Sound Footings for Economic and Export Growth
A total of 201 Memoranda of Understanding (MoU), product launches and technology transfers were concluded during AERO India 2021 at Bangalore last week, according to a statement from the Indian government’s Public Information Bureau on 5 February. These included the formal handing over of the Advanced Light Helicopters Mk III to the Navy and Coast Guard, the start of performance-based logistics for the Coast Guard fleet and initial operational clearance for the Army version of the Light Utility Helicopter.
Over the three days of the show, 128 MoU, 19 technology transfer agreements, four initial deliveries, 18 product launches and 32 major announcements were made. The foundation of India’s vision rests on three pillars: research and development (R&D); public and private defence production; and defence exports. In R&D, an attempt has been made to broaden the nation’s research base by supporting and encouraging the private sector – for example, a number of DRDO patents have been shared with the private sector. Efforts have also ben made to encourage private sector R&D initiatives, such as iDEX and the Defence India Start-Up Challenge (DISC). One result has been a drone swarm technology initiative, demonstrated during Army Day at New Delhi on 15 January.
India intends to reduce annual defence imports by at least $2 billion (€1.66 billion) by 2022, to encourage local defence manufacturing. Some 138 proposals, worth over $37 billion for domestic manufacturing, were approved between 2016 and 2019. Investments totalling INR6,800 crore (€770 million) in defence industry infrastructure have been pledged by public and private sectors in the defence corridors of Uttar Pradesh and Tamil Nadu.
A robust defence sector will significantly reinforce India’s export potential: the government’s current target is to increase the defence base from $11 to $25 billion by 2025, including a $5 billion export component. Defence exports between 2015 and 2020 grew from INR2,000 to 9,000 crore (€221 million to 1.02 billion), with the great majority coming from the private sector. The aero components sector, in particular, is set to grow from INR30,000 to 60,000 crore (€3.82 to 6.84 billion) by 2024, according to government forecasts.