Armament majors eye big, fat defence pie

Deals worth $30 billion in the offing

India has spent close to $ 50 billion in military purchase since the Kargil conflict in 1999 and the buying spree continued unabated.

The lucrative market has brought more than 225 foreign companies in the great arms bazaar. Desi companies are not far behind. With the Centre opening up the defence sector, many Indian companies are also eyeing the pie through joint venture or offset route.

“At the 6th defexpo, we are looking at building better partnership for better and faster growth of Indian defence industries. It is a forum to catalyse and support the indigenous defence industry,” R K Singh, secretary, defence production said here on Friday.

Almost all armament majors from the USA, UK, Germany, France, Russia, Israel, Italy, South Africa and Ukraine would be attending the exposition. India being one of the world’s biggest importer of military hardware, offset contract worth Rs 40,000 crore would be signed till the year 2012.

Between 2006 and 2008, offsets contracts worth Rs 8,000 crore have been signed, of which 94 per cent are in the aero systems and six per cent in land systems.

With more than $ 30 billion worth of purchase to materialise in the next five to seven years, the government too is setting its house in order. “The first defence procurement policy will be ready in a month or two,” Singh said, adding that middlemen would not be encouraged.

The Centre may soon offer a better package for Indian companies which will “make” military equipment for the armed forces.
Though as per the norms, only the lowest bidder receives the contract, the Centre may allow the second-lowest bidder also a part of the contract so that the armed forces receive the equipment quickly, Singh said.