In a run up to the upcoming Global Investors Meet (GIM) on November 2, 3 and 4, Karnataka’s industries department is ready with an Aerospace & Defence policy (2022-27) which aims to establish the state as the preferred investment destination for Aerospace and Defence manufacturing.
The Defence ministry has set a target of 70% self-reliance in weapons by 2027, creating huge prospects for the industry players. “Our aim is to attract investments to the tune of Rs 60,000 crore (US $6 billion) in the aerospace and defence sector during the policy period of 5 years, create additional employment opportunities of more 70,000 and to develop state as manufacturing hub including MRO and space applications for both Indian market and exports, which are some of the key features of A&D policy,” said Large and Medium Industries Minister Murugesh R Nirani on Sunday.
Nirani who has piloted the policy said that India’s current market size of approximately US $7 billion is expected to grow at a CAGR of 7.5% to reach US $15 billion by 2032 presenting a significant opportunity for defence electronics players in India to capitalise.
“Karnataka contributes major share of 40% of defence electronics systems/products. To give it a further boost, the A&D policy offers huge land and financial incentives packages for space, defence and aerospace manufacturers and other sub-sectors,’’ he said.
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Electronics is the primary capability in modern warfare systems with a value contribution being more than 40% across leading platforms. The growth in demand for electronics in Indian A&D is driven by modernisation of weapon platforms, introduction of state-of-art weapons, impact of indigenisation and make in India initiative.
The minister said:”Under the A&D policy the state will develop five Aerospace and Defence hubs — Bengaluru, Belagavi, Mysuru, Tumakuru and Chamarajanagara districts.’’
“The policy promotes for setting up A&D parks which will have a comprehensive infrastructure facilities including roads, captive power generation, water supply, facilities for R&D, common training facilities, common warehouse facilities, plug-n-play facilities like manufacturing complex and built-in space for all precision manufacturing companies, government ITIs to provide courses pertaining to the A&D sector to create a strong pool of talent for the companies setting up their units within the parks,” Nirani said.
The department is already developing phase 2 of the A&D park in Haralur, near Bengaluru International Airport spread over 1,200 acres. Financial incentives have been earmarked to A&D park developers as per the Karnataka Industrial Policy (2020-25).
Another key thrust of the policy is to focus on setting up of Defence Testing Infrastructure (DTI). “Lack of accessible testing infrastructure is the main impediment for the domestic A&D production units. The DTIs will be set up under private sector with government assistance,” he said.
“With Karnataka leading the Foreign Direct Investments (FDI) of over 40% share in the country, I have no doubt that the state will be a hub of defence & aerospace sector thereby following Prime Minister Narendra Modi’s call of Atmanirbhar Bharat,’’ said Nirani.