By Vijay Grover
Response to the “Make-in-India” rises to the challenge set by Prime Minister Modi.
The past seven years have seen businesses, micro, small and medium enterprises (MSMEs), beginning to play a significant role in the defence sector.
With a vision for “Atmanibhar Bharat”, a clarion call given by Prime Minister Narendra Modi, the government has been successful in putting a special focus on bringing MSMEs into the supply chain for the defence sector.
The move marks a shift and enables India to become self-reliant through an active partnership of the government, the defence forces, major defence and aerospace companies and, more importantly, enterprises all over India. Be it the light combat aircraft Tejas, the trainer HTT 40, or the magnificent aircraft carrier INS Vikrant, the “Make-in-India” stamp is visible on the defence equipment used by the forces.
The spirit of “Make in India” and the spirit of self-reliance “Atmanirbhar Bharat” are clearly visible in the manufacturing of INS Vikrant. “18 States and Union Territories of India are involved”, Vice Chief of Indian Navy Vice Admiral S N Ghormade said at the launch of INS Vikrant. “Equipment made in places like Ambala, Bengaluru, Daman and Diu, Hyderabad, Kolkata, Indore, Jalandhar, Kutch, Kota, New Delhi and Pune, among others, have been used in the manufacturing of INS Vikrant. This clearly shows that it is the effort of the entire nation,” he added.
In December 2021, Defence Minister Rajnath Singh announced that around 12,000 MSMEs joined the defence industry in seven years, and the defence equipment exports from the country crossed the INR 38,000-crore mark in the last seven years. This was when the world looked seriously at India emerging as a major manufacturing hub, not just for the requirements of India but as a serious exporter.
The success of “Atmanirbhar Bharat” is testimony that the MSMEs have played and will continue to play a greater role in meeting domestic and international requirements. As of April 2022, 19,509 defence items, which were earlier imported, were opened for indigenisation. Out of them, the Indian industry had taken up work for the indigenisation of 4006 defence items. The list continues to expand; the expenditure on defence procurement from foreign sources has reduced from 46% to 36%. The move has helped India reduce the burden of imports over the last three years.
The success stories of MSME units span the country; some are truly inspiring.
Entrepreneur Jacob Crasta set up CM Envirosystems near Bengaluru, leaving behind a successful career in Mumbai. The company has made its mark as an engineering company specialising in environmental simulation testing technology. The company designs and manufactures Environmental Test Chambers used to simulate real environmental conditions such as temperature, rain, dust, humidity, pressure, etc. in its test space to conduct reliability testing of defence equipment.
Jacob Crasta recalls, “It was during the Kargil war in 1999, there were sanctions on India, and proper testing equipment could not be imported. We lost many soldiers because of the failure of the telecommunication equipment.” It was then that CME decided to start making the testing chamber for the defence and auto sectors.
At its Dobbaspet facility near Bengaluru, CME designs and manufactures environmental test chambers. “We create an atmosphere from -80 degrees to 250 degrees Celsius for temperature, humidity levels that range from 5% to 90% and simulation of up to 100,000 metres above sea level,” says Crasta. Components of fighter jets like Sukhoi and the Agni and BrahMos missiles are tested in their chambers.
Companies like CME have largely benefited from being present in Karnataka, a key state that has given enterprises and start-ups the much-needed push. With its new Aerospace and Defence Policy, the state aims to thrust the Defence and Aerospace start-ups. Karnataka is the largest Aerospace and Defence hub in India. With 65% of India’s Aerospace related exports originating from Karnataka, the state is a preferred investor destination for Aerospace & Defence companies. In August this year, the Karnataka government announced a revised “Comprehensive Aerospace and Defence Policy” to attract more investments into the state.
Karnataka’s strong ecosystem has blossomed with decades of the presence of PSUs like ISRO, NAL, HAL, DRDO, and BEML. The state is also home to all major global leaders like Airbus and Boeing, who are playing a key role in assisting ancillaries etc.
“Karnataka is home to Public Sector Units engaged in defence and aerospace industry right since the 1950s, it is our initiative to fulfil the dream of the Prime Minister by giving total support to his mission, and we are inviting the Industry, especially in Aerospace,” says Murugesh Nirani, Large Scale Industries Minister of Karnataka.
Testimony to this is the Drone start-up, NewSpace Research & Technologies which inked a deal with the Ministry of Defence in February 2022. NewSpace Research & Technologies, founded and run by former IAF officer Sameer Joshi, is developing a High-Altitude Pseudo Satellite (HAPS) with Hindustan Aeronautics Limited as the lead prototype development partner. HAPS is an unmanned aircraft that operates at altitudes of nearly 70,000 feet and is capable of conducting surveillance operations by staying airborne for months at a stretch.
Aviation major Lockheed Martin is also drawing up big plans for setting up a Research & Development Centre and a Skilling Institute to train skilled workers needed for high precision aviation and the aerospace industry. Lockheed is also setting up a unit for its Sikorsky helicopter manufacturing in Karnataka. The move comes as a major step, which will give not just Lockheed but other aviation majors access to locally upskilled workers and testing facilities.
Karnataka Industry minister Dr Murugsh Nirani also met with Dean Halter, Paul Weedon, Maya Raichelston and Kyle Ballard of Raytheon Group, Collin’s Aerospace and Pratt and Whitney on further expanding their presence in Karnataka.
Notably, these companies have already proposed to invest nearly INR 1,500 crore in the state. While Karnataka advances ahead, other states like Telangana are making giant strides in the direction of attracting global players to invest in India’s youngest state. Hyderabad’s Rajiv Gandhi International Airport is becoming a magnet for the aviation industry. With proposed MRO facilities proposed by the entry of Safran have given a big boost.
By setting up the new facilities in Hyderabad and the announcement of the largest maintenance and repair centre for LEAP engines, Safran has sent a strong signal to the Indian Government about its long-term plans for India. The Safran Aircraft Engines plant will make rotating parts for the LEAP engine from CFM International. It will provide the additional capacity needed to meet the requirements of a production ramp-up for the best-selling commercial airplane engine of its generation.
The largest MRO centre in the network will start operations in 2025 and eventually offer an annual capacity of 250 to 300 engine shop visits. The LEAP and its predecessor, the CFM56, now power over 330 Airbus A320/A320neo and Boeing 737/737 MAX airplanes deployed by airlines in the Indian subcontinent.
This MRO facility will be about 35,000 square metres and is coming up in the GMR Industrial Park at Shamshabad. This project holds national significance as it is the first MRO being established by a global OEM in India. Safran already has a digital technology unit, Digit in Hyderabad to develop digital systems for Safran. In all, with this move, Safran now has four projects in Hyderabad with a total investment of $200 million (about INR 1,580 crore), making it a key player in India.
With the potential for the job creation that Make-in-India offers, the Tamil Nadu government is laying special focus on attracting investment in Defence and Aerospace. Tamil Nadu plans to carve a niche in aerospace and defence manufacturing in view of the Central government’s plan to promote self-reliance in defence manufacturing in the country through defence industrial corridors and other measures.
Tamil Nadu which will be housing one of the two proposed defence industrial corridors with five nodes at Chennai, Tiruchirappalli, Coimbatore, Salem and Hosur hopes to tap the local talent of engineers available in the state. This corridor is expected to create new defence production facilities and clusters with necessary testing and certification facilities and export facilitation centres.
Tamil Nadu has proposed to house testing facilities under the Defence Testing Infrastructure Scheme (DTIS) of the Ministry of Defence (MoD). The State government plans to lease about 160 acres of defence land in Villupuram district for the creation of an aviation technology hub.
The state’s proposal to the Airport Authority of India (AAI) for the establishment of an Aircraft MRO Complex on 50 acres of land at Chennai Airport is also under active consideration.
Tamil Nadu Industrial Development Corporation has identified around 500 acres of land at near Sulur Airforce Station and 1,000 acres of land in Coimbatore District to develop industrial parks to accommodate companies keen to start defence start-ups.
While the three southern states have a first mover advantage, the success of these states is inspiring other states like Uttar Pradesh, Gujarat, Maharashtra, and Rajasthan also do not want to be left behind. The state governments are seeking investments by ramping up infrastructure in their states.
Uttar Pradesh Government in July 2022, approved the “Uttar Pradesh Defence and Aerospace Unit and Employment Promotion Policy-2022”, providing higher incentives to investors setting up their units in the defence and aerospace manufacturing sector in the state.
Chief minister Yogi Adityanath, keen to attract investment, approved more incentives to attract larger investment in the defence and aerospace manufacturing sectors in the UP Defence Industrial Corridor. It will provide incentives up to a maximum of INR 500 crore to attract large investments. The new policy provides for a capital subsidy of 7% or a maximum of ₹500 crore in non-Bundelkhand region and 10% or a maximum of ₹500 crore in the Bundelkhand region of the state.
Analysts feel that the “Make-in-India” has triggered healthy competition between the Indian states, which is benefiting the country, the small enterprises playing a key role.
Vijay is the Editor of IA&D
