New govt needs to explore placing long-term orders

India's defence exports have grown by 31 times in the past decade. The private sector accounted for 60 per cent of the record defence exports in 2023-24 (FY24), when they grew 32.5 per cent year-on-year to touch ₹21,083 crore (about $2.63 billion). Against this backdrop, Bharat Forge's Chairman and Managing Director BABA KALYANI, in an interview with Bhaswar Kumar in Pune, talks about what the new government should focus on in its first 100 days to give Make in India in defence a fillip. Edited excerpts:

Large orders for the domestic industry are still missing. So, what should the new government do in its first 100 days to address this area of friction?

When Covid-19 hit, things came to a standstill. This posed a challenge for military procurement. Simultaneously, the Galwan clash occurred between India and China in 2020. In response, the government and the armed services initiated emergency procurement procedures, restricting purchases to what was needed for the next 12 months, with a cap of ₹300 crore per item, necessitating swift decision-making. Today, the services and the Ministry of Defence favour this process. However, it also resulted in a new challenge: the absence of long-term or platform orders.

Building a platform within ₹300 crore is unfeasible. For instance, we would receive an order for 36 Kalyani M4 mine-protected vehicles per year. Producing only 36 vehicles annually isn't viable. In its 100-day agenda, the new government must explore issuing long-term orders for platforms. The Railways, for instance, awards a 10-year contract through a bidding process for projects like the Vande Bharat and other trains. A similar approach is needed in defence. Once the emergency procurement phase subsides, stability will ensue. Moreover, the government must designate its suppliers. Not everyone can fulfil every requirement. It's time for the government to select India's defence manufacturer and grant them long-term orders.