Kishore Jayaraman, President, Rolls-Royce, India and South Asia

Rapid Indigenisation

The Indian defence industry, which has grown substantially in the recent years, is poised for even better days. Today, India ranks among the top 10 countries in the world in terms of military expenditure yet imports 70 per cent of defence equipment. For India to successfully continue with its massive acquisition programme of the latest and best equipment in a sustainable way, it has to actively look into indigenisation.

The government’s clear vision for building an indigenous defence industry will help boost manufacturing and attract funds to build the country’s infrastructure. The foreign direct investment (FDI) hike in defence is intended to cut imports by indigenising defence production. It will also help create jobs and also encourage collaboration between foreign defence equipment manufacturers to get into co-development and co-production arrangements with Indian companies.

Defence technology comes with huge investments in research and development (R&D). Constant improvements are taking place in this sector and better technologies are being developed around the globe. With increased FDI limit India can now focus on increasing its share of defence budget to R&D which is only 6 per cent compared to 15 per cent in France and 12 per cent in the US. At Rolls-Royce, we put great emphasis on technology and this is evident from the fact that over the past 10 years, Rolls-Royce has invested £7.9 billion in R&D. Our investment in R&D has grown in the past decade, with two-thirds aimed at improving the environmental performance of our products.

Leveraging Strong Partnerships

UK has played a pivotal role in India’s defence modernisation and share a strong history of mutual cooperation. India is one of the fastest growing economies in the world and is a powerhouse of technology. There are several agreements in the area of encouraging defence industrial partnerships, for example, setting up of Defence Science and Technology Laboratory. However, as India requires advanced technology and manufacturing capabilities to bridge the existing defense capability gap, there is a need to look at joint production, joint R&D and most importantly the need to move beyond a buyer-seller relationship. With increased FDI limit and the new government initiating forward-looking policy measures, there will be much more scope for greater collaboration and participation between the two countries.

Conclusion

India and Rolls-Royce share a common desire to grow and develop the Indian aerospace industry. This desire is based on a successful partnership that has seen India and Rolls-Royce working together with India’s armed forces since 1933, when the IAF took to the skies with Rolls-Royce Bristol Jupiter engines. Over the past 60 years, Rolls-Royce and HAL have produced a wide range of engines together for various military applications. Throughout this period Rolls-Royce has invested time and resources to increase the capability of Indian industry. Rolls-Royce is working towards the indigenisation of the Indian defence industry by exploring strong partnerships with companies who share our goals. We are already working with many partners in India which we are proud of – TCS, Quest and the Hindustan Aeronautics Limited. With a higher FDI limit, there will be opportunities to further contribute in the development and modernisation of India’s defence sector by offering world-class innovative products and services. Rolls-Royce is committed to helping the IAF gain the most value from their current and future fleets by applying the best practice it has learnt from supporting over 160 defence customers in 106 countries.