Scaling New Heights In Defence Production

NEWS:
In the beginning of April this year, Hindustan Aeronautics Limited (HAL) declared that it has recorded the highest ever revenue of over 24,000 crore in the financial year ending March 31, 2022, registering a six per cent growth over the previous fiscal. The corresponding figure for the previous year stood at 22,755 crore. ‘’Despite the challenges of the second wave of COVID-19 during the first quarter of the year and the consequent production loss, the company could meet the targeted revenue growth with improved performance during the balance period of the year,’’ said R. Madhavan, Chairman and Managing Director of HAL. The company achieved record revenue with the production of 44 new helicopters/aircraft, 84 new engines and overhauled 203 aircraft.

Issue: 05-2022By Air Marshal B.K. Pandey (Retd)Photo(s): By Karthik Kumar / SP Guide Pubns

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The fact that despite the onslaught of the COVID-19 pandemic that had a crippling effect on the practically all segments of the industry and economy in countries across the globe, the Indian aerospace major HAL has indeed put up a commendable performance, scaling a new peak in its financial earnings for the year gone by. However, while this has been an encouraging development, the aerospace and defence industry of the nation has still a long way to go to develop the capability to meet with the requirements of the Indian Armed Forces for most, if not all, modern military hardware. Today, the nation is branded as the largest importer of modern weapon systems and other items of equipment that the Indian Armed Forces require to maintain the desired level of operational capability. This is extremely important and critical especially in view of the intimidating presence of the enemy both on the Northern and Western fronts of the country.

Over the past several decades since the nation attained independence, despite the heavy investments by the Government of India in the nation’s aerospace and defence industry, the Indian Armed Forces have been heavily dependent on foreign sources for the acquisition of military hardware. Initially, the list of nations from where weapon systems were procured, included primarily three nations namely the Soviet Union, France and Israel. With the breakup of the Soviet Union in the early 1990s and the emergence of a uni-polar world, the Soviet Union was replaced by Russia and later on, the United States was added to the short list of suppliers of military hardware. Today, the nation has the dubious distinction of being the largest importer of weapon systems and other military hardware accounting for more than ten percent of total global imports.

However, certain developments in the recent past, one of these being the ongoing war between Russia and Ukraine, have resulted in some new developments in this segment of acquisition of military hardware by the nation. The Government of India now appears to have understood the need for and the paramount importance of self reliance in the sector pertaining to the defence industry. As a first step, the Indian Ministry of Defence has released a number of negative import lists that contain a total of 310 items of military hardware. The Government of India will no longer permit the import of items of military hardware that figure on the lists. Henceforth, it will be incumbent on the Indian defence industry to produce the items on the banned lists within the country. The list of items on the banned lists for which import licence will not be granted, is fairly exhaustive. This appears to be the initial positive step towards building self reliance that the Government of India has taken to propel the nation to embark on a journey towards the radical transformation of the defence industry infrastructure in the country in the decade ahead to begin with.

It is quite clear that for the Indian defence industry in the public sector that has well developed infrastructure, this decision comes as a boon as it will give the industry the opportunity to finally make productive use of the manufacturing facilities and the related infrastructure that have been set up in the country over the last seven decades or so. But what is also important is that this decision by the Government of India will provide a fresh window of opportunity for the aerospace and defence industry in the private sector which is still in a nascent stage. The first lot of companies in the private sector that will be in the lead in the exploitation of fresh opportunities arising in the wake the decision by the Government of India to boost the indigenous segment in the private sector would be the Tatas, Larsen and Toubro and Mahindra Aerospace. The smaller companies in the Indian aerospace and defence industry that have the capability to provide the required engineering services which include the Information Technology services and the startup companies will be the major beneficiaries of this move by the Government of India towards indigenisation of the Indian aerospace and defence industry sector through its ‘Make in India’ programmes.

India is a rising power both economically and militarily. The nation has to be well equipped to be able to take on both Pakistan and China that are military allies and are capable of posing threat not only from conventional weapons but from nuclear weapons as well. It is necessary for India to indigenise defence production and not continue to depend on foreign sources as the nation has been doing so far.