Govt for greater public-private partnership in defence sector

The government will provide 80 per cent funding to the research and development projects that will be taken up by the private enterprises in the defence sector. The government is also open for joint ventures and joint productions of defence equipment. The focus will be on transfer of technology and reduction of lead times for various projects. The resulting IP will be shared by the partners, said Union Minister of State for Defence MM Pallam Raju.

Speaking at the Defence- Industry partnership meet, organised by the Confederation of Indian Industry here on Saturday, he said private enterprises will have a lot of business opportunity in defence manufacturing due to offset policy, which makes it mandatory to source 30 per cent of defence import deals to the domestic industry, being implemented by the government. It will release the new Defence Procurement Policy 2008 shortly and will come into effect from August, he said.

At present, the Indian industry is doing business worth $ 2.5 billion (Rs 10,000 crore) and it is likely to touch $ 10 billion (about Rs 40,000 crore) by 2012, he said.
 
Ministry of Defence joint secretary (supplies) T Ramachandru said the ministry so far has issued 100 letters of intents (industrial licences) to 50 domestic companies. ``There are massive upgradation plans for the defence sector,'' he said adding that time now is conducive for alliances for joint production. However, manufacture of defence products is fraught with long gestation period, strict delivery schedules and international competition among others.

Maj Gen VS Tonk, assistant chief of Integrated Defence Staff, said there is need for new technology to fight terrorism as it is consolidating.Monitoring, surveillance technologies, satellite communications, night fighting capabilities, robotics, electronic warfare, GPS, cyber secutriy, biometrics and a host of others provide a business opportunity for the private players.

Hindustan Aeronautics Limited (Hyderabad region) executive director V Srinivasan said outsourcing by public sector undertakings like HAL will increase. It outsourced business worth Rs 4 crore in 2006, 11.5 crore in 2007 and this year is targeting to give out Rs 55 crore. ``We expect our outsourcing to grow to 25 per cent of  our turnover,'' he said adding that defence holds promise for private players.

CII southern region chairman and Infotech Enterprises Limited chairman and managing director BVR Mohan Reddy said an SEZ is coming up in 350 acre in Ranga Reddy for manufacture of aerospace and precision equipment.