Lucknow: While noting that DefExpo has been a great business opportunity for state-run BEL, CMD Gowtama MV adds that for pushing up defence exports, efforts need to be made by both the government and the industry. In an exclusive conversation with Defence Watch, Gowtama weighs in on how India is perceived as a defence manufacturing hub by investors and what can be done to change that perception. Here are excerpts:
How would BEL describe the experience at DefExpo?
We have had a great experience at DefExpo. The UP government and the Ministry of Defence have done a good job at putting this event and business discussions together. Over the course of DefExpo, a number of business delegations have visited BEL.
The government has spelt out its intention to undertake disinvestment in a big way. Is this a concern for BEL?
Part of shares in BEL has already been disinvested. So, I don’t think this impacts us. We are already in the business and we have a diverse portfolio. We don’t just fulfil defence needs, we also meet civilian requirements. BEL has achieved nearly 40 percent of the orders on its book through competitive tendering. The remaining orders have come from existing customers who we provided some equipment in the past. And now, the customer requires a repeat of the past order. Defence is a tough business as compared to other businesses. But we are rich with experience. And that is why we have been able to sustain over others. We certainly feel that the Indian private industry is catching up with us, but our competencies in niche areas are unmatched.
The government has placed a lot of emphasis on pushing up defence exports. The target is to reach $5 billion in the next five years. Going at the current pace, do you think that is achievable?
This is totally achievable. When we are able to do exports in the IT industry, automobile sector, biotechnology, doing the same in defence is quite possible. However, reaching this target would require a sustained effort not just from the industry but also from the government. What I have seen during my tenure is that the countries that are looking for defence imports, they are not seeing India as a great option in the arena of defence exports. One of the major concerns for them is will India stand by with them in the case of a conflict?
ALSO READ: Govt enlists outcomes of Defence Expo 2020 in Rajya Sabha
So, this concern needs to be mitigated. We have taken a major exercise towards that. BEL is the only defence PSU and the only company amongst private players as well to have set up marketing offices in 6 locations overseas exclusively for facilitating defence orders. We have offices in Vietnam, Myanmar, Sri Lanka, Oman, Singapore and the US (New York). Slowly, we expect a change in investor perception of India as a defence manufacturing hub. It will take another year or two, but I am sure it will happen.
Over the last five years, do you see any change in the way India is perceived by global investors?
Certainly, there has been a lot of change. The business delegations that have visited us have shown a lot of confidence in the technological advancements made by India. They have shown a lot of confidence in our abilities. And I am positive that we are going to make great strides in this area.
(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram & Twitter as well. Join PSU Watch Channel in your Telegram and follow us on Twitter to stay updated)