Global Defense Firms are Swarming Near Uttar Pradesh


Defense corridor has gained traction on the political scene in UP, but law and order are crucial

The Uttar Pradesh Capital Summit 2023 will be held in Lucknow from February 10–12, and top military and defence hardware manufacturers from the US, Europe, and Russia will be in attendance. At the investment event, the Yogi Adityanath administration would highlight the UP Defence Corridor’s defence industrial capabilities.

The world’s top manufacturers of military gear will likely engage in commercial competition for the first time ever following the Russia-Ukraine conflict. The US missile company Northrop Grumman, the UK’s BAE Systems, Germany’s Umarex, Sweden’s SAAB (which makes Carl Gustaf M4 rifles), Russia’s Almaz-Antey (one of the top exporters of military hardware), France’s Dassault Aviation (maker of Rafale jets), and Israel Weapon Industries are among the defence companies that will participate in the event, according to UP government officials.  The composites facility, established by Lohia Aerospace, is attempting to distinguish itself as a distinctive player plugged into the global defence ecosystem. The company even purchased an Israeli company and transformed into a manufacturer of key components for unmanned combat aerial vehicles with an order book that is soon expected to cross Rs 100 cr. Its backers bet on the low cost of production in UP. The most recent proposal for the corridor is a factory for Brahmos missile production close to Lucknow, which is expected to generate a sizable base of ancillary businesses. With a $300 billion initial investment, the factory is anticipated to get orders worth thousands of billions of dollars over the next ten years. With various start-ups and technological innovation firms receiving land in the Aligarh node, cutting-edge technology is also likely to be introduced in the corridor. A start-up focused on swarm drone technology, New Space Research, is one of the businesses given land here. Aerolloy Technologies has already launched a Rs 300 crore project in Lucknow to produce titanium and super alloy components for military applications. MKU intends to build the first factory in India in Kanpur to produce the vital raw fibres that are the basis for bulletproof goods. 26 industries have already received land, while 73 companies have signed memorandums of understanding (MoUs) to consider establishing plants at various nodes along the corridor. The state is taking into consideration proposals for a hub close to the planned airport at Jewar, encouraged by the significant desire from businesses for property in Aligarh. The sector and state officials have been in discussions on how to use the new drone policy to attract business to the corridor. When it comes to businesses wanting to open up shop, the corridor has suffered a reality check after being initially envisioned as a hub for foreign investors. Nearly all of the industries that have occupied land are domestic competitors. A few grand schemes have been quietly abandoned, including the much-touted Rs 38,000 crore investment by Ukrainian aircraft manufacturer Antonov with an Indian partner. Everyone involved in the industry agrees that the state’s law and order situation will be crucial to the corridor’s success. Companies believe that tight law enforcement is essential to retaining high-skill staff, in addition to ensuring the security of pricey equipment being installed and valuable shipments being transported across the state. According to a senior executive who has spent more than ten years working in the defence industry close to Kanpur, the influence of local strongmen has drastically lessened. The highly technological sector is attempting to take advantage of the cheap local labour that is readily accessible, but some top jobs will necessitate attracting talent that is being courted by companies with headquarters in places like Bengaluru and Hyderabad.

The corridor narrative continues to be a focal point of the BJP’s election campaign as a representation of transformation for the state. Given the long gestation time that the defence manufacturing business has, it is still difficult to assess its popularity with voters. When manufacturing picks up steam in all of the corridor’s nodes, generating thousands of high-paying jobs and changing the character of the local economies, real political benefits can be realised. Industry analysts predict that this will take at least 3 years.

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