Defence self-reliance pitch turns focus on telecom; BEL & HFCL join hands
By Sanjay Singh
New Delhi, June 23: India is moving fast towards strengthening its defence sector with major focus on becoming self-reliant in this space, as a major chunk of public money goes in procuring arms and ammunitions from global players.
In one such development, India’s defence PSU, Bharat Electronics Ltd (BEL) has signed and MoU with a leading tech company HFCL Limited. The MoU which would address requirements of defence, telecom, Railway sectors, BEL announced having received orders of Rs 5,900 crore in the 2023-24 financial year. The orders include improved Akash Weapon System (AWS), Shakti electronic warfare suite, Sanket MK III (Naval Systems) among others, crucial for India’s defence forces.
BEL in a statement said, “As part of this MoU, BEL and HFCL shall pursue business opportunities, capitalising on their domain expertise, technological strengths and market presence to enhance the nation’s capabilities in Defence and contribute to the growth of telecommunications infrastructure and other critical, developing sectors. BEL and HFCL shall in this process explore options such as Transfer of Technology and joint production of mutually identified products and solutions.”
According to BEL Director, Vinay Kumar Katyal, with India’s massive digital transformation with the rollout of 5G, rapid adoption of new-age technologies across sectors, this tectonic shift in the telecommunication industry, Indian Government has prioritised its focus on initiatives such as acceleration of the implementation of 5G network, nationwide fiberisation and promoting participation in the PLI (production linked incentive) scheme.
“We believe that our partnership with HFCL will certainly play a crucial role in meeting the government’s target of building state-of-the-art technology architecture. Our domain expertise in Defence combined with HFCL’s cutting-edge solutions will enable us to actively contribute to the Government’s vision of a digital India and help establish India as a prominent global manufacturing hub,” says Katyal.
The Government has taken several policy initiatives in the past few years and brought in reforms to encourage indigenous design, development and manufacture of defence equipment, thereby promoting self-reliance in defence manufacturing & technology in the country. These initiatives, include according priority to procurement of capital items of Buy Indian (IDDM) category from domestic sources under Defence Acquisition Procedure (DAP)-2020.
India also liberalized its Foreign Direct Investment (FDI) policy allowing 74% FDI under automatic route. Rapid progress has been made towards achieving complete Self-reliant, in the manufacturing of defence equipment required by India’s Defence Forces within the country.
Till October 2022, a total of 595 Industrial Licences have been issued to 366 companies operating in Defence Sector. With focus of Government on indigenisation and procurement of defence products from the domestic resources, the expenditure on defence procurement from foreign sources has reduced from 46 per cent to 36 per cent in the last four years, from 2018-19 to 2021-22.
The Government has also established two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu to attract investments in Aerospace & Defence sector and established a comprehensive defence manufacturing ecosystem in the country. Moreover, the respective State Governments have also published their Aerospace & Defence Policies to attract private players as well as foreign companies including Original Equipment Manufacturers (OEMs) in these two corridors. The two State Governments have already signed MoUs/Agreements with various industries for investment worth total value of about Rs 24,000 crore. Investments worth Rs 2,242 crore and Rs 3,847 crore have been made in Uttar Pradesh Defence Industrial Corridor (UPDIC) and Tamil Nadu Defence Industrial Corridor (TNDIC) respectively.
The Government, in the last three years, from 2019-20 to 2021‑22 and current year (2022-23 up to September, 2022), has accorded Acceptance of Necessity (AoN) to 163 proposals worth Rs 2,46,989.38 crores approximately, under various categories of Capital procurement which promote domestic manufacturing as per DAP-2020.
The share of domestic procurement in the total procurement has been on an uptrend. In 2018-19, the domestic procurement stood at 54% of the total procurement, this figure jumped to 59% in 2019-20 and to 64% in 2020-21. This year it has been increased to 68% for domestic procurement, of this 25% budget has been earmarked for procurement from private industry.
About The Author
