The Modi government's Make in India initiative has led to a number of Indian companies entering the defence sector. In this exclusive interview, Baba Kalyani, Chairman and Managing Director, Bharat Forge Ltd, one of the early movers in the defence manufacturing space among Indian private sectors, tells India Inc′s Consulting Editor Arnab Mitra about the opportunities, problems and future of the sector. There's a perception that foreign investors aren't coming forward to establish defence units in India What more should the government do I don't think that is completely true. There are many foreign companies that are willing to / are in the process of establishing defence units in India. Setting up base in the country is dependent on many complex issues - easing of licensing procedures, FDI norms, offsets rules, a general feeling of ease of doing business and other such actions taken by the government are poised to play a major role in the years to come. Companies which consider the Indian market an important long-term bet will look for a permanent foothold in the form of investments in the country. To give you a perspective, two major foreign OEMs Elbit and Rafael have formed defence units (in the form of JVs) with the Kalyani Group. We also have some other foreign companies talking to us for the same. I am sure similar discussions are going on with many other companies in the country. India routinely develops technologies and platforms that are denied to it by technology control regimes but fails miserably on technologies that can be bought from foreign vendors. Why Manufacturing under transfer of technology (ToT) brings only build to print capability in the country and can at best bring knowhow. The key to progress on technologies received from the foreign vendor will require “Know Why”. In my opinion, there are two major drivers for this. One, that the receiving company must have the culture of research and development, and secondly, that there should be a competitive environment. We, therefore, need to move away from the culture of nomination to giving ToT to the best suited entity in the country. For larger projects, we must have two lines of production, which will lead to healthy competition. [caption id="attachment_9728" align="alignleft" width="306"]
53811027 - military tank barrel close up[/caption] Many public sector defence units make weapons platforms under license in India. This has not led to much technology absorption by Indian industry. How will allowing private companies to make arms under license change the situation for the better As I said before, manufacturing under license only gives you build to print capability and not the technology knowhow and know why. We need to make optimal use of all available resources in the country, whether in the public sector or private sector to get maximum mileage out of TOT. I am sure competent private sector companies can develop the knowledge and can come out with upgrades and futuristic versions based on indigenous design and development capabilities. We have demonstrated this in the field of artillery systems. How long will it take for India to develop its own defence industrial base Development of a defence industrial base needs a self-reliant technology and manufacturing eco system. Indian industry has taken rapid strides in the field of manufacturing and is competing with the best on the global platform. However, defence manufacturing in India is not aligned to the manufacturing capability existing in the country. Fortunately, the present government has realised this and its 'Make in India' campaign is expected to address this issue - to promote defence manufacturing in India and develop the country as a manufacturing hub. The major concern for us should be a technology ecosystem. The meteoric rise of entrepreneurship, leading to innovation, in the other sectors in our country has not touched the defence industry even remotely. There are hardly any defence start-ups in the country today and the existing ones are struggling to survive. We need to overcome this challenge to develop our own defence industrial base. I believe the recently introduced IDDM category in DPP 2016 will help boost indigenous development and manufacture. Bharat Forge has developed four towed, truck mounted and mobile artillery guns. Please talk us through this development. What is their current status Using the combined strength of various Kalyani Group companies, we have established modern and sophisticated infrastructure required for manufacturing of artillery guns. My group follows a product-driven strategy and believes in developing a product to demonstrate our capability. We have designed, developed and manufactured 100 per cent indigenous systems like Bharat 52, Bharat 45, Garuda 105 and the latest ultra-light howitzer (ULH).
We are also partnering DRDO for ATAGS program. The ordnance including barrel and breech for ATAGS 155/52 cal gun has been successfully test fired at Central Proof Establishment, Itarsi, and at PXE, Balasore. Garuda-105, while awaiting trials by the Government of India, has also been successfully fired and tested in the US. We are now hopeful of test firing next month in India. Having proven our capabilities with these developments, we are now focusing on the requirements of the Indian defence forces and are confident of providing state-of-the-art indigenous artillery solutions for them. How do your artillery guns compare to the Bofors, Dhanush and M777 in terms of technology, performance and costs Our products can compete with the best in the world; in terms of technology. Our products are 100 per cent designed, developed and manufactured indigenously using the latest technology. To give you one example of our performance, we got our barrel and breech 'first time right' when it was proof fired by DRDO. The pressure achieved during the firing was the highest ever recorded by any artillery manufacturer anywhere in the world. Isn't it ironic that India still can't manufacture a local pistol, assault rifle, carbine or light machine gun of international standards Why isn't the private sector stepping in to fill this void That's because the private sector was not given the license to manufacture small arms until now. However, the Arms Rule 2016 released in Jul 2016 by MHA should change this scenario. The new arms rule is a welcome change and we are sure to see many reputed private companies, including our group, entering the small arms segment. You are present in other spheres of the defence space as well. Can you elaborate on your plans, please Our main focus areas other than artillery are armoured vehicles, protected vehicles, ammunition and air defence. In armoured vehicles, Kalyani Group has been a long-time supplier at the sub-system level. We are now focusing on mobility and fire power solutions along with our global partners. In the protected vehicles segment, we have developed products like Light Strike Vehicle, Light Specialist Vehicle and Light Armored Vehicle and are participating in MoD tenders. In ammunition, we are not looking at developing routine products, but are working towards developing niche products like BMCS, FSAPDS, etc. We are also partnering with foreign partners for fuzing technology. We have partnered with leading OEMs for anti-tank and AD programs in India.