand Expressway. What exactly is planned on the defence corridor was showcased on three pavilions measuring over 12,000 square meters. This was intended to serve as a branding tool to showcase the corridor and to attract investors for it.

Once both the Southern and Northern defence corridors get operationalised, India would greatly enhance its capability and would have a much higher degree of self-reliance than what is available at present. It is also hoped that the DefExpo will act as a catalyst in attracting both investments and cutting- edge technologies to the region.

Over 200 partnerships involving in the signing of a Memorandum of Understanding (MoUs), Transfer of Technology (ToT) and product launches were concluded on the third day of the DefExpo. These pacts were inked in a ceremony titled Bandhan and were aimed at forging and renewing partnerships for innovative collaboration and transformation of defence manufacturing in India.

The MoUs were signed by representatives of various DPSUs, Indian private defence companies, and foreign companies, in the presence of both the Raksha Mantri Shri Rajnath Singh and the Chief Minister of UP, Shri Yogi Adityanath.

The Raksha Mantri referred to the signing of the MoUs as a step forward to fulfill the aim of the Prime Minister to creating exports worth USD 5 billion in the next five years. There were many firsts in DefExpo 2020. As per the Defence Secretary, Dr. Ajay Kumar, these included the signing of the largest number of MoUs, ToTs and product launches.

Bandhan witnessed 13 product launches, 124 MoUs between DPSU’s, private and global defence manufacturing companies and 23 MoUs between UP and private manufacturing companies. The 23 MoUs inked with the UP government will attract, as stated by the UP Chief Minister, Rs 50,000 crore investment in the state and generate three lakh job opportunities.

DefExpo

Over 70 countries participated in DefExpo 2020, with 925 exhibitors putting up their stalls. Of these, 775 were Indian firms, which accounted for the bulk of the exhibitors. This shows the coming of age of India’s defence industry, both in the public and private sectors.

DefExpo 2020 thus provided an opportunity for foreign representatives to look into products for their own defence needs as well as to Indian professionals to see what the world has to offer to enable India’s defence sector. This would enable fresh opportunities for India to export military hardware.

The first three days of the five day DefExpo, from 5 to7 February, were open only to the invitees but was opened up to the public on the last two days of the five-day event. The United States, Russia, France, Sweden, South Korea and the Czech Republic set up their exclusive pavilions. Information about the event was made available both on the Apple App Store as well as on the Android Play Store.

This was a first for India, marking the use of technology to provide relevant information on one’s fingertips. The app provided detailed information about the day-to-day events; participating exhibitors; DPSUs, guest speakers of seminars/webinars; publications i.e., electronic brochures and e-books; maps and directions of the venues and city weather.

DefExpo 2020, hopefully, has provided the necessary fillip to Indian manufacturers for entering the defence market. This is essential as the Defence Public Sector, by itself lacks the capacity to produce what the military needs. With the Private sector getting increasingly involved in defence production, India will strengthen its defence industrial base and this should propel India towards increasing self-reliance in defence production. At present, about 70 % of India’s defence needs are met from external sources. This figure needs to brought down to about 30 %, for India to be considered self-reliant in defence. Hopefully, DefExpo 2020 will contribute towards that goal.

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