Last week, the whirlpool of Delhi’s hectic schedule also witnessed an event with a difference. The Defence Innovators and Industry Association (DIIA), whose members, mostly MSMEs, are a reflection of the new Indian breed of entrepreneurs who have the guts to go beyond the often hyped Make in India concept and passionately create sub-systems and equipment that is Designed, Developed, and Made In India.
DIIA, an association of defence industries with an ambitious goal of becoming self-reliant in defence through indigenous design and development, hosted its inaugural conference attended by Hon’ble Union Minister for Defence, Manohar Parrikar. Making a departure from norms and shunning an address to delegates, he instead opted for an hour long question and answer session with a well-informed and involved audience. The focus of the session was in consonance with the theme of the conference – Self-Reliance in Defence Through Design and Development. To a few question about how MoD intends progressing in the near future, the Raksha Mantri’s broad thrust was that by indigenisation he isn’t looking at manufacturing alone but the whole gamut of design, development, and manufacturing.
Mr Parrikar’s response to questions reflected his firm and well-thought out views He informed the audience that the new Defence Procurement Procedure, expected to be notified on 2 April, was just the beginning. Waiting in the wings to be addressed next are the Defence Procurement Manual (DPM) and OFB procurements. He also asked for DPM related suggestions from DIIA.
The Raksha Mantri addressed other concerns of the industry, too. An issue of import was, how to ensure that the company that develops the product gets the order without undue/often unfair competition from established industry majors/OEMs who tie-up with foreign OEMS and strategically underbid, if required, to scuttle the efforts of entrepreneurs who have a passion for innovation and design, but not deep enough pockets. The question in the minds of Indian entrepreneurs is how can they be assured that they are given a fair opportunity to build India’s defence capability while being protected from such tactics of the foreign OEMs?
The issue of IP surfaced strongly. In collaborative projects with the DRDO, as of now the IP is held by DRDO. The participants had legitimate concerns: How to ensure that the IP developed by companies for DRDO can be used for exports and other purposes? Also, can such IPs be held jointly?
There was a view held by most industry members that a mechanism for transparent interaction with the armed forces and MoD after submission of response to RFP for knowing the status of the procurement needed to be put in place. As of now, industry leaders felt, the establishment is reluctant to entertain the vendors.
The bigger issues also included the question that is being debated all across the IDI: How to calculate Indigenous content in the locally manufactured products? How to ensure that it is IDDM? Further, entrepreneurs who have the passion for design and development have to be given business earlier in the production cycle to ensure that he remains viable, since most such entrepreneurs have limited finances. Can the cycle of procurement be changed so that there is enough mobilization advance payment as well as faster complete payment, was the question that most entrepreneurs had. Some of the other suggestions on this count included: imposing Penal provisions for falsely claiming indigenous content or IP; special cases where weightage can be increased from 1.5 to 3 times for SMEs thus creating more business opportunities for them; advance of 50 percent against bank guarantee (BG), especially for SMEs.
During the discussions it was decided that DIIA will propose measures for implementation in the short, medium and long term. The RM insisted that IDIs create complete solutions.
DIIA’s first conference of stakeholders consisted of five sessions including the RM’s Q&A. The second session was a talk on Building a National Consensus on Importance of Design & Development. Former Minister of State for Defence, Shri Pallam Raju addressed the issue, opining that the aspects of design and development were at the core of indigenisation. Shri Muralidhar Rao was also expected to address the gathering alongside Shri Raju, but was unable to attend due to a last minute contingency.
The next session on Accelerating Indigenous Design & Development in Defence elucidated the government’s objectives and intent with senior officials addressing multiple issues. Among the participants were Shri A K Gupta, Secretary Defence Production, Lt Gen Ravi Thodge, Master General Ordnance, Lt Gen Ak Ahuja, Deputy Chief Integrated Defence Staff (PP & FD), Air Marshal RKS Bhadauria, Deputy Chief of Air Staff, Vice Admiral P Murugesan, Vice Chief of Naval Staff. Mr Ashok Atluri, CMD of Zen Technologies Limited moderated the session.
The fourth and the fifth sessions were devoted to Self Reliance in Defence – an Innovators Perspective, and Accelerating Exports in Defence.
DIIA’s first conference involving multiple stakeholders including leading policy makers and industry leaders in the area of defence innovation provided a platform for free and frank exchange of views. Its importance at a stage when the final touches are being given to the formulation of a new Defence Procurement Policy, can barely be overstated.
The fact of R&D being critical to indigenization efforts was in sharp contrast to the popular misconception that mere manufacturing of defence equipment in India would empower the nation to take strategic geo-political decisions.
With billions of dollars being earmarked for defence modernization, and the government prioritizing Make in India and Start up India as key result areas, the dividends will accrue only when we develop the technological progress to graduate beyond being a nation of cheap production lines to being innovators with world class design and development capabilities.
The conference, the first congregation of defence industry’s lead R&D practitioners, also displayed the zeal and enthusiasm that the defence corporate enterprises have to bring down current import levels from 70 per cent to 20 per cent, more than Raksha Mantri’s target of 30 percent imports, in the next five years. Over and above, DIIA members felt an ambitious target of exporting 20 per cent of Indian-manufactured products equivalent to the proposed volume of imports must also be attempted by the Indian Defence Industry in the next five years.