They can hope to get around $5 billion worth of business over the next 10 years
India, Russia to sign pacts on MRTA and fifth generation fighterPublic sector companies asked to focus on exports
Bangalore: Indian industries associated with the Defence sector can hope to get around $5 billion (Rs. 25,000 crore) worth of business over the next 10 years thanks to India's recently announced "offset policy."
K.P. Singh, Secretary, Department of Defence Production, told presspersons on Tuesday that the policy obligates that every seller of Defence equipment to India involved in a deal above Rs. 300 crore procured at least 30 per cent of the equipment from Indian companies.
"The first deal with the offset clause has already been signed, with the Israeli company Eltar who will sell us radars. They have decided to offset work to two Indian companies L&T and Astra Microwave Products."
Mr. Singh, who is here in connection with Aero India 2007, said that the Department of Defence Production was committed to a partnership approach for induction of Defence systems, rather than just buying products of the shelf.
"This approach will give us a better insight into the know how of the product, and also allow us to acquire the latest technology."
Mr. Singh also announced that India and Russia will shortly sign inter-governmental agreements on both the 60 tonne multirole transport aircraft (MRTA) and the fifth generation fighter that the two countries wanted to jointly develop and produce. According to him, the major issues had already been agreed upon, with the detailed project report on the MRTA having already been prepared.
"Officials from Hindustan Aeronautics Limited (HAL) and the Defence Ministry will be leaving for Russia shortly to discuss issues like how much money is needed and the stages of payment and whether India will have a right to export to a third country. Thereafter an inter governmental agreement will be signed."
Calling on Indian public sector companies like HAL and Bharat Electronics Limited, who have been largely preoccupied with meeting Indian user perspectives and requirements, to also focus on exports, Mr. Singh said that the private industry had shown the way to go forward.
Commenting on the long delay in sending out a request for proposal (RFP) to global fighter aircraft manufactures in order to finalise the multi-role combat aircraft that would be inducted into the Indian Air Force (IAF), Mr. Singh pointed out it was better to take time considering that it was a large procurement.
"The Indian Air Force and the Department of Defence are in the process of tying up the loose ends. It will happen within the next six months."
Asked about the flight of key human resources from Indian public sector companies and defence laboratories,
Mr. Singh said that the boards of companies had been given the flexibility to "give more than the ordinary" in order to retain people.
Mr. Singh also disclosed that Hindustan Aeronautics Limited would shortly begin to finance selected students to undertake aeronautical courses, so that they could tap a ready pool of talent.