Lukewarm response from global industry for the Defence Expo in Chennai

Lukewarm response from global industry for the Defence Expo in Chennai

Despite India being the world's topmost buyer of arms, the international arms market has given a lukewarm response to the Defence Ministry's biennial exposition that would be inaugurated by the Prime Minister near Chennai next week.

Only 677 companies would take part in the Def-Expo-2018 as against participation of more than 1,000 firms in the previous edition of the show in Goa in 2016. The four-day exhibition will be inaugurated on April 11 at Thiruporur, 35 km south of Chennai.

"The overall number of exhibitors may be 10% lower than last year," Ajay Kumar, Secretary, Defence Production claimed here on Wednesday.

In reality, the drop was almost 30% - from 1,055 companies in Goa to 677 in Chennai.

For years, Def-Expo was a platform for the arms sellers from around the world to showcase their latest wares to the Indian Army and Navy.

According to Kumar, there is now a policy turnaround as the event would be used to showcase India's manufacturing capabilities to the world as India positions itself to become a hub of defence manufacturing.

The FDI figures for the defence sector, however, don't reflect any enthusiasm among the foreign vendors to make in India.

Between April 2014 to December 2017, the defence industry received only Rs 1.17 crore worth of FDI, though the sector was opened up to 49% of FDI through the automatic route within months of Modi government coming to the power.

Kumar claimed almost 55,000 crore worth of defence equipment was manufactured in India in 2017.

The bulk of the manufacturing happened in the state-owned Defence Public Sector Undertaking and ordnance factories as the private sector, being a late entrant in the market, has only a tiny share of the pie.

The new Strategic Partnership model that was conceived to facilitate lateral entry of big private companies in defence manufacturing, is yet to take off, though the scheme was approved by the Union Cabinet in May 2017.

After nearly three years of consultations with the industry, the government now considers bringing the DPSU's into the scheme, which was thought of only for the private sector.

When asked about the possibility of including the DPSUs in the scheme, Additional Secretary of Defence Production Subhash Chandra said, "The government was committed to creating a level-playing field for all the stakeholders. We will consider inclusion of the DPSUs if they have the wherewithal to do this."

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