''Defence exports have dropped to laughable level''

Posted By: Pti
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New Delhi, Feb 6 (PTI) There has been a "total failure"of policies governing foreign and private participation indefence production, with imports rising as high as 75 per centand exports falling to a meagre Rs 12.28 crore in 2009-10, aformer army officer has said.

Maintaining that all hopes raised by the 2002 DefenceProcurement Procedure have been "belied", Maj Gen (Retd)Mrinal Suman said the last decade has been "a chronicle oftall claims, missed opportunities and inability to translatepolicies into implementable programmes. The current regime hasbeen a total failure".

To buttress his point, Suman, who himself was associatedwith defence procurement while in office, said imports haveclimbed to 75 per cent rather than dropping to the targeted 30per cent. India has also not been able to produce "a singledefence system with cutting-edge technology".

Defence exports from Ordnance Factories have slided from"a paltry Rs 41.07 crore in 2008-09 to a laughable Rs 12.28crore in 2009-10. It is a reflection of the nature and qualityof items being produced indigenously".

"While every critical item is being imported, Indiacontinues to be happy producing (aircraft) doors and windowsfor foreign aviation majors," Suman said in an article in thepremier journal ''Indian Defence Review''.

Despite "repeated assertions" of the government tointegrate private sector in defence industry, "there is littleprogress on ground. The private sector continues to be aperipheral player" producing some low-tech items andcomponents, he said.

Building a strong case for turning India into amanufacturing hub, he said for this, it was imperative thatforeign direct investment (FDI) flows in.

However, FDI should be technology-centric with inherentflexibility. "It could be 26 per cent for low-tech products,51 to 74 per cent for matured systems and 75 to 100 per centfor cutting-edge technologies," he suggested.

Observing that all countries leverage offset clauses inconsonance with their national economic priorities to fill animportant technological or economic void, he said, "Strangely,India does not accept technology against offsets."

With the "current flawed policy", offsets were notcontributing to upgrading of the indigenous technologicalbase, he said, calling for amending the current offset policyto make transfer of technology the preferred mode.

Asserting that India must become a key player in theglobal supply chain, Suman made a strong plea for setting upof a multi-disciplinary ''Defence Capability Development Board''under the Commerce Ministry to oversee the entire gamut ofrelated activities and act as a single window interface forall entrepreneurs.

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