L&T urges govt to use private providers for military deals

India needs to give more business to domestic private companies in defence procurement currently dominated by state-owned companies and imports, according to the chief financial officer of one of the country’s largest engineering and construction companies.
 
Larsen & Toubro finance chief R Shankar Raman said in an interview that the company’s production abilities exceeded the procurement opportunities offered by the Indian government.
 
The conglomerate, which generates about 5 per cent of its $27 bn annual revenues from defence, recently signed deals worth hundreds of millions of dollars to help construct ships for India’s navy and supply the air force with radar equipment. It also manufactures weapons delivery and air defence systems.
 
“We’ve been constantly lobbying . . . saying that the government should fast-forward this whole programme,” said Raman.
“Defence infrastructure needs [an] overhaul and I think they need capable people to deliver that,” he added. “We do think that the capacity that we have far exceeds the opportunity we get today.”
 
India, flanked by hostile neighbours China and Pakistan, is the biggest importer of military hardware in the world for a wide range of kit, including fighter jets, tanks and helicopters. Russia is New Delhi’s largest arms supplier.
 
In the past decade, Prime Minister Narendra Modi’s administration has liberalised defence procurement and raised bidding transparency, allowing more groups to win military contracts.
 
But New Delhi remains reliant on more than a dozen state-owned corporations, such as Hindustan Aeronautics and Bharat Electronics, which have struggled to produce a world class defence industry and which Raman characterised as “not very efficient”.