Defence and Aerospace Offset Policy and Practice

Govt sets joint venture norms for defence PSUs

2012-02-11T08:17:00.000+05:30

Read the Full Report: Govt sets joint venture norms for defence PSUs

MMRCA Deal a Shot in the Arm for Industry

2012-02-08T12:28:00.002+05:30

The impending $12 billion contract to buy 126 Medium Multi Role Combat Aircraft (MMRCA) by the defence ministry from Dassault, is set to be a game changer for the Indian aerospace and defence industries with about $6 billion worth of offset contracts expected to flow to Indian companies.

This deal, as and when signed, ensures that Dassault along with its two major suppliers Thales and Safran Group would place offset contracts on Indian vendors amounting to minimum of 50 per cent of the value which in this case could be $6 billion and this obligation would be co-terminus with fulfillment, which is 12 years span.

With this, new technology absorption, world class facilities, adaptation of cutting edge processes, systems and the skilled manpower would create a formidable ecosystem for India to compete in the global marketplace.

Of the $6 billion in offset money flowing into India, about 50 per cent is likely to be spent on manpower. On an average of $20,000 per man year, this would mean 150,000 man years of new jobs in the defence aerospace industry. This would translate into 5,000 jobs in the3rd year and stabilize at 20,000 jobs in the ninth year. Also, all support services like maintenance, training and logistics have to be provided by Indian industries with the technology and know-how of Dassault, Thales and Safran for the next 40 years. This could create an additional 4,000 jobs. And more……

Read Full Article: MMRCA Deal a Shot in the Arm for Industry

Indian MMRA Competition Declares Dassault Rafale as L1

2012-02-01T08:33:00.000+05:30

"The French firm Dassault Rafale has emerged as the L-1 (lowest bidder) and cheaper than its European rival EADS (maker of Eurofighter) in the tender and will be offered to supply the aircraft to the IAF."

French company Dassault Rafale today qualified to bag India's contract for supplying 126 combat ac for the IAF.

Dassault Rafale as the lowest bidder, is likely to get the contract under India's Defence Procurement Procedure. Further negotiations are likely to move with Dassault in this deal.

The TOI Report: Indian MMRA Competition Declares Dassault Rafale as L1

Private Sector Participation in Defence Production: Industrial Licensing and FDI Issues

2012-01-30T20:12:00.000+05:30

India has permitted 100 % participation by the private sector in defence sector, with foreign direct investment (FDI) permissible up to 26 per cent in the manufacturing, subject to licensing and security clearance. However, 100 % FDI is permitted in the case of the services sector.

By October 2011, the Department of Industrial Policy & Promotion (DIPP) gave 200 Letters of Intent/Industrial Licenses (LoI/IL) to various private entities, with proposed investment totaling Rs 11,773 Crore, and potential employment opportunities for 38,579 people. By November 2011, a cumulative FDI of Rs 17.68 Crore (US $3.72 m) was received by the Indian defence industry.

As per the guidelines of the DIPP, defence falls under the ‘Manufacturing’ sector. So, the companies in the manufacturing business can apply for a license and get it (subject to approval), and be formally part of the defence industry. However, this is not the case for companies in the services sector (such as, engineering, design and software, etc.), which do not come under the purview of ‘Manufacturing’, and hence do not require a license for their services. Consequently, they are not formally part of the defence industry, even though their services have direct application in defence products.

For the services sector, the equivalent minimum equity share (by the Indian shareholder) is 51 per cent in order to be called an Indian company. However, Defence Offset Facilitation Agency (DOFA) —responsible for facilitating offsets in defence contracts—insists that companies in the services sector must have a minimum 74 % domestic equity share in order to participate as an Indian Offset Partner.

Full Article with Other Implications: Private Sector Participation in Defence Production

Aerospace and Defence exports likely to reach USD 2 billion in 2011-12

2012-01-28T09:35:00.003+05:30

Aerospace and defence exports are likely to clock two billion dollars in the current fiscal, industry chamber Assocham has said.

With about 18% growth during the first three quarters of 2011-12, aircraft exports including component parts stood at about 1.31 billion dollars against 1.11 billion dollars in the corresponding period of previous fiscal, Assocham said.

Parts and components have contributed a major 96% of the total aerospace exports, highlighting India's manufacturing capability in aerospace sector oriented towards tier I, II and III suppliers as against aircraft Original Equipment Manufacturers (OEMs).

Read the Report: Aerospace and defence exports likely to reach USD 2 billion in 2011-12

Thales-Samtel Defence Systems (SDS) Partnership

2012-01-24T07:58:00.001+05:30

Thales has a joint venture company, Samtel Thales Avionics. Thales' offset liability from the Mirage upgrade contract for Euro 1.47 b (Rs 9000 Crores) amounts to Euro 441 m (Rs 3,000 Crores). That induces Thales to source from SDS a significant share of the avionics (aviation-electronics) for upgrading the Mirage-2000. SDS already supplies Hindustan Aeronautics Ltd (HAL) with cockpit displays (multi-function displays, or MFDs) for the Sukhoi-30MKI fighters that are built at HAL's Nashik plant. The Ghaziabad-based company is also competing to build avionics for the IAF's forthcoming Sukhoi-30 MKI upgrade.

And, if the Rafale fighter — built by Dassault with a large avionics component from Thales — is chosen by the MoD as the IAF's new medium multi-role combat aircraft (MMRCA), SDS could benefit enormously from another wave of offset-driven orders for display systems and other avionics in the 126 MMRCA.

Read the Full Report: Thales-Samtel Defence Systems (SDS) Partnership

Indian Defence Industry, Defence Exports and Offsets

2012-01-14T09:44:00.001+05:30

A number of Private Indian A & D Companies have obtained Letter of Intent / Industrial Licenses for manufacture of defence products & Services in India. These products would have markets in India and abroad, quality and price being primary issues. It is important that JVs or any other type of co-operation are set-up with such manufacturers/vendors which bring-in international standards to the firm.

The companies could invest in production themselves, or seek offset funding in addition to other sources of funds. DPP 2011 and other regulations of the MOD/India set the stage for the industry in the Private Sector to develop and manufacture defence products.

We at http://www.freemarketsdefence.com/ / http://www.indiandefenceindustry.com/ are aggregating the industry into the global landscape. This adds value to the industry manifold, in various ways. Please contact Us at svipja@airtelmail.in for your defence exports, offset fulfillment, and any other requirement relating to the Indian Defence Industry.

Indian Defense Sector Spend by 2015

2011-10-27T08:13:00.003+05:30

The Indian defense sector is one of the fastest growing markets globally, with an estimated US$13.9 billion of the annual budget allocated for the acquisition of military hardware and technology in 2010.

Defense expenditure, which refers to the part of the budget that is spent on the acquisition of all types of military hardware and technology, has grown at a CAGR of 12.14% from 2005-09. Defense expenditure is expected to record a CAGR of 6.59% during 2010-15, to reach an annual spend of US$42.6 billion by 2015. This is primarily due to ageing military hardware and technology, domestic insurgencies and hostility from neighboring countries.

Strong growth in the sector is attracting foreign original equipment manufacturers (OEMs) and leading players from the domestic private sector to enter the market. Moreover, terrorism is leading to sharp increases in the defense budget and a shorter sales cycle, which translates as an attractive market for defense manufacturers.

The areas that are specifically expected to emerge over the short to medium-term include unmanned combat aerial vehicles (UCAVs), advanced electronic warfare systems, combat systems, rocket and missile systems, fighter and trainer aircraft, stealth frigates, and submarines. In addition, spend on IT and communications is expected to increase significantly, with a strong focus on enterprise applications, systems integration, and real-time mobile communications.

Among the defence services the Army with a budget of approximately Rs. 74,582 Crores in 2010-11 has the largest share, followed by the Air Force (Rs. 40,462 Crores), Navy (Rs. 21,467 Crores), DRDO (Rs. 9,809 Crores), and Ordnance Factories (Rs. 1,015 Crores).

Credit: USIBC and Its News Agencies

MoD Approves Offset Proposals for the MMRCA Deal

2011-10-13T09:24:00.001+05:30

The defence ministry approved the offset proposals for the MMRCA Deal paving the way for opening the commercial bids.

The offset proposals from Dassault Aviation (Rafale) and the Eurofighter consortium (Typhoon) were presented before the DAC by director general acquisition Vivek Rae. Besides the Defence Minister, the two-hour meeting was attended by the three Service chiefs, the Defence Secretary, the Secretary, Defence Production, the DG (Acquisition) and concerned joint secretaries in the Ministry.

Foreign vendor bagging MMRCA Deal will have to invest back 50 per cent of the worth of the deal in Indian Defence Industry. This means investment of more than Rs 21000 Crore in India, in military, homeland security and civil aviation.

Click: MoD Approves Offset Proposals for the MMRCA Deal

Defence Offsets India Fund & Offsets

2011-10-03T09:35:00.001+05:30

Please read below my Post on 'Defence Offsets India Fund' dt Jun 28, 2008.

We still feel that India should create a PE Fund to Develop Indian Defence Industry incl MSMEs for Inclusive Growth with Seed Funding by the MOD, & Cash out of Unabsorbed Offset Funds Due from the Obligor(s). A difficult proposition, but must be discussed.

In addition, the following should considered:

1. Banking of offsets beyond the present limit to 10 years and above in case of infrastructure,special and greenfield projects rendering value to the Indian Defence Industry.

2. FDI 26%, and extendable to 49% with approval. Anything beyond this has to be discouraged to retain our 'freedom'; commerce is not end all of everything.

3. Defence & Aerospace high-tech start-ups should get their rightful share of Offsets. Creation of long-term value addition should be seen in these companies.

These are some of the points that merit attention, especially in the backdrop that we may not get the desired technology thru the offset route.

Svipja Technologies

Undue Criticism: Defence Offsets

2011-09-11T08:17:00.002+05:30

Some Knowledge Professionals / Think Tanks provide exaggerated views on the defence offsets deals being executed lately. They may not be in full picture, or may not have an access to 'right source(s)'. These comments need 'mature' interpretation, sometimes the observations may even be biased or motivated.

Market Forces play in offsets. Obligors' Power, Buyers' Power, Threat of New Entrants / Competitors, Rivalry amongst Obligors, Alliances,etc, play its role. 'What You Need/Want', and 'What You Get' may have very little co-relation as a result.

We need to weigh it up all. Everything should not be seen with a 'black eye' sensing only kickbacks and corruption.

Sukhwindar

We Need to be Pragmatic in Offset Contracts

2011-09-02T18:54:00.000+05:30

I feel judicious application of the Policy by India in defence procurement is the key to reaching high-tech zone where we do not have the desired grip in India, though the ToT may not be totally current in the ‘World of Defence Technology’. Pragmatism is the key to success; MOD does exhibit it abundantly in various negotiations in defence deals.

We must read Ajai Shukla’s Article keeping in mind that ‘no one will give you the current technologies; no one would like to create a competitor; Yes, still you can reach state-of-the-art technologies by leapfrog’. India will have to do this. Wisdom dictates that nothing would come on platter.

Click: MoD Flouts Offset rules, Favours Foreign Vendors

Sukhwindar

Defence Offsets: Indian Parliament Informed

2011-08-05T08:37:00.001+05:30

The Indian defence industry will benefit from an inflow of $30 billion as offsets through military procurements from abroad over the next decade, according to a report submitted to parliament on Wednesday, 03 Aug 2011.

In a deposition before the Parliamentary Standing Committee, the MOD said that the projection, amounting to INR 1.5 lakh crore, was made in view of the $100 billion that India is expected to spend on defence procurements in the next 10 years. The deposition was part of a report on budgetary demands for grants for 2011-12, submitted by the committee to the Lok Sabha.

Offsets is a clause in the defence ministry’s procurement policy under which any equipment import worth more than Rs.300 crore will involve ploughing back of 30 percent of the contract amount back in Indian defence, homeland security and aviation industry. The policy is in existence since 2005, and has been refined over the years now.

‘As far as offsets are concerned, it is true that our procurements in the next five to 10 years would be more that $100 billion and 30 percent of that is $30 billion, which is INR 1.5lakh crore,’ a defence ministry official told the committee.

The official also went on to explain that the offsets clause involved either in a direct purchase by foreign arms companies from Indian industry, or technology transfers, or joint ventures with domestic firms in the defence, homeland security and aviation sectors.

The official, in its report, gave the example of the recent Indo-US deal for supply of 10 Boeing C-17s to Indian Air Force (IAF), under which India’s premier military research agency Defence Research Development Organisation (DRDO) will get high altitude engine test facility and a wind tunnel facility, both firsts in the country.

The Indo-Asian News Service (IANS)

Mahindra Aerospace Looks at US/Europe Defence firms

2011-08-03T09:34:00.001+05:30

Mahindra is eying aircraft-part makers in the U.S. and Europe for a stake purchase. It may acquire stakes in Tier-I suppliers, specializing in sheet metal components for aircraft, This will give it an access to them for orders from companies such as Boeing Co. and EADS in the commercial as well as defense aircraft markets.

Mahindra Aerospace started its expansion in 2009 by acquiring Australian companies Gippsland Aeronautics and Aerostaff Australia. Last year, the company signed an agreement to acquire parts-making machinery from Boeing's facility in Melbourne, Australia. Mahindra has a three-year plan of spending 4.5 billion INR ($102.2 million) in its aerospace business, of which about 1 billion rupees was spent in the two acquisitions above. The company plans to spend 2.8 billion rupees in a factory near Bangalore city and the rest will be spent in setting up a distribution network in the U.S. and China,

Mahindra Aerospace has developed a five-seater aircraft which will be tested in September. The company plans to develop a 10-seater and an 18-seater plane in the future, he added.

Mahindra Aerospace and Eurocopter Sign MoU

2011-07-28T08:41:00.001+05:30

The Mahindra join hands with Eurocopter to manufacture sub-assemblies and other engineering products for helicopter market in India.

The partnership would focus on manufacturing of sub - assemblies, engineering and customisation of civil helicopters, and the joint development of specific market segments. The scope and structure of the partnership would be decided accordingly.

Mahindra Satyam already provides IT and Engineering Services to the Aerospace Sector, particularly to plane manufacturer Airbus.

Eurocopter partnered with HAL in 1962 , enabling HAL to manufacture more than 600 helicopters based on the Alouette 3 and Lama heptrs, more popularly known in India as the Cheetah and Chetak.

Indian Companies Supply for Boeing Dreamliner Project

2011-07-16T10:16:00.002+05:30

B-787 , Boeing Dreamliner, has components, software and designing services from Indian companies like Tata Motor's Nagpur-based fully owned subsidiary TAL Manufacturing Solutions Limited, HCL, Wipro and Tata Consultancy Service (TCS).

Tata's are providing the floorbeams for the airline, on which the seats are laid. HCL has provided with advance software and some designing work was done by TCS.

Boeing and TAL Manufacturing Solutions entered into a manufacturing contact in 2008 for light weight floor beams made out of titanium and composite materials by using state-of-the-art technology.

Currently the company also buys parts for its other aircraft from Hindustan Aeronautics Ltd. (HAL) and service from Infosys.

Full Report: Indian Companies Supply for Boeing Dreamliner Project

IAF Briefs Lockheed Martin on MMRCA Deal

2011-07-16T09:51:00.005+05:30

Lockheed Martin, one the two US companies eliminated from the 126 combat aircraft tender, has said it had met the Indian Air Force this week to know the reasons for its non-compliance in the contract.

"We had a meeting this week with the IAF to learn about the reasons for our aircraft being non-compliant in the deal," Lockheed Martin's Vice president Orville Prins told reporters here Thursday.

He said such a meeting would help the company prepare itself in a better manner for future competitions.

The request for the debriefing was made by the US Government, which had offered the aircraft to the Indian establishment through the Foreign Military Sales route.

In April, India had shortlisted Dassault and Eurofighter for 126 Medium-Multirole Combat Aircraft (M-MRCA) deal and excluded the two American companies including Boeing along with Russian MiG Corporation and Swedish Saab Gripen.

Asked if he was satisfied with the explanation given by the IAF, Prins said, "We are satisfied that we had the meeting and we could ask questions."

Commenting on the two shortlisted aircraft, he said, "I think Eurofighter and Rafale were evaluated as per the provisions of the DPP-06 which I understand says that in order to be shortlisted, the equipment should be fully compliant without any waivers."

The IAF had evaluated the six competitors on 660 parameters; Prins said adding that if waivers were to be granted to the aircraft, "I don't know where to draw the line."

Asked if the short listing of the two aircraft was a political decision, he said, "I think it was a political plus decision", which was a usual practice world over.

Courtesy: http://www.brahmand.com/

US-India Strategic Defence Co-operation

2011-06-29T09:25:00.001+05:30

Senate Armed Services Committee (SASC), which oversees the US Department of Defense, has ordered the Pentagon to submit a report by November 1 with a detailed assessment of the current state of US-India security cooperation; and a five-year plan for enhancing that cooperation in the Indo-Pacific region and globally.

The SASC has also ordered “a detailed assessment of the desirability and feasibility of the future sale of F-35 Joint Strike Fighters to India, and a potential US partnership with India to co-develop one or more military weapon systems, including but not limited to the anticipated program to replace the US Air Force T-38 trainer jet”.

“It is in the national interest of the United States… to support India’s rise and build a strategic and military culture of cooperation and interoperability between our two countries, in particular with regard to the Indo-Pacific Region.”--- opined certain Senators.

Senior US officials privately contrast the flowering of the broad US-India strategic relationship with deepening scepticism about the defence relationship.

Read the full Report: US-India Strategic Defence Co-operation

Svipja Technologies

DCNS and Flash Forge India Private Limited Partner for Scorpene Submarines

2011-06-09T08:16:00.002+05:30

DCNS has signed an indigenisation contract with Visakhapatnam-based Flash Forge India Private Limited for the supply of critical parts for the Scorpene submarines being built at MDL. MDL is to build six Scorpene submarines under a Rs 20,000 Crore ($4.5 billion) contract and the first of these Project-75 vessels is expected to be commissioned in the Indian Navy in 2015. DCNS, a French Company, is partnering the project.

Flash Forge is a manufacturer of customised special material forgings used for severe service conditions in industries such as defence, aerospace, power, oil and gas, shipbuilding, petrochemicals and process plants.

The indigenous elements to be installed onboard the Scorpene submarines include systems and sub-systems such as engines, pumps, valves, accommodation elements and safety equipment, as also the combat and ship control systems that are part of the Mazagon Procured Materials element of the contract.

MDL is the main contractor It is to sub-contract work to the local players. Together, DCNS & MDL, are qualifying the suitable local companies to partner in the project.

Read Report: DCNS and Flash Forge India Private Limited Partner for Scorpene Submarines

Svipja Technologies

Defence Offsets and SMEs

2011-06-07T09:23:00.000+05:30

The defence offset policy needs further revamping to allow small and medium industries (SMEs) to partake in defence offsets. Indian SMEs has a potential in areas like aero structures, landing gear, brakes and wheels, avionics, IT-based design and analysis solutions.

Defence public enterprises which get the offset benefits should outsource at least part of their orders to SMEs.

It is suggested that a permanent regulatory body of specialists should handle all offsets as a single window, preferably it to be a corporate body. It should be empowered to take decisions and guide local suppliers and MNC vendors within Govt. Guidelines.

Click to read an interrelated Article: Defence Offsets and SMEs

Svipja Technologies

French Dassault Rafale and Eurofighter Typhoon Fighter Jets

2011-05-24T19:40:00.003+05:30

Eurofighter Typhoon is the front-runner for the USD 11 billion contract of Indian Air Force Multi-Role Combat Airacraft deal, a senior official of the BAE Systems has said indicating that if the contract goes through a part of fighter manufacturing would be off loaded to India.

"The negotiation for crucial commercial terms will begin next month," Michael Christie, Senior Vice President, BAE Systems India told a group of visiting journalists at BAE Systems' production centre at Warton, Lancashire, in UK yesterday.

India had short-listed French Dassault Rafale and Eurofighter Typhoon fighter jets for the project to acquire 126 fighters, while rejecting American Boeing F/A-18 Super Hornet, Lockheed Martin F-16, Sweden's Gripen and Russian MiG-35 fighters.

Dassault and Europefighter have been asked by the Ministry of Defence to extend the offer validity.

Credit: PTI News

Technology Transfer: Aircraft Propulsion System to Replace Existing APUs

2011-04-19T18:56:00.001+05:30

This system technology aims to equip existing in-service 50 to 190 passenger aircraft with Aircraft Propulsion System , named, “PlanePower”, to replace the Auxiliary Power Units.

It is a secondary propulsion system (Patents pending) for The Boeing Company, Airbus Industries, Bombardier, and Embraer companies as OEM supplier. It is being developed in the US. The real customers are the Airlines around the World.

Its Objective is to reduce fuel burn on ground by 80% and protect the environment and reduce the noise while reducing recurring operational costs.

There are over 17,600 aircrafts in service which could benefit from the system and represent the retrofit market of over $14 b.The global market forecast anticipates a demand for over 16,600 new single-aisle aircrafts in the next 20 years creating OEM market of over $15 b.

The System does NOT require any electrical, hydraulic, or pneumatic power to taxi the aircraft. It does NOT use aircraft Auxiliary Power Unit (APU) power to taxi. The following companies are developing competing systems / technologies:

1. Delos Aerospace.
2. Chorus Motors, subsidiary of Borealis Exploration, Ltd. of UK – “WheelTug”.
3. The Boeing Company.

All patented systems under development (not yet certified) by the above companies use APU power and / or electrical energy stored to run the motors mounted on the landing gear, whereas “PlanePower” secondary propulsion system is a self-contained.

This technology is available for transfer to a company which is capable of manufacturing the System. Terms can be discussed. Pse contact svipja@airtelmail.in

Svipja Technologies

Ashok Leyland in Defence and Aerospace

2011-03-18T09:58:00.001+05:30

A MoU has been signed between ALDS and KMW Group of Germany which includes scope in development of artillery systems, combat systems, armoured wheeled vehicles, recovery vehicles, bridge laying systems and other similar products. ALDS is a newly formed arm of Ashok Leyland, a Hinduja Group flagship company, in which it owns a 26 per cent stake.

The German firm would provide technology on which a certain amount of customisation would be done and manufactured by ALDS in its existing facility. The details on developing the vehicles and manufacturing are to be finalised,

KMW, a 170-year-old company, has experience in the market for highly protected armoured wheeled and tracked vehicles. It supplies systems like MBT Leopard 2, the artillery system PzH 2000 and the highly protected Dingo 2 to over 30 countries worldwide, in addition to related military wares.

Ashok Leyland, in February, 2010, had signed a principle of co-operation with the Paramount Group, South Africa, for the development and manufacture of mine protected vehicles in India. A vehicle under this tie up is currently in the developmental process.

Article: Ashok Leyland in Defence and Aerospace

Svipja Technologies

Dhanush, Prithvi-II Ballistic Missiles Test Fired

2011-03-12T10:18:00.000+05:30

Two indigenously developed, nuclear-capable ballistic missiles -- Dhanush and Prithvi-II -- were fired of the Orissa coast on 11 Mar 2011. Both missiles have a strike range of 350 km.

'Dhanush' was flight tested from naval vessel INS SUVARNA in the Bay of Bengal, surface-to-surface 'Prithivi-II' ballistic missile was test-fired within an hour from Launch Complex-3 of the Integrated Test Range (ITR) at Chandipur-on-Sea.

"The flight tests were in text book fashion with the missiles reaching the target points with high accuracy," said ITR director S. P. Dash. "All the radars and electro-optical systems located along the coast tracked the missiles and monitored the parameters. The final event was witnessed from a ship located near the impact point," Dash said.

The missiles were launched by the Strategic Force Command as part of the regular user training exercise.

A successful demonstration of Ballistic Air Defence Missile System was held on 6 March, 2011, by DRDO. "The series of successful launches have boosted the morale of scientists and armed forces. The missiles have been integrated under the supervision of Missile Systems Quality Assurance Agency (MSQAA)," a DRDO release said.

Courtesy: Press Trust of India(PTI)

India’s Airborne EW and Control (AEW&C) System

2011-02-26T08:58:00.002+05:30

Embraer has unveiled the first of three EMB-145s ordered by DRDO as testbeds for an indigenously developed Airborne Early Warning and Control (AEW&C) System. The three EMB-145 AEW&C testbeds will also be used for a range of tests including cold-weather trials in Alaska.

The first aircraft, equipped with the antenna structure for the phased-array radar under development by DRDO’s Bengalaru-based Center for Air Borne Systems (CABS), is ready for flight testing at Embraer before its scheduled delivery to India in Aug, 2011.

Once delivered, CABS will begin integration of the AEW&C Mission System, which includes the active, electronically scanned array radar, electronic support measures, satellite communications, datalinks and operator workstations.

The full configuration is expected to fly in 2012.

The Indian aircraft incorporates several improvements. These include an in-flight refueling probe; a new electrical generation system with a second auxiliary power unit for the mission suite; and a new cooling system.

Read full Report on Aviation Week: India’s Airborne EW and Control (AEW&C) System

Svipja Technologies

Raytheon Initiative for India

2011-02-25T17:37:00.002+05:30

Raytheon Company is vying for a pie of India’s potential $80 billion defence market in the next ten years. The company is trying to hardsell the Silient Guardian Protection System, the Javelin and the Patriot missile systems and is involved in the coastal surveillance project being carried out by the coast guard, William. L. Blair, the incoming CEO of Raytheon India, said.

Missile transfers are Government to Government engagement. Raytheon is working through the US Government process to determine what we can provide to India by way of technology transfer. In missile systems, there are layers that constitute a systems capability. Raytheon’s approach towards India is likely to be to figure out what weapons we can co-develop with India. All this would be subject to US Govt. approvals.

Raytheon has established relationships with companies such as the Tatas, Godrej, Larsen & Tubro (L&T) and many different Indian companies in the public and private sector to create at least a context in how we can operate. We have also established some pilot projects with some of those partners, where we are actually working on some manufacturing specific to what we will be delivering under the MMRCA, should a platform with our content be selected. We are working very actively with L&T on the T-72 upgrade and with Tata Power Stretegic Electronics Division (SED) for upgrading the infrastructure of the IAF.

Read the full Interview: Raytheon Initiative for India

Svipja Technologies

Offset Process for MSMEs

2011-02-20T09:14:00.004+05:30

India’s aerospace and defence sector is throwing up huge entrepreneurial opportunities worth several hundred million dollars in the form of offsets.

An offset agreement is a stipulation made between a foreign supplier(Obligor) and a local company, which requires the supplier (Obligor) to fulfill certain offset commitments in that country as part of a Prime contract. For the Air India deal, Boeing’s offset commitment is to invest $1.7 billion and for P-8I maritime recce aircraft deal, it is $630 million, President Boeing said.

Boeing has already partnered with TCS , Wipro , Infosys, HCL, Infotech, Tata, etc. The Tier-I companies in the US/EU need to partner with several hundred small companies in India for offsets. As of now, mid-tier companies in India such as Maini, Dynamatic and QuEST support the A & D supply chain directly or indirectly. Opportunities exit for other similar companies to supply to US/EU A & D Companies.

A & D Sector needs skilled labour, capital, technology transfer, equipment and military or civil certification, as appropriate, in US/EU to be part of the chain.

“Entrepreneurs need to have a very good business plan supported by experts in the field. They also might need to partner with Tier-I companies. So, find partners, have a good plan, validated by experts in the field. In this business, there is no reward, if you can’t take risks”, the President said.

TTTHG-Svipja helps You develop business plan in concert with experts in the field from US/EU for You to be capable of becoming part of the supply chain of US/EU A & D Majors. Please read our Industrial Sector Partnership (ISP) Process on this Blog.

Read the Interview of President, Boeing India: International Co-operation and Offsets

Svipja Technologies

Tata Offset JVs

2011-02-16T07:41:00.001+05:30

Tata Advanced Systems Ltd, a subsidiary of Tata Sons Ltd, signed an agreement with Lockheed Martin Corp. to form a joint venture (JV) company, Tata Lockheed Martin Aerostructures, to build aerostructures for the C-130 aircraft produced by the US firm. The Tata Lockheed Martin Aerostructures facility will come up near the Hyderabad airport in the later part of 2011.

Tata Industries Ltd has formed a joint venture with Boeing Co. in 2008 to manufacture defence-related aerospace components in India for export to Boeing and its clients worldwide.

Tata Advanced Systems has also teamed up with Sikorsky Aircraft Corp. and United Technologies to manufacture S-92 helicopter cabins in India.

Report: Tata Offset JVs

Svipja Technologies

Defence Offset ' Pinks '

2011-02-08T20:10:00.007+05:30

It may be difficult to ‘swallow’ an argument that Indian Defence Industry, Govt. and Civil, are not ready to absorb offsets accruing from the ongoing defence projects. Similarly, it may not be a very valid take that any co-development/co-production, low-tech or high-tech, for a system would not develop/build the indigenous defense industry capability; technologies can be put to multifarious usage, contracts permitting.

Recent changes in the Offset Policy in DPP 2011 are to be welcomed. Civil aviation, homeland security and training – equipment, academies, etc – could help our Industry manifold. We need to ensure that we regulate and manage the offsets pragmatically.

The Govt. had initially permitted Direct/Quasi-Direct offsets, but review(s) of the Policy has brought in new areas where offsets can also be discharged. We need not unduly burden ourselves with ‘likely scams syndrome’; just play sincerely and transparently. Everything will fall in place.

Offsets for any major pgme like MMRCA/Others would encompass a fair mix of products/services delivered by an Obligor in certain % in the Offset Programs. These could relate to:

Co-development & Co-production, say about 40%.
Direct Offset Pgms including Infrastructure, say about 30%.
General Indian Defence Industry , say about 20%.
General Security, Training and Civil Aviation Pgms, say about 10%.

DAC/MOD, I am sure, would prioritize, and fix % of offsets delivery in various areas in discussions with the Obligors. And monitor implementation of the pgmes effectively.

Advocacy/Any Fear Psychosis should not derail our acquisition pgms.

Svipja Technologies

Army Howitzers

2011-01-25T09:55:00.001+05:30

The Indian Army is looking at inducting several types of howitzers through inter-governmental pacts and global tenders. It has plans of starting trials for the guns this year and enable their induction by the end of next year.

India is already in an advanced stage of negotiations with the US for procuring over 145 M777 Ultra-Light Howitzers for their deployment in mountainous region. Trials for the 155 mm 52 calibre towed artillery guns are also expected to commence soon involving the BAE Systems and Singapore Technologies. As per COAS, the Indian Army is going through a transformation to emerge as a “lethal, agile and networked” force capable of meeting challenges on both the western and eastern fronts.

Arty upgrade plan may cost up to INR 20,000 Crore. As per reports, RFP for Howitzers has already been issued last week.

Full Report:

Army to Induct Howitzers and Other Arty Arsenal

Indian Private Sector in Defence Contracts

2011-01-25T09:36:00.003+05:30

Approvals in-principle given by the MoD for purchase of equipment by the Armed Forces between Mar 2007 and Sep 2010, could generate business worth as much as Rs.87,356 Crore for domestic non-state companies. The DAC has approved the “acceptance of necessity” (AoN) for orders worth Rs.40, 368 Crore in 2010 alone. Private Indian defence equipment makers will be allowed to tender for these projects.

Out of this, equipment worth Rs 30,330 Crore is to be under the “buy (Indian)” Category, Rs 33,814 Crore under the “make” Category, and Rs 8,000 Crore under “buy and make (Indian)” Category. These orders are at various stages of procurement—expression of interest, request for information / request for proposal, technical evaluation, field trials, opening of bids, contract negotiation, financial approval, signing of contract and stage-wise progress for deliveries. In addition, Indian Private Sector companies get orders for subsystems/components etc., from OFs, DRDO and DPSUs.

The total value of defence orders given to private sector companies, between March 2007 and September 2010, is worth Rs 21,193 Crore.

Private Sector A & D Companies have also participated in 51 offset proposals, which are at various stages of processes/implementation.

Click for Report:

Indian Private Sector in Defence Contracts

DRDO to Test Upgraded Ballistic Missile Defence Next Month

2011-01-21T08:08:00.000+05:30

After carrying out major upgrades, India will testfire an advanced version of its indigenous Ballistic Missile Defence(BMD) System in February allowing it to destroy enemy rockets at a much higher altitude. As part of its efforts to protect itself from enemy missiles, India is developing a two-tier BMD which can intercept enemy missiles at exo-atmospheric (outside the Earth’s atmosphere) altitudes of 80 km and endo-atmospheric (inside the Earth’s atmosphere) heights of 30 km.

Under the improved system, the DRDO-developed missile shield will intercept missiles at exo-atmospheric altitudes of 150 km and endo-atmospheric height of 80 km, DRDO sources told PTI here. The system is being upgraded after DRDO felt that a capability to intercept enemy projectiles at higher altitudes would give it more response time in case the first attempt is a miss and the second layer of the system can be put into action.

Sources said with India facing a theatre-based threat and not a global one from an Inter Continental Ballistic Missile (ICBM), such a capability would also give it an advantage in terms of the area covered by the missile defence system.

The system was first test-fired in November 2006 elevating India into the elite club of four countries to have successfully developed an Anti-ballistic missile system, after United States, Russia and Israel. Last year, DRDO conducted the fourth in a row successful test of the endo-atmospheric interceptor missile at an altitude of 15 km. Sources said if the tests prove successful, the DRDO will go ahead with the deployment of the BMD by 2015.

Courtesy: Colonel (Retired) PN Khera, ADNI News Agency.

DPP 2011 , Revised Offsets Policy, Defence Production Policy 2011, and Supplement 2010 to DPM 2009

2011-01-08T09:26:00.003+05:30

Defence Procurement Procedure (DPP 2011) including Revised Offsets Policy, Defence Production Policy, and Supplement to Defence Procurement Manual 2009 has been released by the MOD, India.

The scope of the offset Policy Guidelines has been expanded to include Civil Aerospace, Internal Security and Training within the ambit of eligible products and services. The List of the Eligible Offsets includes most aspects of the Civil Aerospace, including ac, both fixed wing and rotary, air frames, air engines, ac components, avionics, ac design & engg services, ac material and technical publications, flying and technical training institutions. And a wide range of weapons and services for counter-terrorism for ‘internal security’.

All this will provide wider range of offset opportunities to Obligors, and help build the indigenous capability.

Please read the Docus on http://mod.nic.in/dpm/welcome.html

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Pentagon Notifies Apache Helicopters Sale to India

2010-12-31T09:10:00.001+05:30

The Pentagon has notified the US Congress about the possible sale of 22 Apache helicopters and that of AGM-84L Harpoon Block II missiles to the country at a potential cost of USD 1.6 billion. India has yet to select the Boeing-United States Army proposal.

AH-64D Block III Apache helicopters which includes engines, equipment, weapons, training, parts and logistical support will cost about USD 1.4 billion, whereas USD 200 million is the package of 21 AGM-84L HARPOON Block II Missiles and associated equipment, parts and logistical support.

If India selects the Boeing-US Army proposal, the Government of India will request a possible sale of 50 T700-GE-701D engines, 12 AN/APG-78 Fire Control Radars, 12 AN/APR-48A Radar Frequency Interferometers, 812 AGM-114L-3 HELLFIRE LONGBOW missiles, 542 AGM-114R-3 HELLFIRE II missiles, 245 STINGER Block I-92H missiles, and 23 Modernised Target Acquisition Designation Sight/Pilot Night Vision Sensors, rockets, training and dummy missiles.

Besides, the order would also include 30mm ammunition, transponders, simulators, global positioning system/inertial navigation systems, communication equipment, spare and repair parts; tools and test equipment, support equipment, repair and return support, personnel training and training equipment; publications and technical documentation, US Government and contractor engineering and logistics support services; and other related elements of logistics support to be provided in conjunction with a proposed direct commercial sale of 22 AH-64D Block III APACHE Helicopters.

Full Report: Pentagon Notifies Apache Helicopters Sale to India

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'Buy Indian, Make Indian' Defence Procurement/ Production Renewed Thrust

2010-12-28T09:24:00.004+05:30

Indian Defence Industry is poised to witness major policy changes. The first ever Defence Production Policy is likely to be unveiled soon and major changes incorporated in the Defence Procurement Policy.

MoD, aims to have a strong defence industrial base in India. A country like India cannot indefinitely depend on foreign suppliers for majority of our equipments, the Defence Minister averred. At the moment 65-70 percent of the equipments are imported, this trend needs to be reversed.

New mantra is to be 'Buy Indian, Make Indian.' There is plenty of space and opportunity for the public and the private sector to contribute in this effort, coexist and thrive. "A growing nation like India, a nation aspiring for the membership of the Security Council, a place on the high table of the nations still depending heavily on foreign countries for supply of defence equipments is not good for us," he added.

Defence R&D needs to keep pace with the state-of-the-art technologies. Resources will not be the constraint.

Full Report: India’s Defence Minister hints at major policy changes in defence industry

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India – Russia Partnership

2010-12-23T09:41:00.002+05:30

India possibly realises only Russia will be ready to supply it with some "sensitive" military hardware.

The expansive Indo-Russian defence partnership, which has already zoomed past $35 billion since the 1960s, marked a new high on Tuesday with the two nations inking the Preliminary Design Contract (PDC) for joint development of the fifth-generation fighter aircraft (FGFA). The PDC may be only worth $295 million but it will lead to India spending around $35 billion over the next two decades to induct between 250 and 300 of advanced stealth fighters from 2020 onwards in what will be its biggest-ever defence project. The Indian FGFA or "perspective multi-role fighter" will be based on the Russian single-seater FGFA Sukhoi T-50, a prototype of which is already flying, but will be tailored to the IAF requirements. The IAF wants a twin-seater FGFA powered by a new engine "with a higher thrust". India and Russia propose to market the FGFA to "friendly third" countries at a later stage.

India has consciously diversified its defence imports since the 1999 Kargil conflict, turning towards countries like Israel, France, UK and now increasingly the US. Israel, in particular, is snapping at the heels of Russia, notching up sales worth over $10 billion since Kargil.

Read More: India – Russia Partnership

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Current Media Debate on Defence Offsets and Implementation Process

2010-12-21T12:05:00.003+05:30

Our country is new to Defence Offsets. Our stated aim in seeking defence offsets is ‘to develop and build Indian Defence Industry’ with support from our defence suppliers. Media is full of articles/comments on the issue. We need to however articulate a pragmatic take on this.

Obligors by all means would shun any offset projects that create a competitor for them unless they are allowed to become ‘substantial partners' in the outcome. This should be appreciated as a basic premise by our policy makers. It is from this baseline that we need to proceed to seek the defence offsets; direct or indirect.

Also, Obligors may like capability mapping of offset partners themselves in partnership with some high-tech company that may be up-to-date in defence technologies and local dual-use industry knowledge. It is a business case after all. DAC/DOFA/Other stakeholders could intervene at the offset proposal acceptance stage in case the offset project does not build capability of the Indian Defence Industry in line with its aim.

Obligor-Foreign Patent Holder- Foreign TT Partner- DAC/DOFA- Local Partner have to work in very close co-operation and of course transparently for implementing offset project(s) within the Defence Offset Policy.

Any changes to our offset policy should keep these terms of reference in view.

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DRDO in Nano-Technology Research

2010-12-15T07:45:00.001+05:30

The Defence Research and Development Organisation (DRDO) will set up a nano-foundry. This project will partner IITs and other academic institutions in India.

Nano-Technology applications enhance strength and capabilities of missiles. The outcomes are also highly useful in healthcare, medicine, sensors, and energy harvesting. The R&D facilities for nano-technology thus created can be used by industry and various academic institutions for research purposes.

We need to also develop capabilities in nano-technologies in the fields of agriculture and healthcare, and ability to apply the technology in varied field.

Please Click: DRDO in Nano-Technology Research

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Defence Offset Policy Debate

2010-12-14T08:45:00.006+05:30

Indian Defence Offset Policy is continuously evolving, as it should be. With the size of defence offsets due and desire of foreign vendors to partner more with the Private Defence Industry in India for obvious advantages, various defence policy researchers have been propounding liberlising the Policy to include areas that are complementary/supplementary to defence, and thus enhance country’s strategic needs in allied areas. The Govt. is not averse to this idea. MoD however has to discuss the changes pragmatically.

Svipja has always maintained that we must permit defence offsets, direct and indirect, in the Industry to consolidate our high-tech reach. May be we lay down certain % of offsets for direct and indirect; say 60:40. We also support multipliers and ToT for offset credits amongst few others discussed on this Blog earlier.

As per Business Standard , the following amendments to the offsets policy may come-up for discussion in a DAC/MOD Meeting on 15 Dec 2010:

• Liberalising the policy to permit indirect offsets in civil aviation and homeland security. Currently, vendors must discharge their offset obligations entirely within the defence industry.

• Expanding the definition of services that qualify as offsets. Currently, those that qualify for defence offsets are “maintenance, overhaul, upgradation, life extension, engineering, design, testing of defence products, defence related software or quality assurance services”. Many more are being considered, including training.

• Allowing transfer of technology to be eligible for offset credit. So far, the MoD has insisted it will pay upfront for technology, as a part of the main contract. Now, by providing technology as an offset, a vendor could discharge his offset liability.

• Permitting foreign vendors to invest ‘in kind’ in Indian defence industry. Presently, the policy permits ‘direct foreign investment’. Permitting investment in kind would allow vendors to claim as offsets the supply of goods and services, e.g. training simulators.

Full Report : Offset Policy Debate

We need to wait and watch, advocacy notwithstanding.

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Update India SAM Missile Systems

2010-11-30T08:18:00.000+05:30

The SAM Systems-- to detect and destroy hostile aircraft, drones and helicopters at ranges between 25 and 70 km – codenamed Akash Systems, are the indigenous missile systems , and the two other Systems being developed with the help of Israeli Aerospace Industries (IAI) -- the long-range SAM (LR-SAM) and medium-range SAM (MR-SAM).

Akash systems are already on course to be inducted, with the IAF order being worth Rs 6,200 Crore and the Army's Rs 12,402 Crore. The first IAF Akash squadron, with two `flights' of four launchers each, is expected to be operational by next year. Six of the squadrons will subsequently be based in the North-East.

The 70-km-range LR-SAM project -- with multi-function surveillance and threat radars, weapon control systems and missiles -- is slated for completion by May 2012. In the first phase, it will arm the three destroyers being built at Mazagon Docks.

Under the MR-SAM project, which will also have a strike range of 70 km, the delivery of the first firing unit to the IAF is scheduled for March 2013, with the 18th one coming in October 2016.

Read full Report: Update India SAM Missile Systems

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Dassault Systems and Infosys in Pact

2010-11-20T09:05:00.001+05:30

Infosys Technologies, India, signed a pact with French software company Dassault Systems to become its global system integration partner. The deal will help in promoting Dassault solutions in India and the other markets in South Asia, Europe and North America.

Dassault offers imagining and simulating solutions across sectors like aerospace, defense, ship building, engineering, construction, and life sciences.

Dassault centres in India work with other centres (globally). The company has three R&D centres in Pune, Bangalore and Chennai.

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Credit: PTI, New Delhi.

DRDO Delivers Life Support System For Tejas

2010-11-18T10:34:00.001+05:30

The DRDO has developed an Integrated Life Support System (ILSS) for fighter aircraft pilots, potentially adding India to a group of nations owning such technology.

An ILSS for fighter aircraft is a state-of-the-art technology that enables a fighter pilot to venture to the limits of the aircraft capability in terms of flight altitudes and g-forces. The first batch of ILSS will go into Tejas aircraft.

The ILSS can also be customized to the needs of MiG-29, Su-30 and Mirage 2000.

Full Report: DRDO Delivers Life Support System For Tejas

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Obama's India Visit: US-India Defence Industry Co-operation and ‘ A Sticking Point’

2010-11-18T09:35:00.003+05:30

The U.S. may withhold several subsystems until India ratifies certain specific Agreements, which govern current and future transfers of high-tech military systems to India. India is not ready to commit to the security pacts for various reasons.

President Obama has removed certain Indian companies and Govt. organizations from the U.S. Entities list, a clause that has been blamed for holding back India’s development of major missile systems and space programs.

The Indian Space Research Organization (ISRO), Defense Research and Development Organization (DRDO) and Bharat Dynamics Ltd. (the country’s prime production agency for missile systems) as well as many of their respective laboratories are set to benefit from the Entities list action. Laboratories at the DRDO dropped from the list include the Armament Research and Development Establishment, Defense Research and Development Laboratory, Missile Research and Development Complex and the Solid-State Physics Laboratory. ISRO’s subordinate entities include the Liquid Propulsion Systems Center, Solid Propellant Space Booster Plant, Sriharikota Space Center.

India has welcomed amongst others, steps to expand the cooperation in space, civil nuclear, defense and other high-end sectors.

India’s inhibition to sign the security pact was not discussed publicly but is understood to have been a sticking point between the two countries. Still, India is purchasing 10 C-17 heavy-lift military transports, eight P-8I maritime patrol jets, Harpoon anti-ship missiles, Apache attack helicopters and Chinook transport helicopters, all manufactured by Boeing. Anticipating the announcement, Boeing noted prior to Obama’s visit that the Harpoons would not be ensnared by the security pact.

Full Report: Security Pact Remains U.S.-India Hurdle

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Defence Offsets India Until Oct 2010

2010-10-29T08:40:00.003+05:30

Three US companies have hogged at least 42 per cent of recent national military contracts worth nearly Rs 39,000 crore (around $8.78 billion at current exchange rates). The contracts were given out between March 2008 and October 2010.

Boeing, Lockheed Martin and GE Aviation totally won contracts worth around Rs 16,631 crore ($3.75 billion) among 13 overseas companies that won different orders from the Government.

Of the US suppliers, Boeing topped the pack with 21 per cent of the orders given, worth $2.1 billion and likely to go up (around Rs 9,314 crore), followed by Lockheed Martin with 11 per cent of the contracts worth $1 billion (Rs 4,434 crore) and GE Aviation 7 per cent at $650 million (Rs 2,883 crore), says a just-released KPMG-American Chamber of Commerce report on the Indian Defence sector.

The recent deals clinched by the US companies include - the P-8I Poseidon maritime surveillance aircraft from Boeing; C 130J transport planes from Lockheed Martin; GE's engines for the light combat aircraft Tejas; Harpoon anti-ship missiles and ultra light howitzers.

Offsets from the three US companies alone amount to around $1.1 billion, out of a total of $2.6 billion from all the 13 companies listed. These are for the products and services related to the contracts that Indian companies will export, in a move aimed at encouraging collaborations, building up indigenous capabilities and make them part of global Defence supply chains.

Click for the Report: Defence Offsets India Up till Oct 2010

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India's UAV Rustom I Takes to Air

2010-10-20T08:28:00.003+05:30

India has flown the homegrown Rustom-1 unmanned aerial vehicle for the first time.

Developed by the DRDO Aeronautical Development Establishment (ADE), the 30-min. flight took place on Oct 16 from a Taneja Aerospace and Aviation Ltd. airfield at Housr, near Bangalore.

“Notwithstanding erratic weather conditions, the UAV had a perfect textbook flight, meeting all mission parameters,” says Dr. Prahlada, Chief Controller at DRDO. It flew to a planned altitude of 3,000 feet.”

The Rustom-1 has autonomous features such as GPS-controlled waypoint navigation. With a maximum endurance of 15 hr., Rustom-1 can carry payloads up to 75 kg. (165 lb.) and climb up to 25,000 ft.

The UAV’s datalink was designed and developed by DRDO’s Defende Electronics Applications Laboratory, located in Dehradun, while the airframe was made by Coimbatore-based private firm Zephyr. DRDO hopes that Rustom-1 will act as a stepping stone for future programs such as the medium-altitude, long-endurance UAV project Rustom-H and an unmanned combat aerial vehicle project.

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India-Russia Co-operation for 5th Generation Aircraft

2010-10-19T04:52:00.000+05:30

India and Russia will jointly produce 5th Generation Aircraft (FGA) at an estimated investment of about $ 25 billion. The production partners would be Sukhoy from the Russian side and HAL from the Indian side. Within a span of next 10 years, India will get about 250 to 300 FGA from this joint production.

India will also get 45 Medium Transport Aircraft (MTA) within a period of 10 years.

India and Russia will also cooperate in the areas of R&D and technology transfer with the active involvement of the DRDO from the Indian side.

Click for the Report: India-Russia Co-operation for 5th Generation Aircraft

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The Research Center Imarat (RCI)

2010-10-15T05:36:00.001+05:30

The Research Center Imarat (RCI), a sensitive wing of India’s Defense Research and Development Organization (DRDO), is playing a key role in India’s next-generation missile programs.

RCI is currently involved in Air Defense Systems (ADS) and the Agni-V long-range strategic missile. The lab has successfully participated in demonstration of ADS with over five launches so far. The Agni-V, capable of traveling a maximum range of 6,000 kilometers is scheduled for a maiden launch in March 2011. This would further put India among a select group of nations with such advanced deterrent systems.

The Exposition Hall at RCI provides a peek into various missile systems and other platforms that are currently being developed by the lab. The RCI is to become a leader in missile technologies.

Courtesy: USIBC and Its News Agencies.

EoI: Tactical Communications System (TCS) for the Army

2010-10-07T08:33:00.005+05:30

The EoI for the TCS has gone out to at least five private companies, Tata Power (Strategic Electronics Division); HCL Infosystems; Wipro Technologies; Rolta India; and L&T in addition to three public sector undertakings — Bharat Electronics Ltd (BEL); Electronics Corporation of India Ltd (ECIL); and ITI Ltd.

The TCS project was sanctioned by the Defence Acquisition Council in May 2009. It may cost around INR 10,000 Crore.

The EoI places the TCS project in the “Make” category of the Defence Procurement Procedure of 2008 (DPP-2008). Under this, the MoD will fund 80 per cent of the development costs, while the selected company (termed the Development Agency(DA)) will fund the remaining 20 per cent. The “Make” procedure mandates that at least 30 per cent of the system must be indigenously developed. However, one of the companies that have received the EoI confidently claims that it will develop at least 70-80 per cent of the system in India.

The TCS is to provide a robust, secure, mobile network for the Indian Army for tactical communications.

The TCS the second project under the “Make” procedure, after the Future Infantry Combat Vehicle (FICV) development project sanctioned in early 2010.

Click for the Report: EoI for TCS Issued

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Boeing-Mahindra Progress on Aerospace Parts Procurement

2010-09-18T09:42:00.009+05:30

Mahindra & Mahindra Ltd. has signed a deal to buy aircraft parts-making machinery from Boeing Co.'s plant in Melbourne, Australia. M & M feels the deal will boost orders as it will likely help improve the quality of aircraft parts it produces and attract clients that need to fulfil their offset obligations in India.

The Indian Govt. had put an offset clause on a $15 b, 111 aircraft deal signed in 2005 by national carrier Air India with Boeing and European manufacturer Airbus. Boeing also last year signed a $2 bn deal with the Govt. to supply eight long-range maritime recce and anti-submarine warfare P-8I aircraft to the Indian Navy with offset clause.

In 2009, Mahindra had purchased 75.1% stake in two Australian aerospace companies--Gippsland Aeronautics and Aerostaff Australia--for a total of 1.75 b INR($37.9 m) to expand its aircraft and aerospace-component manufacturing capabilities in Australia.

The company plans to establish an aerospace facility in India, possibly in the South Indian State of Karnataka.

Mahindra Systech's component manufacturing units include Mahindra Aerospace Pvt. Ltd, as well as Mahindra Forgings Ltd, Mahindra Composites Ltd and Mahindra Ugine Steel Co Ltd.

Read the full Report: Boeing-Mahindra Deal for Aerospace Components

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Aerospace and Defence SEZ by Karnataka Govt. Near Bangalore International Airport

2010-09-16T05:30:00.002+05:30

Bangalore-based companies such as Bharat Fritz Werner (BFW), Ace Group and Kennametal India Limited (KIL) and Rajkot-based Jyoti Huron are already supplying machining centres for making moulds, prototyping models, forging dyes and precision mechanical parts to the aerospace sector.

Boeing estimates that India will need 1,000 commercial aircraft worth $100 billion over the next 20 years, while PricewaterhouseCoopers estimates that India will spend $25 billion on commercial aircraft and $100 billion on defence until 2014. This will drive growth for domestic components suppliers.

The Karnataka Govt. has acquired 1,000 acres near the Bangalore International Airport in Devanahalli for the aerospace SEZ. About 55 per cent of the land will be allotted to companies for setting up factories.

Units in the SEZ will cater to domestic demand as well as the export market. The park will include aviation MRO (maintenance, repair and overhaul) activities too.

So far, state-owned defence suppliers BEML Limited and HAL, Mahindra and Mahindra, Dynamatic Technologies and Japan’s Amada have been allotted land. These companies are eyeing a substantial portion of the business emerging out of the offset business opportunity.

Read the Report: Aerospace and Defence SEZ by Karnataka Govt Near Bangalore International Airport

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India Ranks Second in Arms Transfer Agreements with US During 2006-2009: A US Report

2010-09-16T05:25:00.000+05:30

India ranked second in arms transfer agreements with US during 2006-2009 period, while Saudi Arabia is the leading developing world arms purchaser from 2002-2009.

From 2006-2009, Saudi Arabia ranked first in arms transfer agreements, with a substantial increase to USD 29.5 billion from USD 15.3 billion in the earlier 2002-2005 period. This total constituted 17.2 per cent (USD 171.5 billion) of all arms transfer agreements with developing nations during these four years.

India ranked second in arms transfer agreements during 2006-2009 with USD 17.1 billion (in current dollars), or about 10 per cent of the value of all developing world arms-transfer agreements.

Congressional Research Service (CRS) told Congressmen that India, while the principal Russian arms customer, has begun to diversify its weapons supplier base. In 2008, India purchased 6 C130J cargo aircraft from the US. This pattern of Indian arms purchases indicates that it is likely that Russian will face strong new competition from other major weapons suppliers for the India arms market.

According to CRS, Asia has traditionally been the second largest developing-world arms market. In 2006-2009, Asia ranked second, accounting for 34 per cent of the total value of all arms transfer agreements with developing nations (USD 59.8 billion).

Read the full Report: India Ranks Second in Arms Transfer Agreements with US During 2006-2009: A US Report

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MOD Floats RFI for 6 Submarines

2010-09-10T18:32:00.002+05:30

MOD has issued a global request for information (RFI) to shipbuilding majors to submit their initial offers by the end of Sep 2010 for the six submarines to be constructed under 'Project-75 India'. This comes after the Defence Acquisition Council (DAC) cleared P-75I Project in June. The gigantic naval project will clearly overtake the Rs 42,000 crore project to procure 126 multi-role fighters for IAF, so far dubbed the "mother of all defence deals".

Foreign collaborator is to specify the air-independent propulsion (AIP) being offered for the project. Conventional diesel-electric submarines have to surface every few days to get oxygen to recharge their batteries. But with AIP systems, they can stay submerged for much longer periods, narrowing the gap with nuclear-powered submarines which can operate underwater for virtually unlimited periods.

Read more: MOD Floats RFI for 6 Submarines

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An Appeal by US/EU Vendors to Soften India Defence Offset Policy

2010-09-09T18:35:00.005+05:30

An appeal has been made by the USIBC; the US AIA (Aerospace Industries Association); the British ADS (Aerospace, Defence and Security); French aerospace body GIFAS; German aerospace body BDLI; and Canadian aerospace body AIAC to the MOD 'to soften India Defence Offset Policy'. Israeli and Russian companies are conspicuously absent from this initiative.

The letter urges the following specific policy reforms:

• Enhancing the current 26% ceiling on foreign direct investment (FDI) in defence. The letter states that accepting the Ministry of Commerce’s proposal to enhance FDI to 74% would “bolster confidence” and enable “robust investment in… technology transfer”.
• It suggests allowing dual-use technologies and high-tech civilian projects to be counted as defence offsets. This, the letter argues, would create a high-tech, civilian industry, that would build dual-use products to feed the defence industry. The current offset policy mandates only direct offsets, i.e. products that are directly used in defence systems.
• The MoD should offer multipliers for offsets in key sectors where the MoD most wants technology transfers. For example, if the MoD wants radar technology, it could specify an offset multiplier of 2. A company that transferred radar technology worth $1 million would get $2 million in offset credits. The current policy treats all offsets equally.
• The creation within the MoD of an empowered and adequately staffed permanent “offset authority”. Currently, “there is still ambiguity in how offset contracts will be approved, validated, discharged and measured.”
• Capping financial penalties in defence cooperation, in order to “not deter competition for defence contracts.” The letter points out that “(u)nlimited financial liability inhibits industrial defence cooperation.”

Demands from MoD by the US/EU Offset Consortium

• Raising FDI limit from 26%.
• Allowing offsets outside defence.
• Use of offset multipliers.
• An empowered offset authority in MoD.
• Capping financial penalties.

Read the full Report: An Appeal by US/EU Vendors to Soften India Defence Offset Policy

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India Signs Deal for 24 x Harpoon Block II Missiles with US

2010-09-03T07:15:00.001+05:30

India has signed an agreement with the US government to purchase 24 Harpoon Block II missiles for its Jaguar strike aircraft, in a bid to ramp up its maritime warfare capability.

In production at Boeing facilities in Saint Charles, Missouri, is the Harpoon Block II, intended to offer an expanded engagement envelope, enhanced resistance to electronic countermeasures and improved targeting. Specifically, the Harpoon was initially designed as an open-ocean weapon. The Block II missile provides the Harpoon with a littoral-water anti-ship capability.

The key improvements of the Harpoon Block II are obtained by incorporating the inertial measurement unit from the Joint Direct Attack Munition program, and the software, computer, Global Positioning System (GPS)/inertial navigation system and GPS antenna/receiver from the SLAM Expanded Response (SLAM-ER), an upgrade to the SLAM.

Although initially tested from U.S. Navy ships, the decision was made to not procure Harpoon Block II for the U.S. Navy fleet. Boeing lists 28 foreign navies as Block II customers.

Read the Report: India Signs Deal for 24 x Harpoon Block II Missiles with US

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Courtesy: Wikipedia

Indian Private Shipyards Role in a New Submarine Project?

2010-09-01T08:02:00.003+05:30

DAC/MOD has decided to exclude Indian Private Shipyards from the construction of six submarines for the Indian Navy under Project 75I. Instead, the first two submarines will be built at a foreign shipyard.

Project 75I initially envisaged all six submarines to be built in India. The MDL was to build three; Hindustan Shipyard Ltd — recently acquired by the MoD from the Ministry of Shipping — would build one; while Indian private sector shipyards, L&T and Pipavav, were to compete to build the remaining two. Now the first two are likely to be built abroad.

This change in earlier decision will require fresh sanction from the CCS typically involving a 12-24-months time.

L&T and Pipavav have invested sufficiently to build world-class shipyards, and have lobbied intensely for a share of the submarine programme.

Senior L&T officials feel that MDL would have its hands full with Scorpene production until at least 2019 and has no capacity to take on another three submarines. MDL has however presented a detailed plan to set-up a second submarine line.

Click to read the full Report: Indian Private Shipyards Role in a New Submarine Project?

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India to Buy Javelin Missiles

2010-08-27T08:36:00.000+05:30

Delay in the manufacture of indigenous NAG missiles has forced India to consider buying thousands of Javelin anti-tank guided missiles from the United States.

The Indian government would go down the route of a U.S. direct foreign military sale when ordering the Javelin, made by Raytheon and Lockheed Martin. The process could frustrate European, in particular Russian, ATGM manufactures because it bypasses the global competitive tender route.

A letter-of-request has been sent to the U.S. government for procurement of the third-generation off-the-shelf Javelin including ToT.

The Javelin has been used by U.S. forces during bilateral battalion-level combat exercises, including the annual Yudh-Abhyas at the Indian army's Babina base, in the state of Uttar Pradesh, last October.

Click to Read: India to Buy Javelin Missiles

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3 b USD Offset Opportunities in the Navy

2010-08-14T08:40:00.002+05:30

Naval projects offer 3 b USD offsets in the mid-term. Defence PSUs and the Private Sector could absorb these offsets.

As per Plans, in addition to the acquisition of six Scorpene class submarines by 2012, the Navy has also received AON for acquiring six more submarines, four destroyers and seven frigates over the next two plan periods. The Navy, as you know, is in the forefront of indigenization. It may be recalled that India is among the 20 nations capable of indigenously designing and construction of warships.

The Navy had concluded 11 offset contracts so far, while 40 proposals were in various stages of finalization. Although many countries were wary of technology transfer of their defence products owing to IP issues, the offset route loosens the ‘grip’ as the manufacturers were willing to share technology while offering offsets.

Pse read the full Report: 3 b Offset Opportunities in the Navy

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’Make’ Project for Future Infantry Combat Vehicles

2010-08-10T20:09:00.002+05:30

Four Indian companies - Tata Motors; the Mahindra Group; L&T; and the MoD-owned Ordnance Factory Board (OFB) --- will compete to design and build qty 2600 new-generation Future Infantry Combat Vehicles (F-ICVs) to replace the existing BMP-IIs. Two of these vendors will be nominated to develop a prototype each and the winning design selected for the F-ICV production.

Cost of developing and manufacturing 2600 FICVs could add up to Rs 50,000 crores.

The MoD will fund 80% of the cost of developing the FICV under the ‘Make’ procedure; the selected contractor will pay just 20%. It has been mandated that the FICV must have an indigenous content of at least 50%. With a development time of 7-8 years, the FICV should be ready by 2018.

Read the full Report: ’Make’ Project for Future Infantry Combat Vehicles

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DRDOs Border Intelligence Systems

2010-08-04T18:18:00.004+05:30

Defence Electronics Research Laboratory (DLRL),and Electronics and Radar Development Establishment's (LRDE), both located in Hyderabad, are very versatile and credible labs of the DRDO.

DLRL has developed a border communication intelligence gathering system that would be of help to the armed forces and paramilitary in intercepting communication of our adversaries. It will be introduced into service by end-2011.

LRDE is working on low level light radars (LLLRs). A set of LLLRs has been tested in mountainous terrain successfully, both for Army and Air Force. LRDE is also working on an Active Electronically Scanned Array (AESA) radar for use in future Light Combat Aircraft (LCA) 'Tejas' for both IAF and Navy, apart from a Maritime Patrol Airborne Radar (MPAR) that could track even sea-skimming missiles.The AESA would be ready by 2013.

Laser System and Technology Centre (LASTEC), New Delhi, has developed laser-based ordnance disposal system (LORDS). The system is capable of destroying rockets, bombs and explosives that have completed their shelf-life without having to get closer to them. LASTEC was also working on other laser-based systems such as direct energy warfare application, low intensity conflict (LIC) applications, battlefield optoelectronic systems and advanced science and technology for future systems.

Click for the Report: DRDOs Border Intelligence Systems

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DRDO Consortium to Design, Develop and Manufacture 155 mm Gun

2010-07-30T18:18:00.003+05:30

The Armament Research & Development Establishment (ARDE), Pune, could become the hub for developing an indigenous 155-mm towed gun, with the DRDO partnering private industry giants such as Bharat Forge and Larsen & Toubro.

Shri A K Antony informed Parliament that the CBI had recommended the blacklisting of four companies that had been involved at various stages of this procurement: Singapore Technologies Kinetics (STK); Germany’s Rheinmetall; Israel Military Industries (IMI); and another Israeli Company, Soltam. Denel, a South African company, had been blacklisted earlier; and the only other gun on offer, the BAE Systems FH-77B-05 howitzer, is a modernised version of the controversial Bofors gun.

The contract, is estimated at Rs 8,000 Crore, which had envisaged buying 400 towed guns off the shelf and building 1,180 in India from transferred technology.

The ARDE is one of DRDO’s star laboratories, having developed over 200 items that are in service with the military today. With just one per cent of DRDO’s total budget and five per cent of the DRDO’s manpower (1,300 persons, including 220 scientists and 250 technical officers), the ARDE has developed 70 per cent of the equipment that the Ordnance Factories have manufactured for the military.

Click to Read the Full Report: DRDO Consortium to Design, Develop and Manufacture 155 mm Gun

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Credit: Business Standard.

700 m Pound Hawk Deal for HAL

2010-07-29T09:04:00.001+05:30

India and the United Kingdom signed a £700 million Advanced Jet Trainer (AJT) Hawk deal on 28 Jul 2010. Cameron, the British PM, oversaw the signing of the agreement between BAE Systems and HAL for India to produce additional 57 of BAE's Hawks.

India had earlier purchased 66 Hawks from BAE that included 24 in fly-away condition, with 42 to be produced by HAL under licence from BAE.

The aircraft will be manufactured under licence at HAL's facilities in Bangalore. BAE Systems will provide specialist engineering services, raw materials and equipment for airframe production, and the support package for the IAF and Indian Navy.

The Hawk is flown in 18 countries including the IAF.

Read the Full Report: 700 m Pound Hawk Deal for HAL

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US Navy Gets the first F/A-18 Super Hornet with HAL Gun Bay Doors

2010-07-28T14:03:00.003+05:30

Boeing has delivered the first F/A-18 Super Hornet Combat Jet to the US Navy featuring a gun bay door manufactured by HAL. The gun bay door contract is the first military contract between Boeing and HAL.

Boeing and HAL are also working together on projects for the P-8I multi-mission maritime aircraft for the Indian Navy, and for the commercial Boeing 777 airplane.

The gun bay door covers the F/A-18's six-barrel 20 mm, externally powered M61A2 Gatling gun system that can fire 4,000-6,000 rounds per minute. Made by General Dynamics, the gun however carries only about 600 rounds.

The gun can be used in a dogfight. Also the aircraft is loaded with long-range precision strike weapons and missiles as the emphasis now is on beyond visual range (BVR) engagement.

HAL has already sent five sets of the gun bay doors to Boeing and 13 more are under manufacture as part of an initial contract. HAL is also hoping for a repeat order.

So far, Boeing has been sourcing gun bay doors from the Czech Republic's AERO Vodochody, which has already supplied more than 300 of these doors.

The gun bay door contract is not tied to any project but is part of a Boeing Initiative to source USD one billion worth of parts and services from India. As part of this, Boeing is also sourcing wire harnesses for the F/A-18 from HAL.

Svipja Technologies
Courtesy: USIBC News Letter.

MMRCA Jets for India

2010-07-20T11:21:00.003+05:30

India may be in a position to sign the MMRCA contract within a year from now.The flight evaluation report on the aircraft under evaluation is likely to be ready by Jul-end. This will be followed by internal discussions/clarifications of the field evaluation report within the MOD, evaluation of offset proposals, opening of commercial bids and the final negotiations.

The IAF is keen to induct the first lot of the MMRCA by 2014. The contenders are F/A-18 ‘Super Hornet’, F-16 ‘Falcon’ , Gripen (Swedish), Rafale (French), MiG-35 (Russian) and Eurofighter Typhoon jets.

India has also signed deals for 230 Sukhoi-30 MKI fighters (over 110 have been inducted) with Russia. Another 42 Sukhois are likely to be ordered shortly. This is in addition to LCA (light combat aircraft ) and FGFA (the fifth-generation fighter aircraft) planned.

Svipja Technologies
Courtesy: The Economic Times

6 Submarines for India

2010-07-13T08:43:00.001+05:30

Stage is being set for six new-generation diesel-electric submarines for the Indian Navy. The deal could be for over Rs 50,000 Crore.

Three of the six submarines will be constructed at Mazagon Docks (MDL) in Mumbai, and one at Hindustan Shipyard Ltd (HSL) in Visakhapatnam, with the help of a foreign collaborator. The other two submarines will either be imported from the foreign vendor directly or constructed at a private shipyard in India. Fresh estimates show that the six submarines will cost almost Rs 8,500 Crore per unit.

Under the programme—Project-75 India (P-75I)—apart from stealth, land-attack capability and the ability to incorporate futuristic technologies, all the submarines will be equipped with air-independent propulsion (AIP) systems to boost their operational capabilities.

If everything goes smoothly, the first submarine under P-75I will be available to the Indian Navy in 6-7 years,ie by 2016-17, instead of 10 years.

Click to read the Report: 6 Submarines for India

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C-17 Airlifter for India

2010-07-13T08:11:00.003+05:30

India and the United States have begun talks here on the onboard equipment for the 10 Boeing C- 17 military transport aircraft, and the associated price structure.

United States Air Force (USAF) C-17 which had come to India for trials last month has met the IAF specs. The aircraft was tested in short and high altitude runways.

DOD/USA has set the maximum price at $5.8 b for the aircraft and standard systems loaded on the aircraft,but the actual price would depend upon what equipment and onboard options the IAF finally needs.

The US government will issue a Letter of Acceptance (LOA) after these discussions are finalized, indicating the equipment, services, and lifecycle support and their costs. There would be a 3.8 percent administrative fee that the US Government now charges on all FMS deals. (This fee varies periodically between 2.5 to 5 percent).

C-17 Globemaster-III, which India is seeking, can carry a maximum payload of 74,797 kilograms for 2,400 nautical miles without refueling and 45,495 kilograms for 4,000 nautical miles without refueling.

Click to read the Report: C-17 Airlifter for India

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Courtesy: USIBC and Its News Agencies

Tata Advanced Systems (TASL) in JV with Lockheed Martin

2010-07-08T08:25:00.000+05:30

As per news report, the Tata group’s Defence and Aerospace arm, Tata Advanced Systems (TASL), has forged a JV with Lockheed Martin Corporation to manufacture defence equipment and aircraft parts in India. TASL is a wholly-owned subsidiary of Tata Sons. The JV will have 26% stake for Lockheed Martin . Indian partner will hold the rest.

The proposal submitted by TASL to the FIPB stipulates that Lockheed Martin Aeroframe Corporation (LMAC), wholly-owned subsidiary of Lockheed Martin , will invest Rs 42.82 Crore in the proposed JV for 26% stake.

Tata Aerostructures Ltd, the JV company in India, will design, develop and manufacture Aerospace and Aerostructure products.

The Indian partner will bring in Rs 121.87 Crore.

There is an export potential of $200 million (Rs 920 Crore) over a period of five years in this JV.

Svipja Technologies

MOD, Armed Forces, DRDO and Defence Systems

2010-06-29T18:50:00.002+05:30

It is expected that MOD, Armed Forces and DRDO should work in ‘total co-ordination’ in order to execute the identified defence projects in time and without cost overruns. The DRDO should inspire desired confidence level in the stakeholders. There appears to be some trust deficit.

Who imports systems and serves the Armed Forces is immaterial on a few major counts. Firstly, it is national money being spent, Secondly, delivery of the systems needs to be timely, Thirdly, the Armed Forces must be content with the systems, and Lastly, the nation should get best value for the money. ‘Scramble’ for imports must stop.

It has been the experience that whenever new systems are needed, the DRDO ‘jumps’ to grab the project on the pretext of ‘can do’ and ‘indigenisation’, cost and time overruns notwithstanding. Invariably systems are delayed, and the Forces begin to ‘crib’ till some via media is found. A bad show for all involved.

It is worth studying projects handled by the DRDO since its raising in relation to time and cost overruns with technology perspective. The DRDO should be encouraged, developed and strengthened but not at the cost of efficiency; it impacts our defence preparedness.

Same is the case in case of Tejas Engines as reported in the Press. Read the Full report: Air Force Says DRDO Stalling Tejas Fighter Engine

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No Rushing with FDI Reforms

2010-06-25T08:49:00.004+05:30

India favours calibrated liberalisation of foreign investment norms in sensitive sectors like retail, defence, banking and insurance on account of domestic sensitivities.

India already has a liberal and transparent FDI regime in place except for a few sensitive sectors where the country was in favour of `calibrarted liberalisation’.

India's initiatives like simplification and consolidation of the FDI policy would go a long way in improving business environment. At present, FDI is not allowed in multi-brand retail in India, but it is permitted in wholesale trade and single-brand retail. Up to 26% FDI is allowed in defence and insurance sectors, while banks can have up to 74% of foreign investment.

The US wanted India to address longstanding impediments such as investment caps, agricultural market access barriers, high tariffs, intellectual property rights and the need for continuing regulatory streamlining and transparency,etc, in recently concluded CEOs Meet in the US.

These insights emerged in an official and industry delegation in the second meeting of the Forum co-chaired by Tata Group Chairman Ratan Tata and Honeywell Inc CEO Dave Cote. The meeting was also attended by finance minister Pranab Mukherjee and deputy chairman of Planning Commission of India Montek Singh Ahluwalia.

The US official delegation included secretary of state Hillary Clinton, treasury secretary Timothy Geithner, commerce secretary Gary Locke, US Trade Representative Ambassador Ron Kirk and director of National Economic Council Larry Summers.

Read the full Report: No Rushing with FDI Reforms

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Credit: Business Standard.

India Tells US to Remove ISRO and DRDO from Blacklist

2010-06-25T08:48:00.001+05:30

India has asked US to remove its two state-run frontline technology establishments ISRO and DRDO from the entities list, in apparent anticipation of Washington and New Delhi opening cooperation in hi-tech systems.

ISRO and DRDO were put on American technology export control blacklist after the 1998Pokhran nuclear blast.

India has also urged American companies to invest in defence sector in the country. On the investments in defence sector, it was felt that 26 per cent FDI in the sector was very high.

Read the full Report: India Tells US to Remove ISRO and DRDO from Blacklist

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Courtesy: Business Standard.

India’s Defence and Aerospace Market: Emerging Trends

2010-06-17T08:47:00.001+05:30

All the Studies/Reports/Surveys indicate that as defence expenditure is dropping in the traditionally big-spending western economies, including the USA, Indian defence spending will grow steadily over the next 20-25 years, as India implements a major defence modernisation. CIIs Report entitled “Prospects for Global Defence Export Industry in Indian Defence Market”, released in Jun 2010 at the Eurosatory 2010 too indicates this.

Linking defence spending to the International Monetary Fund (IMF) prediction that India’s economy will grow in real terms by 7.5 per cent from 2010 to 2014, the Studies indicate that India’s current defence expenditure of $32.03 billion will rise to an estimated $42 billion by 2015. The Capital Expenditure on new weapons / platforms will rise from the current $13.04 billion to $19.2 billion in 2015.

The figures are impressive. India will spend $100 billion on weaponry during the current Five Year Plan (2007-12), which will rise to $120 billion during the next Five Year Plan (2012-17), as per reports in the media.

“Buy Local” and "taxation arrangements" create special advantages for Indian firms. In case of Defence Public Sector Undertakings (DPSUs), tax advantages can be as high as 50 per cent. There are therefore clear opportunities for foreign firms in providing specialist inputs to Indian Defence Industry for developing advanced platforms and systems indigenously.

Read the full Article: India’s Defence and Aerospace Market: Emerging Trends

Svipja Technologies.
Courtesy: Business Standard.

Debate of FDI in the Indian Defence Industry

2010-06-11T18:29:00.010+05:30

India’s business media reports possible changes in foreign direct investment (FDI) limits that range over legally significant figures from nothing to 26% and 49%, and on to 50%, 51%, 74% and 100%. The figures give foreign companies varying degrees of control. All this makes interesting story at home and abroad.

In the past the debates – or, rather, the pushes and pulls of (often suitcase-carrying) vested interests – have been invisible behind the headlines. But that has now partly changed. The Commerce Ministry’s industrial policy department (DIPP) has publicised a debate about whether FDI should be raised in defence production by issuing a discussion document that covers all the issues. Could find the Discussion Paper on http://dipp.nic.in/DiscussionPapers/DiscussionPapers_17May2010.pdf

The government’s defence manufacturing discussion paper has raised the basic question of whether FDI is needed and, if so, how much. This is a good question, and it has rarely been asked on any Indian FDI in the past.

Indian companies need time to establish themselves before FDI is allowed at such high percentages that foreign companies swamp the market and make India in effect a virtual subsidiary of powerful developed economies.

That is the issue now in defence – is it time to open up and how far? Currently the FDI limit is 26%, apart from a very few higher exceptions, and it is generally accepted that this is not enough to attract commitment, top executives and high technology from most foreign defence companies.

Strengthening that argument is the government’s evolving “offset” policy that requires foreign defence suppliers to spend 30%-50% of a contract’s value on defence equipment investment and purchasing in India. This is making it more attractive for the foreign suppliers to set up joint ventures here, and is correspondingly leading to increased foreign pressure on the government for FDI above 51%.

The domestic industry, led by companies such as Larsen & Toubro (L&T), M&M and various Tata group businesses, however wants the limit raised only to 49%so that they maintain control and have a chance to grow, having been restricted till relatively recently from doing more than supply components. This view has been backed by a recent Confederation of Indian Industry-KPMG survey with 57% of respondents saying “yes” to a higher FDI limit and 26% more saying “maybe”.

You could read the full Article on Debate of FDI in the Indian Defence Industry

Svipja Technologies has always advanced the argument on this Blog to limit FDI in Defence to 26% it being a strategic sector with provision of enhancement on 'case-by-case' depending on the quality and depth of technology being offered by a foreign partner, advocacy notwithstanding. I think that is fair and logical. Does not hurt anyone except for some procedural delays.

Svipja Technologies
Courtesy: USIBC and Its News Agencies.
Note: The Article was first written on RidingTheElephant Blog and then transferred to Financial Times.

Indian Aerospace Industry Nets $185 m Worth of Projects

2010-06-08T08:35:00.001+05:30

Aerospace Sector gets projects worth USD 185 m for component makers.

Eight new projects that will entail an investment of Rs 885 Crores were finalised during the two-day Global Investors Meet in Bangalore.

"Bangalore, being the nerve centre of the aerospace sector, gives Karnataka an edge as the preferred destination for ventures in aerospace," said Ashok Nayak, chairman, Hindustan Aeronautics Ltd (HAL). "The state also provides a well-developed IT sector which is vital for aerospace."

The state is home to the only Aerospace SEZ, set up in Belgaum by engineering firm Quest Global. The Govt. is also setting up an Aerospace SEZ at Devanahalli, near the Bangalore International Airport.

Quest, on 03 Jun , signed an MoU with Indo Schottle, a Pune-based engine components maker, to set up a facility at the Belgaum SEZ to manufacture and export engine parts.

Svipja Technologies
Credit: Business Standard.

Boeing Wants India to be Part of Its International Supply Chain

2010-05-27T08:40:00.001+05:30

Boeing plans to bid for defence projects worth up to USD 30 b (Rs 1,43,480 Crore) in India over the next 10 years. Space, Homeland Security and UAVs are some of the big businesses the company is targeting. Vivek Lall, in an interview, to the Financial Express commented on various issues covered in the succeeding paras.

‘Over the last four-five years, we have entered the defence segment. We come into the market with aspirations to be India's preferred partner. The Apache and the Chinook CH-47 are shortly going for summer trials. The US Congress has been informed about the possible sale of 10 C-17 Globemaster strategic air lifters, potentially valued at USD 5.8 b. This strengthens the growing partnership between the two countries.’

‘The competition for the MMRCA deal is very significant for all companies involved. We have completed all of the three trials. I think it is a very strategic acquisition, considering the number of competitors, but the Ministry of Defence has done a great job and done a thorough process. We want to establish a strong India footprint, regardless of the platform sales. This is a very important dimension to our company.’

‘We have a USD 600 m plus (Rs 2,777 Crore) commitment on offsets for the P-81. A USD 4.7 m (Rs 22 Crore) contract with HAL has been signed to provide weapon bay doors for the eight P-81 long-range maritime reconnaissance and anti-submarine warfare aircraft for the Indian Navy. We have an engagement strategy for India and want to make it part of our international supply chain. We want to be partners in India's mission to become self-reliant and a net exporter of defence products. As part of our F/A-18E/F campaign, we have signed 13 MoUs with Indian companies. This conglomerate has signed up with a cross section of 38 Indian companies for offsets. We have been looking at SMEs too.’

‘India's Defence procurement process is very forward-looking. We applaud the policy. The MoD introduced banking offsets. It is a welcome addition as it incentivises the original equipment manufacturers to work with the Indian partner. The buy-and-make clause shows the government's confidence in the industry. We've done USD 40 b (Rs 1, 85140 Crore) worth of offsets in over 30 countries and never defaulted. Fifty per cent of offset is a challenge. We are now looking forward to DPP 2010.’

Boeing’s future Plan calls for ‘An increase in UAV capabilities. We will engage in discussion with the forces here in conjunction with the government. We also have Homeland Security Solutions to offer.’

‘The good thing about the FMS Route, even though sometimes it is hard to understand, is that it brings with it the full support of the US Govt. If we get that, then we can hopefully show the Indian government the commitment of the US government. This is important.’

Svipja Technologies
Credit: USIBC and Its Agencies

US High-Tech to India Stumble on Safeguards

2010-05-26T08:30:00.005+05:30

The Communications Interoperability and Security Memorandum of Agreement (CISMoA); and the Basic Exchange and Cooperation Agreement for Geo-spatial Cooperation (BECA) are the stumbling blocks for high-tech systems transfer from the US to India.

Indian establishment possibly feels that it may compromise security in today’s Information Warfare scenario. These concerns need to be ‘prudently' addressed and negotiated.

Article by Ajai Shukla in the Business Standard on ‘US high-tech arms to India stumble on safeguards’ details various blocks in the high-tech transfers from the US.

Click: ‘US High-Tech to India Stumble on Safeguards’

Svipja Technologies

India’s First Light Combat Helicopter( LCH) Flight-Tested

2010-05-25T08:03:00.003+05:30

India's first indigenous attack helicopter took to the skies on 23 May 2010, Sunday morning, marking the country’s entry into a league of select nations that can design and manufacture the complex rotary wing attack aircraft.

The twin engined LCH has been derived from the Advanced Light Helicopter (ALH). The LCH programme was given clearance by the government in October 2006.

The LCH, which has been developed by Hindustan Aeronautics Limited (HAL). It will now go through a series of tests and evaluations over the next few years before its planned induction into the Army and Air Force by 2014-15.

Pse Click for the full Report: India’s Light Combat Helicopter Flight-Tested

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DRDOs AGNI-II Successful

2010-05-18T18:29:00.003+05:30

Agni II Long range nuclear capable Ballistic AGNI-II Missile has been successfully launched on 17 May 2010 (Monday) from the Wheelers Island in the Bay of Bengal off the coast of Orissa. Indian Navy ships tracked the missile and confirmed the Missile hitting target. It meets the mission objectives fully.

The two stage solid propellant based AGNI-II Missile has 2000 kms range with a pay load capability of one ton. The missile is equipped with a state-of-the-art Navigation System for taking the Missile towards its designated target. Number of Radars and electro-optical tracking systems, located along the coast of Orissa have monitored the path of the Missile and evaluated all the parameters in real-time. Strategic Forces Command carried out the launch under supervision / guidance of the DRDO.

DRDO officials and senior officers of the Strategic Forces Command witnessed the launch.

Svipja Technologies

DRDO Being Revamped

2010-05-15T08:52:00.000+05:30

India will set-up a new Defence Technology Commission to provide a major boost to Defence R & D in the country. The Govt. also decided to go for the second generation of main battle tank 'Arjun' and 'Akash' surface-to-air missile. It is a welcome step!

Aeronautical Development Agency (ADA) will continue to design and development of combat aircraft, and continuation of the Kaveri aero-engine programme.

Management of the DRDO will be de-cetralised with a view to make it a leaner organisation by merging some of its laboratories with other public-funded institutions with similar discipline, interest and administrative system. It will form technology domain-based centres or clusters of laboratories, numbering Seven, each headed by a DG. The DGs will be responsible for time-bound delivery of the programmes.

Present DRDO Director General would be re-designated as 'DRDO Chairman' with Directors General at centres and Chief Controllers of Research and Development (CCsR&D) at the HQ DRDO reporting to the DRDO Chairman, the head of the organisation.

Budget for rejuvenating research should be 5 per cent of DRDO's budget for a period of three years.

The new Commercial Arm of DRDO would be a Private Limited Company with a seed capital of about Rs 2 Crore. It would deal only with spin-off products and technologies meant for civilian use. It will not take up any manufacturing activity, public or private sector industry will do it.

Svipja Technologies

Indian-designed Data Link for P8I of Boeing for the Indian Navy

2010-05-13T07:28:00.004+05:30

BEL has begun supplying communication technology to Boeing to install in P-8I long-range maritime reconnaissance and anti-submarine ac it is building for the Indian Navy.

BEL delivered the Indian-designed Data Link II, a communications system that will enable exchange of tactical data and messages among Indian Navy aircraft, ships and shore establishments. Boeing will install the system on P-8I at its facility in Renton, Wash.

India inked the $2.1 billion deal with Boeing for eight customized P-8A Maritime Multi-Mission Aircraft, designated P-8I, in January 2009. India will get its first P-8I in late of 2012 or early 2013, with delivery of the remaining seven aircraft expected by 2015 -16. India is the first international customer for the P-8 aircraft.

Svipja Technologies
Credit: DefenseNews

Time and Cost Overruns in DRDO Projects

2010-05-08T08:09:00.001+05:30

DRDO will use a consortium approach for design, development and fabrication of critical components, Project Monitoring Reviews and joint funding by the military services to try to overcome delays in Defence Projects/Pgmes, as per the Indian Defence Minister.

Some of the DRDO projects that have missed their original timelines include:

• The LCA Full Scale Engineering Development (FSED) Program – Phase II was approved in 2001. It has overshot its budget by almost 100%. It was to be completed by 2008; the latest probable completion date is 2012.

• The Full Scale Engineering Development Program for the Naval Light Combat Aircraft (LCA-Navy) also overshot its budget and timeline by four years, from 2010 to 2014.

• The Interception, Monitoring, Direction Finding and Analysis System (IMDFAS) – Divyadrishti. Started in 2002, it was to be completed in 2008. The new date for completion is 2010.

• The Integrated Guided Missile Development Program (IGMDP), begun in 1983, was to be completed by 1995. The revised date is 2010.

• The Kaveri Engine for LCA was approved in 1989 with a completion date of 1996. The latest schedule is 2010.

Reasons for delays and cost escalation include “technical/technological complexities; sanctions imposed, increase in scope of work, creation of more infrastructure, test facilities and their maintenance; change/enhancement in user requirements during development; deviations/failures during testing; [and] extended and long-drawn user trials.”

The R & D in any country does take time. This should not unduly alarm Us. We should however project realistic timeframe and funding needs at the time of project /pgme approval. Tendency in the Organisations to get the projects approved ‘at low outlay and least project timeline’ needs to be checked with a firm hand.

Svipja Technologies

Credit: Aviation Week.

National Seminar on Defence Acquisition by the IDSA

2010-05-05T09:49:00.003+05:30

There are many stakeholders in India’s defence industrial base and acquisition, but the Armed Forces remain central to it. The Forces have valid concerns about time-bound delivery of arms and systems to them. Any delay in any supply is counterproductive and thus has to be checked.

As per me, Defence Acquisition in India is plagued with ‘lack of transparency’, ‘deal money or corruption’, and ‘undue advocacy by vendors and their team’, as elsewhere. Cumulative effect of this results in delays. We need to check this.

The existing Acquisition Procedure(s) with sound trial system and ‘dispersed’ indep checks and balances, is considered highly adequate provided we lay down realistic timeframe, and adhere to it. Lapses in failing the timelines must be made accountable, and punishable.

There is a need for an integrated process and time-bound smooth acquisition. This does not mean creating yet another organisation /agency. It could happen from the present ‘desks’; just move integratedly. Seminar Summary can be read at:

http://idsa.in/event/NationalSeminaronDefenceAcquisition2010

We need not justify our ‘failures’ to deliver in-time, but endeavour to handover the right equipment at the right time to the Forces.

Svipja Technologies

Mahindra-BAE Defence JV Gets Operational

2010-05-05T08:53:00.001+05:30

Defence Land Systems, India, a 74:26, JV between Mahindra and BAE Systems was declared operational on 04 May 2010 at its first Board Meeting. Mr Anand Mahindra was elected as Chairman of the JV.

The Company starts functioning with existing products, business and facilities, and the present Team with Brigadier (Retd) Khutub Hai as MD & CEO .

"It is intended that the Company will become a National Centre of Excellence for design, development, manufacture, final assembly, integration and test of artillery systems in support of the Indian Army's Field Artillery Rationalisation Plan and upgrade programme for artillery," a press release said. The company is focused on the manufacture of up-armoured light vehicles, specialist military vehicles, mine protected vehicles, artillery systems and other selected land system weapons, support and upgrades.

Svipja Technologies

India Commissions Its First Indigenous Stealth Warship, INS Shivalik

2010-04-30T20:34:00.001+05:30

India commissioned its first indigenously-built stealth warship, INS Shivalik with sophisticated systems integrated ,the first of the three-ship Project-17 frigates, at Mazagon Docks (MDL), on 29 Apr 2010.

The 143-metre-long warship, with 6,000-tonne displacement, has "versatile control systems with signature management and radar cross-section reduction features." The other countries having the capability to build stealth warships are the US, the UK, Russia, France, China, Japan and Italy.

The Navy currently has a 130-warship which includes an aircraft carrier, twenty landing ships, eight destroyers, twelve frigates and sixteen attack submarines.

Shivalik class warships can deal with multiple threat environment and are fitted with weapon suite comprising both area and point defence systems. It has sensors for air, surface and subsurface surveillance, electronic support and counter equipment and decoys for 'soft kill measures'.

Shivalik marks Indian capability in design and development of indigenous vessels.

Svipja Technologies

MMRCA, India

2010-04-27T06:52:00.000+05:30

IAF is presently conducting flight trials for the MMRCA Jets. The bids are to expire on April 28. The MOD has asked manufacturers to extend offers for an additional year with the option of revising their price, if warranted, as per report.

The Jets need to go through field trials in all the terrain obtaining in the country. It is a normal process to ask for extension of the validity of the bids by a few months if delay in contract signing is envisaged. One year extension should suffice.

Svipja Technologies

Indigenous Anti-Submarine Corvettes for the Navy

2010-04-21T19:40:00.002+05:30

India launched its first anti-submarine warfare corvette built by GRSE, Kolkata, on 19 Apr 2010. It would be commissioned in 2012. Four ships of this class are under construction, other three are expected to be commissioned by 2015.

The corvette is a small, fast-moving ship with 3,100-tonnage. It will be fitted with the latest indigenous sonars. The torpedo tubes, and scutter (torpedo decoys) launchers contribute to its anti-submarine capability. In addition, the ship will also be equipped with vertically launched Point Defence Missile System (PDMS) and Close- In-Weapon-Systems (CIWS) such as AK 30s and Super Rapid Gun Mount (SRGM). The ship is equipped with decoy system, Kavach which counters the threat of various anti-ship missiles.

At present the Indian Navy does not have any anti-submarine corvettes. It uses bigger ships like frigates and destroyers for anti-sub ops.

Svipja Technologies.

IDSA Defence Acquisition Seminar Special, Jan 2010

2010-04-20T12:40:00.001+05:30

'Our defence forces require timely and cost effective acquisition of defence equipment to enable them to meet any challenge to the country's security. The emerging security scenario is very challenging. Nobody can say what will happen in some of our neighbouring areas. India will have to be fully prepared, our armed forces will have to be fully prepared to meet any challenge from any quarter and they must be able to protect every inch of Indian territory' said the Defence Minister in the IDSA Defence Acquisition Seminar in Jan 2010.

Defence equipments are technology intensive involving heavy investments. Moreover, the equipment remains in an inventory for a long time. Acquisition of defence equipment requires expertise in diverse fields from technical to administrative such as military, technology, industry, market research, contract management, project management, administration and policy making. Defence acquisition is, therefore, a time consuming and a cumbersome process

It is therefore essential that we all are conversant with India's Defence Acquisition Process to make it happen expeditiously but correctly.

Pse read the Defence Acquisition proceedings compiled by the IDSA in its Special Issue on the Defence Acquisition: http://idsa.in/jds/4_1_2010

Svipja Technologies

Arty Guns for India

2010-04-20T08:50:00.001+05:30

Trials for procuring 155 mm, 52-calibre towed guns began in summer 2002, when the Ministry of Defence (MoD) began evaluating three guns from BAE Systems, Soltam; and Denel. Five rounds of trials, conducted in 2002; 2003; 2004; and 2006; reached no conclusion. Denel was blacklisted for corruption in September 2005; the other two guns did not meet the army’s standards.

A fresh tender was issued in 2008.

Indian Field Howitzer-2000 (IFH-2000), developed by Singapore Technologies Kinetics, or STK joined-in the tender. In 2009, STK was 'blacklisted' for corruption after the arrest of the Chairman, OFB. STK has now been asked to field its gun for trials.

Guns under trials are to be from BAE (Indian Partner M & M), and STK (Indian Partner Punj Loyd). The Order for 155 mm Gun, 52 Calibre towed gun, is for about INR 8000 Crores.

Pse read the full Report from Business Standard on: Arty Guns

Svipja Technologies

Defence Procurement: A Serious Matter to Give Way to Advocacy

2010-04-15T08:55:00.006+05:30

There is ‘understandable rhetoric’ in the media about Indian Defence Procurement. It is unsettling in a sense. Creates confusion all round. It is to the credit of DAC/MOD that it does not let itself swayed in a hurry – after all defence procurements are not be made in a jiffy. We need to be pragmatics, accountable and true to the ‘nation’, personal gains notwithstanding.

India is one of the largest armed and systems importers in Defense.

The MOD is likely to release a comprehensive Defense Production Policy (Drip), on the lines of the DPP that to strengthen the country’s Defence Industrial Base (DIB). The DPrP and DPP will give a new impetus to indigenization in line with our goal of near- self-reliance.

As per the DPP, The Govt. is willing to fund up to 80% of the development costs of some systems.

Also, the draft Long Term Integrated Perspective Plan (LTIPP) up to 2022 is under making.

Svipja Technologies
http://www.svipja.com/

Consolidated FDI Policy India, effective 01 Apr 2010

2010-04-14T09:02:00.004+05:30

FDI in Defence Industry is permissible up to 26%, under Government route subject to Industrial license under the Industries (Development & Regulation) Act 1951 and the following conditions:

Licence applications will be considered and licences given by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, in consultation with Ministry of Defence.

Cases involving FDI will be considered by the FIPB and licences given by the Department of Industrial Policy & Promotion in consultation with Ministry of Defence.

The applicant should be an Indian company / partnership firm.

Government decision on applications to FIPB for FDI in defence industry sector will be normally communicated within a time frame of 10 weeks from the date of ack.

Consolidated FDI Policy India, 2010

Svipja Technologies

India for more AEW ac

2010-04-10T08:56:00.002+05:30

India has sought RFP from Israel Aerospace Industries(IAI) to supply another three Ilyushin Il-76-based airborne EW ac.

The deal could be worth $1.5 billion. It follows India’s previous order for three IL-76s modified by IAI's Subsidiary, Elta Systems. India is likely to receive its second AEW ac in mid-2010 under the first contract, with the third to follow next year.

The ac is deployed for tactical surveillance, and EW Int missions.

Svipja Technologies
Credit: USIBC & Its News Agencies.

DRDO Launches Aero Programme With Civil Industry

2010-04-09T08:51:00.002+05:30

Gas Turbine Research Establishment (GTRE), HQ Bangalore, a DRDO lab, is the nodal agency to spearhead Rs 100 Crores initiative to fund R&D projects in the area of gas turbines. Under this venture, aero R&D projects for investments of Rs 50 lakhs to Rs 5 Crores would be considered for funding. Rs 78 Crores have already been sanctioned. GRTE would support 40 to 45 such projects.

The initiative is expected to fuel "coherent directed research" in the area of gas turbines, DRDO said.

DRDOs Approach takes into account futuristic national programmes. It would support, encourage, nurture, monitor and exploit the design, research, development and manufacturing capability of academic institutions and R&D establishments, industries and other think tanks to carry out frontline work in bringing out next generation gas turbine engine system.

The programme envisages participation of 100 R&D Centres and 1,000 scientists, engineers and technicians.

High-Tech MSMEs should come forward to join the programme.

Svipja Technologies

Indian Defence Industry Development: INS Chennai Launched

2010-04-03T19:20:00.002+05:30

India's indigenous naval destroyer, INS Chennai , built in Mazagaon Docks , Mumbai, under the code name, Project 15 Alpha, has been launched on 01 Apr 2010 in Mumbai by the India’s Defence Minister.

The destroyer is the third of the Kolkata class warships built at Mazagaon Docks and displaces more than 6,000 tonnes. Its weaponry is entirely indigenous comprising 16 Brahmos missiles and torpedos. The warship is also equipped with the indigenous Humsa sonar and Ellora EW suite, and carries two helicopters on board.

Svipja Technologies

Indian Defence Industry Development

2010-03-31T05:39:00.002+05:30

Air Force to Get Brahmos. The Govt. has cleared Rs 11,600 Crore Agreement for formal induction of the Brahmos missile into the IAF. It has also cleared two more regts of the supersonic land attack system to the Army.

The missile is already in service with the Navy and Army. This is the first time that a surface-to-surface version of the missile will be inducted into the IAF.

Brahmos Aerospace, a joint venture between the DRDO and Russian company. This is to develop and manufacture of advanced versions of the cruise missile that can be launched from aircraft, submarines, ships and land. Brahmos is capable of attaining speeds between 2.5 and 2.8 mach, it has a range of about 290 km .

Indian Light Combat Helicopter(LCH). India has flight-tested a prototype of the LCH successfully.

"The maiden test flight of the LCH on 29 Mar 2010 was successful. Though it was a short haul lasting about 20 minutes, the performance was good," said the CMD, HAL.

The 5.5-tonne attack helicopter copter is an Air Force derivative of HAL's Advanced Light Helicopter (ALH), known as Dhruv. The LCH can operate at altitudes up to 6,000 m. It has Shakti engine, developed by HAL in partnership with Turbomeca, France.

HAL plans to supply about 150-175 units of the LCH to the Indian Air Force (IAF) and Indian Army which already operates the military version of Dhruv for various functions.

The LCH will be equipped with advanced weapons systems , helmet-mounted targeting system, EW Systems. It will incorporate a number of stealth features and crash-worthy landing gear for better survivability. It will have a narrow fuselage, with two crew stations.

Svipja Technologies

100% FDI in Defence Sector

2010-03-25T19:46:00.002+05:30

It could be a 'wishful thinking' to reach 49% figure and a 'red herring' of a special variety etched differently. MOD remains firm on 26% FDI generally enhanced on case-to-case basis.

Sukhwindar
Svipja Technologies

India to Get Second AWACS Today

2010-03-25T07:51:00.001+05:30

India will receive another Israeli-made Phalcon Airborne Early Warning and Control System (AWACS) today, giving it the second 'eye in the sky' for enhanced surveillance.

The second AWACS will arrive in Jamnagar in Gujarat and will be based in Agra.

With the arrival of the second AWACS, officials said the IAF can keep an eye on both the Eastern and Western Fronts.After the induction of the third system, India would be able to virtually cover the whole nation at one go.

The system, primarily used for detection of incoming hostile cruise missiles and aircraft from hundreds of kms away, can also direct air defence fighters during combat operations against enemy jets. It also helps detect troop build up across the borders.

Svipja Technologies
Credit: PTI.

Indigenous Effort in A & D

2010-03-19T06:27:00.001+05:30

India's Public and Private Sector would have a much bigger role to play in the production of defence equipment in the near future if the country is to achieve near-self-reliance, Defence Minister A.K. Antony said on 17 March after commissioning the ICGS ‘Vishwast' at the Goa Shipyard Limited. Our desire is to strive for more self-reliance in this critical area.

“We should reduce reliance on other countries and make more space for Indian industries in both the Private and Public Sectors,” he said.

The bottom line is, while underlining the growing importance of the Private Sector in the area of defence equipment production, it would not mean the weakening of the Public Sector. Private Sector production in the A & D is to be add-on. Defence equipment supply to other friendly countries should also be on our agenda.

Svipja Technologies
Credit: The Hindu.

Transparency and ‘Value Receipt’ in Offset Projects

2010-03-17T13:19:00.002+05:30

Offsets are to flow in India in the next 5-10 years. This could give rise to ‘scandals’ if not handled prudently. It is important that offsets drive value to the Buyer in a transparent and accountable manner without compromising professional integrity in the Offset System which includes all the ‘players’ both in India and abroad.

Offset projects should be screened with the same diligence as the main contract. This would need an ‘organisation’ that should be capable of conducting ‘due diligence’ on a number of offset projects, large number in most cases, with each project evaluated and valuated with ‘buyer-country-fit’ to get real value of the offsets.

All ‘leakages’ need to be plugged while evaluation is under way.

DOFA-MOD and DAC have to ‘mediate’ effectively. It is no secret that most of the offset agencies quite often are not very experienced to handle the offset projects. If required, professional help from ‘neutral experts’ can be taken. Defence Industry Units, both at home and abroad, are quite burdened with their routine schedules; offsets are extra work, need extra professional staff.

Svipja Technologies

‘Relax Hi-Tech Export Control’, India to US

2010-03-17T08:48:00.001+05:30

In the 7th High Technology Cooperation Group held in Mar 2010, India again asked the US to liberalise its export control regulations which restrict ToT to India. India feels that there could be no better partner than India to galvanise its High-Tech.

"We see this as yet another area where Indian and US interest converge and, as a reliable and strategic partner, we look forward to seeing enhancement of trade in such goods and technologies between our two countries and removal of remaining Indian organisations from the Entity List. It is anomalous that a body like ISRO, which is developing several collaborations with NASA, should continue to be on this list," Nirupma Rao, Indian Foreign Secy, said in the Group.

With the US Government's recent decision to undertake a thorough export control review to increase High-Tech exports, Ms Nirupma Rao said, "We noted the announcement of a National Export Initiative - to reform the Export Control System for American strategic, High-Tech Industries, so that their competitiveness is enhanced without compromising the country’s national security”.

India needs a close co-operation with the US in High-Tech Strategic Areas.

Svipja Technologies

Indian Defence Industry Development

2010-03-09T09:50:00.002+05:30

LCA. India is likely to induct the LCA into the Air Force by March 2011, as per the Indian Defence Minister A. K. Antony. LCA is an advanced technology, supersonic, multi-role, air superiority fighter, single-seat, single-engine, lightweight, all-weather ac designed for air-to-air, air-to-ground and air-to-sea combat roles. The IAF has already inducted 20 LCAs at the Operational Clearance Stage. They need more than 200 LCA-type ac.

Nag (Cobra) Missile/ATGM. It is a third-generation (Gen-3) - fire-and-forget- missile. Its optical guidance system is virtually jam-proof. It will be inducted into the Indian Army shortly. Has a range of 500 m to 3000-4000 km. Can be fired at night. Developed by the DRDO under Integrated Guided Missile Development Programme (IGMDP) which was initiated in 1983. The IGMDP has the Agni and Prithvi ballistic missiles; the Akash and Trishul anti-aircraft missiles; and the Nag ATGM to its credit.

Sukhwindar

Indian Defence Industry Development

2010-03-06T07:21:00.007+05:30

Issues are falling in place after the recent Def Expo 2010. The Govt./MOD has made its stand clear on certain matters. Some of the important developments are listed in the succeeding paras.

FDI in Defence. As articulated in this Blog from the very beginning, the Govt. may allow higher FDI than 26% on case-to-case basis, but the 26% limit remains.

Basic Trainer Planes. India is to procure 75 Basic Trainer Planes. As per Reports, RFPs have been floated to EADS PZL (PZL-130-TC-11 Orik), Raytheon (T-6 Texan), Grob Aircraft Company (G-120TP) , Embraer’s Tucano, Pilatus (PC-7 or PC-/9), Finmeccanica (M-311), and Korea Aerospace Industries (KT-1). Later, 106 ac will be built by Hindustan Aeronautics Limited (HAL)”.

Russia-India Co-operation. Are likely to sign 4 b USD defence contracts. These are to be three contracts incl retrofitting the Admiral Gorshkov aircraft carrier, possibly during Russian Prime Minister Vladimir Putin's visit to India.

NBC Simulator by Navy. The Navy is setting up a NBC defence training facility for its personnel. Request for Information (RFI) has been issued.

Brigadier(Retired) Sukhwindar Singh
http://www.indiandefenceindustry.com/
(An e-Hub for India Defence & Aerospace Ecosystem)
Credit: USIBC and Its News Agencies.

TCS to BEL?

2010-03-04T07:47:00.003+05:30

There is a report in the Business Standard today captioned 'MOD Sidelines Pvt Sector in Crucial Defence Project'. There is a logic in engaging DPSUs, or OFB for sensitive projects though the defence sector participation is open to the Private Sector. Reasons are not difficult to understand. The MOD on case-to-case basis could decide the project clearance. It is therefore not very difficult to appreciate why should BEL be in the lead for getting the TCS project.

BEL can be the main integrator with technology taken from the DRDO and Others incl from abroad. Also MSMEs get their share as vendors of components and subsystems. BEL as a DPSU is best placed to evaluate security needs of our main stay comn system like TCS, and monitor in various stages of its integration.

In fact in EW-intensive battle environments, TCS procurement ‘must’ be categorised as, “Make — Strategic, Complex and Security Sensitive Systems”, and funded accordingly.

If the decision comes through the way it is being reported in the Press, it would be highly pragmatic – no one should be very ‘doubtful’ of the DPSUs and the DRDO in certain abilities, or technologies.

Defence Projects, as I have said elsewhere on this Blog, are 'not a purely business decision’.

Sukhwindar