Narendra Modi will undoubtedly need some of Louis XIV's worth to be able to transform India into a high-tech defence manufacturing hub. How and what to Make in India is a major issue to be solved for the Government
The Aero India 2015, organised at Yelahanka Airport in Bangalore on the theme, ‘Make in India’, was of great vintage. The presence of the Prime Minister was an important element. It is clear that Mr Narendra Modi has decided to radically change the stakes in the fields of defence, aerospace, civil aviation and defence manufacturing; he is determined to take concrete steps to manifest his ‘Make in India’ dream.
The Prime Minister’s visit to the stands was one of the highlights of the air show. To see him moving around, with the ‘masses’ watching from behind a tight and rough police cordon, made me think of Louis XIV, the powerful French king, walking through the gardens of Versailles Palace, followed by hundreds of courtesans and musketeers (in this modern case, the Special Protection Groups). There was something regal in the arrival of Mr Modi; like the Sun King, he seemed to say: ‘Le Roi, c’est moi’ (The King, it is me).
The Prime Minister will undoubtedly need some of Louis XIV’s worth to be able to transform India into a high-tech defence manufacturing hub, but the air show was an opportunity for Mr Modi to articulate his vision: “We have the reputation as the largest importer of defence equipment in the world; that may be music to the ears of some of you here. But this is one area where we would not like to be number one,” he added that India was ready to “build an industry that will have room for everyone — public sector, private sector and foreign firms.”
This is a major change of direction which may help his scheme: “We must involve our scientists, soldiers, academia, industry and independent experts more closely in research and development,” said the Prime Minister. But there is a long, long way to go.”
Though ‘Make in India’ was the central theme of the five-day fair, many questioned: ‘Can Mr Modi make it in India?’ Take a small indicator of the present level of Make in India; the media received a ‘Press kit’ prepared by the organisers. The badges and other papers were stacked in a nice black bag; when I opened it, I immediately saw a ‘Made in China’ label. When asked why we were given ‘Chinese’ bags, an organiser sheepishly answered: “Sorry, sir, we have a certain budget, and this bag is four times cheaper that an Indian equivalent. What can we do, sir?” How and what to ‘Make in India’ is a major issue to be solved for the Modi regime.
The bag was not an isolated case, but a general one: While passing the mega Israeli stand, I saw some good-looking badges with the Indian and Israeli flags; and guess what? ‘Made in China’!
The distance to be travelled is long, and it was not about badges or bags that the Indian Prime Minister was talking when he said that he wanted to end India’s status as the world’s number one defence importer; he wanted eventually to have 70 per cent (from the current 40 per cent) of hardware manufactured domestically by 2020.
The show was indeed big: More than 700 companies from 49 countries participated; players such as the United States, Israel, Russia and France had come to Bangalore with impressive armadas of equipment and staff.
Over the years, the show has grown so much that some thought of shifting the biennial fair to another venue. When a rumour naming Goa, started to spread, Mr Manohar Parrikar, the Indian Defence Minister, immediately denied the move; he was not interested to have the show in his constituency, he said; he simply advised the organisers to plan better the available space in Yelahanka.
Not only was the Indian Air Force present en masse behind Air Chief Marshal Arup Raha and several three-star Air Marshals, but also the Army, led by its chief and a battery of Lt Generals, was seen moving around under the scorching sun.
The Make in India theme was particularly exciting for the professionals. Foreign exhibitors and possible participants in the new scheme had understood that the Government was serious when in August 2014, Delhi notified an increase in foreign direct investment limit to 49 per cent. The move was aimed at boosting India’s domestic industry and creating confidence amongst eventual investors.
The talk of the air show was of course the Rafale deal. The long-delayed $20 billion deal to supply 126 Medium Multi-Role Combat Aircraft to India, had been in the news with the rumour that the deal might be scrapped.
During his Press conference, Mr Parrikar clarified that he was expecting a report from the contract negotiation committee before the end of February or latest during the first week of March. A decision would then be taken: “I have asked the CNC to speed up the process of completion of the report for us to take a decision on the acquisition of Rafale.”
The next day, Air Chief Marshal Raha said that out of four sub-committees, three had already completed their jobs (for determining the offsets, the maintenance support and the technology transfer to Hindustan Aeronautics Limited to produce the Rafales), only the last sub-committee, (the Cost Negotiation Committee) was to give back its copy.
Some difficulties seem to have arisen due to some lack of clarity in the procurement policy and the fact that the currency exchange rate has tremendously changed during the last three years. An issue not easy to solve!
Air Chief Marshal Raha also said that there was no plan ‘B’ for the time being, as the IAF was keen on the medium multi-role combat aircraft; he clarified that the Su-30s was not a substitute for the MMRCA requirement: “They are different types of aircraft and cannot replace each other; they only complement each other,” he added.
The negotiations have to move to the political level where each side will have to do some adjustments to find a solution acceptable by both parties. Sensing the need to go ahead fast, Jean-Yves Le Drian visited Delhi on February 24. Will we see the white smoke coming out of the chimney of the South Block before the end of the Financial Year? Nothing is impossible.
It is, however, clear that the time has come for the Indian private sector to bring its dynamism into the play and give a boost to Mr Modi’s ‘Make in India’ scheme. After all, Lockheed-Martin, Dassault, Boeing, Rafale and others foreign players are private companies working closely with their Governments to take care of their respective country’s defence requirements … and export their products.
The presence of some top Indian industrialists at the air show may be a sign that the ‘big ones’ are ready to take on the challenge. But the battle against many vested interests is far from being won.
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