Govt to fund 80% of private defence R&D: Minister

The government will provide 80 per cent funding to the research and development projects taken up by private enterprises in the defence sector.

The government is also open to joint production of defence equipment and the focus will be on transfer of technology and reduction in lead times for the projects, according to Union Minister of State for Defence MM Pallam Raju. The resulting intellectual property, he said, would be shared by the partners.

Speaking at a defence-industry partnership meet organised by the Confederation of Indian Industry here, he said private enterprises would get a lot of opportunity in defence manufacturing due to the offset policy, which makes it mandatory for foreign suppliers to source 30 per cent equipment for big defence deals from the domestic market.

The government would release the new Defence Procurement Policy, 2008, shortly and it would will come into effect from August, he said.

Ministry of Defence Joint Secretary (Supplies) T Ramachandru said the ministry had so far issued 100 letters of intent (industrial licences) to 50 domestic companies. “There are massive upgrade plans for the defence sector,” he said, adding that time is conducive for alliances between the goverment and private parties for joint production.

Maj Gen VS Tonk, assistant chief of Integrated Defence Staff, said there was a need for new technology to fight terrorism. Monitoring, surveillance technologies, satellite communications, night-fighting capabilities, robotics, electronic warfare, GPS, cyber secutriy, biometrics and a host of other fields provided a huge business opportunity for private players, he said.

Hindustan Aeronautics Limited (Hyderabad region) Executive Director V Srinivasan said outsourcing by public sector undertakings like HAL would increase. HAL outsourced business worth Rs 4 crore in 2006, 11.5 crore in 2007, and aims to take it to Rs 55 crore this year. “We expect our outsourcing to grow to 25 per cent of our turnover,” he said.

CII Southern Region Chairman and Infotech Enterprises Ltd Chairman and Managing Director BVR Mohan Reddy said an SEZ is coming up on 350 acres in Ranga Reddy for manufacture of aerospace and precision equipment.