CG aims to make inroads in defence sector

Raipur, November 05

That the paradigm shift in its new industrial policy has already evoked massive response nationally with new vistas of opportunity opening for investors in non-core sector, Chhattisgarh now aims to emerge as a defence manufacturing hub of the country. The State has already taken first step, though small one, in June this year by signing memorandum of understanding with ACSG Corp to establish assembly and analysis facility unit for unmanned aerial vehicle drones.

Commerce and Industry Minister Amar Agrawal says this is the right time for defence manufacturers to invest in the State as its Industrial Policy 2014-2019 has all that what they wish to have to start their business.

According to World Bank, Chhattisgarh is fourth in the country in ease of doing business and follows Gujarat, Andhra Pradesh and Jharkhand. It was the single-window clearance policy commenced by Raman Singh’s think tank while introducing Industrial Policy 2014-2019 that prompted some of the top multinational IT firms to search grounds of development in this part of the world.

The State already has shut doors for fresh investments in core sector – that it – steel, cement and power with manufacturing units in this sector reaching super-saturation mark. Conservation of environment is another major factor due to which the government has shifted focus from core sector to non-core sector. Now it is beckoning environment-friendly units, and in doing so succeeded in attracting IT and electronic firms which showed keen interest in investing in Naya Raipur.

However, for defence manufacturing units, the government is likely to provide lands in the districts adjoining to Raipur, especially in Durg, Bilaspur, etc.

With the country having set a target of achieving 75 percent indigenisation in defence production between 2020 and 2025 and spending over $150 billion over the next five years on defence procurements, it is said to be an excellent opportunity for defence-related manufacturing industries. This means that the local industry doubles in size and 120000 new jobs are created. Also, numerous offsets in the three wings of the armed forces are expected to be executed in the next five years.

According to Rear Admiral AK Verma (Retd), who was in Raipur, the Centre is likely to bring key changes in the offset policy in the defence sector under which a company will have the option of migrating from the offset obligations to Buy and Make. The much-awaited changes to the Defence Procurement Procedures (DPP-2013) are expected in the coming months with the release of DPP-2015, he said by adding that with the Make in India campaign gaining momentum, domestic as well as overseas companies would collaborate to manufacture products in India. He hoped such changes would help states like Chhattisgarh to push up their stake in defence manufacturing sector.

With nearly $100 billion worth of defence capital acquisition in the pipeline in the next one decade, Eastern Region as a whole and Chhattisgarh in particular are in a position to reap dividends. About 48 ships and submarines are under construction in various Indian public and private sector shipyards and estimates show that the Indian Air Force will have more than 1000 fighter jets and around 60 squadrons by 2030.  Therefore, there is vast opportunity for the defence manufacturers to increase their business.