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The <keyword id="19905108" type="General" weightage="20" keywordseo="ministry-of-defence" source="keywords">Ministry of Defence</keyword> has sanctioned over Rs 300 crore through its <keyword id="20416767" type="General" weightage="100" keywordseo="technology-development-fund" source="keywords">Technology Development Fund</keyword> (TDF) to create an ecosystem aimed at enhancing capabilities in cutting-edge technology and promoting '<keyword id="20460685" type="General" weightage="20" keywordseo="aatmanirbharta" source="keywords">Aatmanirbharta</keyword>' in defence, an official statement said on Thursday. The Technology Development Fund (TDF) scheme is a flagship programme of the Ministry of Defence, executed by <keyword id="19948662" type="General" weightage="20" keywordseo="drdo" source="keywords">DRDO</keyword> under the '<keyword id="20018809" type="General" weightage="20" keywordseo="make-in-india" source="keywords">Make in India</keyword>' initiative. Under this initiative, the government provides grants-in-aid to Indian industries, including <keyword id="19910977" type="General" weightage="20" keywordseo="msmes" source="keywords">MSMEs</keyword> and <keyword id="19945815" type="General" weightage="20" keywordseo="startups" source="keywords">startups</keyword>, as well as academic and scientific institutions, for the development of defence and dual-use technologies that are currently not available in the Indian defence industry. With these initiatives, the Ministry aims to engage private industries, especially MSMEs and startups, to foster a culture of design and development in military technology and support them with grants-in-aid. The TDF seeks to enhance the capacity and capability of Indian industries for the design and development of defence technologies in the country. It aims to create an R&amp;D ecosystem where industry and academia work together to meet the current and future requirements of the Armed Forces and the defence sector. The government aims to achieve 'Aatmanirbharta' in defence technology by building a robust defence manufacturing ecosystem in the country. The <keyword id="19910956" type="General" weightage="20" keywordseo="defence-ministry" source="keywords">Defence Ministry</keyword> on Wednesday highlighted several successful startups benefiting from the scheme. Pune-based startup <keyword id="22281521" type="General" weightage="20" keywordseo="Combat-Robotics" source="keywords" meta.keywordsubtype="org" meta.entityname="Combat Robotics" meta.hostid="153" meta.entityid="Combat Robotics">Combat Robotics</keyword>, with the help of the scheme, has successfully developed an innovative simulator for <keyword id="20146841" type="General" weightage="20" keywordseo="unmanned-vehicles" source="keywords">unmanned vehicles</keyword>. This multi-domain simulator supports unmanned ground vehicles (UGVs), unmanned underwater vehicles (UUVs), unmanned surface vehicles (USVs), and unmanned aerial vehicles (UAVs), serving as an excellent development tool for agencies working on autonomous systems. Another Pune-based defence equipment startup, ChiStats Labs Private Limited, is developing virtual sensors for aero gas turbine engine health monitoring, which helps to increase the operational reliability and longevity of the engines. The system is built on modern artificial intelligence/machine learning (AI/ML) technologies. Bengaluru-based NewSpace Research and Technologies Pvt. Ltd., under the project titled 'Autonomous Drone as First Responder for Search and Report Operations in Enclosed/Indoor Environments', has created a cutting-edge UAV capable of exploring indoor environments under various conditions, including zero light. The success of this project will open up various applications, including search and rescue operations, surveillance, industrial inspections, environmental monitoring, and hazardous environment exploration, contributing significantly to technological advancements in unmanned aerial systems, the Ministry added. The technology has been developed under the technical guidance and mentorship of CAIR, Bengaluru.

Defence ministry allocates Rs 300 cr for technology development fund to promote Make in India products

India's <keyword id="20884491" type="General" weightage="20" keywordseo="cement-industry" source="keywords">cement industry</keyword> is heating up faster than a kiln! If one’s tracking the sector, the war-like situation between the existing and emerging cement giants is pretty evident. For the uninitiated, Aditya Birla Group-backed <keyword id="19963567" type="General" weightage="100" keywordseo="Ultratech-Cement" source="keywords" meta.keywordsubtype="org" meta.entityname="Ultratech Cement" meta.hostid="261" meta.entityid="Ultratech Cement">Ultratech Cement</keyword> and <keyword id="19955648" type="General" weightage="20" keywordseo="Adani-Group" source="keywords">Adani Group</keyword> have been at loggerheads for increased market share in recent years. And now, JSW Cement also seems to be gearing up to challenge the potential duopoly. As conglomerates aggressively acquire smaller players to achieve market domination, the cement industry in India right now resembles an eighteenth-century battlefield. The battle has significantly escalated this year, but this trend of acquiring regional cement companies can be traced back to 2018 when Ultratech acquired Binani Cement. Since then, both Adani Group and Birla Group have been capturing checkposts all over India, one by one. Ultratech acquired Binani Cement to strengthen its base in the western region and this week, India Cement, for the southern states. Adani has also acquired the Hyderabad-based Penna Cement this year, after acquiring majority stakes in Ambuja Cements and ACC in 2022. But why the obsession with cement? <h2>Why are the Titans clashing for…cement?</h2>India's infrastructure boom is in full swing, and whoever controls the cement supply holds the key to this construction kingdom. Adani Group has been known to follow an acquire &amp; dominate strategy for capturing market segments. <keyword id="19907441" type="General" weightage="20" keywordseo="Aditya-Birla-Group" source="keywords">Aditya Birla Group</keyword>, however, has dominated the cement industry in India through Ultratech for a while now. The answer to the above question may simply lie in establishing the leadership moat for themselves. With even-growing public and private spending on infrastructure, both players want to capture the majority share to dominate the supplies of cement, which is essential for construction. <h2>Where is the sector heading?</h2>While both Adani and Aditya Birla groups have locked horns to acquire CK Birla’s Orient Cement for a while now, a new hurdle threatens their dominance. As per an Economic Times report, Sajjan Jindal-led JSW Cement has now started to evaluate the acquisition of the promoter stake in Orient Cement. As an emerging front, JSW Cement also aims to reach 50 MT per annum by 2030. However, two other major players, Shree Cement and Dalmia Bharat, already have 53 MTPA and 43 MTPA capacity. <div type="image" title="Birla Vs Adani" msid="112196675" hostid="261" sizebytes="284160" caption="&amp;lt;p&amp;gt;Look back at major acquisitions in the cement sector&amp;lt;/p&amp;gt;"></div> However, with over a dozen acquisitions over the last decade, both Ultratech and Adani Group are by far the largest players in the sector eyeing over 200 MT per annum by 2030. <h2>What about the prices?</h2>Will consumers benefit from this cutthroat competition to industry domination? In the short term at least, yes! While lower prices might sound appealing, it's essential to keep an eye on quality as consolidation in the manufacturing sector is always tricky. We don't want to end up with buildings crumbling like cookies. And let's not forget about the little guys. This consolidation of power into a few mega-corporations could squeeze out smaller players, reducing competition and potentially leading to higher prices in the long run. <h2>I think I’ve seen this film before….</h2>The current atmosphere of the cement industry feels reminiscent of what happened in the telecom industry in India in 2016 i.e. the infamous tussle of tariffs. As Reliance Industries launched Jio, it disrupted the entire segment and forced other telecom companies to compete on their terms. As a result, the tariffs fell sharply, companies shut and brands merged, but Jio still claims 40% of the market share in India in terms of subscriber count. Moreover, experts feel that the change in power dynamics in both these industries, cement and telecom, have direct ties to the current government’s industrial policy. Government policies seem to favour companies that have acquired a dominant position in distinct sectors of the economy, which in India’s case are led by two of the richest men in Asia — Gautam Adani and Mukesh Ambani. This strategy of adopting ‘<keyword id="1327299" type="General" weightage="20" keywordseo="national-champions" source="Orion">National Champions</keyword>’ is seemingly inspired by South Korea’s <keyword id="4933297" type="General" weightage="20" keywordseo="Chaebols" source="Orion">Chaebols</keyword> and Japan’s Zaibatsu conglomerates that came into existence decades ago. <h2>From corporate drama to k-drama: Chaebols</h2>The term Chaebol might ring a bell if you've watched K-dramas. They are family-owned business conglomerates in South Korea. This business structure originated in the 1960s and got so popular that it made its way into Korean pop culture. While chaebols have fueled the rapid growth of the Korean economy, concerns about their opaque governance and controlling shareholder interests often deter external investors. Japan’s zaibatsu were also similar financial and industrial conglomerates that were major forces in Japan during World War II. Korea’s Hyundai and Japan’s Mitsubishi are some prime examples of this structure. <h2>Growth of the Goliaths</h2>Viral Acharya, the former Deputy Governor of the RBI, highlights the decade-old trend of the central government achieving economic growth outcomes by working with large conglomerates in part, rather than with state governments. In his conference paper for the Brookings Papers on Economic Activity in March 2023, he demonstrates this pattern with examples from multiple sectors. “By way of specific examples, the share of the Top 5 groups by sales in Civil Engineering and Construction rose from 31% in 2016 to 42% in 2021, in Telecommunications from 65% to over 84%, and in the Retail trade sector from under 44% to over 65%. Similarly, the share of Top-5 groups by Assets rose sharply by 2021 to 68% in the Manufacturing of Basic Metals, 26% in the Manufacturing of Chemicals, 90% in the Manufacturing of Refined Petroleum and Coke, and 47% in the Manufacturing of Non-metallic Mineral Products (including cement and other building materials),” writes Acharya. While this strategy of ‘National Champions’ has benefitted the telecom sector, it has its caveats. The acceleration in the growth may lead to an oligopolistic economy, thereby restricting the entry of new players and stifling innovation. Additionally, a multi-dimensional concentration of power poses the threat of crony capitalism. <h2>National champions: checks and challenges</h2>There’s more to this debate. Arvind Subramanian and Josh Felman, in their paper titled ‘India’s Stalled Rise’ note that the collective impact of this strategy could be more adverse in India, more than anywhere else. They explain that the two big conglomerates — Adani Group and Ambani-led Reliance “have interests that extend throughout the economy, in defence production, ports and airports, energy, natural gas, petroleum, digital platforms, telecommunications, entertainment, media, retail, textiles, financial payments, and education.” Chaebols and Zaibatsu have/had their demerits that range from autocratic decision-making dubbed as ‘imperialistic management’ to the slow inclination of the market towards an oligopolistic structure. However, they weren’t shielded from international competition, nor was this strategy of creating ‘national champions’ shaped using government regulation. They were prevalent in sectors that faced competition internationally, like Hyundai in automobile manufacturing, keeping them in check. The lack of a similar system of checks and balances in India may lead to deeper implications of this strategy of ‘national champions.’ Viral Acharya further notes that they “grew not just at the expense of the smallest firms, but also of the next largest firms” and empirically established a causal link between market power and markups (broadly, profit). At a point when India has seen a monumental shift in infrastructure and looks to capture the market share that China could evacuate, the implications of a tilted policy could prove detrimental. While consolidation can improve performance and catalyse growth, we need to be very careful as a country of the direction we will set ourselves in at this crucial juncture. <h2>Also read:</h2> <div type="Article" hostid="261" msid="112159576" title="India Cement employees to lose jobs after UltraTech acquisition? Chairman Srinivasan answers" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div> <div type="Article" hostid="261" msid="112163130" title="Ambuja Cements Q1FY25 profit at Rs 789.63 crore; revenue at Rs 8,311.48 crore" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div>

Cementing dominance: Birla vs Adani, of Chaebols, conglomerates, and National Champions

New Delhi, <keyword id="20748494" type="General" weightage="20" keywordseo="domestic-commercial-vehicle" source="keywords">Domestic Commercial Vehicle</keyword> (CV) volumes are expected to dip 4-7 per cent year-on-year next fiscal with high base effect kicking in, rating agency <keyword id="19908266" type="General" weightage="20" keywordseo="icra" source="keywords">Icra</keyword> said on Tuesday. The volumes are expected to remain muted through the January-March quarter on account of a perceived pause in the infrastructural activities as the model code of conduct kicks in ahead of the general elections. "Icra estimates the domestic CV industry volumes to register 2-5 per cent year-on-year growth in volumes in FY24. Subsequently, the industry's sharp <keyword id="20748180" type="General" weightage="20" keywordseo="upcycle" source="keywords">upcycle</keyword> is expected to plateau in FY25, with a decline of 4-7 per cent in volumes," the rating agency stated. <keyword id="20277974" type="General" weightage="20" keywordseo="icra-ratings" source="keywords">Icra Ratings</keyword> Vice President &amp; Co-Group Head <keyword id="20322347" type="General" weightage="20" keywordseo="kinjal-shah" source="keywords">Kinjal Shah</keyword> said he expects the long-term demand for CVs to remain intact. The continued focus on infrastructure capex, emphasis on private participation in infrastructure, construction, defence and manufacturing activities would remain a long-term positive for the CV industry, he said. "However, in the near term, Icra expects the volumes to plateau on a high base, amid the transient moderation in economic activity in some sectors with the onset of the general elections," he added. Overall, the domestic CV industry's ability to scale previous peaks hinges on sustenance of the macro-economic environment, improvement in infrastructure activity and increased demand for last mile transportation, Icra stated.

Domestic commercial vehicle industry to see 4-7% dip in volumes next fiscal: Icra

<keyword id="6354785" type="General" weightage="20" keywordseo="france" source="Orion">France</keyword> wants to be <keyword id="3658" type="General" weightage="20" keywordseo="india" source="Orion">India</keyword>'s "best partner" in boosting its <keyword id="2377476" type="General" weightage="20" keywordseo="defence-manufacturing" source="Orion">defence manufacturing</keyword> and has decided to share the <keyword id="15204665" type="General" weightage="20" keywordseo="best-technologies-and-equipment" source="Orion">best technologies and equipment</keyword> in sync with the growing "trust" between the two sides, French Ambassador Emmanuel Lenain has said. Without divulging specific details, the envoy said French and Indian companies are working together on "equipment of the future", platforms and engines. "I do not think any country provides India with the same level of technology. The progress is also due to the fact that we recognise that India wants to boost its strategic autonomy, wants to build its industrial base and we want to be India's best partner in this move," he told PTI. Indo-French strategic ties have been on a major upswing after India inked an inter-governmental agreement with France in September 2016 for the procurement of 36 Rafale jets at a cost of around Rs 59,000 crore. "Defence has always been a very strong component of our cooperation because there is a lot of trust between our two countries. When you want to work on these issues, you need trust because you commit yourself for 10, 20, 30 years," Lenain said. "This trust is the main asset that we have. Defence cooperation has been developing very well because we are very comfortable with India and we have decided that we could share our best technology, state-of-the-art equipment, best-in-class technology," he said. The two sides are now looking at further bolstering the strategic partnership in view of the evolving global geo-political landscape triggered by the crisis in Ukraine and developments in the Indo-Pacific region. "From the beginning, we were the best partners in the Make-in-India policy. Now that India is switching to the Atma Nirbhar policy, we are also there for India," Lenain said. He said France is ready to co-develop equipment with India and share know-how. "Our companies are working together on the equipment of the future, on engines, on different sorts of equipment. It is very positive for both industries," he said. Lenain chose not to give a direct reply when asked about the possibility of the Indian Air Force procuring additional Rafales and whether France was also looking at supplying the naval version of the jet to the Indian Navy. "We are talking, and again, we are very much willing to provide state-of-the-art equipment. Everything is on the table and we do our best," he said. French aerospace major Safran has already set the ball rolling to set up its biggest maintenance repair and overhaul (MRO) facility in Hyderabad with an investment of around USD 305 million. "It is a partnership of equals and it is a partnership to boost each other's strategic autonomy," Lenain said. Ways to expand defence and security cooperation figured during French Foreign Minister Catherine Colonna's visit to India last month. In December last year, Defence Minister Rajnath Singh said France has agreed to jointly build aircraft engine with India. In 2017, India unveiled the ambitious strategic partnership (SP) model to facilitate joint ventures between select private Indian firms and foreign defence majors to build military platforms like submarines and fighter jets in India. The SP model aims to create a vibrant defence manufacturing ecosystem in the country through joint ventures between Indian corporates and global defence majors. The government has initiated a series of measures in the last few years to boost domestic defence manufacturing. In March, the defence ministry said it plans to procure military equipment worth Rs five lakh crore from the domestic industries in the next five to seven years in line with its policy of promoting indigenous defence manufacturing. India has been one of the largest importers of arms globally. According to estimates, the Indian armed forces are projected to spend around USD 130 billion (one billion is equal to 100 crores) in capital procurement in the next five years. The government now wants to reduce dependence on imported military platforms and has decided to support domestic defence manufacturing. The defence ministry has set a goal of a turnover of USD 25 billion (Rs 1.75 lakh crore) in defence manufacturing in the next five years, including an export target of USD 5 billion worth of military hardware. SEE ALSO:

France wants to be India's best partner in defence manufacturing: French envoy Lenain

<ul><li>The DefExpo kicks off tomorrow and it will be teaming with 1,000 companies from 40 countries around the world. </li><li>It will be an opportunity for domestic firms to find international partners to boost their technological capabilities. </li><li>According to Sameer Patil, an international security expert with GatewayHouse, India’s Armed Forces prefer to import equipment because domestic products either don’t meet their requirement or are of inferior quality. </li></ul>As <keyword id="8154465" type="UNKNOWN" weightage="20" keywordseo="DefExpo-2020">DefExpo 2020</keyword> is all set to kick off tomorrow, the many foreign players who will arrive for it, will bank on Indian love for imported equipment. Despite the push for ‘Make in India’, <keyword id="112134" type="ORGANIZATION" weightage="20" keywordseo="Indian-Armed-Forces">Indian Armed Forces</keyword> prefer to purchase high-quality products from global majors. “The DefExpo 2020 would provide a unique platform for defence industry OEMs, exhibitors and private industry to display their latest innovations and capabilities,” said defence minister <a href="https://twitter.com/rajnathsingh">Rajnath Singh</a>. According to him, over 1,000 companies from 40 different countries are scheduled to be present at the five-day event. However, the theme of the event is ‘Digital Transformation of Defence’ — an area where domestic firms don’t excel. “We have defence industrial capacity but our defence industrial capacity is not geared towards high-tech items but low-tech items, which doesn’t require complex expertise,” Sameer Patil, an international security expert with Mumbai-based think tank Gateway House told Business Insider India. An opportunity for foreign players to bag big deals India’s short-term requirements are mostly off-the-shelf items that foreign defence firms are already producing. The Armed Forces don’t favour picking up these items at home because homegrown products normally don’t live up to the hype. “The armed forces are saying that they would prefer imports rather than rely on the Defence Research and Development Organisation (DRDO) to develop the equipment because sometimes it's of inferior quality and sometimes it doesn’t meet the requirements of the Armed Forces,” explained Patil. For instance, the Navy rejected the Naval Light Combat Aircraft — or Tejas — developed by the DRDO and Hindustan Aeronautics Limited (HAL) because it was ‘overweight’. It’s size made it difficult to operate the aircraft from a carrier. However, the Tejas took nearly four decades to make in India. Regardless of the rejection, HAL is pursuing the project. The government’s military equipment manufacturing arm also saw tough times when the Dhruv helicopter crash instigated return-and-refund requests from Ecuador and the Maldives. The Navy also wanted an upgrade over the Dhruv helicopter. It applied to buy new naval utility helicopters with foldable rotor blades. However, HAL <a href="https://www.defencenews.in/article/MoD-expert-rejects-foreign-helicopter,-HAL-says-Dhruv-is-suitable-808920">argued</a> that its own design was robust enough and that it could develop foldable blades on its own over the next two to three years. An opportunity for domestic firms to tie up with foreign players When HAL first partnered with United Aircraft Corporation to manufacture the Sukhoi Su-57, the government expected a transfer of technology. “But because there was no planning or management culture in defence at that time, no one bothered to absorb those technical skills,” explained Patil. However, history is trying to correct itself. Tata, for example, already has a tie-up with Lockheed Martin to build F-16 wings and the F-21 fighter jet. Bharat Electronics Limited (BEL) and Larsen &amp; Toubro (L&amp;T) have also signed a pact to develop and manufacture defence products. “Because the private sector is more efficient, there is an expectation that they will absorb those tech skills. Given a chance, they can come up with indigenous equipment,” said Patil. However, defence indigenisation doesn’t happen overnight. According to Patil, it takes at least two decades to get the ball rolling and see visible results. Its realisation will mean catering to India’s medium and long term requirements for weaponry that isn’t available off the shelf — like robotic technologies. See also: <a href="https://www.businessinsider.in/news/defexpo-2020-will-have-france-russia-south-korea-israel-us-and-african-countries-wooing-indias-defence-sector-for-partnerships/articleshow/73903166.cms">DefExpo 2020 will have France, Russia, South Korea, Israel, US, and African countries wooing India’s defence sector for partnerships</a> <a href="https://www.businessinsider.in/defense/news/india-will-be-picking-up-ai-enabled-military-tech-from-south-korea-at-the-defexpo-2020/articleshow/73933364.cms">India will be picking up AI-enabled military tech from South Korea at the DefExpo 2020</a>

DefExpo 2020 will be an opportunity for domestic defence companies to prove their might to woo foreign firms

<ul><li><keyword id="3820" type="General" weightage="100" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword> is leaving no stone unturned in his bid to diversify from a select few industries like oil, retail and telecom to software and beyond. </li><li>SankhyaSutra Labs, a subsidiary of <keyword id="9093411" type="General" weightage="20" keywordseo="Jio-Platforms" source="Orion">Jio Platforms</keyword>, showcased software for drone and aircraft design, pitting itself as an option as India liberalises its drone policies and doubles down on defence indigenisation. </li><li>Gautam Adani, too, has announced his foray by picking up a 50% stake in General Aeronautics, a drone maker. </li></ul>Mukesh Ambani has set his sights on the Indian government’s defence indigenisation efforts. After drones, Ambani Senior is looking to enter the critical space of aircraft design through a Bengaluru-based subsidiary, SankhyaSutra Labs. The Reliance subsidiary, under <keyword id="2003276" type="General" weightage="20" keywordseo="Jio" source="Orion">Jio</keyword> Platforms, showcased a Made in India software that can be used to design aircraft at the AeroCon 2022 — an aerospace conference organised by the Society of Automobile Engineering. The company said that it intends to launch a major product in October this year, but stopped short of specifying exactly what it would be about. SankhyaSutra’s focus seems to be on making it easier and cheaper to simulate aircraft designs. Simulation plays a significant role in all aircraft design, particularly in defence. <div type="Article" hostid="261" msid="91892935" title="These four drone company stocks gave record breaking returns in one year" mstype="2" mssubtype="0"></div> “Accurate and reliable simulations can potentially reduce the need for expensive and time-consuming experiments, such as wind tunnel experiments, used for the design of aircraft,” said Dr. Vinay Kariwala, vice president of business development and SankhyaSutra Labs. “This opens up several possibilities by making aircraft design faster and cheaper, as well as allowing exploration of unconventional and radically new design alternatives,” he added. The company said it uses a combination of physics, mathematics and computer science for its designing tools. <cmsannotation type="cmsannotation" annotationid="Ambani joins Adani in capitalising on India’s drone needs" comment="subhead" text="Ambani joins Adani in capitalising on India’s drone needs">Ambani joins Adani in capitalising on India’s drone needs</cmsannotation> Last week, SankhyaSutra also showcased its products and solutions for drones at the Drone Festival of India 2022, where Prime Minister Narendra Modi was also present. India liberalised its drone policies and lifted restrictions on drone usage and expanded it from just defence to other sectors like — agriculture, tourism, healthcare and more. The potential of drones has caught the fancy of both Ambani and Gautam Adani - two of India’s richest men. The Adani Group recently picked up a 50% stake in a drone company called General Aeronautics. Drone company stocks have <a href="https://www.businessinsider.in/stock-market/news/these-four-drone-company-stocks-gave-record-breaking-returns-in-one-year/articleshow/91892935.cms">delivered record returns</a> of up to 160%. All the four listed entities – Paras Defence, Zen Technologies, RattanIndia Enterprises, and Bharat Electronics had gained momentum. It remains to be seen if Gautam Adani will follow Mukesh Ambani in launching a dedicated defence vertical as India doubles down on achieving Atmanirbharta (self-reliance) in defence. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/these-four-drone-company-stocks-gave-record-breaking-returns-in-one-year/articleshow/91892935.cms">These four drone company stocks gave record breaking returns in one year</a> <a href="https://www.businessinsider.in/business/corporates/news/ambani-and-adani-together-borrowed-more-than-1-out-of-every-5-from-foreign-lenders/articleshow/91909834.cms">Mukesh Ambani and Gautam Adani account for $1 out of every $5 of foreign loans</a> <a href="https://www.businessinsider.in/business/corporates/news/rakesh-jhunjhunwalas-delta-corp-stock-lost-more-than-a-third-of-its-value-in-two-months/articleshow/91957129.cms">Rakesh Jhunjhunwala’s gamble on this stock is proving to be a bust after it slips 20% in a month</a>

Mukesh Ambani sets sights on defence – showcases Made in India software for aircraft design

<ul class="summary-list"><li>South Korea's defense industry has seen meteoric growth in recent years.</li><li>Countries are spending more on defense, and Seoul's affordable, high-quality hardware is in demand.</li></ul>A growing sense of instability in the year since Russia attacked Ukraine has prompted multiple countries to increase their defense spending, and the global defense industry is now set to break records in sales and growth.No country is better positioned to benefit from this than South Korea. Its defense sector has seen meteoric grown in recent years, setting records for foreign sales in both 2021 and 2022.2023 is also shaping up to be a good year for South Korea's defense industry. Twenty-nine South Korean companies <a href="https://www.koreatimes.co.kr/www/nation/2023/02/113_345853.html" target="_blank" rel="noopener nofollow sponsored">participated</a> in this year's International Defence Exhibition in Abu Dhabi in February. Among developments there was <a href="https://www.janes.com/defence-news/news-detail/kai-signs-a-deal-with-malaysia-for-fa-50-aircraft" target="_blank" rel="noopener nofollow sponsored">a $920 million deal</a> with Malaysia for 18 FA-50s, a light combat aircraft that has attracted <a href="https://www.businessinsider.com/poland-buys-south-korean-jets-to-replace-aging-soviet-fighters-2022-8" target="_blank" rel="nofollow noopener sponsored">interest around the world</a>.The sales are the result of a half-century of rapid development that has vaulted South Korea from having no defense industry at all to being one of the world's largest arms exporters.<h2>Meteoric growth</h2><div type="image" title="South Korea K2 tanks and K9 howitzers in Poland" height="1333" width="2000" msid="98545830" hostid="261" sizebytes="241058"></div>South Korea's quest for a domestic defense industry began in 1968, after several particularly <a href="https://www.businessinsider.com/decades-after-blue-house-raid-north-korea-still-threatens-seoul-2023-1" target="_blank" rel="nofollow noopener sponsored">aggressive actions</a> by <a href="https://www.businessinsider.com/north-korea-captured-us-navy-spy-ship-uss-pueblo-1968-2021-1" target="_blank" rel="nofollow noopener sponsored">North Korea</a> and a shift in US defense policy convinced then-President Park Chung-hee that the country needed its own suppliers.South Korea's defense industry was originally tailored to meet the country's own needs, and Seoul assisted its growth with subsidies and other incentives. It also required foreign companies that wanted to sell defense products to South Korea to either build them at least partially in the country or incorporate South Korean-made components.South Korea's industry slowly began exporting to foreign countries in 1977, and by 2016, it was the 13th-largest defense exporter in the world, <a href="https://www.sipri.org/sites/default/files/Trends-in-international-arms-transfers-2016.pdf" target="_blank" rel="noopener nofollow sponsored">according</a> to the Stockholm International Peace Research Institute.As South Korea's defense products increased in quality, so too did its exports. In 2020, SIPRI <a href="https://sipri.org/sites/default/files/2020-12/sipriinsight2013_emerging_suppliers.pdf" target="_blank" rel="noopener nofollow sponsored">designated</a> South Korea the largest of the world's four major emerging arms suppliers, accounting for 1.5% of all global arms transfers between 2010 and 2019.As of 2021, the most recent year for which <a href="https://www.sipri.org/sites/default/files/2022-03/fs_2203_at_2021.pdf" target="_blank" rel="noopener nofollow sponsored">data</a> is available, South Korea is the world's eighth-largest defense exporter, accounting for 2.8% of all arms exports between 2017 and 2021. The volume of South Korea's exports increased a staggering 177% over the 2012-2016 period — a bigger increase than those seen by any of the other top 10 largest arms exporters during that period, according to SIPRI.South Korea's defense exports <a href="https://asia.nikkei.com/Business/Aerospace-Defense-Industries/South-Korea-s-defense-industry-doubles-overseas-orders" target="_blank" rel="noopener nofollow sponsored">amounted</a> to roughly $3 billion in 2020. Those sales increased to $7.2 billion in 2021 and more than <a href="https://www.forbes.com/sites/jeremybogaisky/2022/11/07/south-korea-has-quietly-become-one-of-the-worlds-biggest-weapons-suppliers/?sh=42c9e5e6375d" target="_blank" rel="noopener nofollow sponsored">doubled</a> to an estimated $17 billion in 2022.<h2>A quality alternative</h2><div type="image" title="South Korea FA-50 fighter jet factory" height="1232" width="2000" msid="98545832" hostid="261" sizebytes="222414"></div>South Korea's rise in the defense-export rankings reflects a desire to shift the defense industry's focus from the domestic market to international buyers.One reason the shift has been so successful is that South Korea can sell quality products at lower prices than the world's biggest arms suppliers. South Korean arms also give foreign buyers another option for high-quality material, often with fewer strings attached.For example, in January 2022, South Korea <a href="https://www.defensenews.com/industry/2022/01/18/south-korea-inks-largest-arms-export-deal-with-uae-for-missile-interceptor/" target="_blank" rel="noopener nofollow sponsored">signed</a> a contract to sell the UAE its <a href="https://www.globalsecurity.org/military/world/rok/m-sam.htm" target="_blank" rel="noopener nofollow sponsored">Cheongung II KM-SAM</a> surface-to-air missiles. The UAE likely agreed to the $3.5 billion deal, then a record for Seoul, at least in part to mitigate the impact of a potential US decision <a href="https://www.cnbc.com/2021/01/28/bidens-pause-on-gulf-weapons-sales-and-the-us-saudi-relationship.html" target="_blank" rel="nofollow noopener sponsored">to pause arms sales</a> again in the future.South Korea topped that record in August, when Poland <a href="https://www.bloomberg.com/news/articles/2022-08-27/poland-south-korea-sign-5-8-billion-tank-artillery-deal" target="_blank" rel="nofollow noopener sponsored nofollow sponsored">signed</a> a $5.8 billion contract for 180 <a href="https://www.armyrecognition.com/south_korea_korean_tanks_and_heavy_armoured_uk/k2_black_panther_main_battle_tank_hyundai_rotem_technical_data_sheet_description_information_identification_intelligence_pictures_photos_images_video_sou.html" target="_blank" rel="nofollow noopener sponsored">K2 main battle tanks</a> and 212 <a href="https://www.army-technology.com/projects/thunderselfpropelled/" target="_blank" rel="nofollow noopener sponsored">K9 howitzers</a>. That hardware, to be delivered over the next several years, is part of a larger multibillion-dollar agreement in which Poland will acquire 980 K2s, 648 K9s, and 48 FA-50s.In October, Poland made another <a href="https://www.defensenews.com/global/europe/2022/10/14/poland-to-buy-hundreds-of-s-korean-chunmoo-multiple-rocket-launchers/" target="_blank" rel="noopener">order</a> for 288 <a href="https://www.army-technology.com/projects/k239-chunmoo-multiple-launch-rocket-system-south-korea/" target="_blank" rel="noopener nofollow sponsored">K239 Chunmoo</a> self-propelled rocket-artillery systems after it became clear that the US could not fulfill Warsaw's <a href="https://www.defensenews.com/global/europe/2022/05/27/poland-eyes-500-us-himars-launchers-to-boost-its-artillery-forces/" target="_blank" rel="noopener">request</a> for 500 High Mobility Artillery Rocket Systems amid <a href="https://time.com/6244479/himars-rockets-ukraine-russia/" target="_blank" rel="noopener">the war in Ukraine</a>.South Korean firms have burnished their appeal with a record of rapid deliveries. The UAE received its first KM-SAMs within a year of buying them, and Poland <a href="https://apnews.com/article/europe-business-poland-seoul-south-korea-6d7a06d58323ef77fd4ce3024110e0e8" target="_blank" rel="noopener nofollow sponsored">received</a> its first 24 K9s and 10 K2s in December. (Poland is still waiting <a href="https://www.defensenews.com/land/2023/02/23/tanks-might-not-reach-ukraine-this-year-us-army-secretary-says/" target="_blank" rel="noopener">on</a><a href="https://www.defensenews.com/land/2023/02/23/tanks-might-not-reach-ukraine-this-year-us-army-secretary-says/" target="_blank" rel="noopener"> delivery</a> of the 366 Abrams tanks it has ordered from the US over the past year.)<h2>Exports and products</h2><div type="image" title="South Korea KF-21 fighter jet" height="1245" width="2000" msid="98545834" hostid="261" sizebytes="99190"></div>Naval vessels are a major part of South Korea's defense exports, making up 47% of the total volume in 2019, according to SIPRI.South Korea itself has sought to <a href="https://www.businessinsider.com/how-north-koreas-and-south-koreas-navies-compare-2021-7" target="_blank" rel="nofollow noopener sponsored">build a world-class navy</a> for years. South Korean firms have designed and built frigates, diesel-electric submarines, patrol vessels, and replenishment ships for foreign customers. Seoul regularly trades the title of world's largest shipbuilder with China. (South Korean shipbuilders have also designed vessels for foreign buyers to build on their own.)The South Korean defense industry's most anticipated product might be the <a href="https://www.koreaaero.com/EN/Business/KF21.aspx" target="_blank" rel="noopener nofollow sponsored">KF-21 Boramae</a>, a multi-role combat jet optimized for air-superiority missions.The KF-21 is South Korea's first domestically developed supersonic aircraft, and while it doesn't have the advanced stealth features of <a href="https://www.businessinsider.com/f22-f35-russia-su57-china-j20-5th-gen-fighter-comparison-2021-5" target="_blank" rel="nofollow noopener sponsored">fifth</a>- or <a href="https://www.businessinsider.com/countries-are-teaming-up-to-build-next-generation-fighter-jets-2023-1" target="_blank" rel="nofollow noopener sponsored">sixth-generation</a> aircraft, such as radar-absorbent coating, the KF-21's angular airframe gives it a low radar cross-section and thus stealthy characteristics.The KF-21 is both a technological and diplomatic milestone for Seoul. It is a joint development project with Indonesia, which is providing 20% of the funding in exchange for technology transfers and 50 aircraft. Similar joint efforts produced the F-35 and are being used <a href="https://www.businessinsider.com/countries-are-teaming-up-to-build-next-generation-fighter-jets-2023-1" target="_blank" rel="nofollow noopener sponsored">to develop even more advanced jets</a>.Four of six planned KF-21 prototypes have been produced, including a <a href="https://theaviationist.com/2023/02/22/successful-first-flight-for-the-two-seat-kf-21-boramae/" target="_blank" rel="noopener nofollow sponsored">two-seat variant</a>. The first test flight <a href="https://www.defensenews.com/global/asia-pacific/2022/07/19/south-korea-records-successful-maiden-flight-test-of-its-kf-21-fighter-jet/" target="_blank" rel="noopener">was in July</a>, followed by the <a href="https://www.businessinsider.com/south-koreas-stealthy-kf21-fighter-jet-makes-first-supersonic-flight-2023-2" target="_blank" rel="nofollow noopener sponsored">first supersonic flight test</a> in January. South Korea hopes to begin mass production in 2026 and field 120 aircraft by 2032.South Korea <a href="https://www.businessinsider.com/south-korea-is-seeking-buyers-of-new-kf21-fighter-jet-2022-8" target="_blank" rel="nofollow noopener sponsored">wants to export</a> the fighter, and analysts say it could compete with <a href="https://www.businessinsider.com/south-korea-is-seeking-buyers-of-new-kf21-fighter-jet-2022-8" target="_blank" rel="nofollow noopener sponsored">China's fourth- and fifth-generation jets</a> for sales. Poland has already <a href="https://aviationweek.com/defense-space/aircraft-propulsion/polands-pgz-looks-join-south-koreas-kf-21-program" target="_blank" rel="noopener nofollow sponsored">expressed interest</a> in joining the program.<h2>Future</h2><div type="image" title="South Korea destroyer Sejong the Great" height="845" width="1933" msid="98545835" hostid="261" sizebytes="133534"></div>South Korean leaders have made it a priority to increase their country's share of the world's defense market.At a meeting with defense CEOs in November, South Korean President Yoon Suk-yeol <a href="https://www.koreatimes.co.kr/www/nation/2023/02/113_340507.html" target="_blank" rel="noopener nofollow sponsored">called</a> their industry "the country's future growth driver and the backbone of other industries of advanced technologies."South Korea "should secure its technological competitiveness to develop weapon systems that can be a game-changer in future warfare," Yoon said, adding that the research-and-development environment should be improved "to establish an ecosystem that the country's defense industry can transform into an export-oriented business."Yoon has said that he <a href="https://www.washingtonpost.com/world/2022/12/23/south-korea-defense-arms-exports/" target="_blank" rel="noopener nofollow sponsored">wants to make</a> South Korea the world's fourth-largest arms exporter, which would put it behind only France, Russia, and the US, based on SIPRI data through 2021.Achieving that will require South Korea to overcome several issues, including a <a href="https://asia.nikkei.com/Business/Engineering-Construction/South-Korean-shipbuilders-embrace-foreign-labor-amid-shortage" target="_blank" rel="noopener nofollow sponsored">worker shortage</a> and a heavy reliance on foreign components, like jet engines and naval propulsion systems, that could hinder efforts to sell hardware to third parties.With <a href="https://www.businessinsider.com/aging-north-korea-fighter-jets-still-active-around-south-korea-2023-2" target="_blank" rel="nofollow noopener sponsored">tensions rising</a> on the <a href="https://www.businessinsider.com/conflicts-that-could-turn-into-world-war-iii-during-2023-2023-1" target="_blank" rel="nofollow noopener sponsored">Korean Peninsula</a>, Seoul will also have to think harder about <a href="https://www.businessinsider.com/south-koreas-military-modernization-bigger-problem-than-north-korea-2021-2" target="_blank" rel="nofollow noopener sponsored">how it divides resources</a> between its military exports and its own <a href="https://www.businessinsider.com/south-korea-submarines-face-defects-amid-north-korean-missile-launches-2022-11" target="_blank" rel="nofollow noopener sponsored">pressing military needs</a>.

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