Defence PSUs should outsource more to private sector: Parrikar

Defence Minister Manohar Parrikar has asked public sector undertakings such as Hindustan Aeronautics Ltd and Bharat Electronics Ltd to become lead integrators in making fighter aircraft and electronic warfare systems, while sourcing components and systems from private players.

These firms have traditionally built these capabilities in house and are constrained with capacity to build large volumes. HAL has been struggling to double its annual production capacity of Tejas, the Light Combat Aircraft to 16 planes due to its vertically integrated approach.

Parrikar cited the example of Tejas and the basic trainer aircraft of HAL as an opportunity for private sector involvement to increase production capacity.

"In addition to LCA, HAL has to make 70-100 basic trainer aircraft for which the industry has to participate in a big way," he said here on Thursday.

The Defence Minister said that Indian firms are reaping benefits through offsets following defence deals with foreign companies. The total offsets is expected to touch between $ 12-15 billion over the next ten years.

"The quantum of offsets will increase in the coming years because deals are in the offing," said Parrikar. "In the last two years, 100 per cent of the offset obligations have been achieved as against 60 per cent in the previous five years."