By Ramesh S.
New Delhi: One of the Government’s key focus areas in its Atmanirbhar drive in the defence sector has been defence exports. The Defence Ministry has set a target of US$5 billion in defence exports over the next five years. This is also borne out of the realisation that orders from the Indian armed forces alone may not suffice to maintain a large defence-industrial base. One of the areas where the prospects of defence exports brighten is in the design and construction of warships, where India has achieved a very high degree of self-sufficiency.
The third panel discussion in the India Today Defence Summit 2020 was on the subject of whether Indian shipbuilding can make the leap from a builder’s Navy to an exporter’s Navy. The panellists included, Rear Admiral VK Saxena, Chairman and MD, Garden Reach Shipbuilders & Engineers Ltd. (GRSE); Jayant Patil, Whole-time Director, Defence and Smart Technologies, Larsen & Toubro Ltd.; and Fernando Formoso Freire, Director India, Business Development and Commercial Division, Navantia. India Today Executive Editor Sandeep Unnithan was moderating the discussion.
Rear Admiral Saxena was asked to give an overview of Indian shipbuilding, specifically in the construction of warships. Speaking on the subject, he said, “The GRSE is one of the premier defence shipyards in the country. We were the first shipyard to have produced the first indigenous warship for the country way back in 1961, the INS Ajay, which was a Seaward-class defence boat. And since then we have been making a variety of ships for the Indian Navy and Indian Coast Guard, starting from the frigates to the missile Corvettes, the ASW Corvettes, the only fleet tanker Aditya has been made by the GRSE, the survey vessels and amphibious warships like LCUs, LSTs, and likewise. I am happy to inform you that today we have reached a figure of 105… We are the only shipyard in the country to have reached 100-plus warships construction and delivery to our maritime forces, which also includes one export warship. In fact, we were the first one to export a warship, Barracuda, an offshore patrol vessel, in 2014 to the Mauritian Coast Guard. So, our journey of exports began way back in 2014.”
The GRSE CMD mentioned that one of the best achievements for the GRSE was the successful completion of the prestigious four warships project for the Indian Navy, the ASW Corvettes, the last of which got commissioned on October 27 this year. He said the GRSE was proud of the fact that for a weapons-intensive platform like the ASW Corvette, it had achieved over 90 per cent indigenisation and lauded the significant contributions from L&T for designing and developing the rocket launchers and torpedo tubes, which have become a standard now for all future projects of the Navy. Then the Super Rapid Gun Mount (SRGM) Gun was produced by BHEL Haridwar and the close-in weapon systems, the AK-630 as well as the chaff launchers were produced by the Ordnance Factory Board (OFB). The plethora of indigenous armaments, sensors and equipment developed in-house for the Corvette project showcased a great mix of public-private partnership to produce this kind of a weapons platform. The GRSE, according to Rear Admiral Saxena, had even achieved over 90 per cent indigenisation in other projects like the LCUs. He acknowledged that it could not have been possible without the great efforts of all the stakeholders – the Indian Navy, L&T, BHEL, BEL, OFB and several other manufacturers and suppliers, and said the Navy today can say it has achieved atmanirbharta to the extent that more than 80 per cent of the platforms are made indigenously.
Rear Admiral Saxena said given the experience in producing an array of complex weapons platforms, Indian shipbuilders could claim the status of a builder’s navy and move on to the next logical step of becoming an exporter’s navy. Of course, the recent changes in the Government’s defence procurement policy and initiatives like Make in India have come in at the right time to give the indigenous warship building sector a major push towards achieving the MoD’s export target, he added.
Taking the debate further on the role of public-private fusion to create high-value proprietary platforms like bigger warships for the export market, L&T’s Jayant Patil said a large private sector conglomerate like L&T has been associated with the defence PSUs like GRSE and Mazagon Dock Shipbuilders Ltd. for over three decades. He said the one fundamental point that started with the Indian Navy was the need to become a builder’s Navy. “So, platform design as a whole started happening in the country, but platform alone in shipbuilding constitutes less than 25 per cent of the value. Where does the rest come out of?”
Patil said: “It was a part of the grand vision of the Indian Navy that even if it was foreign OEM, the Navy would tell them that fine, initially we will buy the first ship from you, but the rest of the class will have to be produced in the country. That is an aspect which started making a huge difference. Some of our earlier ships had the entire weapon and sensor suite from one origin. We realised that’s not something which is working for us. We wanted to pick and choose the best available in the world. That’s one area the Indian Navy did amazingly well… The strength of Indian Navy today is because of this ecosystem, built over decades. It’s an ecosystem with a clear three-tier industry in it.”
The L&T Whole Time Director said entities like L&T can today build an entire warship, having started just a decade ago. Their first order came in 2010, and today, “we are knocking at delivering our 61st vessel.” Of course, L&T had an advantage in terms of the fact that over the decades they were already building each of those components like weapons systems, engineering equipment, logistic systems and the varieties of life-support systems that get fitted on ships. “So, the ecosystem having been built, we were part of that absolute key element of that overall strategy to build a complete platform.”
Patil explained how they started with smaller vessels and climbed up the ladder. The technology too had improved, so they were able to build a shipyard with absolutely cutting-edge technologies, industry standard 4.0, which makes them one of the most efficient shipyards. “Today, when we are talking of exports, the government of India not only wants to export a platform, but with some of those extremely friendly countries, they wouldn’t mind giving them the ability to manufacture those platforms on their own, with the help of our design, manufacturing techniques and methodologies and entire processes… That’s exactly where we are now moving.”
Elaborating on the country’s export potential, Patil said aside from the CGS Barracuda which was delivered for export by GRSE in 2014-15, the real push for exports came in from 2015-16 onwards. The country has seen a spiralling growth in exports since then. Having dwindled from the typical Rs 900 crores to Rs 400 crores in 2013-14 due to the controls, exports touched Rs 10,786 crores in 2019. This is a jump of over 16 times. One area where the design and build has made India extremely strong is naval ship building area, and by that it does not mean just the vessel, but the entire ecosystem associated with it. He said “the government’s clearances and policy push for exports came at the stage when we were giving out elemental capabilities, sort of modularly to be fitted out. So, this was absolutely the right time to start doing a complete platform.”
Explaining complete platforms, The L&T Whole Time Director said “he was looking at the naval shipbuilding timeline of the country where we had done more than 90 ships and 19 different classes of vessels. Each of these is truly the intellectual property of the nation. This is what can be truly exported as a complete platform, where we have a complete track record of having created them ab initio. Of course, the private shipyards have created some of the additional designs, but those are primarily on the auxiliary side. And that’s essentially where one can today juggle around say at least 20-25 classes of vessels which India can say it created out of nothingness. And from that nothingness the entire range is available to be exported out. And that’s essentially where I agree with Admiral Saxena that we truly require a collaboration there.”
Joining the discussion on India’s shipping future was Fernando Formoso Freire, the India defence business head of Spain’s Navantia, one of Europe’s largest defence shipyards. According to moderator Unnithan “the Spain and Navantia story is what we in India are trying to emulate — how Spain made the transition from a builder’s navy to an exporter’s navy. That’s one of the reasons why Formoso is here in India to offer us technologies that our shipyards might not have.”
Based on their own experience in Spain, the Navntia India head said the leap from builder to exporter is possible for India too and that Navantia strongly believes in and is fully committed to the Make in India and make for the world initiatives. “We started building ships with foreign designs, strategy, equipment, materials…and well we have managed to evolve through transfer of technology, digitisation, internal re-engineering and a lot of effort to a situation where we now design, build, commission and give lifecycle support to the most advanced ships of the Spanish Navy. We think that this process can be replicated in any shipyard and, in fact, India is already on its way and these initiatives of the government will boost the process.”
Navantia’s Formoso explained the key points that helped them make the leap from a builder to an exporter. First of all, he said “it was very important to build a good and stable relationship with your own navy because you need to have a balanced building plan over the years, and reference ships already in operation to have access to the export market. It is very difficult to export if you only have a paper ship… And before you can export, you need to become competitive – in all aspects, of technology, price, quality, time to market, you name it. Good is not enough. You need to position yourself among the best ones globally, because you are going to encounter those best ones everywhere you go. So, benchmarking is a very important key…You have to identify your strengths and weaknesses and make a plan, which includes infrastructure, technology, skills and processes. Make a plan to improve your strengths further and get rid of your weaknesses.”
Pitching for Navantia as a good technological partner, he said, “We have a lot of experience in transfer of technology programmes. Lately, we have successfully developed programmes in Australia, Turkey and Saudi Arabia, developing local capabilities through collaborations with industries, associations and academia. I think the same approach is good for India. Being patient is important because the process takes time. Moreover, he stressed that competition was a good thing because if you have tough competitors, it will help you grow. Protectionism was not a good thing. You have to be exposed to the market.”
“Another aspect to remember was that specialisation was a good thing, because one can’t be the best in everything you do,” said Formoso. “You have to concentrate on the kind of ships you are comfortable with building. Then, of course, one needs an export plan, a long-term export plan. Here again, he said, the important thing while taking up an export project was to hire local talent, hire former employees of the OEM. One of the difficult things in export was to understand your client’s needs, where you have to be flexible, find a balance between the efficiency you have and the customer’s needs,” he concluded.
-The writer is a journalist with close to three decades of experience in print, online and TV media
(To Be Continued)