India private sector rue lack of defence orders in rare meeting with Modi’s office

New Delhi: India‘s top companies such as Reliance, Tata, L&T, Mahindra and Bharat Force have urged Prime Minister Narendra Modi to shift ministry projects from the public sector to the private sector in case he was serious about growth in domestic defence manufacturing.

The companies made the suggestion to the Prime Minister’s Office here on June 20 during a meeting with top government officials, including the PM’s Principal Secretary Nripendra Misra, Niti Aayog chief executive Amitabh Kant and Defence Secretary G. Mohan Kumar.

Even foreign companies, such as European Airbus and Israeli Elbit, which recently tied up with the defence business of the Gautam Adani Group, were represented at the talks, the Economic Times reported today.

The talks were part of a new mechanism for regular interaction between Indian defence players and the government put in place on instructions from Modi. Four such meetings, including the June 20 on, have been held so far, the report said citing four persons familiar with the discussions but preferred to remain anonymous.

At the meeting on June 20, the defence ministry is said to have made a presentation on higher volumes of orders. In the 2015-16 fiscal, India placed orders worth Rs. 50,000 crore ($7.5 billion) on Indians companies and Rs. 26,000 crore ($4 billion) worth of orders on foreign players. But this figures were countered by the Indian industry representatives, who told the officials that “not a fraction” of the orders had gone to the private sector, the report said.

Private companies informed that the public sector shipyards were given orders worth Rs. 1.24 lakh crore ($19 billion) in the past two years, while the private sector shipyards got barely Rs 2,000 crore ($300 million), one of the four unnamed persons was cited as saying.

Private sector executives present at the meeting also questioned another statistic shared by the defence ministry — that offsets worth $990 million had been realised in the past financial year. There were also questions raised on why PSUs were not outsourcing enough work to the private sector. Industry representatives pointed out that over the past two years, not a single Rs. 100 crore-plus order was placed by PSUs on any private defence manufacturer.

Author: indostrat

IndoStrat is a media outfit that brings you news from the Indian defence and strategic sectors. If you are an avid watcher of India's military, diplomacy and strategic affairs, this is the place to come to for satiating your appetite for latest news, opinions, facts, tidbits and some informed gossip.

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