DefExpo 2018: Modi says 'never again' to UPA policies; top 10 developments

Inaugurating Defence Expo 2018 at Chennai, Prime Minister Narendra Modi launched a new scheme called 'Innovation for Defence Excellence' aimed at young innovators

Inaugurating the Defence Expo 2018 (DefExpo 2018) at East Coast Road near Chennai, Prime Minister Narendra Modi on Thursday said that in less than four years, his government had issued 794 more defence export permissions for a "total value of over $1.3 billion" compared to the 118 defence export permissions granted as on May 2014 for a total value of $577 million. Modi also said that his "bold action" in meeting India's critical defence and military requirements were contrary to the Congress-led UPA government's "laziness, incompetence or perhaps some hidden motives" that damaged the country's defence and security. Taking a further dig at the previous dispensation, the Prime Minister said, "Not now. Not anymore. Never again."   

Modi, as reported earlier in the day, focused on defence policy positives at Chennai. In what the Prime Minister described as "a humble beginning", he cited progress "on defence manufacturing licenses, on defence offsets, on defence exports clearances, on foreign direct investment in defence manufacturing, and on reforming our defence procurement".    

However, things might not be going as well as the government paints them. As reported by defence expert Ajai Shukla and T E Narasimhan for the Business Standard in their coverage of DefExpo 2018, while Modi said that "the defence procurement procedure has been revised with many specific provisions for stimulating growth of domestic defence industry", in truth, the industry's growth has been anaemic. According to the report, a major reason for this lacklustre growth in the defence industry has been the single-digit annual growth in the country's defence budget.  

Before leaving Chennai, the Prime Minister also witnessed a demonstration staged by the seashore in which the Indian Navy's warships, the Air Force's combat aircraft and helicopters, and the Army's tanks and helicopter-borne commandos displayed their capabilities. 

In his inauguration speech, Modi also referred to the Indian Air Force's request for information (RFI) issued last week to global defence majors for the procurement of 110 single-engine and twin-engine fighter aircraft. Amid these developments, American defence major Lockheed Martin has again expressed its readiness to shift its F-16 fighter aircraft production unit to India. The US government, according to the manufacturer, will allow it to do that.  

Here are the top ten developments around Defence Expo 2018 and Prime Minister Narendra Modi's speech at the defence exhibition:

1) Modi recognises that single-digit defence budget growth is hurting defence industry: Despite the fact that Modi focused on policy positives in his DefExpo 2018 speech, described as "determinedly upbeat" by Shukla and Narasimhan, as reported earlier, the conservative and single-digit year-on-year growth in the country's defence budget has ensured that the defence industry's growth has been anaemic and lacklustre. Modi, according to Shukla and Narasimhan, recognised the issue when he said that the government is "conscious that defence manufacturing is unique in terms of government involvement" and that the industry needs "the government to grant a license to manufacture arms and ammunition", adding that "since the government is almost the only buyer, you need the government to grant an order" and "you need the government even to grant permission to export".  

2) How much of the $1.3-billion export permissions granted by the Modi government has been realised? The defence industry will have to rely on export orders for growth without domestic off-take, explained Shukla and Narasimhan. In this regard, the Prime Minister cited figures to claim that his government had performed better than the UPA government. "In May 2014, the total number of defence export permissions granted stood at 118, for a total value of 577 million dollars. In less than four years, we have issued 794 more export permissions, for a total value of over 1.3 billion dollars," Modi stated. However, exactly how much of this sanctioned figure has been exported in actual terms is not known so far.

  

3) Modi highlights major defence contract for 186,000 bulletproof jackets: Referring to the Army's urgent need for protective gear for its jawans in his speech at DefExpo 2018, Modi said, "You would have seen how the issue of providing bulletproof jackets to Indian soldiers was kept hanging for years. You would have also seen that we have brought the process to a successful conclusion with a contract that will provide a boost to defence manufacturing in India." The Prime Minister was referring to a major defence contract, signed earlier this week, for the procurement of 186,000 bulletproof jackets.  

The Rs 6.39-billion project has gone to SMPP Pvt Ltd, which is a Delhi-based company that has a research and development centre in the Okhla Industrial Area. The contract was signed under the "Make in India" initiative nine years after the Indian Army first made a request to acquire body armour for its soldiers. 

Earlier, a fast-track contract for 50,000 bulletproof jackets had been concluded by the Modi government. However, the Army alone requires approximately 386,000 bulletproof jackets. 

4) Modi indicates latest IAF tender for 110 fighter jets will have speedy conclusion: Modi also spoke about the Indian Air Force's RFI issued last week to global vendors for the purchase of 110 single-engine and twin-engine combat aircraft under the Defence Procurement Procedure of 2016 to facilitate indigenous military hardware manufacturing. He also referred to the previous medium multi-role combat aircraft (MMRCA) tender. "You would also recall the long-drawn process of procurement of fighter aircraft that never reached any conclusion (during the previous government). We have not only taken bold action to meet our immediate critical requirements but have also initiated a new process to procure 110 fighter aircraft," said the Prime Minister. US defence majors Boeing and Lockheed Martin, Swedish aircraft-maker Saab, France's Dassault Aviation, the Eurofighter consortium, and Russian jet builder United Aircraft Corporation are expected to bid for the fighter jet project that could be worth more than $15 billion.  

While the 2007 MMRCA tender dragged on without yielding a result, Modi indicated that this one would have a speedy conclusion. 

Click here for our coverage of the deals inked on Day One of DefExpo 2018 in Chennai: DefExpo 2018: On day one, DRDO, MNCs inks pacts with Indian companies  

5) Modi launches Innovation for Defence Excellence scheme for young innovators: At DefeExpo 2018, Prime Minister Modi launched a new scheme called "Innovation for Defence Excellence", or IDEX, for linking young innovators to defence agencies as part of the government's efforts to boost and modernise India's nascent military manufacturing sector. Under the scheme, the government would set up defence innovation hubs throughout the country to provide necessary incubation and infrastructure support to start-ups in the defence sector. 

Click here for defence expert Ajai Shukla's take on what PM Modi said today at DefExpo 2018: Modi claims 'humble beginning' in building defence industry, slams UPA rule 

6) Modi says his government has made a humble beginning on defence manufacturing: Modi also said that to ease the defence manufacturing process, his government took many steps and "made a humble beginning on defence manufacturing licenses, offsets, exports clearances, foreign direct investment, and on reforming India's defence procurement".

"In all these areas, our regulations, processes and procedures have been made more industry-friendly, more transparent, more predictable, and more outcome-oriented. The defence procurement procedure has been revised with many specific provisions for stimulating growth of domestic defence industry. We have also de-notified some items earlier made exclusively by Ordnance Factories, so that private sector, especially MSMEs, can enter this space," said the Prime Minister.  

7) Modi says 'never again' to what he calls UPA's 'laziness' and 'hidden motives' in defence procurement: Modi claimed that his "bold action" in meeting India's critical defence requirements was in contrast to the Congress-led UPA government's "laziness, incompetence or perhaps some hidden motives" that had damaged the country's military preparedness. Modi blasted the UPA over stalled defence projects and commended his own government for finalising the procurement of bulletproof jackets for soldiers and setting in a new process to procure 110 fighter planes for the Indian Air Force. "There was a time when the critical issue of defence preparedness was hampered by policy paralysis. We have seen the damage such laziness, incompetence or perhaps some hidden motives can cause to the nation. Not now. Not anymore. Never again," Modi said in a 30-minute speech at the defence trade fair that projects India as one of the major defence manufacturing hubs in the world. 

8) Boeing ready to manufacture F/A-18 Super Hornet in India: American aerospace major Boeing on Thursday announced a partnership with Hindustan Aeronautics Limited (HAL) and Mahindra Defence Systems (MDS) to manufacture its carrier- and land-based F/A-18 Super Hornet multi-role fighter aircraft in India. According to the defence firm, the future production with Indian partners will involve maximising indigenous content and producing the F/A-18 in India for its armed forces.  

9) DRDO, MNCs inks pacts with Indian companies: On the first day of Defence Expo 2018, the Defence Research and Development Organisation (DRDO), Adani, Larsen & Toubro (L&T), Bharat Electronics Limited (BEL), along with multinationals from the United States, Europe, and Korea, signed pacts and showed interest in transferring technologies to Indian companies. "At the national level, about 1,500 companies have been engaged with the ministry. So far, 712 technology transfers have been made. At the state level, 35 companies have signed transfer of technology for the supply of defence equipment," said Defence Minister Nirmala Sitharaman.  

On Wednesday, the DRDO handed over products it has developed to private players as part of its transfer of technology (ToT) drive. Some of these technologies and products included ASTRA missile, Varunastra heavyweight torpedo, anti-thermal laser grenade, identification of friend and foe (IFF) system, HUMSA-UG sonar, and ABHAY sonar, among others. Officials said that in the past three years, around 200 ToT initiatives generated revenues to the tune of around Rs 1.9 billion for the DRDO. 

10) Modi says foreign and domestic firms will be consulted on defence procurement policy: At DefExpo 2018, Modi said that major stakeholders, including foreign and domestic firms, will be consulted regarding the defence production and procurement policy. The Prime Minister added that the government was attempting to give a major push to military manufacturing in India. In the presence of top executives of global defence majors, Modi said the government was conscious that creating a defence industrial complex was far from simple but it was sincerely working to achieve it. We are committed to building a defence industrial complex that has room for everyone -- public sector, private sector, as well as foreign firms, he said. 

WATCH: Prime Minister witnesses a demonstration staged by the seashore in which the Indian Navy's warships, the Air Force's combat aircraft and helicopters, and the Army's tanks and helicopter-borne commandos display their capabilities 

With agency inputs