The IDS deputy chief urged
industry to develop SMEs, to produce the components going into larger and more
complex system
He said the new DPP would liberalise defence procurement
further. This conformed to industry expectations, as it has been the trend in
successive modifications to the DPP in 2005, 2006, 2008 and the currently valid DPP-2011.
Matheswaran urged private industry to focus less on the high value, high
technology weapons platforms (eg, aircraft and tanks) on which the big defence
money is spent. Instead, he suggested, private industry should emulate the
automobile parts industry by setting up manufacturing units that were part of a
global supply chain. These small units would form the backbone of a countrywide
defence industrial base.
In the MoD’s planning, such a defence industrial backbone is
crucial for maintaining, repairing, overhauling and upgrading the complex
defence platforms that are currently being bought from abroad and manufactured
under licence in India.
“Rather than focusing on large weapons systems integration and
manufacture as the only way, I think we need to break down the supply chain
into many component parts, so that you become part of a global supply chain. If
you look only at the Indian military as the only source of your order book,
then you’re not going to have continuous orders for any length of time,” said
Matheswaran.
The IDS deputy chief urged industry to develop small and medium
enterprises, to produce the components going into larger and more complex
system that would eventually be built by large conglomerates like the Tatas,
L&T and the Mahindras.
Highlighting the “enormous” opportunities for private industry,
Matheswaran pointed out the scope for India’s capital expenditure to grow
from its current Rs 80,000 crore. “Our defence budget is still much less than
the global average of three per cent of GDP. We haven’t exceeded even two per
cent of the GDP,” he said.
