Frost & Sullivan,
MUMBAI, India: The Indian land-based training and simulation market is all set to deliver on its promise, with the Indian army embarking on a modernisation programme. It is not only the domestic companies that will benefit from the programme but also the overseas participants, especially considering policies for foreign direct investment (FDI) and private participation is expected to become more favourable.
New analysis from Frost & Sullivan, “Indian Land-based Training and Simulation Market Assessment,” finds that the market is expected to grow at a compound annual growth rate of 36 per cent from 2007 to 2017.
“For overseas as well as indigenous companies, strategic alliances such as joint ventures, Memorandum of Understandings/agreements, offset partnerships are very significant,” says Frost & Sullivan Research Analyst Srinivas Sishtla. “Choosing the right collaborator in terms of technical know-how, local market knowledge, brand image and past relations with the Indian military, paramilitary and police forces will be vital for success.”
These alliances will bode well for Indian software companies as they may get a chance to collaborate with simulator developers to design and supply software required for simulators.
“Advances in software and information technology and the use of commercial off-the-shelf (COTS) technology have encouraged new participants to enter this market,” notes Sishtla. “In the last two years, there has been an increase in the number of request for proposals (RFPs) for simulators for the Indian army and this trend is expected to persist.”
Apart from the much-vaunted modernisation program, the market has also gained from the greater awareness of the cost, safety and time benefits of simulators. The need for savings on service of worn-out original equipment, fuel, and man-hours; concern for soldier safety during training and the need to train soldiers in the use of new equipment acquired under the modernisation programme will significantly aid this market.
However, the Indian army's low budgets eliminate the prospect of conducting commitment trials on full-fledged simulators for technical evaluation. It also compels the army to choose products in the lowest price range, challenging market participants to manufacture low-cost, yet technologically advanced simulators. This situation may ease in the near future with significant hikes expected in the defence budget by 2009.
For market participants, it is vital to design easily upgradeable and interoperable simulators to increase market shares over time.
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