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		<title>DEFENCE REVIEW 2023 &#8211; Defence Production in 2023</title>
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		<dc:creator><![CDATA[IMR Reporter]]></dc:creator>
		<pubDate>Wed, 15 Nov 2023 06:12:23 +0000</pubDate>
				<category><![CDATA[Air Force]]></category>
		<category><![CDATA[Army]]></category>
		<category><![CDATA[Defence Industry]]></category>
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		<category><![CDATA[defence exports]]></category>
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		<category><![CDATA[DEFENCE REVIEW]]></category>
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		<category><![CDATA[startups]]></category>
		<category><![CDATA[Swavlamban]]></category>
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					<description><![CDATA[<p>Indigenisation Efforts In continuous pursuit of self-reliance in defence manufacturing and to minimise imports by Defence Public Sector Undertakings (DPSUs) under &#8216;Aatmanirbhar Bharat Abhiyan&#8217;, Dept of Defence Production (DDP) notified 4th Positive Indigenisation List (PIL) of 928 items on May 12, 2023, which includes LRUs/ sub-systems/ assemblies/ sub-assemblies, raw material, low value critical spares and [&#8230;]</p>
<p>The post <a href="https://imrmedia.in/defence-review-2023-defence-production-in-2023/">DEFENCE REVIEW 2023 &#8211; Defence Production in 2023</a> appeared first on <a href="https://imrmedia.in">IMR</a>.</p>
]]></description>
										<content:encoded><![CDATA[
<h2 class="wp-block-heading" id="h-indigenisation-efforts">Indigenisation Efforts</h2>



<p class="wp-block-paragraph">In continuous pursuit of self-reliance in defence manufacturing and to minimise imports by Defence Public Sector Undertakings (DPSUs) under &#8216;Aatmanirbhar Bharat Abhiyan&#8217;, Dept of Defence Production (DDP) notified 4th Positive Indigenisation List (PIL) of 928 items on May 12, 2023, which includes LRUs/ sub-systems/ assemblies/ sub-assemblies, raw material, low value critical spares and components of DPSUs for time-bound indigenisation. These items are to be indigenised within the timelines of December 2023 to December 2029. As compared to previous year, 4500+ items of Srijan Portal including 173 PIL items, have been indigenised in 2023.</p>



<p class="wp-block-paragraph">To give fillip to the ongoing indigenisation, a portal – www.srijandefence.gov.in &#8211; was launched in August 2020 for DPSUs/Services with an industry interface to provide development support to MSMEs/ Startups/ Industry for import substitution.</p>



<p class="wp-block-paragraph">The MoD has successfully indigenised 10,451 items during the period of 3 years since the launch of Srijan Portal. More than 34,000 items were uploaded by the DPSUs and Service Headquarters on Srijan Portal for indigenisation by Industry. This includes the 4,666 items under PILs being notified by DDP.</p>



<p class="wp-block-paragraph">Standardisation of defence equipment/ inventory is undertaken through 13 Standardisation Sub-Committees dealing with specialized equipment/ technologies. During 2023, a new Standardisation Sub-Committee namely, Marine Equipment Standardisation Sub-Committee, was formed to formulate Standards for Marine Equipment.</p>



<p class="wp-block-paragraph">During 2023, training on standardisation and codification was imparted to 333 personnel of Tri-Services, Defence Public Sector Undertakings (DPSUs), Authority Holding Sealed Particulars (AHSPs), Ordnance Factories and civil industries, through two Training Institutes located at Pune and Badarpur (New Delhi).</p>



<p class="wp-block-paragraph">The 14th edition of Aero India-2023 was held from 13th–17th February at Bengaluru, Karnataka and has been the largest ever edition since its inception in 1996 with more than 100 countries, 809 exhibitors, first ever Fly past with 53 aircrafts showcasing our airpower to global attendees and a total footfall of 7+ lakh visitors over five days.</p>



<p class="wp-block-paragraph">Start-ups promotion was a focus area at Aero India-2023 with Indian Start-ups being showcased at an exclusive iDEX pavilion, and at the Chiefs of Air Staff Conclave. The Annual Start-up event &#8216;Manthan&#8217; was also conducted. The maiden iDEX Investor Hub (iIH) was conducted with over Rs 200 crore pledged during iIH.</p>



<p class="wp-block-paragraph">A concerted effort was made towards forging B2B partnerships at the &#8216;Bandhan&#8217; ceremony and more than 250 such partnerships with a total value of more than Rs 75,000 crore have been finalized. The partnerships are a step towards increasing traction for business, ToT and Joint development between the companies.</p>



<h3 class="wp-block-heading">Defence Exports</h3>



<p class="wp-block-paragraph">Export leads received from various stakeholders are being disseminated to the registered Indian Defence Exporters through online portal. This facility helps the Indian defence exporters to quickly respond to export opportunities arising in other countries. The online portal has been upgraded with a feedback mechanism from Indian Industry for online monitoring/ follow-up of the disseminated export leads. Total 245 leads have been disseminated through the portal since Jan 2023.</p>



<p class="wp-block-paragraph">In order to boost defence exports, webinars were organized with Friendly Foreign Countries (FFCs) under the aegis of DDP, MoD through Industry Associations. Total 26 webinars have been organised since Jan 2023.</p>



<p class="wp-block-paragraph">A scheme for financial assistance to Defence Attaches (DAs) for promotion of “Brand India” in defence was approved by the RM in Nov&#8217; 2023. Under this scheme DAs have been mandated for export promotion of Indigenous defence products of both public and private sector through enhanced financial grants to the Indian missions. For FY 2023-24, DAs of 64 countries were allocated a total of Rs. 3.76 crores.</p>



<p class="wp-block-paragraph">An institutional support mechanism has been created for facilitation and hand-holding of Indian defence companies for promoting the export of UN Contingent Owned Equipment (COE) to troop contributing countries.</p>



<p class="wp-block-paragraph">In line with India&#8217;s Defence Export Strategy to enhance defence exports, 1310 Export Authorisations were issued by Dept of Defence Production to 73 countries during 2023, having value of Rs. 13345 crore.</p>



<h3 class="wp-block-heading">Defence Innovations</h3>



<p class="wp-block-paragraph">During 2023, 101 winners of iDEX challenges were declared, 131 contracts were signed and 15 prototypes were developed. Three versions of Defence India Start-up Challenges (DISC) i.e., DISC 8, DISC 9 &amp; DISC X were launched. Three versions of Open Challenges, i.e., OC 7, OC 8 &amp; OC 9 were launched.</p>



<p class="wp-block-paragraph">iDEX in partnership with US DoD conducted the India-U.S. Defence Acceleration Ecosystem (INDUX-X) event in Washington DC, USA on 20-21 June 2023. The initiative will expand the strategic technology partnership and defence industrial cooperation between the start-up eco-system, businesses, and academic institutions.</p>



<p class="wp-block-paragraph">iDEX Investor Hub (iIH) brought additional funding of Rs 50 cr through ITI Growth Opportunities Fund (a venture capital fund of the Investment Trust of India group), raising the total iIH amount to Rs 260 cr.</p>



<p class="wp-block-paragraph"><strong>Swavlamban 2023.</strong> During Swavlamban 2023 event on 4 Oct 2023, Raksha Mantri launched a number of initiatives.</p>



<p class="wp-block-paragraph"><strong>Collaboration with US DoD.</strong> Along with 76 Challenges of DISC X, 5 problem statements under iDEX 4 Fauji and first 2 challenges under &#8216;INDUS-X Mutual Promotion of Advanced Collaborative Technologies&#8217; (IMPACT were jointly launched by iDEX and United States Department of Defence (US, DoD).</p>



<p class="wp-block-paragraph"><strong>iDEX-Navy Venture for Technology (iNVent):</strong> Naval Innovation and Indigenisation Organisation (NIIO) and Defence Innovation Organisation (DIO) entered into an MoU for jointly working on facilitating the infusion of Venture Capital into the defence ecosystem through the iDEX Investor Hub (iIH).</p>



<p class="wp-block-paragraph"><strong>DAC Approvals.</strong> Indigenous Design &amp; Development of Defence Systems has been undertaken through &#8216;Make Procedure&#8217; provided under Defence Acquisition Procedure-2020. In 2023, 18 projects were accorded &#8216;Approval-in-principle&#8217; bringing the total tally to 149 projects. Also, 11 projects have been accorded Acceptance of Necessity (AoN) in 2023, taking the number of AoN projects to 60.</p>



<p class="wp-block-paragraph"><strong>Defence Industrial Corridors.</strong> Two Defence Industrial Corridors (DIC) have been established at Uttar Pradesh and Tamil Nadu to boost Defence Manufacturing ecosystem in the country with intent to attract investment of Rs. 10,000 Crore in each DIC. In Uttar Pradesh Defence Industrial Corridor (UPDIC), Uttar Pradesh Expressways Industrial Development Authority (UPEIDA), the nodal agency, has signed 138 Memoranda of Understanding (MoUs) with industries, etc. Actual investment of Rs. 2656 core has been made in UPDIC. In Tamil Nadu Defence Industrial Corridor (TNDIC), Tamil Nadu Industrial Development Corporation (TIDCO), the nodal agency, has made arrangements through 57 MoUs, etc. Actual investment of Rs. 4085 Crore has been made in TNDIC.</p>



<p class="wp-block-paragraph"><strong>Helicopter Factory. </strong>Prime Minister Narendra Modi dedicated HAL&#8217;s New Helicopter factory in Tumkuru to the nation on 6th Feb &#8217;23. During the same event, Prime Minister unveiled HAL&#8217;s indigenously designed and developed Light Utility Helicopter (LUH).</p>



<h2 class="wp-block-heading">DPSU’s Successes</h2>



<p class="wp-block-paragraph">Raksha Mantri Rajnath Singh inaugurated first overseas regional marketing office of HAL in Kuala Lumpur, Malaysia on 11 July 2023.</p>



<p class="wp-block-paragraph">HAL received the &#8216;State Export Excellence Award&#8217; (for the years 2017-18, 2018-19 &amp; 2019-20) from Department of Industries and Commerce, Govt. of Karnataka under the category of &#8216;Govt. of India Undertaking Exporter&#8217; on 22 Jul 2023.</p>



<p class="wp-block-paragraph">HAL played key role in success of Chandrayaan-3 including on-time delivery of 30 types of rivetted structure, six types of welded structure and the satellite&#8217;s bus structure Rover, Lander and Castings &amp; Forgings, appreciation received.</p>



<p class="wp-block-paragraph">ASTRA indigenous Beyond Visual Range (BVR) air-to-air missile, successfully fired from Light Combat Aircraft (LCA) LSP-7, off the coast of Goa on 23 Aug 2023. All the objectives of the test were met. This was a joint effort by ADA and HAL.</p>



<p class="wp-block-paragraph">HAL received DGCA approval under &#8216;CAR21 Subpart G&#8217; for series production of Hindustan 228 aircraft, indigenously built, as Make-in-India project and &#8216;Maintenance Type Training Certificate&#8217; under CAR147 under category B1 and B2 for imparting AME type rated licence on Hindustan-228 aircraft.</p>



<p class="wp-block-paragraph">Prime Minister Narendra Modi visited HAL Bangalore on 25 Nov 2023 and undertook a sortie on the LCA Tejas Twin Seater Aircraft. PM is the first Prime Minister of the Country who undertook a sortie in our home grown technology marvel-Tejas.</p>



<p class="wp-block-paragraph">Indigenous Air Traffic Management System (ATMAS), jointly developed &amp; installed by BEL and Airports Authority of India (AAI), was inaugurated &amp; commissioned at Bhubaneswar airport on 27 Oct 2023.</p>



<p class="wp-block-paragraph">Combat trial of indigenously developed Varunastra, a ship-launched anti-submarine heavy-weight torpedo (HWT) was successfully conducted on 6 June 2023 by Indian Navy. The Torpedo was fired from a submarine and successfully hit an underwater target demonstrating the combat worthiness and capable of meeting the Navy&#8217;s operational requirements. BDL has manufactured and supplied the torpedo and associated in integration, torpedo preparation for sea trials and firing onboard ship.</p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img fetchpriority="high" decoding="async" width="600" height="401" src="https://imrmedia.in/wp-content/uploads/2024/01/Combat-trial-of-Varunastra-ship-launched-anti-submarine-heavy-weight-torpedo-were-successfully-conducted-on-6-Jun-2023.jpg" alt="Combat trial of Varunastra, ship-launched anti-submarine heavy-weight torpedo were successfully conducted on 6 Jun 2023" class="wp-image-17022" srcset="https://imrmedia.in/wp-content/uploads/2024/01/Combat-trial-of-Varunastra-ship-launched-anti-submarine-heavy-weight-torpedo-were-successfully-conducted-on-6-Jun-2023.jpg 600w, https://imrmedia.in/wp-content/uploads/2024/01/Combat-trial-of-Varunastra-ship-launched-anti-submarine-heavy-weight-torpedo-were-successfully-conducted-on-6-Jun-2023-300x201.jpg 300w" sizes="(max-width: 600px) 100vw, 600px" /><figcaption class="wp-element-caption">Combat trial of Varunastra, ship-launched anti-submarine heavy-weight torpedo were successfully conducted on 6 Jun 2023</figcaption></figure>
</div>


<p class="wp-block-paragraph">BDL has launched three new products i.e., Vertically Launch Short Range Surface to Air Missile (VL SRSAM), SAL Seeker ATGM for BMP II and Drone Delivered Missile (JISHNU) during the Bandhan event at Aero India held in Feb 2023.</p>



<p class="wp-block-paragraph">BDL carried out field firing of 3rd Generation Fire and Forget Man Portable Anti-Tank Guided Missile named Amogha-III on 26 Mar 2023.</p>



<p class="wp-block-paragraph">The i-ATS (Indigenous- Automatic Train Supervision) system, developed by BEL, was formally launched on the Delhi Metro Red Line on 18 Feb 2023 from the Operations Control Centre (OCC), Shastri Park.</p>



<p class="wp-block-paragraph">MIDHANI indigenously developed SNI C276 sheets, a premier corrosion-resistant material. Alloy C276, strengthened with nickel, molybdenum, chromium, and a touch of tungsten, excels in oxidizing and reducing environments used for flue gas purification. This achievement was appreciated at BHEL SAMVAAD 3.0 held at New Delhi on 9 Nov 2023.</p>



<p class="wp-block-paragraph">MIDHANI developed 1000th heat in the indigenously developed Vacuum Arc Remelting (VAR) furnace within 6 years.</p>



<p class="wp-block-paragraph">MIDHANI launched five newly developed products and signed 11 MoUs during the 14th edition of Aero India 2023, organised by BEL along with HAL, held at Yelahanka, Bengaluru on 13-17 Feb 2023.</p>



<figure class="wp-block-gallery has-nested-images columns-default is-cropped wp-block-gallery-1 is-layout-flex wp-block-gallery-is-layout-flex">
<figure class="wp-block-image size-large"><img decoding="async" width="602" height="400" data-id="17023" src="https://imrmedia.in/wp-content/uploads/2024/01/HAL-has-handed-over-the-Crew-Module-Fairing-and-High-altitude-escape-motor-thrust-transfer-structure-to-ISRO-for-Gaganyaan-mission.jpg" alt="HAL has handed over the Crew Module Fairing and High-altitude escape motor thrust-transfer structure (to ISRO for Gaganyaan mission" class="wp-image-17023" srcset="https://imrmedia.in/wp-content/uploads/2024/01/HAL-has-handed-over-the-Crew-Module-Fairing-and-High-altitude-escape-motor-thrust-transfer-structure-to-ISRO-for-Gaganyaan-mission.jpg 602w, https://imrmedia.in/wp-content/uploads/2024/01/HAL-has-handed-over-the-Crew-Module-Fairing-and-High-altitude-escape-motor-thrust-transfer-structure-to-ISRO-for-Gaganyaan-mission-300x199.jpg 300w" sizes="(max-width: 602px) 100vw, 602px" /><figcaption class="wp-element-caption">HAL has handed over the Crew Module Fairing and High-altitude escape motor thrust-transfer structure (to ISRO for Gaganyaan mission</figcaption></figure>



<figure class="wp-block-image size-large"><img decoding="async" width="600" height="400" data-id="17024" src="https://imrmedia.in/wp-content/uploads/2024/01/BDL-launched-Drone-Delivered-Missile-JISHNU-at-Aero-India-2023.jpg" alt="BDL launched Drone Delivered Missile (JISHNU) at Aero India 2023" class="wp-image-17024" srcset="https://imrmedia.in/wp-content/uploads/2024/01/BDL-launched-Drone-Delivered-Missile-JISHNU-at-Aero-India-2023.jpg 600w, https://imrmedia.in/wp-content/uploads/2024/01/BDL-launched-Drone-Delivered-Missile-JISHNU-at-Aero-India-2023-300x200.jpg 300w" sizes="(max-width: 600px) 100vw, 600px" /><figcaption class="wp-element-caption">BDL launched Drone Delivered Missile (JISHNU) at Aero India 2023</figcaption></figure>
</figure>



<p class="wp-block-paragraph">The 4th ship of Project-17A “Mahendragiri”, built by MDL, was launched on 1 Sep 2023.</p>



<p class="wp-block-paragraph">Goa Shipyard Limited (GSL) and Foundation for Science innovation and Development, IISC Bengaluru signed MoU on 29 July 2023 towards fostering joint development and implementation of AI technologies in the field of shipbuilding &amp; defence applications.</p>



<p class="wp-block-paragraph">GSL &amp; Kenya Shipyards Limited signed MoU in Capacity Building &amp; for collaboration in ship design &amp; construction, during the bilateral meeting held between Defence Minister Rajnath Singh and Kenya’s Cabinet Secretary for Defence, Aden Bare Duale in New Delhi.</p>



<p class="wp-block-paragraph">Yard &#8216;Infrastructure Augmentation Plan&#8217; worth Rs. 1393.55 cr was executed in five phases and completed in all manners on 31 Mar 2023 by GSL.</p>



<p class="wp-block-paragraph">Two Diving Support Vessels (DSV), indigenously designed by Hindustan Shipyard Limited (HSL), are being built for Indian Navy for the first time by an Indian yard.</p>



<p class="wp-block-paragraph">HSL has received three Inmex Maritime Excellence Awards in categories of Best Ship Repair Company, Best Technology Innovation and Women Leadership Award.</p>



<p class="wp-block-paragraph">IOL has signed 13 MOUs valuing approx Rs 6,100 crore for cooperation in designing, development, manufacture, upgradation etc. of new products/ technologies with different parties like BEML and others.</p>



<p class="wp-block-paragraph">In pursuance of MoD&#8217;s policy to promote &#8216;Aatmanirbhar Bharat&#8217; Programmes, IOL has indigenised many ex-import components/sub-assemblies using Srijan portal. IOL has placed 101 project sanction orders on Indian manufacturers, under Make-II scheme of DAP-2020 and 8 RFPs/EOIs have also been published. IOL has 189 items in PIL1 and 47 items in PIL3 Lists, out of which 184 Items have already been indigenised. IOL has also sponsored five innovative technology projects under iDEX.</p>
<p>The post <a href="https://imrmedia.in/defence-review-2023-defence-production-in-2023/">DEFENCE REVIEW 2023 &#8211; Defence Production in 2023</a> appeared first on <a href="https://imrmedia.in">IMR</a>.</p>
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		<title>Foreign firms achieve only 82% target in defence offsets</title>
		<link>https://imrmedia.in/foreign-firms-achieve-only-82-target-in-defence-offsets/</link>
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		<dc:creator><![CDATA[IMR Reporter]]></dc:creator>
		<pubDate>Mon, 15 Aug 2022 10:45:44 +0000</pubDate>
				<category><![CDATA[Defence Industry]]></category>
		<category><![CDATA[Industry News]]></category>
		<category><![CDATA[Defence Offset Guidelines]]></category>
		<category><![CDATA[defence offsets]]></category>
		<category><![CDATA[Defence Procurement Procedure]]></category>
		<category><![CDATA[DPP]]></category>
		<category><![CDATA[MSME]]></category>
		<category><![CDATA[offset commitments]]></category>
		<guid isPermaLink="false">https://imrmedia.in/?p=14907</guid>

					<description><![CDATA[<p>The total offset commitment by foreign defence companies to be fulfilled in India for various defence deals during the last 15 years, was $6.83 billion till August 01, 2022 of which they fulfilled offset claims worth 82.13% or about $5.61 billion, the Defence Ministry informed Parliament. Expressing concern over the shortfall, MP Kunwar Danish Ali [&#8230;]</p>
<p>The post <a href="https://imrmedia.in/foreign-firms-achieve-only-82-target-in-defence-offsets/">Foreign firms achieve only 82% target in defence offsets</a> appeared first on <a href="https://imrmedia.in">IMR</a>.</p>
]]></description>
										<content:encoded><![CDATA[
<p class="wp-block-paragraph">The total offset commitment by foreign defence companies to be fulfilled in India for various defence deals during the last 15 years, was $6.83 billion till August 01, 2022 of which they fulfilled offset claims worth 82.13% or about $5.61 billion, the Defence Ministry informed Parliament.</p>



<p class="wp-block-paragraph">Expressing concern over the shortfall, MP Kunwar Danish Ali who raised this question said this “huge money could revive MSME (Micro, Small and Medium Enterprises) sector and create a lot of jobs.”</p>



<p class="wp-block-paragraph">“Total 15 companies have missed the first deadline set for implementation of their defence offset commitment. Further details being strategic and sensitive in nature, cannot be disclosed,” Minister of State for Defence Ajay Bhatt said in a written reply in the Lok Sabha, on Friday. “For unfulfilled offset obligations, penalty as applicable has been imposed on the defaulting vendors as per the governing Defence Offset Guidelines.”</p>



<p class="wp-block-paragraph">Further, in genuine cases, re-phasing of offset obligations has been allowed to enable vendors to discharge the pending offset obligations, Mr. Bhatt stated, detailing the steps taken by the Defence Ministry to prevent default or delay in implementation of offset commitments by vendors.</p>



<p class="wp-block-paragraph">Defence offset policy was promulgated under Defence Procurement Procedure (DPP) 2005 with the objective that it would bring in high-end technology into the country and build the domestic defence industry. Under offset clause, a foreign company which wins a defence deal is supposed to invest back a part of the contract value in the country thus developing skills and bringing in technology while also generating employment.</p>



<p class="wp-block-paragraph">As per DPP 2006, offset value has been fixed at 30% of defence deals above ₹300 crore which was revised to ₹2000 crore in DPP 2016 for full import deals. The first offset contract was signed in 2007.</p>
<p>The post <a href="https://imrmedia.in/foreign-firms-achieve-only-82-target-in-defence-offsets/">Foreign firms achieve only 82% target in defence offsets</a> appeared first on <a href="https://imrmedia.in">IMR</a>.</p>
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		<title>Export Target of Rs 2.6 L Cr, Total Self-Reliance: Defence Ministry</title>
		<link>https://imrmedia.in/export-target-of-rs-2-6-l-cr-total-self-reliance-defence-ministry/</link>
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		<dc:creator><![CDATA[IMR Reporter]]></dc:creator>
		<pubDate>Sat, 09 Jul 2022 05:30:00 +0000</pubDate>
				<category><![CDATA[Daily Defence News]]></category>
		<category><![CDATA[atmanirbharta]]></category>
		<category><![CDATA[defence exports]]></category>
		<category><![CDATA[defence production]]></category>
		<category><![CDATA[defense news]]></category>
		<category><![CDATA[Export Target]]></category>
		<category><![CDATA[indigenisation]]></category>
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		<category><![CDATA[self-reliance]]></category>
		<category><![CDATA[Vision@2047]]></category>
		<guid isPermaLink="false">https://imrmedia.in/?p=13657</guid>

					<description><![CDATA[<p>The defence ministry is looking at an export target of Rs 2.6 lakh crore by 2047 when India reaches its 100th year of independence, top sources in the government told News18. The government is also aiming for full indigenisation and self-reliance in the defence sector by that year. This was discussed in a meeting chaired [&#8230;]</p>
<p>The post <a href="https://imrmedia.in/export-target-of-rs-2-6-l-cr-total-self-reliance-defence-ministry/">Export Target of Rs 2.6 L Cr, Total Self-Reliance: Defence Ministry</a> appeared first on <a href="https://imrmedia.in">IMR</a>.</p>
]]></description>
										<content:encoded><![CDATA[
<p class="wp-block-paragraph">The defence ministry is looking at an export target of Rs 2.6 lakh crore by 2047 when India reaches its 100th year of independence, top sources in the government told News18. The government is also aiming for full indigenisation and self-reliance in the defence sector by that year.</p>



<p class="wp-block-paragraph">This was discussed in a meeting chaired by defence minister Rajnath Singh on Friday on targets to be achieved by India by 2047 as part of the Narendra Modi government’s Vision@2047. Other major targets discussed at the meeting were increasing the number of micro, small and medium enterprises (MSMEs) in the defence sector to 45,000 from 15,000 at present.</p>



<p class="wp-block-paragraph">Government sources said what also featured in the discussions with the minister was increasing India’s current market share in the space economy to 15 per cent by 2047 from the current two per cent. They added that India is aiming to be a $1 trillion market by 2047, and this will involve a big investment in the space startup ecosystem.</p>



<p class="wp-block-paragraph">India’s defence exports in 2020-21 stood at Rs 13,000 crore, Sanjay Jaju, additional secretary (defence production), said on Friday. The Rs 2.6 lakh crore target by 2047 would hence amount to increasing the exports by nearly 20 times, the top source in the government said.</p>



<p class="wp-block-paragraph">“Increasing defence exports continues to be the top priority of the government and a target of Rs 35,000 crore to Rs 40,000 crore by 2024-25 has been fixed,” the source added. The export of the LCA Tejas of HAL and Brahmos supersonic cruise missiles are the two major focus areas for exports with multiple countries showing interest in them.</p>



<p class="wp-block-paragraph">The defence ministry is also working on a defence production and export promotion policy, which is learnt to be in its final stages. India is looking at exporting Advanced Light Helicopters Mark III to the Philippines and the Light Combat Aircraft Tejas to Malaysia. The talks between the two countries are at an advanced stage.</p>



<p class="wp-block-paragraph">India has offered to set up a production line to manufacture LCA and choppers in Egypt, and plans to explore the African market for exports, the source quoted earlier told News18. India also recently inked a $375 million deal for the supply of the BrahMos supersonic cruise missiles to the Philippines. Indonesia is also a potential customer for the Brahmos and talks are ongoing between the two countries.</p>



<p class="wp-block-paragraph">Ten sectoral groups of secretaries (SGoS) spanning all sectors have been working on preparing a set of targets and a roadmap to achieve them by 2047. One of the sectoral groups is on security and foreign affairs. This is the Modi government’s big roadmap for India’s 100th year of Independence.</p>



<p class="wp-block-paragraph">Indian defence exports have grown almost six times from Rs 1,500 crore to Rs 9,000 crore in the past five years, in which the participation of the private sector stands at 90 per cent, as per ministry of defence data. These exports are broadly going to 84 countries. A Stockholm International Peace Research Institute (SIPRI) report of 2020 stated that India stands in the list of the top 25 countries in defence exports.</p>
<p>The post <a href="https://imrmedia.in/export-target-of-rs-2-6-l-cr-total-self-reliance-defence-ministry/">Export Target of Rs 2.6 L Cr, Total Self-Reliance: Defence Ministry</a> appeared first on <a href="https://imrmedia.in">IMR</a>.</p>
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		<title>Impact of COVID-19 on Aerospace &#038; Defence MSMEs</title>
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		<dc:creator><![CDATA[IMR Reporter]]></dc:creator>
		<pubDate>Tue, 19 May 2020 10:25:09 +0000</pubDate>
				<category><![CDATA[Defence Industry]]></category>
		<category><![CDATA[Industry News]]></category>
		<category><![CDATA[aerospace]]></category>
		<category><![CDATA[defence-industry]]></category>
		<category><![CDATA[defence-production]]></category>
		<category><![CDATA[MSME]]></category>
		<category><![CDATA[supply-chain]]></category>
		<guid isPermaLink="false">https://imrmedia.in/?p=1576</guid>

					<description><![CDATA[<p>Covid-19 pandemic continues to disrupt businesses, international trade, economy and supply chains across the world in addition to adverse impact on day-to-day lives of the global population. The World Health Organisation (WHO) declared the outbreak of the disease COVID-19 due to Corona virus as a Public Health Emergency of International Concern on 30 January 2020. [&#8230;]</p>
<p>The post <a href="https://imrmedia.in/impact-of-covid-19-on-aerospace-defence-msmes/">Impact of COVID-19 on Aerospace &#038; Defence MSMEs</a> appeared first on <a href="https://imrmedia.in">IMR</a>.</p>
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<p class="wp-block-paragraph">Covid-19 pandemic continues to disrupt businesses, international trade, economy and supply chains across the world in addition to adverse impact on day-to-day lives of the global population.</p>



<p class="wp-block-paragraph">The World Health Organisation (WHO) declared the outbreak of the disease COVID-19 due to Corona virus as a Public Health Emergency of International Concern on 30 January 2020. On 11 March, COVID-19 was declared as a pandemic. The UN Department of Economic and Social Affairs (DESA) has analysed that the global economy could shrink by up to 1% as opposed to a growth of 2.5%3 before this crisis hit the world. There is high possibility that it may reduce even further if restrictions such as lockdown continue, and governments do not provide financial support.</p>



<p class="wp-block-paragraph">The Ministry of Finance, on 8 April 2020, released an order listing spending and cash flow management of each ministry. For the Ministry of Defence (MoD), the order has put a cap of 20% to defence capital, defence services and defence pensions. This means that only 20% of the budget can be spent in the first quarter of 2020-2021 (April to June).</p>



<div class="wp-block-image"><figure class="alignleft size-large"><img loading="lazy" decoding="async" width="600" height="360" src="https://imrmedia.in/wp-content/uploads/2020/05/24-A-Vertical-Drive-Turbine-casing-inspection-at-MSTTL-Bengaluru.jpg" alt="" class="wp-image-1580" srcset="https://imrmedia.in/wp-content/uploads/2020/05/24-A-Vertical-Drive-Turbine-casing-inspection-at-MSTTL-Bengaluru.jpg 600w, https://imrmedia.in/wp-content/uploads/2020/05/24-A-Vertical-Drive-Turbine-casing-inspection-at-MSTTL-Bengaluru-300x180.jpg 300w" sizes="auto, (max-width: 600px) 100vw, 600px" /><figcaption> Vertical Drive Turbine casing inspection at MSTTL Bengaluru</figcaption></figure></div>



<p class="wp-block-paragraph">On 27 March 2020, Society of Indian Defence Manufacturers (SIDM) organized a webinar with MoD for the Indian industry. The panel included Defence Secretary, Secretary (Defence Procurement), Directorate General (Acquisition), CMDs of the nine defence public sector undertakings (DPSUs) and Master General Ordnance (MGO) amongst others. In the webinar, DG Acquisition shared that a general order for all capital acquisitions has been published for extension of submission of bids, RFI, EoI, etc. MGO stated that all trials have been frozen and no new trials shall begin until the situation changes for the better. DPSUs were advised to ensure Industry that payments are made to all industry with preference to MSMEs. MoD urged the industry to support in fighting COVID-19 by providing ventilators, personal protective equipment and any other products for the same.</p>



<p class="wp-block-paragraph">Indian Armed Forces and civil administration have been running quarantine and isolation facilities in the country. In order to speed up the procurement of supplies for these facilities, MoD has invoked emergency powers which will provide three important exemptions in the existing procurement rules. These are exemption from long-drawn bidding procedure, dispensation of procurement from Government e-Marketplace (GeM) and making 100% advance payment to suppliers after due diligence – to procure necessary supply in the fastest possible manner.</p>



<p class="wp-block-paragraph">An amount of Rs 50,000 crore has been provided to National Bank For Agriculture &amp; Rural Development (NABARD), Small Industries Development Bank of India (SIDBI) and National Housing Bank (NHB) to meet the needs of agriculture and the rural sector, small industries, housing finance companies, NBFCs and MFIs. RBI has announced that Non-performing Assets (NPA) norms of 90 days have been relaxed. The period of moratorium will be excluded from the 90-day classification norms of NPAs for those accounts, which would avail the moratorium facility. Non-Banking Financial Companies (NBFCs) have been given flexibility for relief to their borrowers.</p>



<p class="wp-block-paragraph"><strong>Impact on Indian industry</strong></p>



<p class="wp-block-paragraph">Since the lowdown period in India has started, no production or less than 10% production is being done on the shop floor so far. Even with relaxation from 20 April 2020, return of workers and staff who have gone to native places or are unwilling to travel will be difficult to manage. Workforce limitation is major challenge as industrial areas are away from housing areas and people have to consider their safety of travel. At the same time, migrant workers/ labour will re-join after 3-4 months and there is a chance of skillset loss and deviation in quality of products in the initial period before everything streamlines.</p>



<p class="wp-block-paragraph">Many Indian companies keep inventory for 3 months of future production, thus the challenge of limited supply is currently addressed. However, if the global situation does not ease by June, then manufacturing industry will start to feel the burden of raw materials and bought out items necessary for production.</p>



<p class="wp-block-paragraph">There is significant insecurity in the industry as budget priority, policies and strategy focus will change for at least next two years and many on-going capital acquisition plans will be deferred indefinitely. As economy dips, health and infrastructure will get priority over other sectors. Specifically, for the Aviation industry, this will either be a short term &#8220;V-rise&#8221; or a long term &#8220;U-recovery&#8221;. With thorough applications of stringent A&amp;D quality standards, with BCP being a critical requirement, maintenance and upkeep of facilities is manageable remotely with minimum human intervention. By July-Aug production/ utilisation levels may reach 70% and only after September it is expected that there will be 90-100% utilisation. This is subject to rate of growth of Covid-cases.</p>



<div class="wp-block-image"><figure class="alignleft size-large is-resized"><img loading="lazy" decoding="async" src="https://imrmedia.in/wp-content/uploads/2020/05/24-B-Key-Issues-MSMEs-no-caption.jpg" alt="" class="wp-image-1579" width="779" height="617" srcset="https://imrmedia.in/wp-content/uploads/2020/05/24-B-Key-Issues-MSMEs-no-caption.jpg 900w, https://imrmedia.in/wp-content/uploads/2020/05/24-B-Key-Issues-MSMEs-no-caption-600x475.jpg 600w, https://imrmedia.in/wp-content/uploads/2020/05/24-B-Key-Issues-MSMEs-no-caption-300x238.jpg 300w, https://imrmedia.in/wp-content/uploads/2020/05/24-B-Key-Issues-MSMEs-no-caption-768x608.jpg 768w, https://imrmedia.in/wp-content/uploads/2020/05/24-B-Key-Issues-MSMEs-no-caption-696x551.jpg 696w, https://imrmedia.in/wp-content/uploads/2020/05/24-B-Key-Issues-MSMEs-no-caption-530x420.jpg 530w" sizes="auto, (max-width: 779px) 100vw, 779px" /></figure></div>



<p class="wp-block-paragraph">Aerospace demands long cash flow cycle (at least a 6-month credit cycle). Presently, finance institutions are providing support only for 2 months. There needs to be an extension to match the cycle of the sector for at least 6 months if not more. Additionally, lower rate of interest for borrowing is vital for achieving international competitiveness. Similar sized company in Thailand may borrow at 7-8% vs. aerospace MSME in India which borrow at around 12%.</p>



<p class="wp-block-paragraph">While the outbreak of Corona virus has created a situation of uncertainty and apprehension for every organisation, Micro, Small and Medium Enterprises (MSMEs) are the worst affected. Then nation is striving to follow prime minister&#8217;s appeal of not dismissing employees and continuing paying salaries. However, MSMEs, especially those with weak balance sheets, are finding it difficult to retain employees.</p>



<p class="wp-block-paragraph">Key issues that MSMEs in India are facing today are tabulated in table above.</p>



<p class="wp-block-paragraph"><strong>Anticipated post lockdown scenario in India</strong></p>



<p class="wp-block-paragraph">Discussions with Indian industry involved in defence manufacturing has also brought out the following projections:</p>



<p class="wp-block-paragraph">•&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It is anticipated that due to complete halt of all activities, the problems of cash flow, raw material prices and logistics problems will arise after lockdown is over.</p>



<p class="wp-block-paragraph">•&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It appears that complete revival of any MSME shall require at least 6-12 months.</p>



<p class="wp-block-paragraph">•&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Most of the MSMEs are very disturbed and there is feeling that 40% of the MSMEs will be wiped out in three months&#8217; time unless Government comes out with a major package.</p>



<p class="wp-block-paragraph">•&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prices of raw material are expected to increase. Already suppliers have started reaching out for price increase due to low supply high demand situation on certain consumables or raw material.</p>



<p class="wp-block-paragraph">•&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Raw material prices, due to dependency on China are bound to increase and as always would be passed on to the end users.</p>



<p class="wp-block-paragraph">•&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Marginal increase in prices of products (approximately 3-4%) unless imported.</p>



<p class="wp-block-paragraph">•&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transportation will not be a problem after lockdown.</p>



<p class="wp-block-paragraph">•&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Most of the factory workers are migrants from villages or other states. Many of them may not return after the lockdown. So MSMEs will have to recruit fresh employees and train them. Cost of wages and salaries will rise. Labour unrest can also be a threat. Hence, getting raw materials shortage can hamper production.</p>



<p class="wp-block-paragraph">•&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in cost of all raw materials, labour costs and import costs will increase final product cost, reduce profits and many MSMEs will be out of business if government doesn&#8217;t give encouragement and incentives.</p>



<p class="wp-block-paragraph">Other industries such as tourism and aviation are also at a standstill since almost 100 countries have closed national borders in the last month. Even after these restrictions are lifted, the demand for new aircrafts will be low since practice of social distancing will continue. People will refrain from travelling unless very essential.</p>



<p class="wp-block-paragraph">The entire world is putting in efforts in any and every way possible to restore normalcy slowly and gradually. It has become prudent for governments to shift their focus inwards. Countries will concentrate on reviving their economies and restrain from nefarious activities. Since conflict will reduce, demand for military arsenal will also reduce. As a ripple effect, global trade will reduce, export of defence products will not increase because of reduced demand.</p>



<p class="wp-block-paragraph"><strong>Exit Strategy</strong></p>



<p class="wp-block-paragraph">Today, though the world might debate on Covid-19 being a conspiracy, it is unified against China for not containing the Corona virus and lack of information it provided to the world. Consequently, international trade towards China will experience a dip but the sum total trade will remain the same. According to US-India Strategic and Partnership Forum (USISPF), around 200 companies are seeking to shift their manufacturing from China to India. USISPF also said that to attract these companies, India needs to introduce reforms, be more transparent in the process and engage more. Other countries like South Korea and Japan are also seeking to move their factories to India from China. Andhra Pradesh is under consideration by companies like POSCO and Hyundai Steel. Japan has also been reported to spend $2.2 billion help companies to shift out of China.</p>



<p class="wp-block-paragraph">These series of event present themselves as a golden opportunity for India to become a leading manufacturing hub and attract large foreign investments. This will also aid India to accelerate the revival of its economy in the near future along with giving a boost to Make in India. India has lost a window for abundant development when USSR split. India did not capture the moment like shipyards such as Fincantieri and Daewoo which came up since they employed jobless people and tapped into the market in the right time. Ruble fell to unprecedented low and India did not cash on it. Therefore, India cannot miss this prospect. The Industry ministry, Finance ministry and Commerce ministry are in process of developing a package to attract companies planning to exit China. Tax and duty incentives, fast track clearances both at central and state levels with single window clearances where possible, easier availability of land, relaxations from too many regulations if the planned factory is in a SEZ are a few suggestions to be included in this package.</p>



<p class="wp-block-paragraph">To take full advantage of this situation India must focus on quality, cost effective products in an innovative way. Companies need to focus on digital strategy, embrace change, build strong digital fluency, focus on automation and establish single interface for multiple function for agile response. If a company is not online, it is time to have a digital presence. This is the time organisations have to know more about their clients, their buying patterns, why are they buying from a particular source and what is the unique value that source is creating or selling. As of now, it is unclear, how many companies have reviewed their sales pattern data by demography, channel etc. Any organisation needs to understand the customer, and this is the right time to take up this task by conducting interviews/calls and asking their opinion about the products and identifying the gaps based on their feedback. Introducing key team members to customers especially sales, marketing, finance and support leads is another need of the hour. This is the time where companies need to establish metrics and start measuring. They need to create product awareness, new leads, new signup, referral programs and identify churn rate.</p>



<p class="wp-block-paragraph">There is no contention in the fact that government is the single buyer of defence products in India. MoD needs proactively engaging with industry by placing orders. If this is not done, problems like cash flow and unemployment will rise leading to a hungry work force and in turn an angry work force. Problems in hinterland is the last thing a government wants.</p>



<p class="wp-block-paragraph">As far as the issue of financial resources for procurement from industry is concerned, it is important to realise a way so that military modernisation does not take a hit. Capital defence budget consists not only of modernisation but also land, construction work etc. The 20% cap should be enforced on the budget outlay for such segments without hampering military modernisation. On the revenue side, a 30% cap has been indicated. In these times, there is no troop movement hence less fuel consumption, no military/international exercises. The only major negative impact is that no training can be conducted. However, this loss of training in quarter 1 and 2 of 2020 will be offset by rapid training schedule fitted in the curriculum in the next 2-3 quarters. Hence, operational efficiency shall not be affected.</p>



<p class="wp-block-paragraph">If India wants to save its MSMEs, MoD should ensure placement of direct offsets on MSMEs and give up wasting offset credit value to be given to OEMs abroad for non-productive items like buying land in Defence Corridors, establishment of test facilities, ToT, etc., (and most of them with offset credit multiplication factors). Direct offsets should only be resorted to and not indirect offsets as has been proposed under new DPP-2020.</p>



<p class="wp-block-paragraph">Courtesy: E&amp;Y Report</p>
<p>The post <a href="https://imrmedia.in/impact-of-covid-19-on-aerospace-defence-msmes/">Impact of COVID-19 on Aerospace &#038; Defence MSMEs</a> appeared first on <a href="https://imrmedia.in">IMR</a>.</p>
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