Defence Electronics and System Design Policy Recommendations
The Policy Recommendations by IESA, NASSCOM and Roland Berger, launched at DEFTRONICS 2016 uncovered many issues, opportunities and risks that will play significant role in the formation of A&D Electronics Market
Bengaluru, Thursday, August 4, 2016: India Electronics and Semiconductor Association (IESA), the premier trade body representing the Indian Electronic System Design and Manufacturing (ESDM) industry, The National Association of Software and Services Companies (NASSCOM), along with Roland Berger, a leading global strategy consulting firm with immense expertise in defence, today launched the Defence Electronics and System Design Policy Recommendations at DEFTRONICS 2016, the annual flagship A&D event. The recommendations are based on current aerospace, defense and internal security trends and happenings to provide guidance towards the formulation of Defense policies by the Union ministry.
The chief guest for the event was Dr. V. K. Saraswat, Member NITI Aayog and Former Chief Scientific Advisor to the Indian Minister of Defence & Director General, DRDO. He spoke on the event theme, throwing light on the importance of the need to build India’s Strategic Electronics ecosystem for greater self-reliance and emphasized on its global relevance to areas in fields of Defence, Aerospace and Internal Security.
Dr. V. K. Saraswat said, “India’s electronics market has been witnessing huge market in Consumer Electronics, Industrial, Communication, Strategic Electronics. Today, the size of Strategic Electronics is projected to grow to $72 Bn from the present $1.7 Bn market, and this indicates immense potential as there exists a significant gap between supply and demand. Though India is considered as a ‘Soft Power’ in the space, we are yet to witness a single Indian company that develops strong end-to-end Aerospace and Defence software solutions. As a result, we keep depending on foreign companies. The only on boarding option for Indian electronics component companies in India is to target Strategic Electronics (Defense) industry, and we should act now. We need to understand that the return on investments in the Defense Electronics industry in India is long term and the players need to have a long-term view.”
“We expect the government to support startups in the Defense Electronics industry in India. The Defense manufacturing shifts globally has seen the Wave 1 from US to Japan; Wave 2 from Japan to Europe, Wave 3 from South East Asia to China; I want Wave 4 to be from China to India,” he added.
The guest of honor, H.E. Ms. Yael Hashavit, Consul General of Israel, Consulate General of the State Israel also provided her insights into the Indian defense, aerospace and the innovation in the ESDM sector with respect to her expertise relating to the Israel Defence Force.
Incidentally, IESA and NASSCOM have been given the responsibility to draft recommendations for the policy paper for Defence Electronics and System Design by the Ministry of Defence. Roland Berger has played an advisory and consultant role in the formation of the draft policy paper. The Defence Electronics and System Design Policy Recommendations symbolises the recommendations made to the Ministry of Defence.
The policy recommendations indicate that India not only needs to create world-class companies, but it is imperative to bring them in the global value chain of OEMs. It suggests that the government needs to have the vision to provide the Indian companies the required visibility, timely closure of contracts, ensure technology transfer and provide the manufacturing push through certain initiatives and incentivisation.
In order to promote exports of Defence Electronics, the policy recommendations have stated the need for an introduction of a multiplier that will ensure export base of defence electronics around valid technologies. Moreover, the draft has suggested that DPSUs need to leave control of the supply chain and the government needs to ensure more opportunities in the private industry. Another key issue that the government and the industry need to address together is the shortage of key infrastructure and talent.
Speaking at the event, Sri. K. Krishna Moorthy, Chairman-IESA, said “Defense, Aerospace and Internal Security “ are not only most important for National Security perspective but also can be the biggest job generator in an economy which is growing faster than the rest of the world. With global companies investing in India and leveraging the R&D talent here to create globally competitive products amplifies the fact that we can innovate and develop products and solutions that will meet our growing demands in these verticals. We need to have polices and processes which can accelerate this through skill development, enabling a strong start up eco system which innovates and also absorbs technology which come as part of technology transfers and then develops the next generation technology here, as well as create the infrastructure for defence manufacturing powerhouse. We are glad that we are playing an important role in making India’s defence ecosystem self-reliant and independent with policy recommendations for Defence Electronics and System Design Policy.”
Speaking about the policy, R. Chandrashekhar, President, NASSCOM added, “We are required to keep pace with the innovation happening across the globe and need to start providing a stimulus to the companies in the defence electronics domain. Hence, it is really important for us to create an arrangement for technology transfer with more advanced nations and the role of the government will be significant here. They should create an environment for the domestic players to cross-pollinate knowledge and technologies with other countries.”
Commenting on the occasion, M. N. Vidyashankar, President, India Electronics & Semiconductor Association said, “India has the third largest Army, the fourth largest Air force and the seventh largest Navy in the world. We are the 7th largest A&D market globally. And, we are still dependent on imports to fulfil our defence needs. Therefore, achieving self-reliance and reducing dependence on foreign countries for defence is a necessity today rather than a choice, both for strategic and economic reasons. We have a visionary Prime Minister to bring ‘Make in India’ policy for this sector that aims at facilitating investments and fostering innovations for the manufacturing sector in India. Hence, we believe Defence Electronics and System Design Policy will be instrumental in helping A&D Electronics segment in India, thus ensuring increased self-reliance for the Indian Defence Sector.
The defense and aerospace sector has seen considerable growth in recent years. But the shift from buyer to manufacturer will be challenging. Speaking about India’s multi-billion defense market, Manfred Hader, Senior Partner and Global Head for Aerospace and Defence, Roland Berger said, “The government’s effort to boost the A&D sector can be measured with its seriousness in handling the prevailing issues. The government’s determination in streamlining the sector by forming a policy focused on A&D electronics segment is really commendable. Though the industry is struggling with multiple issues, we believe that with the right policy impetus, India’s A&D electronics can be the driver for the sector’s success story in India. We congratulate IESA and NASSCOM in taking the leap in the form of DEFTRONICS 2016.”
DEFTRONICS 2016 promises to draft a new vision for the defence space through a constructive discussion over two days, led by government officials and industry thought leaders. The first day of the event was graced by dignitaries such as Ms. Yael Hashavit, Consul General of Israel, Dr. V. K. Saraswat, and Former Chief Scientific Advisor to the Indian Minister of Defence & Director General, DRDO, international experts in Cyber Security and also Defense service personnel who are responsible for policy initiatives.
