Defence industry world over facing capacity crunch, India must step up to fulfil needs: Def Sec

Asserting that the defence industry world over is facing a capacity crunch due to ongoing geopolitical conflicts, Defence Secretary Giridhar Aramane said these are indications that demand for defence utilities will remain for years. Indian shipbuilders should build up the capacity to meet the security needs of the country and also the friendly countries.

“Whether it’s ammunition, whether it is the land platforms, are in great demand because of the Russia-Ukraine war, and also the new technologies, the asymmetric warfare which is being carried out in Red Sea as well as in the Gulf,” the defence secretary said in his address, speaking at a session in Mumbai marking the 250th year of service of Mazagon Dock Shipbuilders.

He noted that there will be continued demand for the next several years to build up the inventories and to fulfill, and refurbish whatever is being blown up in the two wars, which are raging across the world.

“So it is essential that we build up the capacity to meet the security needs of ourselves and also the friendly countries we have to help.”

Starting in 1774, the ownership was transferred to the government of India in 1960.

Since then, it has delivered over 800 ships, 7 submarines, and about 65 offshore platforms. The shipbuilder is contributing most of the assets of the Indian Navy, besides its export market.

A commemorative coin was unveiled today marking its 250th year of service to the nation.

“You have a portfolio which is the envy of several other shipyards in the world.

With this kind of heritage and tradition behind you, it is essential that you start building up your capabilities for the future also.”

India, he said, occupies the central role in the Indo-Pacific.

Given most of India’s past battles were fought on land against the hordes invading it, the country did not give so much importance to the Navy in building its capabilities in shipbuilding practices.

That “caused immense harm to us”, said the defence secretary.

“From the 19th century onwards, we have been again building up our capabilities, first meeting the needs of the two world wars.

Then after independence, we have seen a steady stream of orders to our shipyards, which were initially private, but later got nationalized.”

Now, according to him, the time has to come to give a “free hand” to private enterprises to acquire animal instinct to contribute to the nation’s growth.

“In this context, MDL has a major role. You were a private company initially. You have become a public sector company.

Now again, you have to work with the private sector in a major fashion to build a consortium of shipbuilders within the country to meet the needs of our own navy and our commercial entities and also contribute to our friendly countries both to the West and to the east of our country.”

Speaking of supply bottlenecks in the defence space, he outlined how India has taken several initiatives, including opening up the defence industry to foreign direct investments, as well as to the private sector within the country, giving incentives to shipbuilding.

“Domestic solutions by innovation will be difficult to come by if we don’t engage with the academic institutions and the young innovators who are very enthusiastic to start their own companies, startups. and contribute to the country. So engaging with them will be a challenge for established companies like MDL.”

Further, he stressed that India need not always import the previous generation technology from abroad to be able to manufacture those platforms the country may require.

“We should think ahead of time. We should think about how the disruptors are thinking. We should think how Houthis are acting or how Hamas is acting to anticipate what shall be our capabilities.”

He said the government is willing to provide investments and the private sector should capitalize on the availability of those funds.

He also apprised the gathering about the government’s recently announced research fund of almost 1 lakh crores. He said some portion of it can be utilized by defence industry players.

“This is a golden opportunity which MDL and other sister companies can utilize to carry out the research and development activities in the area of shipbuilding,” the secretary said.

The central government has set the target of achieving indigenous defence manufacturing worth Rs 175,000 crore including defence exports of Rs 35,000 crore by the year 2024-25.

India’s defence exports have touched a record Rs 21,083 crore (approximately USD 2.63 billion) in the financial year 2023-24, with a growth of 32.5 per cent over the last fiscal when the figure was Rs 15,920 crore.

The recent figures indicate that the defence exports have grown by 31 times in the last 10 years as compared to 2013-14.