Anil Ambani announces Rs.5,000 crore new defence investment

With the recent acquisition of Pipavav Defence, Reliance Group chairman Anil Ambani announced on Thursday that an additional investment of Rs.5,000 crore will be made as part of India's emphasis on "Make in India" for military hardware and cut imports.

He also underscored the need for larger public-private partnerships in the defence domain, and called for pooling of resources so that India becomes self-reliant in protecting its boundaries and cuts reduces its dependence on the global markets.

Quoting extensively from the experiences he gained from his late father, the legendary industrialist Dhirubhai Ambani, the Reliance Group chairman said his father's vision was to meet the aspirations of generations with self reliance, adding that the Make in India initiative of Prime Minister Narendra Modi is a major step towards that.

"This initiative of the government redefines the defence ecosystem in India with our Navy in the lead... For a country with one of the longest coastlines in the region and vast expanse of territories over the seas, self reliance in naval capabilities is an ever challenging imperative," he said.

The Reliance Group chairman said the acquisition of the Pipavav Defence Company in Gujarat with assets worth more than Rs.10,000 crore was his company's contribution towards self reliance.

"Pipavav has the largest dry dock in the country and the second largest in the world. With more than 30 lakh sq ft of covered area for fabrication and integration alone, this is perhaps the largest single location defence manufacturing facility in India," he said.

"We will invest an additional Rs.5,000 crore over the next few years as part of our commitment towards indigenisation efforts."

He said that the Pipavav facility will be capable to deliver "all requirements of the Indian Navy from frigates to aircraft carriers to submarines".

Russia, meanwhile, has chosen Pipav as a partner to build three updated versions of Talwar-class frigates, likely to be the biggest-ever warship-building project for private sector in India worth around $3-$3.5 crore.

Ambani said self reliance in defence is also needed so that India does not have to compromise on its foreign policy.

"Large part of our Defence inventory have dependency on global relations. This creates limitations and sub-serves our foreign policy. Self-reliance gives us the flexibility to pursue our foreign policy objectives," he said.

He said since the sole consumer for domestic defence hardware was the government, "specific measures towards ease of doing business will encourage industry participation". Accordingly, he suggested an advisory committee with chief executives from public and private sectors to meet regulary to "align and converge the understanding and aspirations of all stakeholders".

"There is need to institutionalise private sector participation not only for indigenisation but the entire spectrum of defence production through groups comprising Private Sector companies and PSUs at MoD to pool resources," he said also suggesting a separate joint secretary in the defence ministry for the private sector.

"Today, in the ministry of Defence we have joint secretaries responsible for different public sector undertakings. I believe there is a case for a joint secretary exclusively to engage at the business level with the private sector," he said.

Ambani also expressed hope that the updated defence procurement procedure (DPP) will help "in ease of doing business with MoD... Transparent, fair procedures and processes creates a favourable climate, encourage competitiveness and eventually deliver the best overall value for the country," he said.

Another suggestion from the industrialist was to introduce courses at IITs, IIMs and other higher learning institution related to the requirements of the defence industry.