India Wants Defense Firms to Make Medical Gear for Virus Battle

(Bloomberg) -- India wants private defense firms to consider manufacturing medical equipment including personal protective gear and ventilators to curb the impact of coronavirus in the south Asian nation, a top policy maker said.

State-run companies like Bharat Electronics Ltd were manufacturing PPEs and ventilators and there was an opportunity for local private companies to tap the growing demand for equipment needed to combat Covid-19 cases, Defence Secretary Ajay Kumar said in an interview.

“Manufacturing medical equipment and supplies is a big opportunity for defense companies,” Kumar, who is the defence ministry’s top bureaucrat, said. “Cost-effective solutions tested and tried in India will have tremendous global demand.”

Hospitals from New York to Sydney have seen supplies of masks, ventilators and protective clothing for frontline health workers evaporate and India is no exception. To prevent a massive outbreak and protect its fragile health care capability, Prime Minister Narendra Modi ordered the population of 1.3 billion people not to leave their homes for three weeks on March 24, initiating the world’s largest quarantine. The lockdown has now been extended to May 3.

India has so far reported over 12,000 infections and over 400 deaths, according to data from Johns Hopkins University.

Dues Clearance

To mitigate the impact on small vendors supplying equipment to defence firms, Kumar said his ministry had directed all state-run units to clear outstanding invoices to vendors immediately. A network of small and medium sized businesses are the main vendor for state-run Ordnance Factory Boards, companies that produce weaponry for the police and defense forces.

Spending on arms purchases is unlikely to be impacted in the financial year that started April 1, Kumar said despite a ceiling imposed to curb first quarter expenditure to 20% of the annual budget. The cap was introduced to meet the Covid-19 fallout.

While New Delhi is the world’s fourth-biggest military spender, its air force, navy and the army are still equipped with weapons that are largely obsolete.

India Wants Defense Firms to Make Medical Gear for Virus Battle

India’s spending in the year starting April 1 will be $47.34 billion, of which $16.2 billion is for capital expenditure and of that, about 90% is devoted to existing obligations and committed liabilities. That leaves little to meet demands for weapons purchases and modernization.

“The first quarter expenditure is around 20% in most years. Therefore, by suitably planning our expenditure, we should be able to manage with the present ceilings,” Kumar said.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.