2. A NATIONS MILITARY STRENGTH IS DETERMINED BY ITS ECONOMIC MIGHT INDUSTRY PROVIDES THE MILITARY WITH THE WHEREWITHAL TO FIGHT THE NATIONS WARS. 3. DEFENCE : ROLLING THE STONE ! The opening up of the Indian economy during the early nineties heralded an era of unprecedented industrial growth in India Huge opportunities for growth within the domestic and global defence and aerospace industries have attracted the attention of Indian industry The current profile of equipment held by the Indian Armed Forces with regards to State of the Art, Matured and Obsolescent equipment is 15, 35 and 50 percent respectively 4. OVERVIEW The countrys defence services include three armed forces and other departments Defence Research and development organization Defence ordinance factories Defence public sector Units 5. Defence Production Defence Public Sector Units (DPSUs) plays an integral part in defence production India has 39 Ordnance Factories and 8 DPSUs DPSUs account more than 65% of the total industrial output Value of production is US$ 3.9 billion Highlights of budget and expenditure Allocation increased to 495.2 Billion rupees R&D allocation raised to 46.80 Billion rupees Running expenditure increased by 3.8% 6. Global Spending on Defence Expected to remain Flat or decline Decline in spending by US and rest of Europe Compensated by China, India, Saudi Arabia, Japan and Brazil 7. Ordnance Factories Organization Indian Ordnance Factories trace their history to 1801, when the first factory to produce guns was established at Cossipore, Kolkata Today, the organization consists of 39 factories and two projects, coming up at Nalanda in Bihar and Korwa in U.P The turnover during the financial year 2011-12 was Rs 12,391 crore The projected turnover for 2012-13 is Rs 12,935 crore The turnover has shown steady growth during the last five years The major investment plans during the 12th Plan period are: (a) Augmentation of capacity for production of Tank T-90 (b) Creation of capacity for production of variants of tank T-72 (c) Augmentation of capacity for ICV BMP-II and its variants (d) Augmentation of capacity for Engines of Armoured vehicles (e) Nalanda and Korwa project (f) Augmentation of capacity for Pinaka Rocket (g) Creation of capacity for production of 155 mm Howitzer (h) HMX and Ammonium per-chlorate plant (i) Booster and Sustainer for Akash missile (j) Creation of capacity for production of Track Link Assembly for armoured vehicles 8. India has established eight Defence Public Sector Undertakings (DPSUs) whose responsibility is to provide the Armed Forces state-of-the-art equipment's and at the same time enhance country's self-reliance in defence production Defence Public Sector Undertakings Name of the PSUs 2010-2011 2011-12 2012-13 (April-Dec 2012) (Provisional) Value of Production Value of Sales Value of Production Value of Sales Value of Production Value of Sales HAL 16450.84 13115.50 12693.19 14204.21 14403.82 14315.68 BEL 5520.80 5529.69 5793.58 5703.63 6290.19 6012.19 BEML 3795.07 3647.07 4077.19 3648.37 3359.70 3289.79 MDL 2611.41 636.56 2523.69 2262.87 1068.51 1063.19 GRSE 1053.30 546.22 1293.80 546.33 1507.21 427.25 GSL 990.32 514.46 676.40 269.70 506.00 749.36 BDL 910.92 939.10 992.94 959.12 475.00 475.00 MIDHANI 485.46 417.87 496.00 509.01 2810.00 2424.81 HSL 603.84 652.14 564.04 564.04 553.78 558.59 TOTAL 32421.96 25998.06 29110.83 28667.28 30974.21 29315.86 VALUE OF PRODUCTION AND SALES OF DEFENCE PSUs 9. Defence Public Sector Undertakings Undertakings have not been able to arms the defence forces, resulting in huge arms imports, to the tune of over US $ 5-6 billion per year Though the volume of production by DPSUs has increased over the years, the value addition by them has progressively decreased Most of DPSUs are over-dependent on external sources for raw material, components and spare parts, and capital goods for the production requirements The export performance of DPSUs taken together is below the three per cent of total value of production or total value of sales 10. TRENDS IN DRDO EXPENDITURES 11. % SHARE OF DEFENCE BUDGET IN GDP 12. FDI IN DEFENCE SECTOR 13. RECENT ACHIEVEMENTS Agni, the 3500 kms range ballistic missile was successfully launched with user participation Successful flight test of Endo atmospheric Interceptors for 2000 kms class target were carried out Capabilities of NAG, the third generation anti tank missile, which is a vehicle mounted system was demonstrated Advanced versions of BrahMos supersonic cruise missile, were developed and flight tested Major procurement contracts for India:- Navy impending contract for project 17A frigates that will be built by MDL and GRSE Supply of 145 ultra light howitzers by BAE system (USA) worth 647 million dollars Supply of 6 Lockheed Martin C-130 J Super Hercules aircraft for Indian special forces worth 1 billion dollars 14. ROADBLOCKS Lack of a coherent industrialization policy Lack of domestic capability to cater to demands from global primes Taxation issues Restriction on foreign investment (FDI) only 26% as of now Restrictions of dual use technologies Inadequate trained manpower Opportunity in Indian defense industry Strong focus on IT, High-tech engineering and research and design capabilities IT infrastructure and manufacturing potential to be one of the key global sourcing definitions 15. THANK YOU!!