Besides Tata and Mahindra, several other firms that have jumped into the arms race such as Larsen & Toubro, HCL, Reliance, Rolta, Bharat Forge, Titagarh Wagons, Pipavav Defence and Punj Lloyd.
This defence ecosystem is not just important to woo international defence firms but also to win big Indian defence contracts. So far, these contracts have benefited government-owned companies like Hindustan Aeronautics, Indian Ordnance Factories and Bharat Electronics that have gone on to be ranked 41, 58 and 81 among the largest arms producing companies in the world respectively, according to a SIPRI report.
But things are changing. For the first-time ever, a joint bid by Larsen & Toubro, Tata and HCL is in the race to develop battlefield communications in a project baptised Tactical Communications System (TCS) estimated to be worth CHF1.5 billion. Another project open to private players involves developing India’s future infantry combat vehicle. Nine private companies have expressed interest in the project, estimated to be worth around CHF7.5 billion. Eventually, in the quest for more indigenisation, big defence projects will have to be opened up to the private sector and companies with a track record of delivering projects to international standards will be well-placed to win them.