With the objective of helping its members diversify into the fast growing Aerospace & Defence sector, the Automotive Component Manufacturers Association of India (ACMA) organised its second Aerospace and Defence Summit on May 15. The Aerospace and Defence sector is one of the closest adjacencies of the automotive sector, and with liberalization, it offers tremendous opportunities to the auto component sector in India. Luminaries from leading global Aerospace and Defence sector addressed the summit, while over 100 focussed participants made it a premier business event.
Mr. Manohar Parrikar, Defence Minister, who was the chief guest for the occasion, commented in his inaugural address: “I am delighted that we have been able to meet one-hundred per cent of defence offset obligation last year, and I am setting a target for achieving $2 billion worth of exports through offset in the next two years. With world-class quality practices and manufacturing capabilities, the auto components industry in India is well poised to partner with the Defence Sector to achieve this goal. The Government will also create the necessary framework in June to reform purchasing processes of Defence PSUs, which would benefit all suppliers, especially MSMEs. This will help realise the Government’s vision of ‘Make in India’ for the Defence Sector.”
Commenting on the future of the Aerospace and Defence sector, Mr. FR Sighvi, Chairman, ACMA Aerospace, Defence & Railways Committee, said: “The time is ripe for the auto component industry to amplify its defence production capabilities. Joint efforts between the auto component industry and the Ministry of Defence can help enhance India’s self-reliance and conserve foreign exchange. The positive approach displayed by the Government, including liberalisation of the FDI norms in the defence sector and clearer licensing requirements, will provide a thrust to the domestic manufacturing.”
Mr. Vinnie Mehta, Director General, ACMA, said: “The vast opportunities offered by the Aerospace and Defence Sector can be an inflection point in the growth for the auto component industry in India. The Indian auto component industry is well poised to meet the requirements of the global players in this sector who have set up a manufacturing base in the country.”
India is in the process of replacing 50 per cent of its ageing defence equipment, and is expected to invest over $100 billion in the next five years in capital equipment purchases across the Air Force, Navy and Army. India and other emerging markets are expected to generate aircraft demand estimated at $5 trillion in the next 20 years.
According to a joint ACMA-KPMG study, 70-80 per cent of the defence equipment cost is used in maintenance and upkeep, an opportunity worth Rs. 20,000 crores, growing at a CAGR of 9-15 per cent. Of this, 15-20 per cent will accrue from Air Force Maintenance, Repair and Operations (MRO) activities covering sub-assemblies, components, spare parts, etc.