Participants at the two-day conference of national ordnance factories also hoped New Delhi would galvanise its policies to draw foreign capital into the domestic armament sector to tide over a perennial resources crunch and boost India's flagging military research.

Harin Pathak, deputy minister in charge of India's defence production, in an address to heads of the state-owned factories warned against complacency and proded them to begin pioneering work.

"While the primary goal of the ordnance factories should remain focused on supporting India's defence, they should also aim at expanding their customer and product base ... to emerge as a viable global industrial organisation," he said.

Pathak underlined the technological developments in the global arms industry and urged Indian munitions agencies to try to keep pace.

"Future wars will not be fought like the earlier ones. Electronic warfare, laser-guided bombs, smart ammunition are replacing conventional weapons and so it is necessary for ordnance factories to exploit latest technologies available in the world.

"For this our factories need to focus on in-house research and development and wherever required collaborate with industrial houses as well as academic institutions in the country and abroad," the minister said at the start of the brainstorming session.

Pathak and India's secretary for defence production and supply, Subir Dutta, both called for an increase in exports by India's loss-making armament industry.

India's total overseas weapons sales average 100 million rupees (two million dollars) annually despite efforts by New Delhi to exploit emerging markets in the international arms bazaar.

"Present levels of exports are not at all sufficient to affect the (production) economies of scale," said Dutta, who asked factories to boost exports tenfold within the next three or four years.

India spends 2.1 billion dollars to import weapons and military spares and Dutta hoped private sector participation would help slash exports and lower dependence on countries to keep the domestic war machine oiled.

"Synergy of the private sector and the public sector should be ensured to reduce total foreign exchange outgoings for the purchase of arms and ammunition.

"(But) for this, upgrading of technology, improving quality, exploration of markets, country-analysis and a new range of products are essential," he said.

The United States slapped sanctions on India after it conducted a series of nuclear tests in May 1998. The restrictions, most lifted this year, hit not only New Delhi's ambitious space programmes but also some of the country's highest priority military projects.

Dutta hoped India would soon "concertise" a pledge it made recently to permit up to 27 percent of foreign capital into the local defence production sector.

"We hope the industry ministry will soon formulate a concrete action-plan," he told the chief executives of India's 39 ordnance factories who form the country's largest single state sector industry.

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