The most prominent theme in defence production today is the surging presence of India’s private sector. At the Defence India ‘08 exhibition (Defexpo), in New Delhi last month, private Indian corporate houses like the Tatas, Larsen & Toubro (L&T) and Mahindra Defence Systems have seriously challenged the traditional dominance of Russian conglomerates, and the eight Indian defence public sector undertakings (DPSUs).

Amongst the most aggressive of India’s hopeful new Lockheed Martins is the Rs 1,30,000-crore Tata Group, which has launched a carefully crafted bid to become a major player in India’s defence industry.

Now Tata Group has coordinated group strategy to grab a serious share of India’s defence market, worth an estimated Rs 2,00,000 crore ($50 billion) over the next five years.


Tata Industrial Services Ltd (TISL), will focus on global partnerships, including the growing opportunities from offsets. Uma Pillai, formerly Secretary of Defence Production in the Ministry of Defence (MoD), will head the offsets business.

“They will bring a new corporate approach to deal with the risks, the global partnerships, and the capital that will be needed for defence… and still remain 100 per cent Tatas.”

TAS has already crossed the first hurdle; it has obtained seven critical industrial licences, broad enough to cover most defence products.

While TAS has the licences, the actual development and manufacture will be done across 11 other Tata Group companies, which already possess the tooling and facilities necessary. The Tata Group has no plans yet to set up manufacturing or R&D facilities specifically for defence.

Business is already coming in. During the Defexpo in February, TAS signed a deal with US helicopter maker, Sikorsky Aircraft Corporation, to manufacture cabins for their S-92 helicopter.

The Tata Group also grabbed India’s biggest-ever outsourcing joint venture, inking a half billion dollar deal with Boeing to manufacture military components for the F-18 Super Hornet fighter, the CH-47 Chinook helicopter and the P-8 Maritime Patrol Aircraft. This is the first time American defence products will be manufactured in India; Boeing hopes that India will buy all three of those aircraft.

The first big test is the Tatas’ quest for the Rs 4,000-crore ($1 billion) project to develop a state-of-the-art Tactical Communications System (TCS) for the Indian Army. In a sign of growing confidence, the Tata Group has asked the MoD not to buy the TCS from the global market.

The Strategic Electronics Division (SED) of Tata Power is heading an all-private consortium (which includes Delhi-based private company, Precision Electronics, US major, Raytheon, and European conglomerate EADS-Defence Systems as technology partners) that argues that the TCS can be made in India.