MV Gowtama, Chairman & Managing Director, Bharat Electronics Ltd, in this insightful interview with MMI’s Chief Editor Soumi Mitra, shares the company’s continuous strive for exploring diversification opportunities in Defence and allied non-defence areas and the reasons PSUs show stability in growth
Soumi Mitra: Please tell us about the important Defence orders that Bharat Electronics Ltd (BEL) has executed in the past three to five years?
MV Gowtama: BEL has been breaking new ground by successfully implementing projects of strategic importance, like Weapon Locating Radar for the Indian Army, Akash Missile System for the Indian Air Force and Indian Army, Coastal Surveillance System for the Coast Guard, Network Centric Systems, etc. The Akash Weapon System is testimony to BEL’s commitment to the ‘Make in India’ initiative. Barring a few electronic components, every bit of Akash, the medium-range surface-to-air missile system, has been indigenously developed by Defence Research and Development Organisation (DRDO) with BEL as the nodal agency for integration, in partnership with companies from both the public sector and the private sector. BEL is also geared up to establish Phase-II of the Coastal Surveillance System (CSS) developed for the Indian Coast Guard (ICG) to guard India’s long coast against infiltrations. BEL is also interacting with the Ministry of External Affairs for supply of the system to other friendly countries.
We have executed significant Defence orders during the last three to five years including supply of C4I system for the Air Force, Night Vision Devices, Ground-based Mobile Electronic Intelligence System, Low Intensity Conflict Electronic Warfare System, Schilka Weapon System Upgrade, TROPO Upgrade, L70 Gun Upgrade, Fire Control Systems, Electronic Fuzes, 3-D Tactical Control Radar, Hand Held Thermal Imager with Laser Range Finder, Battle Field Surveillance System, Advanced Composite Communication System, Submarine Sonar Suite, Ship based EW System, Low Level Transportable Radar, etc.
Mitra: It’s been six decades since the inception of BEL and it has come a long way from its humble beginnings to producing a wide range of state-of-the-art equipment primarily for the Indian Armed Forces and civilian products. What are the plans in the pipeline?
Gowtama: The Defence segment continues to be BEL’s main business domain, covering about 85 percent of its revenues. We will continue to focus on our core defence sectors including Communication & C4I Systems, Radar & Weapon Systems, Anti-Submarine Warfare, Electro Optics, Gun Upgrades, and Electronic Warfare & Avionics for our growth. We have been giving the much-needed impetus to exports, and have also been continuously exploring diversification opportunities in Defence and allied non-defence areas for enhanced growth.
Some of the areas BEL has already diversified into are Homeland Security and Smart City, Electronic Ammunition Fuzes, Composites, Energy Storage Systems, RF Seekers, Imaging Infra-Red (IIR) Seekers, Real Time Information System for Railways, Automatic Fare Collection Gating System for Metro rail, Intelligent Traffic Management System, Satellite Integration, Cyber Security, Unmanned Systems, Composites and Solar Power Plants.
Other areas of focus include Next Generation Indigenous Surface-to-Air Missile (SAM) System, Airborne Radars, Advanced Night Vision Devices, Indian Regional Navigation Satellite System (IRNSS), Direct Energy Weapons (DEW), Helmet Mounted Display Systems (HDMS), IT & Cloud Services, Laser based products, Explosives, Propellants, Smart Bombs etc, in the Defence segment, and Space Grade Solar Cells, and Air
Mitra: How much successful has BEL been in catering to the needs of evolving export markets for Defence products and systems? In what way are we beefing up our strengths to enhance exports in the Defence sector?
Gowtama: The Government is encouraging Defence exports through many policy initiatives and has set a target of `35,000 crore by 2024-25. BEL has identified Exports and Offsets as one of its thrust areas and has drawn up plans to offer its select products and systems to various export markets.
We are giving increased thrust to harness the export potential of our Defence products and systems including Homeland Security solutions and Border Protection systems and solutions. Having established a CSS for a few neighboring countries, we are interacting with Ministry of External Affairs for supply of CSS to other friendly countries. We are also exploring civil markets for Smart Cities, Solar Power Generation etc. in developing and third world countries.
BEL is focusing on addressing Offset obligations in various RFPs of the MoD, on account of the Offset policy incorporated in the Defence Procurement Procedure. We have identified contract manufacturing (build to print and build to spec) for foreign OEMs and partnerships in the form of Transfer of Technology of the latest systems and solutions as areas of emerging export opportunities. Efforts are also on to establish long-term supply chain relationship with global players.
In a bid to develop new markets in the Indian Ocean Region (IOR), BEL has operationalized overseas marketing offices in Vietnam, Sri Lanka, Oman and Myanmar. BEL has also expanded its Singapore and New York Regional Offices to handle marketing activities. We plan to work closely with companies in other countries to increase the geo-spatial presence.
Mitra: According to the latest government sources, state-owned enterprises contribute four times more than privately held entities. How do you perceive the reasons that public sector units (PSUs) are faring better than the private sector?
Gowtama: PSUs have been instrumental in building national assets – infrastructure, logistics, invaluable intellectual property, research, etc. Established way back, they have over the years built vast infrastructure, skilled manpower and knowledge base that have helped them grow steadily and adapt to the ever-changing needs of the industry. PSUs have been leveraged to develop sectors where the private sector has been unwilling to enter due to factors such as high-investment, high-risk and low-return. At one time, they were also a significant source of employment in the formal sector. PSUs have presented the government with a safe investment option even during times of economic downturn. CPSUs have robust systems, processes and procedures in place which have stood them in good stead during adverse times. Thus, they have shown much more stability in growth compared to their private counterparts.
The Akash Weapon System, which is testimony to BEL’s commitment to the ‘Make in India’ initiative.
Source: Bharat Electronics Ltd
BEL is entering into partnerships with major private industries, both Indian and foreign, academic institutions and R&D labs to leverage each other’s strengths and come up with ingenious solutions.
The Government is encouraging Defence exports through many policy initiatives and has set a target of `35,000 crore by 2024-25.