The move for suspending import of defence items should be linked to export requirements to increase competitiveness in the global market. Atmanirbhar Bharat is driving the defence sector as far as manufacturing is concerned. Covid impacted the Q1 earnings considerably, but Q2 will look promising. Expects more than Rs 1 lakh crore orders in 5-6 months

Mumbai: State-owned aerospace and defence company Hindustan Aeronautics Limited (HAL) is working high-profile aviation projects for the Indian forces and projects with DRDO and engineering institutes and lauds the strong push from the government through the 'Atmanirbhar Bharat Abhiyan' initiative.

ET NOW spoke to R Madhavan, Chairman and Managing Director of HAL to understand how the policy formulations and reforms on self-reliance and local production- how will this favourably impact the operations of the company and the defence sector.

"Atmanirbhar Bharat is driving the defence sector as far as manufacturing is concerned and the company is at the forefront as many platforms and a lot of equipment comes from our end,” said Madhavan.

HAL supports medium and small industries who are dependent on the company and supply products to them. Madhavan believes that while the COVID led pandemic impacted the Q1 earnings considerably, Q2 will look promising. The company affected and saw an impact of two months’ worth of production.

“The impact of the supply chain has reduced but is still there, some MSMEs have still not recovered from impact. There has been a restriction on goods movement from foreign suppliers. The supply chain for MSMEs will take 4-6 quarters to recover.”

While Madhavan believes the move of India suspending the import of 101 defence items to boost indigenous production is a positive move, it is a double-edged sword. “The move for suspending import of defence items should be linked to export requirements to increase competitiveness in the global market.”

He says the government should look to export equipment instead of using tier II and III vendors and help in full systems like aircrafts, artillery and guns.

“HAL expects more than `1 lakh crores orders in 5-6 months, but the order flow needs to pick-up in December. Also, we need liquidity in the manufacturing sector with over `7 lakh crores pending. We need capex and tech upgradation in order to meet the indigenous requirements of the armed forces,” said Madhavan. He acknowledged that the impact of issues at the China border cannot allow for reducing defence spend. “We are well placed to fight a two-pronged war between Pakistan and China but the preparedness is for armed forces to reply.” The company is looking forward to the Tejas Mk-2 twin-engine multirole fighter jets.