New India Defense Policies Favor Domestic Manufacturing
New India Defense Policies Favor Domestic Manufacturing

Jun 29, 2018

On May 25th, Syrma CEO Sreeram Srinivasan participated in another panel discussion with other senior electronics leaders hosted by the Electronic Industries Association of India (ELCINA), spotlighting new design and manufacturing opportunities within India’s defense industries. As the Government of India continues to spearhead its Make in India initiative, offering generous incentives for domestic manufacturing, Prime Minister Narendra Modi is expanding the emphasis on the nation’s massive defense sector. While India currently allocates the world’s second-largest defense budget, equivalent to $62.9B, the military relies upon 60% of its equipment imported from other countries. The government is now formally addressing this sizable imbalance. Per the economy-boosting objectives of the Make in India campaign, the Ministry of Defense has underscored their strong preference toward homegrown military production, as outlined in two recently revised documents:

Defense Procurement Procedure: Revised in March 2016 (DPP-2016), streamlines military procurement policies and awarding of defense contracts, supporting Make in India by favoring Indigenously Designed, Developed, and Manufactured (IDDM) equipment and components versus imported materials. While bids from international defense contractors are still accepted, those products sold to the Indian military must be primarily assembled on home soil.

2018 Draft Defense Product Policy (DPrP): Sets ambitious objectives to secure India’s rank among the top 5 nations in defense and aerospace industries, 1 of 10 champion sectors, as defined by Make in India, spanning specific categories including jet fighters, helicopters, warships, missile systems, and field weapons, as well as developing advanced cyberspace and AI technology for military applications. DPrP 2018 lays out a vision of domestic defense manufacturing at $26B and export of defense equipment of $5B by 2025.

Boosting Indian Defense Industries

Modernizing India’s military means more than supplying brand-new equipment. Over the past decades, India purchased high volumes of military hardware from the Soviet Union. Following that superpower’s rapid dissolution at the end of the Cold War, maintaining these items and obtaining replacement units or spare parts became increasingly difficult. This means much of it requires extensive reengineering or refurbishment. One example of this is Syrma’s successful development of test equipment to recalibrate Soviet-era viewfinders on Indian tanks. We expect steady demand from similar large-scale repair and rework projects for the Indian military. Our recently expanded electronics refurbishment services offer an ideal solution for military hardware and consumer electronics alike.

As Srinivasan pointed out at the ELCINA meet, India’s strong promotion of domestic defense industries represents a tremendous opportunity for the nation’s EMS providers to help resupply and modernize the Indian military, as well as take the lead in the development of state-of-the-art defense technologies for export to other nations around the globe. Syrma is poised to be a leading player in this landmark initiative, backed by our world-class engineering expertise and flexible-volume manufacturing strengths.

Backed by 40 Years of Expertise

We contribute our 40 years of design and manufacturing expertise spanning multiple diverse markets. We look forward to discussing how we can deliver world-class products for OEMs across the globe. We understand our home Indian market, familiar with its vast regulatory and selling environments. We foster growth opportunities within India through our strong technology incubation ecosystem. We also assist global OEMs in entering the Indian market by leveraging the local supply chain and favorable operating environments for cost reductions.

Our flagship Chennai location opened in 2006 and lies within a Special Economic Zone (SEZ) for electronics manufacturing, offering economic incentives for imports and exports. This primary facility is within 90 minutes of the Chennai seaport and 20 minutes to the international airport. Additional road and rail connectivity links to the rest of India and beyond and infrastructure advantages with faster import and export clearances. We also have labor force flexibility, both technical and manual, to scale to demand rapidly.

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