Def Expo 2018 – A Launchpad or A damp squib?

Long awaited and much-touted Def Expo 2018 that had spanned over 4 days from 11th April to 14th April, has just concluded.  Serene outskirts of the south Indian coastal city Chennai in the state of Tamil Nadu, although seemed a debatable choice to host the tenth edition of this event, turned out to be a befitting venue with the state’s manufacturing might at display It’s an exhilarating experience to witness India’s defense technologies & products that were showcased throughout the event. Walking past the expo venue, one could easily sense that the pulse of the expo completely centered around the theme of making India as the factory for global defense needs.

Exuberant participation of over 670 companies, including 154 foreign companies, is a clear indication of the high level of interest to support India’s mission to be a defense manufacturing hub. Official delegations from 47 countries attended the expo, including a large number of defense attachés of various countries, who visited the number of stalls to familiarize themselves with Indian products they could import to meet their domestic requirements. Global OEMs Lockheed Martin, Boeing, Saab (Sweden), Thales, Airbus, BAE Systems, MBDA, Naval Group, and even a few South Korean, German, Finnish companies put up their stalls to impress Indian armed forces

I believe, this edition has garnered more attention than the previous editions, for two key reasons:

  1. Firstly, this is the first Def Expo after India Govt’s announcement of Strategic Partnership Policy last year. The buzz around this key policy that opened gates for foreign collaborators and Indian Pvt. industry in four sectors, is quite palpable
  2. Secondly, this also comes right on the heels of the failure of IPOs of defense PSUS; a part of Govt’s disinvestment program of defense PSUs. HAL, BDL, Midhani were few defense PSUs that have gone public last week with lukewarm response from investors.

These two factors have certainly resulted in, those raised voices calling for more private participation gathering steam, and Indian corporates (TATA, Mahindra, and Ashok Leyland) looked to seize this opportunity by announcing their business consolidation plans days before the event, and subsequently following it up with a huge display of products at Def Expo.

With that preface, I would like to share my observations and take ways from this marquee event.

          1. Key strategic partnerships and announcements:

    • IAF’s RFI for 110 fighter jets just before this event has certainly helped this event. Organizations leveraged this event as their launchpad not only to express their interest in participating in the RFI, but also signed agreements with Indian partners for this program to vouch for their commitment to Make in India. Boeing’s agreement with HAL and Mahindra Defense systems to manufacture F/A-18 Super Hornet is certainly an indication of the same.
    • Kalyani Group and BAE Systems have got into a strategic partnership to produce air defense guns and ammunition.
    • Bharat Electronics Limited (BEL) and Larsen & Toubro (L&T) have signed a MoU to supply defense products and systems
    • Goa Shipyard and Naval Group announced a partnership for manufacturing simulators for training of crews for submarines.

     

    2. Gearing for Defense Exports

  1. Defense Exports is a topic that has been in talks for last few years, and the concerted efforts of DRDO in developing world-class products seem to start bearing fruits. While there isn’t any definite announcement on exports, there are enough indications that MoD is clearing the decks for exporting our products. Buoyed by the interest in Indian products, Dr. S. Christopher, Secretary, Defense R&D and Dr. Satheesh Reddy, SA to RM have unveiled an ambitious 18,000 Cr investment plan in Defense Research, and further strengthened these speculations. Having earned the tag of world’s largest defense importer, these steps towards exports, shall help achieving a right balance in defense trade, and sustenance of the defense ecosystem.

         

          3. The emergence of South India as Defense Manufacturing Hub

  1. With Bangalore and Hyderabad long establishing their positions as Aerospace & Defense hubs, it was Chennai’s turn to join this bus. Having succeeded with a very strong manufacturing ecosystem for Automotive and Textile industries, the state of Tamil Nadu has joined the two other southern Indian states to be another emerging Aerospace hub. Tamil Nadu accounts for the largest number of (15.07 percent) Micro, Small and Medium Enterprises (MSMEs) in the country, and Def Expo 2018 has given these entities a great opportunity to interact, engage and forge associations with global players. This certainly augurs well for the Indian defense industry as a whole, as the strong MSME ecosystem can help achieve the efficiencies while driving costs down.  If this trend continues and sustains the growth of MSMEs, we can very soon realize a hub and spoke model with these three cities as hubs.

 

The Verdict

By far, this has been the best Def Expos that I have attended. MoD’s efforts to bring the defense community under one roof to showcase the Indian manufacturing prowess, am sure, will yield the desired outcome – Strengthening Defense Manufacturing ecosystem in India, thereby turn our nation a factory for global defense programs. Many initiatives under the “Make in India” policy umbrella have slowly but certainly started to take shape. To name a few, Defense procurement procedure has been continuously reviewed and revised. Defense production policy is being deliberated with many stakeholders. Industrial corridors were identified and are being nurtured for development of defense industrial base.

In summary, this event has been well leveraged by both DPSUs and Private organizations, as a great Launchpad to announce India’s arrival on global manufacturing landscape. Similar enthusiasm was resonant from the global OEMs, who have shown a lot of interest to partner with Indian firms and be part of this wonderful journey of transforming Indian manufacturing. And, most importantly, this event has provided a great platform to many MSMEs, which for long, had been the weak link of defense ecosystem. This coming together, was only possible because of this great Launchpad offered by Def Expo. We can now start to believe that the good times for Indian manufacturing, a much-needed job creation engine for the country with second largest population, shall soon be a reality.

ravikiran

Industry leader, Aerospace & Defense, Dassault Systemes

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