Monday, July 22, 2024

Forging Partnerships in the Defence Sector

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India’s defence sector is one of the major beneficiaries of the government’s liberalisation of the foreign direct investment (FDI) policy. The removal of the 49 per cent FDI limit in the defence sector has opened up avenues for significant investments and has given the much required impetus for many SMEs to have access to finance and technology.

Already large corporates, including Tata Power, L&T, Reliance Defence and Cyient, have lined up significant investments in the sector following FDI removal. Although the ultimate goal is to make India a global defence manufacturer and exporter, the present need is to achieve a higher degree of self-reliance. Therefore, it is imperative that the government should ensure that the domestic manufacturers find strategic partners for acquiring greater expertise and capabilities. Bringing national and international manufacturers together and giving them a common platform gains added importance in this milieu. Towards building such a platform, Electronic Industries Association of India (ELCINA) has always been a prime enabler and a catalysing force for both domestic and foreign manufacturers.

Although ELCINA has been offering a platform since 2010 for the Indian industry to work with the defence establishment and MNCs, global majors abstained from investing in the Indian defence sector and transferring technology until they were assured of complete control over manufacturing facilities. The opening up of the defence sector envisages a greater role for ELCINA in the coming days.

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ELCINA was established in 1967 as the first industry association supporting electronics hardware, when India’s electronics industry was still in its infancy. Since then, ELCINA has established itself as an interactive forum for electronics and IT manufacturers. ELCINA actively interacts with the government and advises it on policy and business environment issues. It networks with technical institutions and business support organisations in India and abroad to enable business expansion and information dissemination on technical developments.

50 Years of Accelerating Growth

Entering its golden jubilee year, ELCINA has been a catalyst for the growth of the domestic electronics industry by actively engaging with the government in policy-making, supporting manufacturers, and building global partnerships. While ELCINA’s focus was originally on promotion of manufacturing components, it has broadened its scope to include the entire gamut of electronics and IT hardware manufacturing.

“ELCINA aims to bridge the growing demand-supply gap in the domestic electronics industry by enabling it to be globally competitive,” said Mr. Vikram Desai, President, ELCINA. “Towards this end, we seek to provide learning platforms in quality tools/techniques and to take initiatives for meaningful collaboration with various stakeholders of the industry and with policy makers.”

The association is represented on many departmental and ministerial committees that help the government in drafting various policy documents. Apart from policy advocacy at the highest level, it also helps its members on specific issues and takes up individual concerns of the members on policy matters.

Strategic electronics—defence equipment manufacturing—is one of the key focus areas for ELCINA owing to its importance in national preparedness. It is also an area that has immense scope for public-private partnership. As the defence industry is looking forward to a supportive environment and policy dispensation to enable it to grow and realise its potential, ELCINA is quite sure that under the new enabling policies and a strong national leadership, this industry will expand rapidly and contribute to a larger manufacturing sector that our country deserves.

For the past six years, ELCINA has been organising the Strategic Electronics Summit (SES) in Bengaluru, also a hub for defence, aerospace, R&D and manufacturing. The 7th edition of SES is scheduled on 7th & 8th July, 2016 at the Bangalore International Exhibition Centre (BIEC), and it has received a very encouraging response from the industry.

The 7th edition of SES will focus on promoting the local strategic electronics industry, enabling partnerships with international companies, encouraging new business partnerships and sharing information about market opportunities, policies and new technologies. The event will have session on Opportunities for Defence Industries under Make in India Program, where eminent speakers from the private and public sectors will share their ideas.

Bridging the Demand-Supply Gap: The ELCINA Way

The government’s announcement of sweeping changes in India’s foreign direct investment policy comes at a time when FDI inflows have risen from $36.04 billion in FY14 to $55.46 billion in FY16, reflecting the nation’s growing attractiveness as an investment destination and confirming its status as the world’s fastest-growing major economy amid global uncertainty.

“The demand of electronics products and systems in India is expected to grow to about USD 400 Billion by 2020,” said Mr. B S Sethia, former President, ELCINA. “At the conventional rate of growth of domestic production, it would only be possible to meet demand of about USD 100 Billion by 2020.” Although the government attaches high priority to electronics and IT hardware manufacturing, other factors have hampered the growth of electronics manufacturing in the country. These include factors such as the lack of reliable power, high cost of finance, poor logistics and infrastructure, weak components manufacturing base, lack of a targeted and proactive R&D in collaboration with industry, etc.


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