Foreign Defence Suppliers are Seeking to Incorporate the Indian Defence
Industry into Their Global Supply Chains: CII-Deloitte Defence Report
Industry into Their Global Supply Chains: CII-Deloitte Defence Report
Highlights of the CII-Deloitte report on ‘Prospects for Global Defence
Industry in Indian defence market’:
· Indian defence procurement would rise to an estimated USD 42 Billion
(including USD 19.20 bn for capital acquisition) which could make India as
one of the most attractive markets in the World.
· The defence capital expenditure budget is expected to achieve a compound
Annual Growth Rate (CAGR) of 10 Percent from 2011 – 2015.
· Total indigenous production over 2011-2015 would need to expand from
approx USD 30 bn to more than USD 70 bn in the span of 5 years to be able to
achieve 70 percent indigenization by the year 2015. Defence industry would
need to expand by an average of 30 percent a year over the next 5 years.
· It is estimated that India is likely to spend nearly USD 80 bn USD for
next five years (2010-2015) on Capital expenditure.
· The Report provides Information to global investor firms to understand the
Indian defence requirements and domestic industry capabilities and
opportunities in the four key domains vis maritime, land , aerospace and
electronics.
Mr. R.K. Singh, Secretary (Defence Production), Ministry of Defence,
Government of India today released a CII-Deloitte report on ‘Prospects for
Global Defence Industry in Indian defence market’ at Eurosatory 2010
exhibition in Paris. Mr Singh emphasized that the Buy and Make (Indian)
Category is as an opportunity for foreign players to partner with the Indian
Defence industry. He further stated that this new category would enhance the
formation of JVs and Technology partnership between the Indian and the
Foreign defence industry. While responding to a query he clarified that the
Ministry of Defence is in favour of continuing with the FDI limit of 26
percent.
Over the past decade, the Indian Ministry of Defence has put into motion
plans for an unprecedented modernization program of its defence
capabilities. In this context, India has embarked on a major defence
acquisition program, aimed at increasing the size, capability and
self-reliance of its Defence Armed Forces. The report provides that the
aerospace and defence sector is growing at an unprecedented rate and
emerging as a key participant in the Asia Pacific region.
Report also provides indicative list of acquisition plans. In Union Budget
2010-11, expenditure of about USD 32.03 billion has been earmarked for
national defence. More than USD 42 billion in total defence expenditure is
targeted by 2015, of which approximately USD 19.20 billion would be expected
to be spent on capital equipment for the Defence Armed Forces.
Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry
said “While it is clear that India is seeking a high level of self
sufficiency in delivering its ambitious defence re-equipment and expansion
program, it is also evident that there will be a high level of reliance on
overseas interests to supply the necessary technology in a number of areas.
Foreign OEMs are now looking at India as a critical market as well as a
potential manufacturing partner.”
Mr. Gurpal Singh, Deputy Director General CII stated that India is gradually
becoming a key outsourcing hub for the global defence industry. The
continuous revisions of the Defence Equipment procurement procedures in the
recent past suggest the intent of the Indian Government to streamline the
procedures and make the system more transparent and speedier.
Nidhi Goyal, Director - Aerospace and Defence in Deloitte on release of the
report says that “India is considered as the next destination of
manufacturing given country’s strength like wider supplier base, low cost
manufacturing, persistent focus on infrastructure development, huge pool of
skilled workforce and increased penchant for enhancing competitiveness by
the respective domestic firms”.
India has established a notional target for 70 per cent of new acquisitions
in the future to be sourced from indigenous production. Ms Nidhi Goyal says
“to meet the target of 70% indigenization, local industry should achieve an
average growth rate of 30% a year over the next five years”. She further
says that the current offset contracts are still not sufficient for Indian
industry growth and hopefully the target for offset contracts at USD 10
billion by 2011 will give further boost to the industry.
The sheer volume of planned expenditure is expected to create new
opportunities for foreign firms, as total spending will grow in absolute
terms. India is also host to a mature manufacturing sector, which means it
will often be able to offer more cost-competitive terms for large platform
builds.
Industry in Indian defence market’:
· Indian defence procurement would rise to an estimated USD 42 Billion
(including USD 19.20 bn for capital acquisition) which could make India as
one of the most attractive markets in the World.
· The defence capital expenditure budget is expected to achieve a compound
Annual Growth Rate (CAGR) of 10 Percent from 2011 – 2015.
· Total indigenous production over 2011-2015 would need to expand from
approx USD 30 bn to more than USD 70 bn in the span of 5 years to be able to
achieve 70 percent indigenization by the year 2015. Defence industry would
need to expand by an average of 30 percent a year over the next 5 years.
· It is estimated that India is likely to spend nearly USD 80 bn USD for
next five years (2010-2015) on Capital expenditure.
· The Report provides Information to global investor firms to understand the
Indian defence requirements and domestic industry capabilities and
opportunities in the four key domains vis maritime, land , aerospace and
electronics.
Mr. R.K. Singh, Secretary (Defence Production), Ministry of Defence,
Government of India today released a CII-Deloitte report on ‘Prospects for
Global Defence Industry in Indian defence market’ at Eurosatory 2010
exhibition in Paris. Mr Singh emphasized that the Buy and Make (Indian)
Category is as an opportunity for foreign players to partner with the Indian
Defence industry. He further stated that this new category would enhance the
formation of JVs and Technology partnership between the Indian and the
Foreign defence industry. While responding to a query he clarified that the
Ministry of Defence is in favour of continuing with the FDI limit of 26
percent.
Over the past decade, the Indian Ministry of Defence has put into motion
plans for an unprecedented modernization program of its defence
capabilities. In this context, India has embarked on a major defence
acquisition program, aimed at increasing the size, capability and
self-reliance of its Defence Armed Forces. The report provides that the
aerospace and defence sector is growing at an unprecedented rate and
emerging as a key participant in the Asia Pacific region.
Report also provides indicative list of acquisition plans. In Union Budget
2010-11, expenditure of about USD 32.03 billion has been earmarked for
national defence. More than USD 42 billion in total defence expenditure is
targeted by 2015, of which approximately USD 19.20 billion would be expected
to be spent on capital equipment for the Defence Armed Forces.
Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry
said “While it is clear that India is seeking a high level of self
sufficiency in delivering its ambitious defence re-equipment and expansion
program, it is also evident that there will be a high level of reliance on
overseas interests to supply the necessary technology in a number of areas.
Foreign OEMs are now looking at India as a critical market as well as a
potential manufacturing partner.”
Mr. Gurpal Singh, Deputy Director General CII stated that India is gradually
becoming a key outsourcing hub for the global defence industry. The
continuous revisions of the Defence Equipment procurement procedures in the
recent past suggest the intent of the Indian Government to streamline the
procedures and make the system more transparent and speedier.
Nidhi Goyal, Director - Aerospace and Defence in Deloitte on release of the
report says that “India is considered as the next destination of
manufacturing given country’s strength like wider supplier base, low cost
manufacturing, persistent focus on infrastructure development, huge pool of
skilled workforce and increased penchant for enhancing competitiveness by
the respective domestic firms”.
India has established a notional target for 70 per cent of new acquisitions
in the future to be sourced from indigenous production. Ms Nidhi Goyal says
“to meet the target of 70% indigenization, local industry should achieve an
average growth rate of 30% a year over the next five years”. She further
says that the current offset contracts are still not sufficient for Indian
industry growth and hopefully the target for offset contracts at USD 10
billion by 2011 will give further boost to the industry.
The sheer volume of planned expenditure is expected to create new
opportunities for foreign firms, as total spending will grow in absolute
terms. India is also host to a mature manufacturing sector, which means it
will often be able to offer more cost-competitive terms for large platform
builds.
No comments:
Post a Comment
Feel free to drop your comments and suggestions