Defence minister Manohar Parrikar on Thursday advised the state-run defence units to become lead integrators than trying to manufacture everything even as he pitched for more innovation and indigenisation of defence production.
"State-run enterprises should become lead integrators than manufacturing. They should outsource components, subsystems, parts and assembly lines to the private sector," he said at a strategic electronics conference in Bengaluru.
Having failed to arrive at a consensus over the strategic partnership with select private sector partners for defence production, the minister called upon the wider private sector to innovate design and develop products to make in India and for India and global market.
Parrikar said the indigenous Light Combat Aircraft (LCA) was a huge opportunity for them to make its components and subsystems as manufacturer HAL has to rollout 8-16 fighters per annum for induction into the Indian Air Force (IAF).
"In addition to LCA, HAL has to make 70-100 basic trainer aircraft (HTT 40) by 2018 for which the industry has to participate in a big way to ramp up production," he told about 300 delegates participating in the two-day summit, organised by Elcina (Electronic Industries Association of India).
He said, the increase in the budget for defence procurement from small and medium enterprises (SMEs) to Rs52,000 crore this fiscal from Rs 42,000 crore last fiscal, has openef Rsw10,000-cr of additional business opportunities to the private sector.
"Similarly, the offset clause for defence purchases from foreign suppliers offers $12-15-billion orders for the private sector, especially the SME in the next 10 years. Rafale (French multi-rule medium combat fighter) alone offers 50 per cent offsets for the private industry," he noted.
Besides, he said, to promote indigenous development of components and subsystems currently being imported by the defence units, the defence research and development labs across the country have been thrown open to the private sector for innovation and design.
"Our Make project and Make in India programmes offer huge opportunity to the private industry for reducing import of defence equipment and scaling their production for exporting to the global market," Parrikar pointed out.
Affirming the government's commitment to promote the defence industry and help it to develop design and manufacturing capabilities through a `Make in India' campaign, the minister told the stakeholders to apprise him of their needs and share their pain points and bottlenecks.
"The government will support your initiatives to grow and mushroom," Parrkar assured.
Elcina has been holding strategic electronics summits every year since 2010 to offer a platform for the stakeholders to explore opportunities to work together with the defence establishment as strategic partners.