India will have strategic autonomy, says Mahindra Defence's S P Shukla

The move will give a boost to local manufacturing, be a huge employment generator and check currency imbalances, he said

Narendra Modi’s self-reliant India campaign. The embargo on imports is planned to be progressively implemented between 2020 and 2025. S P Shukla, chairman-Mahindra Defence and Mahindra Aerospace, and chair-Defence Committee, FICCI, tells Shally Seth Mohile why the announcement is a significant step forward. The move, he points out, will give a boost to local manufacturing, be a huge employment generator and check currency imbalances. For companies like Mahindra, it opens up avenues to participate in defence procurement at a much larger scale. Edited excerpts:

What gives you the confidence that the thrust for Make in India with regards to import is for real this time around? It has fizzled out in the past. 

The push for Make in India is real. The confidence comes from the keeping aside of Rs 52,000 crore this year for domestic capital purchases. It can’t be used for imports. This shows that the government is serious about promoting and procuring India-made defence equipment.

What does it mean for the Mahindra Group, given the expansive capabilities it has? 
 

Mahindra is the only company to have a presence across all the segments in defence. As a result, we are well positioned to participate in the areas that the embargo list specifies. We already have strong capabilities in wheeled armoured vehicles, which we are manufacturing and exporting. Similarly, for torpedo and other naval equipment, we are the existing manufacturer.

Even for the air wing segment, we have partnerships with the OEMs that should enable us to compete in the private sector. In the area of electronics, radar, surveillance and homeland security segments, too, we have excellent capabilities to participate in the upcoming opportunities.

How do we see the company accelerating to participate in this opportunity?

The embargo comes into effect on December 31, 2021. They (defence ministry) are now also separating the budgets for domestic procurements and imports. This is a very significant step forward. Based on the allocation for the two, companies can plan where they should focus in the coming months. The breakup will help us understand which items top the priority of the armed forces — whether they will need it in the immediate future or in a few years from now. Industry needs clarity on the order of priority of procurement while firming up investment plans. So these two announcements help very much.

Which segments has the company identified for a big play?

Our areas of focus are armoured combat vehicles, mine protected vehicles, torpedo defence systems, ultra-light howitzers, radars, composites components, and such. In the strategic partnership model of defence procurement, our joint venture agreements include combat helicopters, fighter aircraft etcetera. Mahindra Defence has established capabilities and collaborations across land and naval systems, aerospace and defence electronics.

You said the move goes beyond business. Could you elaborate?

Yes, what I mean is, it will create many jobs for India. This will also reduce the foreign exchange outgo. So much foreign exchange outgo happens on account of defence — we are one of the largest importers of defence equipment. The outgo creates currency imbalances by strengthening the dollar and weakening the rupee. A local defence substitution will ease the pressure on Indian currency. 

Most importantly, with this move, the country will have strategic autonomy. That means, when the need arises, all suppliers within the country will step up and rise to the occasion to ensure the requirements are met. That is the strategic and supply chain flexibility the country must have.

Lastly, to be on the high table in the globalised world, a nation needs to be strong and self-sufficient in the field of defence.