Friday, October 30, 2009

India's new defence policy to open $100 bn market



Indian defence companies will gain access to a potential $100 billion market over the next 10 years, following a new policy that allows domestic firms to bid for large defence contracts, officials said on Friday. India, one of the world's biggest arms importers, wants to increase the role of its private sector, which holds around 20 percent of the defence industry market but has the potential to grow significantly.

Under the new policy, the government will allow domestic companies to bid for key projects on their own. Indian companies until the policy change were not invited by the government to bid for big government defence projects and were left to supplying locally made non-combative equipment for the defence forces.

With foreign countries reluctant to share advanced technology with India, the government wants to encourage private defence companies to enter the arms market, officials say. "The field is now open for them to come and bid for any project along with the world's best. The government is giving them an opportunity to expand their capabilities," Sitanshu Kar, the defence ministry spokesman said.

Local companies are free to bid for projects involving tanks, artillery and aircrafts, Kar said. "This move can also save costs and help us turn India into a major production hub in the near future," Kar said. The new policy will provide more opportunities to Indian companies such as Tata Motors, Mahindra and Mahindra, Ashok Leyland and Larsen and Toubro, defence experts and officials said.

"The current review is primarily focused on two essential areas of promoting and facilitating wide participation of defence industry and enabling transparency and integrity in all acquisitions," defence minister AK Antony said at a conference. "Over the next five to six years, the total budgetary provision for capital acquisition is likely to reach $50 billion," Antony said. Defence and company officials say it will touch the $100 billion mark in 10 years.

India wants to upgrade its largely Soviet-era arsenal to counter potential threats from Pakistan and China. The government plans to spend more than $30 billion over the next five years to upgrade its defences.Foreign defence companies have welcomed the government move. "The government is very forward leaning and the steps we view as a sign of the government's confidence in the maturity of the Indian industry," Vivek Lall, India country head for Boeing Integrated Defense Systems said on Friday.

5 comments:

with population growing, shortage of resources such as oil and other commodities and population already in excess of 1.2 Billion, GDP not being able to keep up with population growth and inflation, how is it possible?

Strong growth in the private sector yields large sums of taxmoney for the federal government who does not need to fund socail securities. Simple, really.

Quote :"Indian army chiefs claimed they had spent 10 million rupees (£127,000) on silent reconnaissance vehicles for missions beyond enemy lines.However, it was revealed that they had bought 22 golf buggies, several of which were deployed to patrol the army’s Shivalik Golf Course in Chandigarh."

With $100 bn, the Indian navy cheifs now can buy a stealth jet yacht, better than what Oracle CEO Larry Ellison has.

why can't we produce an aircraft like F16. currently for the fgfa (& su35)project russia is producing the s117 engine which is the best engine they have ever produced,i think. it is comparable or superior to f16 engines & has got the tvc. apart from going indegenious why can't we produce with immence participation from foreign. We has got good advancement in composite(we are about to supply it for the the fgfa) & we prooved it with the thejas.
1.we can design and manufacture the complete airframe (russian help may be sought).
2.fit it with with the s117 engine or its upgrades which is going to power a large number of a/cs for both india & russia.
3.use the most advanced avionics that may come up with the 'mmrca'.
4.what i mean is a hi-tech aircraft which will fit into the the f16 category to counter the pakisthani f16, chinese j10, and a replacement for the our mig23, mig 27. the a/c must have fifth gen characteristics. china acheived the jf17 sucess in a short time and at just 500m$.we should do the same as we have the advantage of a good international position

i think india shoukd learn an lessson from PAKISTAN'S achievement in aircraft manufacturing and should buy jf17 thunder form pakistn

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