Asia’s premier air show, ‘Aero India’ came to a close on February 22 with the event turning into a carnival with about three lakh people descending on the venue at Yelahanka Air Force Station. This year’s airshow also witnessed a few anxious moments when two pilots of Red Bulls aerobatic team of the Czech Republic had a miraculous escape on the second day after their aircraft touched wings in midair while doing stunts.

Though there were no mega deal announcements (Aero India is unlike Farnborough, Paris or Dubai airshows), the focus this time was clearly the Prime Minister Narendra Modi’s ‘Make in India’ pitch.

The 10th edition of the biennial five-day event that began on February 18 with the Prime Minister making a strong pitch to end India’s dependence on defence imports. Aero India had over 300 foreign firms vying with each other to align with the government’s ‘Make in India’ campaign as they eye the burgeoning multibilliondollar Indian defence market. There were 295 Indian and 328 foreign companies showcasing their products and solutions.

Seven of the 11 foreign military aircraft on display were American – two F-15C Eagles, two F-16C Fighting Falcons, one Boeing KC-135 tanker, one C-17 Globemaster III and a P-8A Poseidon maritime surveillance aircraft. The US with 64 companies had the biggest presence at the event, in which 33 other countries took part. France was the second biggest participant with 58 companies, followed by the UK with 48, Russia with 41, Israel with 25 and Germany with 17, the organisers said.

Prime Minister Narendra Modi promised a conducive environment for manufacturers, including a discrimination-free tax system, and asked foreign firms not to be just “sellers” but “strategic partners”. Inaugurating the show he said, while the country needs to increase its defence preparedness and modernise its forces due to security challenges that were well known, it should aim to manufacture 70 per cent of military hardware domestically in the next five years and remove the tag of being number one importer of defence equipment.

Stressing that developing domestic defence industry “is at the heart of the ‘Make in India’ programme”, he said, “we will build an industry that will have room for everyone – public sector, private sector and foreign firms. From sellers, foreign firms must turn into strategic partners. We need their technology, skills, systems integration and manufacturing strength.”

He said the foreign players can use India as part of their global supply chain and India’s frugal but sophisticated manufacturing and engineering services sectors can help reduce costs. Also India can be a base for export to third countries, especially because of its growing defence partnerships in Asia and beyond. He said the government was reforming defence procurement policies and procedures. “There would be a clear preference for equipment manufactured in India. Our procurement procedures will ensure simplicity, accountability and speedy decision making.”

Modi noted that his government has raised the permitted level of foreign direct investment to 49 per cent and this can go higher, if the project brings state-of-the-art technology. “We have permitted investments up to 24 per cent by foreign institutional investments. And, there is no longer a need to have a single Indian investor with at least a 51 per cent stake. Industrial licensing requirements have been eliminated for a number of items. Where it is needed, the process has been simplified.

“We have to equip ourselves for the needs of the future, where technology will play a major role. As a nation of one billion people, we also have huge requirements for managing internal security,” he said.

Modi pointed out that in India, the defence industry in the government sector alone employs nearly 2,00,000 workers and thousands of engineers and scientists. They produce an output of nearly $7 billion annually and also supports a very large pool of small and medium enterprises.

Noting that India imports up to 60 per cent in defence sector, he said there are studies that show that even a 20 to 25 per cent reduction in imports could directly create an additional 1,00,000 to 1,20,000 highly skilled jobs in India. “If we could raise the percentage of domestic procurement from 40 per cent to 70 per cent in the next five years, we would double the output in our defence industry,” he said.

A strong defence industry can boost investment, expand manufacturing, support enterprise, raise the technology level and increase economic growth in the country, the Prime Minister said. Modi said his government had made export policies clearer, simpler and predictable. “But we will also abide by the highest standards of export controls and international responsibility. We will expand our exports, but we will ensure that our equipment and technology do not fall into the wrong hands. India’s record in this area has been impeccable and it will remain so,” he said.

Talking about offsets system, he said this was a crucial instrument to develop and upgrade Indian defence industry. “We have introduced significant reforms in our offsets policy. I am acutely aware that it still needs a lot of improvements. We will pursue them in consultation with domestic industry and our foreign partners,” he said adding that he wants offsets policy not as a means to export low-end products, but to acquire state-of-the-art technology and skills in core areas of priority.

Modi also spoke about involving country’s scientists, soldiers, academia, industry and independent experts more closely in research and development.

Government’s support for research and development is essential for defence sector and, it should also be accompanied by a degree of assurance on purchase, he said.

“We are introducing a scheme to provide up to 80 per cent of funding from the government for development of a prototype in India. And, we are also launching a Technology Development Fund. For too long, our research and development has been confined to government laboratories”, he said.

The highpoint of the show was that a number of Indian companies tied up with foreign OEMs to joinly manufacture several solutions in India itself.