Reforms in defence sector to benefit Telangana State

Hyderabad: The focus on indigenisation and MakeinIndia in defence shall significantly benefit the aerospace and defence manufacturing ecosystem in Telangana, said an expert.

Welcoming the structural policy reforms in Defence and Aerospace Industrial Sector announced by the Finance Minister, Nirmala Sitharaman, Praveen PA, Director of Aerospace and Defence, Government of Telangana, said that Telangana has the largest cluster of private sector Defence and Aerospace manufacturers in India with over 25 large industries and about 1000 MSMEs catering to the sector.

"Hyderabad, the Missiles hub of India hosts over a dozen premier Defence labs, Defence PSUs and an Ordnance factory," he said and added, "Hyderabad is also the preferred investment hub for major A&D OEMs from US, Europe and Israel."

Recently, the Finance Minister has announced major structural reforms in Defence and Aerospace Industrial Sector that included - Increase in the list of notified weapons and platforms to be bought only from Indian manufacturing units; Indigenisation of imported spares; Separate budget provision for domestic capital procurements; Corporatisation of Ordnance factory boards; Defence production FDI limits to be raised from 49 per cent to 74 per cent; Creation of Project Management Groups; Creation of Quality specifications for Realistic GSQRs and Overhaul of testing infrastructure.

Praveen also welcomed the focus given on Civil Aviation, MRO and Space Sectors under the structural policy reforms announced for the Industrial Sector by the Finance Minister. The major policy reforms include - Air Space Utilisation: Ease on restrictions on utilisation of airspace, (currently 60 per cent); Shorter flight paths savings in fuel, time and environmental costs. Airports: 6 more airports to be privatised in second round bidding.

MRO sector: Policy trust for encouraging MRO in India. GST for MRO significantly reduced from 18 per cent to a nominal 5 per cent. Convergence of Defence and Civil MROs for scale.

Space Industry: Level playing field for private sector in Indian Space industry in satellites, launches and space services. Predictable Policy and regulatory framework. Use ISRO infrastructure, participation in futuristic programmes, liberal Geo Spatial Data policy for entrepreneurs

The reforms in Airspace utilisation can significantly cut flying costs and boost profitability of Airlines. Much awaited reforms in MRO and Space sector looks promising for precision engineering hubs like Hyderabad to attract strategic investments and generate high value employment opportunities, he added.