With the objective of
facilitating 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 2016. The
Aerospace and Defence sector is one of the closest adjacencies of the
automotive sector, and with liberalisation, 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.
India is in the process of replacing 50pc of
its ageing defence equipment, and is expected to invest over USD 100 billion in
the next 5 years in capital equipment purchases across Air Force, Navy and
Army. India and other emerging markets are expected to generate aircraft demand
estimated at USD 5 trillion in the next 20 years. According to a joint
ACMA-KPMG study, 70% – 80% of the defence equipment cost is used in maintenance
and upkeep, an opportunity worth Rs. 20,000 crore, growing at a CAGR of 9%.
15%-20% of this will accrue from Air Force Maintenance, Repair and Operations
(MRO) activities covering sub-assemblies, components, spare parts etc.
Chief Guest Manohar Parrikar,
Union Minister of Defence delivering his inaugural address commented, “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 USD 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 by June 2016, to reform
purchasing processes of Defence PSUs, which would benefit all suppliers,
especially the 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, 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 Ministry of Defence can help enhance India’s
self-reliance and conserve foreign exchange. The positive approach displayed by the
government, including liberalisation of FDI norms in the defence sector and
clearer licencing requirements, will provide a thrust to the domestic
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.”
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