Sub Title : A brief QA with L&T on self-reliance & indigenisation

Issues Details : Vol 16 Issue 2 May – Jun 2022

Author : Editoral Team

Page No. : 38

Category : Military Technology

: June 1, 2022

South Asia Defence and Strategic Review had sought views and suggestions of the Indian Industry on issues related to indigenisation. We have received some very  pertinent feedback. One such response, that of Larsen and Toubro, is reproduced below:-

Defstrat. Indigenisation is the most important aspect of self-reliance in defence. Grant of AoNs to Indian Industry in most cases is a definite push in that direction. But what is the level of preparedness for the Indian Industry to shoulder the responsibility at the present moment?

Indian Industry is geared up to take on this responsibility and a significant ecosystem has been built within the Indian Industry. The Vajra Self Propelled Howitzer project is a good example of achieving 50% indigenisation by value for a Global Buy case. The journey towards readiness of Buy IDDM products is a more challenging one. The journey from design & development to realising a reliable product is a long one. Currently most IDDM products are DRDO developed and there is need for collaborative efforts between DRDO, large industries, MSMEs, start-ups and academia to build more IDDM products.

While a critical starting point, only GRANT of AoNs will not be adequate. The AoNs need to convert to RFPs and then orders. One should understand that for any industry, it is the conversion of AoN to contract that matters. In many cases, award of contracts takes a long time or AONs don’t fructify at all.

Defstrat. MoD is issuing ‘Import Positive Lists’ at a rapid pace. Will the Indian Industry be able to fulfil the gap?

Most of the items in the import positive list are items that are already being manufactured by the Indian Defence Industry (Private/Public). The  balance items have been selected with due deliberation on the capability existing in the industrial complex of the country. Industry will have to work towards ensuring readiness of these products for which deadlines to stop imports have been set.

Foreign OEMs have understood through these lists that the only way to address the market in India is to support the Indian companies in co-developing India specific products. With this, technology collaborations are more forthcoming and will help in filling gaps in the Indian industry where they exist. Finally, all this will be put to test only when orders are given to the industry.

Defstrat. Is the government support to the Indian Industry adequate to keep pace with reforms in DAP?

The Govt has come up with number of reforms and a lot of effort has been done in making the environment conducive to Make in India.

A few critical recent ones would be:-

–   Allocating R&D fund for industry.

–   Earmarking Defence budget for domestic industry with increasing share to the private sector.

–   Simplification in processes

–   Making Govt facilities available for trials.

While these have been announced and in-principle accepted, on-ground implementation processes need to be put in place to have required impact.

Defstrat. Suggestions which merit urgent attention of the GoI.

Some areas still need attention

–   Increasing the velocity of acquisition will make a major difference. (e.g. no SP program has progressed since the formulation of the model in May 2017)

–   Identifying methodology of funding industrial R&D and mechanisms for setting up of SPV for joint R&D

–   Emphasis on Make-1 Programs will help the  Indian Industry grow and thereby take the country towards self reliance.

–   Implementation of newly announced testing facilitation scheme

–   Setting up of a professional procurement organisation and creation of a Project Facilitation Office for Make programs.