India Electronics and Semiconductor Association (IESA) the trade body representing the Indian electronic system design and manufacturing space, has envisioned India as the world leader of design and manufacturing of electronics systems by 2025. Electronics is in the core of every manufactured product, and it has a presence everywhere.
As for defence electronics, there’s a felt need to scale up existing technologies and systems to meet the forthcoming needs of military applications. Trade bodies have put their hands together to open out channels through which the aerospace and defence sector can leverage information technology (IT).
“IESA has tied up with the National Association of Software & Services Companies (Nasscom) and Munich-based consultancy Roland Berger, to bring out a report on the electronic opportunities available in the defence sector. As per the survey, right now, there’s a $55bn opportunity in defence electronics waiting to be tapped,” said Anilkumar Muniswamy, director, SLN Technologies Ltd and vice-chairman IESA, speaking at the Keysight India Aerospace Defense Symposium 2018 in Bangalore, for which IESA is the industry partner.
The defence sector has in place a defence offset programme through which India buys big defence equipment from foreign countries. These big-ticket purchases are over Rs 300 crore [INR3bn, £32m or $46m], and over 30 per cent of this is outsourced. This percentage has been increasing because we don’t seem to have enough suppliers in the country to meet the requirement. Muniswamy has estimated that there will be a $4-5bn gap in the next four to five years, which simply means we need to open out opportunities for the domestic market.
If we were to explore the potential that defence electronics has to offer, it’s necessary to understand how the various components of the supply chain works. The defence landscape in India comprises armed forces, defence public sector undertakings (DPSUs) and ordnance factories that manufacture bulletproof jackets and guns.
Equipment provided to armed forces comes from DPSUs. The DPSUs outsource various parts of the equipment from suppliers. A deeper insight into the sector indicates that suppliers fall into two categories, the first being the big ones that can handle orders worth thousands of crores. These suppliers subcontract parts of the product and then assemble all the components in their unit.
Small and medium enterprises (SMEs) constitute the second category of suppliers, who tend to do system integration and concentrate on hardware development.
The Government of India (GoI) has already created a Technology Development Fund to encourage SMEs through grants and funds. To take it a few notches higher, IESA has proposed to GoI to set up an electronics testing measurement and certification facility for SMEs to test, validate their products and meet the criteria in an affordable manner.
A facility of this magnitude is required because it will help strengthen the system, besides encouraging the local market. “It is forecasted that the market opportunity for defence electronics in India would be around $70-72bn in the next 10-12 years,” added Muniswamy. This would result in the next frontier of technology, which will include plasma-based rocket technology, stealth technology and deep technology to meet the needs of the military applications in the next decade.
India has the world’s third largest army, the fourth largest air force and seventh largest navy. Yet only around 30 per cent of the equipment used by the armed forces is manufactured in India. “Business prospects in defence do not include system of systems, which is a web of technologies. System of systems is a $28.7bn market. As of now, DPSUs are partnering with tier suppliers to fulfil the needs of the supply chain,” reasoned Muniswamy.
Keysight Technologies is a US-headquartered electronics instrumentation company that serves a diverse section of industries including aerospace and defence, wireless, semiconductors and general electronics.