Even as Prime Minister Narendra Modi has managed to break the deadlock over the Rafale jet deal on his trip to France, he has promised a new deal for the Indian defence sector.
With an eye on Make in India, the government is hoping to end the country’s dependence on imports – India currently imports 70 percent of its defence needs.
Towards that end, the centre hopes to woo foreign companies and give domestic companies a push to manufacture in India.
In the first of a special series, CNBC-TV18 looks at the emerging Indian defence manufacturing companies and assess if they are indeed ready to be a part of the global supply chain – the first such company is Samtel Avionics.
When top guns of the IAF fly the Sukhoi 30 MKI -- the most coveted fighter jet of the Indian Airforce -- they rely on made-in-India displays to get their bearings and zero in on the enemy.
Greater-Noida based Samtel has been making these displays for Sukhois for the past decade.
Samtel follows the Build-to-Spec principle and boasts of 100 percent in-house product design and development. The mother company of Samtel Avionics is Samtel, which was a market leader in picture tubes before the world adopted flat screens.
Today the picture tube business is almost defunct but Samtel got a new lease of life when it decided to foray into the defence sector in 2001. Since then, the company has inked key JV's with HAL, DRDO, French company Thales, US Giant Honeywell and Swedish firm SAAB.
Till date, Samtel Avionics has supplied display sets for 500 civilian aircraft to Honeywell and hopes to export about 1000 display sets by next year. 150 millitary aircrafts in India also use Samtel Avionics displays -- which includes 110 Sukhois of the Indian Airforce.
The company is all set to supply to Bell Helicopters and will operationalise its new manufacturing facility with Thales. It will also supply its diplays to the light combat helicopter and the Tejas fighters
“Now we are looking at opto-electronics we are looking at electronic warfare suits. We are looking at fully integrated cockpit suits. We have also got in to electronic warfare area which we have started to develop with a foreign partner,” says MD Puneet Kaura. “Coming out of this, we are also looking at multiple LRUs, which are mission computers or radio altimeters which ultimately goes in to a cockpit. We are also looking at being a system integrator of the cockpit.”
With a liberalized FDI regime, Samtel Avionics is willing to allow its foreign partners to up their stake
Kaura says it has left for Thales to decide if it wants to up its stake in the JV. “From our perspective, we are willing to go with the new policy and we are looking at what Thales wants to do. So if they want to take it up to 49 percent and if ministry allows it, we will go with that,” he says.
While Samtel is flexing its wings, it feels that the biggest challenge for the sector is the absence of guaranteed orders, which discourage foreign companies from pumping in big dollars
“The real potential will be realized through a commitment that the JVs will get from government itself,” he says. “For example, if the government stats to clear certain contracts, for which these JVs will deliver to -- till that starts to happen, confidence will never come.”
Samtel has all the right ingredients to make it a player in the global avionics space. It haw IPR, it has tech and most importantly, it has proven experience. All that it now needs is removal of roadblocks in the current policy space.
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