The tectonic plates of geopolitics are beginning to shift. The ongoing conflict between Russia and Ukraine has exposed the flaws of globalization. And being self-sufficient as a nation, especially in critical areas, has become the most important lesson for countries.
India, which is the largest arms importer with 11% of total global imports, has a critical dependence in the defense sector on countries such as Russia, France, Israel and the States United, among others. As the war on Ukraine raises alarm bells about the need for self-sufficiency in defense technology, India’s indigenization efforts have accelerated. India has so far released three negative import lists comprising 310 items which will now be produced in the country. Interestingly, the list is exhaustive. From platforms such as Naval Utility Helicopters (NUH), Medium Altitude Long Endurance (MALE) Unmanned Aerial Vehicles, Light Tanks and Unmanned Underwater Vehicles to high-end sensors such as Multi-Function Surveillance Radar, tracking and guidance (MFSTAR), various missile systems; India has embarked on an ambitious journey of creating a huge military engineering infrastructure over the next decade.
Business opportunities are also substantial for Indian industries. It is estimated that around Rs 2.10 lakh crore of defense equipment orders would be placed in Indian industries over the next five to seven years. As technology is an important component of every piece of military equipment, India’s tech industry – engineering services companies, IT services companies and tech startups – is likely to be a huge beneficiary of this indigenization movement.
“Indian IT companies, including engineering services companies, have never been aggressive on government defense contracts for various reasons. However, this is likely to change as the government makes concerted efforts to ‘make in India’ defense equipment and there are huge market opportunities,” said Pareekh Jain, engineering services consultant and founder of Pareekh Consulting.
“Additionally, big companies like Tata, Mahindra and L&T are betting big on the Indian defense sector. So it will be natural for these companies to rely on their respective group companies (like TCS, Tech Mahindra, LTTS) to run the software part,” he added.
Role of Indian companies and startups
Analysts have also pointed out that the Indian government’s emphasis on technology transfer (ToT) with global defense companies is likely to boost the local ecosystem. Notably, the Defense Research & Development Organization (DRDO) has concluded more than 1,430 ToT agreements with Indian industry, of which 450 have been signed, in the last two years.
Indian engineering services companies such as L&T Technology Services, Persistent Systems, Cyient, Tata Elxsi as well as all major Indian IT services companies are currently working with many global defense giants in the US and Europe. Many believe that the political impetus will help these companies to better exploit the internal market.
“Previously, the trend was for complex technology work that required niche systems and software engineering skills to be largely done outside the country, but with this change in policy combined with the increase in public- private, part of the high-end technical design is carried out outside the country. India and this trend will only continue to increase. Indian engineering services companies can offer solutions such as digital engineering, system engineering and avionics design that enable higher, faster and safer product performance and can help further modernize the engineering industry. the defense of the country. The day is not far when Indian engineering services companies will be able to enable ‘Made in India’ for the defense sector,” said Amit Chadha, CEO and Managing Director of L&T Technology Services (LTTS) at Deccan Herald.
Not only established companies, but startups are also playing an increasingly important role in the nation’s self-sufficiency in defense technology. Given that 25% of the defense research and development budget has been earmarked for industry, startups and universities in this year’s budget, this should give a big boost to innovation.
“Many cutting-edge technologies are not accessible for the defense of global companies, this opens up huge opportunities for Indian semiconductor startups and technology companies. Startups like Astrome, Idea-Forge, Botlabs to name a few are developing very good technologies which can be used successfully for the strategic sector,” said Dr. Satya Gupta, President of VLSI Society of India and Advisor to the India Electronics & Semiconductor Association (IESA). ). He added that an initiative like iDEX is a great start to increasing the participation of startups in the defense technology sector.
As future warfare will be hybrid, with cyberattacks being a key part of warfare, this also opens up significant opportunities for Indian startups, cybersecurity firms and IT firms that can develop specific solutions to thwart such attempts. “We have seen an increase in cybersecurity threat levels in the United States and Europe due to the ongoing conflict between Russia and Ukraine. As any future war will have a significant cyber component, public-private participation with support for startups can enable India to design and develop India-specific cybersecurity solutions,” said Sanjeev Dahiwadkar, Founder and CEO .
of ITShastra, a Pune-based IT services company
The world order is expected to undergo a significant change in the coming years. India, as a middle power with two nuclear-armed neighbors, does not have the luxury of depending on another nation for critical defense technologies. As the war in Ukraine shows, each nation must fight its war alone.
It is therefore better to indigenize our defense technology at a faster rate than to hold our national security hostage to the whims of other nations.
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