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RM Arun Jaitley Speech At India Russia Military And Industrial Conference 2017

RM Arun Jaitley Speech At India Russia Military And Industrial Conference 2017


Inaugural Address by Hon�ble RM Date & Time: 17th March, 2017 at 3:00 pm Place: Manekshaw Centre, Delhi Cantt., New
Delhi Event : India-Russia Military Industrial Conference Minister of Trade and Industry of the Russian
Federation, Mr. Manturov, senior officers of the Russian Government, senior officers
of the Ministry of Defence, industry representatives from India and Russia, friends from Media. First of all, I welcome Russian Minister of
Trade and Industry and his delegation along with large industry delegation to this India-Russia
Military Industrial Conference. This year, we are also celebrating 70th Anniversary
of the establishment of the diplomatic relations between India and Russia. Relations with Russia are a key pillar of
India�s foreign policy and Russia has been a long standing time-tested strategic partner
of India since last 70 years. Since the signing of declaration of the India-Russia
Strategic Partnership in 2000, India-Russia ties have acquired new heights with enhanced
level of cooperation in almost all areas including political, security, trade and economy, defence,
science and technology and culture. Though this Conference has been long overdue,
the organisation of this Conference in the 70th Anniversary of our diplomatic relations
assumes far greater significance as far as the defence cooperation between the two countries
is concerned. 2. India has a long standing and wide ranging
cooperation with Russia in the field of defence. India-Russia Military Technical Cooperation
has graduated from a simple buyer-seller relation to the one involving joint research, development
and production of advanced defence systems. Brahmos Missile System as well as the licensed
production of SU-30 in India are examples of such flagship cooperation. The two countries also hold exchanges and
training exercises between their Armed Forces annually. The joint military exercise �Indra 2016�
was held Vladivostok in September 2016. Since most of our defence platforms and weapon
systems are of Russian-origin, their maintenance and life-cycle support is extremely important
for us from the point of view of our defence preparedness. This Conference is aimed at addressing the
issue of maintenance and life-cycle support of some of the major Russian-origin defence
platforms. 3. Though India has third largest Armed Forces
in the world, we are also one of the largest importers of defence equipments in the world
and this definitely is not a label, we are happy with. Hon�ble Prime Minister, Shri Narendra Modi,
immediately after forming the Government, launched the �Make in India� initiative
to promote manufacturing in the country. Defence production is one of the key areas
identified in this initiative. With regard to maintenance and life-cycle
support also, it is our endeavour that most the components and spare parts required for
maintaining the platforms, which have been procured from Russian companies, are manufactured
by Indian companies through technology transfer or through joint ventures with Russian companies,
so that the serviceability of the platforms is improved and we do not lose critical time
in repairing and maintaining these equipments. 4. I have seen the agenda of the Conference and
I find that it is quite exhaustive. We must take advantage of this opportunity
to finalise some of the agreements or tie-ups for Long Term Supply Agreements and manufacturing
of spare parts/ components in India. It is a unique opportunity where Indian and
Russian industry both are present on a single forum in such a large number. We have several policy and procedural issues
to address for facilitating tie-ups and joint ventures between Indian and Russian companies. This Conference will be an appropriate forum
to discuss all such issues and find solutions to these problems. I am sure that those procedural issues will
not come in the way of taking this agenda forward. 5. Since the announcement of �Make in India�
initiative by our Hon�ble Prime Minister, we are witnessing tremendous enthusiasm and
participation from private companies including foreign companies in the defence production. Russia being our oldest partner in defence
hardware and equipments, Russian companies would have a comparative advantage in partnering
with Indian companies for realizing �Make in India� potential in defence production. The Government has taken several initiatives
to ease the entry of private sector including foreign investment in the sector and several
more initiatives are underway. Though many of the defence platforms, particularly
Russian platforms, are made in India under licensed production, they have very high import
content because most of the components, parts, sub-systems are still imported. We need to review this trend and increase
the indigenous content in our defence capital procurement. Indian companies are gearing up for greater
indigenization and are developing capabilities for design and development. 6. Russian companies should come forward for
technology transfer to Indian companies and facilitate manufacturing of components/ parts
and sub-systems at least for those cases where the requirement is in large numbers and is
recurring in nature. Our companies can also partner or join hands
with Russian companies for joint research and development in defence related technologies. As you may be aware, in the latest edition
of Defence Procurement Procedure (DPP) of 2016, we have introduced a new category of
acquisition called �Buy (IDDM)�, wherein the first preference would be given to the
equipments, which are designed, developed and manufactured within the country. We hope that this will encourage and enthuse
Indian companies to invest in R&D and technology acquisitions. The new DPP has also made several other provisions
for indigenization and greater participation of Indian industry in design, development
and manufacturing. 7. As far as entry of private sector and foreign
investment in defence sector is concerned, you may be aware, the sector was opened up
for private participation including FDI in 2001. Since then, the policy for entry of private
sector and foreign investors in the sector has been gradually liberalized. FDI Policy for defence sector today is one
of the most liberal FDI policies for defence in the world, wherein upto 49% FDI is allowed
without any approval. Similarly, industrial licensing for undertaking
manufacturing of defence equipments has also been significantly liberalized and now for
manufacturing of parts, components, sub-systems, production equipments and testing equipments,
no license is required from the Government. Even for the items for which license is required,
the initial validity has been increased from 3 years to 15 years. As a result of this liberal approach, the
presence of private companies in defence production sector has increased many folds in last two
years. 8. The �Make in India� in defence sector
is not only aimed at meeting domestic requirements, but can also be used to become part of the
global supply chain. The domestic requirements being limited in
defence, manufacturing and business would not be sustainable unless companies look at
the global requirements and economies of scale. The Russian companies may identify some of
the items for which they can set up joint ventures with Indian companies and those items
can be supplied across the world by such joint ventures. Keeping this in mind, we have also streamlined
the process of export clearances in last two years. Though India presently is not a member of
multilateral export control regime, Wassenaar Arrangement, we hope that soon India will
become member of this regime. Our export control processes and technology
security mechanisms are robust and as strict as required in the interest of national security. I think there is a tremendous potential for
collaboration between Indian and Russian companies for export, so as to become part of the global
supply chain. 9. Another area where Russian industry and business
houses can joint hands with Indian companies is research and development. We are now giving significant emphasis to
technology development and innovation in the defence sector. In the Defence Procurement Procedure-2016,
we have streamlined �Make� procedure to encourage and incentivize design and development
of defence equipment and systems. We would welcome the partnerships between
Indian and Russian companies in this area as well. Bengaluru has design centers of many global
defence companies and it is emerging as an aerospace design hub of the world. Russian companies must take advantage of the
large skilled manpower available in India for this purpose. This would be a win-win situation for companies
of both countries. 10. In last more than two years, several policy
and procedure changes have been made particularly in the defence production sector for encouraging
private investment, R&D and indigenization. We are witnessing a significant momentum in
the industry for setting up manufacturing facilities for defence items. Russian companies can be the natural partners
of the Indian companies as most of our defence equipments and inventory are of Russian origin. A large industrial base and supply chain can
be created for manufacturing of spare parts, components of such platforms to be made in
India by Indian companies either through transfer of technology form Russian OEMs or through
setting up of joint ventures between Indian and Russian companies. This Conference is a milestone in our endeavour
to improve the serviceability of these equipments through involvement of Indian companies in
life-cycle support. I am happy that Russian companies are present
in such a large number. In the breakout sessions on Aerospace, Naval
Systems and Land Systems, the issues related to life-cycle support, Long Term Supply Agreements
and manufacturing of spare parts and components in India would be deliberated in detail in
this Conference. We have long deliberations of 1 � days and
I am quite hopeful that at the end of the Conference, we will have some concrete ideas
and proposals to take forward. 11. I request all of you to be free and frank
in your deliberations and discuss all the issues threadbare because such an opportunity
with Russian and Indian companies present together in this significant number would
be very rare. I wish all of you all the best in your endeavours
and this Conference a grand success. Thank you.


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