Finance

Tata defense unit arms itself for bigger slice of Indian market

Tata defense unit arms itself for bigger slice of Indian market
Written by MAGASIR

The defense and aerospace unit of the Tata conglomerate is turning to making drones, artillery and fighting vehicles, as India seeks to curb a dependence on foreign hardware that has made it one of the world’s top military importers.

With New Delhi reliant on Russia for military supplies, Vladimir Putin’s invasion of Ukraine this year highlighted India’s need for wider military supply options. Forty-six per cent of India’s military imports from 2017 to 2021 were from Russia and the US, followed by France According to the Stockholm International Peace Research Institute.

India increased its defense allocation by almost 10 per cent in its February budget, and salt-to-sensors conglomerate Tata is among the Indian corporations hoping to take advantage of New Delhi’s effort to shift military purchases to domestic suppliers.

Sukaran Singh, chief executive of Tata Advanced Systems Limited, a wholly owned Tata Sons subsidiary, argues that India needs to develop its own technology to keep up.

“When you get a technology transfer from abroad, it’s like it’s frozen in time,” Singh told the Financial Times. “Even in the last six months, things have moved on,” he added, citing lessons from the war in Ukraine.

TASL has deployed up to 350 engineers to work on its own drones, artillery guns and war vehicles, the company said in an email.”[The group] decided, TASL certainly did, to take this at our own risk,” said Singh.

That risk is starting to pay off, with Indian Armed Forces orders for TASL’s independently designed self-guided bombs, set to be delivered in March 2023. TASL has already supplied the army with armed mobility vehicles, now deployed on the northern border, and Singh said he expected the army to order towed artillery guns that TASL developed with India’s state-owned Defense Research and Development Organization.

This year, TASL and Airbus secured a contract to build C295 personnel carrier aeroplanes for the Indian Air Force after a 10-year tendering process.

While the government has taken steps to boost domestic purchases, including introducing staggered bans on hundreds of imports, Singh acknowledged that challenges remained.

“Procurement remains a complex thing worldwide, for defense,” Singh said. “India’s moving away from a public sector, government-owned, government-controlled manufacturing set up to more private enterprise.”

India’s armed forces have particularly complex requirements, operating everywhere from baking hot deserts to the high-altitude Himalayan border with China, the scene of deadly clashes in 2020.

The government opened up defense production to the private sector in 2001, and TASL is not the only company to pursue its own military research and development. Engineering conglomerate Larsen & Toubro says it has developed and industrialized more than 50 defense products, both in-house and in collaboration with the Defense Research and Development Organization.

This contrasts with the defense unit of Asia’s richest man Gautam Adani, which has partnered with Israel’s Elbit to manufacture drones and Uzi maker Israel Weapon Industries to produce guns in India.

TASL built up its aerospace business through joint ventures with foreign manufacturers to make portions of their aircraft in India for export, from building the body of Boeing Apache helicopters to wings for Lockheed’s F-16 fighter jets.

“We’ve partnered pretty much with everyone except, happenchance, with Russians. It’s just turned out that way,” Singh said.

The company wants to balance India’s defense needs with overseas markets “because the industry structure is still very much famine and feast”, said Singh.

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