Indian defence industry exports watch

[HariPrasad-1]

Good to start but we need to come to a level where we are able to manufacture all that we need.

Not all that we need but at a level where we can at least export as much as we import.

 

[Indx TechStyle]

Mindset of suspicion in Defence Ministry needs to be removed: Manohar Parrikar

Parrikar pointed out that once the Request for Proposal (RFP) is issued for defence procurement changes in it are not allowed because of the suspicion of bribe or foul play.

BENGALURU: Admitting that some past scams have led to a mindset of suspicion in his ministry, Defence Minister Manohar Parrikar today said there is a need to get rid of this approach as unnecessary tightening of procedures is hurting the industry and country at large.

"Last one-and-half year we tried to analyse...some times it is quite disturbing that because there has been some scams, we have been tightening the screws of the procedures to a level that the basic aspect of procurementprocedure or acquisition itself has been forgotten," he said.

He pointed out that once the Request for Proposal (RFP) is issued for defence procurement changes in it are not allowed because of the suspicion of bribe or foul play.

"The assumption that doing something correct will compromise the transparency is not correct," Parrikar said.

"I have been thinking about how to overcome this situation by changing the procedure, while convincing everyone in the defence that still it can be very transparent," he said.

"You can't make things foolproof right on day one, you tend to make mistakes," Parrikar added.

Parrikar was speaking at the 7th Strategic Electronics Summit 2016 organised by Electronic Industries body ELCINA here.

Noting that today modifications are not possible in RFP and there are instances they have been recalled because of this, the Minister said "this concept or thinking of suspecting everyone needs to be removed".

He also said this kind of mindset has probably damaged Indian defense and the country's strategic industry very much and added that in the past two years efforts were being made to change it.

"One single most achievement if someone asks me, I can quote in which I have made reasonable success is changing the mindset of people in defence, where now they have started understanding," he said.

READ MORE:
request for proposal|procurement|Manohar Parrikar|ELCINA

 

[Indx TechStyle]

Defence offsets to touch $15bn in a decade: Parrikar

Defence Minister Manohar Parrikar at the seventh annual Strategic Electronics Summit organised by Electronics Industries Association of India in Bengaluru on Thursday.

Defence procurements have started flowing in along with their offsets. The offset benefits for the country look set to reach $12-15 billion over the next 10 years, Defence Minister Manohar Parrikar said here on Thursday.

With purchases coming through, their offsets or plough-backs to domestic industry have normalised. In the last two years, 100 per cent offset obligations were achieved compared to around 60 per cent during the earlier five years.

“The quantum of offsets will increase in the coming years because deals are in the offing.” The purchase of 36 Rafale medium multi-role fighter aircraft that is currently going through cost negotiations will result in offsets that will be 50 per cent of the value of the deal.

“There are still many things that can be done with offsets if you apply them well,” Mr. Parrrikar said, while addressing the seventh annual Strategic Electronics Summit organised by Electronics Industries Association of India (ELCINA).

Starting with the Defence Procurement Policy 2016, many changes are taking place in Defence policies where industry role was important. The government was carefully and practically viewing the policy of banning and penalising certain vendors. The logic was to ensure that projects do not get stalled for many years, he said.

The Minister stressed that Defence public sector units such as Hindustan Aeronautics Ltd., Bharat Electronics Ltd. and Bharat Dynamics Ltd., which manufacture critical products for the Forces, should be lead integrators and make way for industry as supplier of components and systems.

The contribution of small and medium industries to Defence PSUs increased four per cent last year and stood at nine per cent of the total procurement. The target is 15 per cent, he added.

Ajay Kumar, Additional Secretary, Department of Electronics and Information Technology, said Defence policies had triggered a huge surge in electronics hat go into major projects for the Armed Forces.

“After many years, last week, we received the 200th proposal for investment in electronics,” he said.

 

[Indx TechStyle]

Parrikar tells defence units to become lead integrator

Pitching for more innovation and indigenisation, Defence Minister Manohar Parrikar on Thursday advised the state-run defence units to become a lead integrator than trying to manufacture everything.

"State-run enterprises should become lead integrators than manufacturing. They should outsource components, subsystems, parts and assembly lines to the private sector," he said at a strategic electronics conference here.

Calling upon the private sector to innovate design and develop products to make in India and for India and global market, Parrikar said the indigenous Light Combat Aircraft (LCA) was a huge opportunity for them to make its components and subsystems as manufacturer HAL has to rollout 8-16 fighters per annum for induction into the Indian Air Force (IAF).

"In addition to LCA, HAL has to make 70-100 basic trainer aircraft (HTT 40) by 2018 for which the industry has to participate in a big way to ramp up production," he told about 300 delegates participating in the two-day summit, organised by Elcina (Electronic Industries Association of India).

With the budget for procurement from small and medium enterprises (SMEs) by the defence units going up to Rs 52,000 crore this fiscal from Rs 42,000 crore last fiscal, the minister said opportunities for the private sector were plenty as the target for total procurement had gone up to 15 per cent from nine percent annually.

"Similarly, the offset clause for defence purchases from foreign suppliers offers $12-15-billion orders for the private sector, especially the SME in the next 10 years. Rafale (French multi-rule medium combat fighter) alone offers 50 percent offsets for the private industry," he noted.

To develop and indigenise several components and subsystems being imported by the defence units, the defence research and development labs across the country have been thrown open to the private sector for innovation and design, he said.

"Our Make project and Make in India programmes offer huge opportunity to the private industry for reducing import of defence equipment and scaling their production for exporting to the global market," Parrikar pointed out.

Affirming the government's commitment to promote the defence industry and help it to develop design and manufacturing capabilities through aMake in India' campaign, the minister told the stakeholders to apprise him of their needs and share their pain points and bottlenecks.

"The government will support your initiatives to grow and mushroom," Parrkar assured.

As a industry representative body, Elcina had been holding the strategic electronics summit every year since 2010 to offer a platform for the stakeholders to explore opportunities to work together with the defence establishment as strategic electronics is a key area to defence production and offset policies.

--IANS
fb/vd

 

[Indx TechStyle]

India looks to West Asia to launch drive for arms exports

The government is seeking to rapidly expand commercial ties with countries such as Saudi Arabia, the UAE, Oman and Qatar — some of which are close allies of Pakistan —in the hope of putting more pressure on its arch rival. (Reuters)​

LOL, pathetic on those morons who sees pakis as rivals.

India is targeting West Asian countries to launch a drive for arms exports with the Indo-Russian BrahMos cruise missile and other products including ammunition for small arms being the main products to be traded. The government is seeking to rapidly expand commercial ties with countries such as Saudi Arabia, the UAE, Oman and Qatar — some of which are close allies of Pakistan —in the hope of putting more pressure on its arch rival.

India remains a limited defence exporter with its only significant market in West Asia being Oman and even there its sale largely consists of small arms. However, with the oil price fall hitting the region’s economy, it has started looking into setting up own defence industries for self-reliance and exports.

[realted-post]

Much of the defence manufacturing base of West Asia remains in the development stage and is relegated to Tier 2 and Tier 3 suppliers. “What ‘manufacturing’ occurs is largely in the area of munitions and small arms, with some licence-production (Egypt primarily) performed. The UAE is growing in the area of niche naval shipbuilding and unmanned platforms and both the UAE and Jordan have worked to develop and design armoured patrol vehicles,” Daniel Darling, international military markets analyst at US-based think tank Forecast International told FE.

According to Darling, “It should also be noted that Saudi Arabian declarations of intent to build up a stronger defence manufacturing base are not necessarily new – they have been voiced before, most recently in January 2011 when former deputy defence minister Prince Khaled bin Sultan declared the country’s intent to domestically-produce 70% of all equipment utilised by the Saudi armed forces.”

“India is aiming to bolster trade and defence ties with the UAE and other states in the region. Besides, with the second edition of its 10-day Desert Eagle-II combat exercise with the UAE Air Force, New Delhi is also seeking to maintain, service, upgrade and weaponise the UAE’s 12 BAE Systems Hawk MK102 advanced jet trainers (AJT),” said Rahul Bedi, Jane’s Defense Weekly,

To give a boost to the defence ties between the two countries, India and Saudi Arabia have a Joint Committee on Defense Cooperation to evolve plans for cooperation in numerous areas of defence cooperation, including high-level reciprocal visits at the political, official and the three armed forces levels, ship visits and conducting passage exercises during such port calls. Among the possibilities thought of at the talks are signing a memorandum of understanding on cooperation in hydrography, increased participation of both sides in training programmes, and examine the possibility of cooperation in defence industries.

While Saudi Arabia has voiced declarations of intent to build up its own defence manufacturing base, it lacks technical expertise and homegrown skilled workers. Thus, even with a robust, prolonged effort, it will be decade(s) before Saudi Arabia is more than a limited-supply, boutique defence manufacturer, say experts.

“Despite its large defence budget, Saudi Arabia has a limited internal market that would not prove sufficient for the efforts put into attempting to expand its own defence industrial base beyond component and spareparts manufacture. It would have to become the preferred supplier for fellow Gulf Cooperation Council (GCC) countries, Arab partners and defence-buying countries without any local production of their own. The GCC nations already prefer Western (or Russian or now even Chinese) vendors and their modern hardware and familiarity with after-sales support,” explains Darling.

From an Indian perspective, the question is whether it is worth for Indian defence companies to tie-up with nascent Arabian partners or Tier-2/3 firms in the UAE or Jordan (such as Jordan’s King Abdullah Design and Development Bureau).

 

[Indx TechStyle]

Defence manufacturing: Another panel to finalise strategic partner model
Since the BJP government came to power, the principal secretary to the Prime Minister has been holding periodic review meetings with the industry and defence ministry officials to give a push to defence manufacturing under Make in India.
WRITTEN BY SUSHANT SINGH | NEW DELHI |Published On:July 8, 2016 2:46 Am

Amid growing concerns among private defence manufacturers regarding the number of government contracts, defence ministry has formed an internal committee to finalise the strategic partnership model. The committee, headed by director general (acquisition) in the defence ministry, has been asked to submit its report by July 31. The first meeting of the committee is scheduled for Friday.

“We had raised this issue with the principal secretary to the Prime Minister last month during our meeting. Virtually no orders have been given by the defence ministry to the private sector so far. The ministry seems to be waiting for the strategic partnership model to be finalised before giving orders,” CEO of a top private defence manufacturing firm told The Indian Express. Since the BJP government came to power, the principal secretary to the Prime Minister has been holding periodic review meetings with the industry and defence ministry officials to give a push to defence manufacturing under Make in India.

Related

• Strategic partnership model: Parrikar to hold discussions with industry representatives today
• Defence ministry makes private players head of sub-groups to choose strategic partners
• OROP payments made to 13 lakh ex-servicemen, rest to get it by Diwali: Parrikar

The strategic partnership model, under which the government is to select a private Indian defence firm to exclusively make a military platform for a specified period of time, was proposed in July last year by the Dhirendra Singh Committee. The defence ministry then formed an expert committee headed by former DRDO chief, VK Aatre, to formulate the criteria for selection of strategic partners. Based on its report, defence minister Manohar Parrikar formed five sub-groups headed by top officials of private firms, to comment on the Aatre Committee report. As reported by The Indian Express on May 26, these five sub-groups made their presentations to the defence minister. Two people involved with the presentations said that many recommendations of these sub-groups were conflicting. Two of the sub-groups, they said, could not even agree upon a set of recommendations.

“The new internal committee has been made to study these presentations, reconcile the differences and come with a final proposal,” said a government source. Besides DG (acquisition), the committee has the secretary (defence finance), joint secretary (industrial cooperation), a representative from the Defence Research and Development Organisation and senior officials of the three defence services.

But private Indian defence manufacturers are worried about the delays already caused in the process. “By chasing the concept of strategic partnership, the ministry is causing further delays in the existing programmes such as the Naval Utility Hellicopters, P-75(I) submarines, recce and surveillance helicopters and combat aircraft,” said an executive of a private defence firm.

Experts feel that there are fundamental issues with the strategic partnership model which are difficult to be resolved at this stage. Amit Cowshish, a former financial advisor (acquisition) in the ministry and says that “there is a lack of clarity on what the strategic partnership means. The ideas that are being bandied around, if I may say for the want of a better word, are nonsensical. They are talking about awarding the contract to a private player on ‘cost-plus basis’. The ministry has no expertise to do this, and we will get objections from other competitors and likely objections from the CAG.”

The ministry, government sources said, is keen on the strategic partnership model. Cowshish, however, argued that “the defence ministry has to be practical about it. The procurement cases must move forward without waiting for this model. We first need to create capability in the ministry before implementing the model. That should be our focus now.”

 

[Indx TechStyle]

'Nashik to be Rs 50,000 cr defence manufacturing hub in 5 years'

 

[Indx TechStyle]

What Are The Challenges To India’s Defence Modernisation

 

[Indx TechStyle]

Airbus Helicopters signs contract with Mahindra to make parts of Panther helicopters

The contract positions Mahindra Aerostructures as the first Indian company to receive a direct manufacturing contract from Airbus Helicopters as a Tier 1 supplier.

MUMBAI: Airbus Helicopters has awarded a contract to Mahindra Aerostructures to make airframe parts for the AS565 MBe Panther helicopter, the companies said in a joint press statement Tuesday.

These parts will be produced at the Mahindra facility in Bengaluru. They will be shipped directly to the Airbus Helicopter production line in Marignane, France where they will be integrated with the rest of the airframe assembly and will form a critical part of the Panthers sold worldwide.

The contract positions Mahindra Aerostructures as the first Indian company to receive a direct manufacturing contract from Airbus Helicopters as a Tier 1 supplier.

"We are playing an active role in the development of a helicopter-focused Indian industrial eco-system, and are embedding Indian suppliers into our global supply chain," said Fabrice Cagnat, Director - Make in India, Airbus Helicopters.

"The contract will allow us to qualify Mahindra Aerostructures as a Tier 1 supplier, establish a manufacturing relationship with them on the Panther, and also lay the ground work for a rapid acceleration in terms of industrializing production in India, in case we are selected for the Naval Utility Helicopter programme," he added.

Airbus Helicopters and Mahindra Defence are in the process of forming a joint venture to target India's military helicopter programmes such as the Naval Utility Helicopter, the Naval Multi-Role Helicopter and the Reconnaissance and Surveillance Helicopter. The AS565 MBe Panther is competing for the Naval Utility Helicopter programme. In case the Indian Government selects the Panther, Airbus Helicopters will establish India as a global hub for Panther production in partnership with Mahindra Defence.

Airbus Helicopters' Panther is an all-weather, multi-role light rotorcraft, designed for operation from ship decks, offshore locations and land-based sites. It is made for a multitude of naval warfare and coast guard missions such as maritime surveillance, search and rescue, casualty evacuation, EEZ Surveillance & control counter-terrorism and Anti Surface / Anti-submarine warfare. Some 250 Panther are operated in more than 20 countries by military customers, including 100 in service with the US Coast Guard. Recently, Panther has won contracts in Indonesia and Mexico.

READ MORE:
Panther Helicopter|Mahindra Aerostructures|Fabrice Cagnat|Airbus Helicopters

 

[charlie]

Ashok Leyland May Close Deal Soon With Malawi for up to 500 Vehicles

Gianluigi Guercia/AFP via Getty Images

A Malawi Defence Force member stands armed by a road following riots in Ndirande township in May 2014 in Blantyre, Malawi.

http://www.military-today.com/trucks/ashok_leyland_stallion.htm

Stallion was also sold to china under the name Panhard TC54 by a french company for towing 155mm artillery

 

[Indx TechStyle]

India Prepares To Kick-Start Delayed Tactical Comms Project

Tauseef Mustafa/AFP via Getty Images
The Indian Army is seeking prototypes for a net Tactical Communication System.

NEW DELHI — India's ruling National Democratic Alliance government will award the first-ever "Make in India" category defense project for a tactical communication system (TCS) for the Army early next year, according to a senior Ministry of Defence (MoD) official, who spoke on condition of anonymity.

Under the program, two domestic development agency (DA) consortiums will be awarded contracts to build one TCS prototype each at a cost of $150 million in 18 months. The government will provide 80 percent of the funding for the prototype developments.

India has shortlisted state-owned Bharat Electronics Limited (BEL), and private-sector firm Larsen & Toubro is set to team with Tata Power SED and HCL Technologies to build a TCS prototype.

Once the two prototypes are handed over to the Indian Army, they will undergo technical evaluation, be tested on the ground and then shortlisted for production, said a senior Army official who spoke on condition of anonymity.

The service plans to induct seven TCS systems for plains and desert areas at a cost of $4 billion in the next 10 years.

Each TCS prototype will include a transmission system; a field wireless system based on 4G Long Term Evaluation technology; routing and switching systems; multiple mobile-platform engineering systems; a network management system; and a security subsystem.

"The DAs will have to tie up with overseas defense companies to build Indian Army-specific 100 Mbps [megabits per second] transmission systems, in addition to other critical systems, and [the] rest of [the] systems they can build on their own," the senior Army official said.

The two DAs must be able to upgrade the fast-changing military communication technologies for the TCS, he added.

The Center for Artificial Intelligence and Robotics — part of the state-owned Defence Research and Development Organisation — is developing a homemade security solution.

However, private-sector DAs have asked the MoD not to grant special favors to state-owned BEL in developing a TCS prototype.

"MoD has waived off the import duty in the case of BEL, but we have been asked to pay import duty on the products that we import from overseas, and this is simply unfair," said a private sector DA executive, who spoke on condition of anonymity.

Additionally, the MoD wants to retain the intellectual property rights of the systems, but the private-sector DA is demanding that it should be vested.

An Army official noted that TCS will be a dedicated strategic project, and the service will eventually sanitize the technologies built into the prototype and the final system.

But there is confusion among the DAs regarding how the Army will sanitize each of the technologies, either homegrown or imported, that will be incorporated in the TCS prototypes.

"We fear that sanitization by [the] Army will lead to direct interference in the developed TCS prototype," the private-sector DA executive said.

DAs will also have to make undertakings from Overseas Equipment Manufacturers for unrestricted use of the imported technologies.

Conceived in 2000, the TCS program was delayed by 15 years due to a lack of clarity on the project's procedures.

TCS will replace the Army's obsolete radio communication network, the Plan AREN system.

Once a plain- and desert-friendly TCS is inducted, the Army will place an additional order of seven mountain-friendly TCS systems.

 

[Indx TechStyle]

A comprehensive overview of defence policy

A Brahmos missile on display.

India’s first defence joint venture with Russia, the Brahmos missile, was described by former President Dr A.P.J. Abdul Kalam as “a fine example of courage, showing excellent leadership through system design, system integration and system management… has contributed in national development by providing opportunities in domestic industries: small, medium and large... This successful model must be replicated both in defence and civil.”

On June 30, 2016, India successfully test-fired thrice a medium-range surface-to-air missile from the Integrated Test Range off the Orissa coast. Jointly developed by DRDO and IAI of Israel for the Indian Air Force, the missile guided by a radar system and on-board avionics successfully hit a pilotless target aircraft. Many Indian industries like BEL, L&T, BDL, Tata group of companies, besides other private industries, have contributed to the development of a number of sub-systems that were used in this flight test. On the same day, India’s indigenous light combat aircraft Tejas was inducted into the IAF.

In March 2016, India successfully test-fired an indigenously developed supersonic interceptor missile capable of destroying any incoming ballistic missile. A lot more is happening on the defence industry front.

Formulated as late as 2005 with the aim of developing the domestic defence industry, the defence offset policy was incorporated in the Defence Procurement Procedure (DPP), 2005. The policy introduced a 30 per cent offset in contracts valued above Rs 3 billion under “buy” and “buy and make” categories.

However, Indian and foreign defence manufacturers lament that the policy lacks clarity in many aspects and that the bureaucratic process related to the policy and DPP was a frustrating quagmire. A paper by the Institute for Defence Studies and Analyses stated that the policy suffered from the absence of any designated agency in the ministry of defence (MoD) to guide, oversee, execute and monitor its implementation. Confusion reigned both in the South Block and in the minds of vendors on how to implement the offset obligations. The absence of any offset benefit to the Indian defence industry led to the MoD making significant changes in DPP in 2006, and again in 2008, which, despite repeated assurances by the then defence minister, A.K. Antony, failed to produce the desired results.

The book has 21 chapters from a wide range of analysts and compiles different perspectives of the primary stakeholders: the Government of India, global original equipment manufacturers (OEM), and Indian industrialists. It tries to understand the evolution, and trace the possible future trajectories, of defence procurement and offset policies in India. It opens with a bird’s eye-view of these, followed by three sections with chapters by individual stakeholders. It concludes with a section emphasising the importance of Indian manufacturing and provides a comprehensive overview of India’s complex offset policies in a reader-friendly language.

In July 2015, MoS for defence, Rao Inderjit Singh, informed Parliament about the steps taken by the government to promote indigenous manufacturing capabilities of defence equipment in the country: As per the reviewed and revised FDI policy in defence, composite foreign investment upto 49 per cent is allowed through government route (FIPB) and beyond 49 per cent with the approval of Cabinet Committee on Security on case-to-case basis. Restrictions such as single largest Indian shareholder to hold at least 51 per cent equity; complete restriction on foreign institutional investor (FII) from the earlier policy were also removed to facilitate investments in defence.

To promote private sector participation, guidelines have been formulated, mandating that each DPSU and Ordnance Factory Board have a short- and long-term outsourcing and vendor development plan to “gradually, increase the outsourcing from private sector including SMEs. The guidelines also include vendor development for import substitution.

To establish a level-playing field between Indian the private and public sectors, anomalies in excise duty/ custom duty have been removed. As per the revised policy, uniform custom and excise duties shall be levied on all companies in the public and private sector.

The Defence Products List for the purpose of issuing Industrial Licences (ILs) under Industries Development and Regulation Act of India Act has been revised and most of the components, parts, sub-systems, testing and production equipment have been removed from it to reduce entry barriers for industry, particularly small and medium segment.

The initial validity of the IL granted under the IDRA has been increased from three to seven years with a provision to extend it by three years on a case-to-case basis.

During Defexpo 2016, defence minister Manohar Parrikar announced that DPP-2016 uploaded on the ministry’s website, would give a push to the “Make in India” campaign. He said that the government has been proactive in the initiative and desires to also include “Startup India” which will find opportunities in the defence sector. He added that the government had tweaked policies to address the concerns of defence manufacturers and suppliers and enhance transparency.

DPP-2016 will ensure faster procurement, especially through newly introduced categories under indigenously designed, developed and manufactured (IDDM) provisions. Mr Parrikar added that the government aims to increase the exports of defence equipment by three to four times in five to seven years and that the new policy initiative will permit defence PSUs to export up to 10 per cent of defence equipment.

As export sales generate higher revenue, the profit accrued will be plowed back into capacity enhancement for improving supply to the armed forces in the long run. Export from DPSUs will be subject to clearances from the partner concerns and ministry of external affairs.

The book offers a fairly comprehensive reference to India’s aims to achieve self-reliance in defence requirements as well as becoming a defence exporter.

 

[charlie]

India Prepares To Kick-Start Delayed Tactical Comms Project

Tauseef Mustafa/AFP via Getty Images
The Indian Army is seeking prototypes for a net Tactical Communication System.

well I am not exactly sure what kind of system they are looking for ? I hope TCS picks harris as their partner.

Non tactical would be something like this with LTE compatible using Beon
https://www.harris.com/sites/defaul..._content/BR1429C_Harris_PSPC_Overview_WEB.pdf

Tactical would be something like
https://www.harris.com/solution/harris-fusion-tactical-cellular
https://www.harris.com/product-line/harris-falcon-radios

they just launched a new concept last year, Nobody else in the world provides this kind of solution as of now.

 

[Indx TechStyle]

Make in India: Tata Advanced Systems, Bell Helicopter to manufacture copters

Tata Advanced Systems and US-based Bell Helicopter have signed an agreement on Thursday for working together to manufacture helicopters under Make in India initiative to meet civil and military requirements.

Under this agreement, both the firms will looks to tap the multi-billion dollar potential rotary wing market in India in light utility and reconnaissance segments.

The scope is intended to include potential production and assembly capabilities, training and maintenance, repair and overhaul needs, research and development and technology sharing that will grow industrial capabilities and result in innovative Make in India solutions, a statement by Tata said.

"TASL's alliance with Bell Helicopter is significant because of our shared synergies… our defence manufacturing capabilities and focus on innovation are well aligned with Bell Helicopter's core competence,” S Ramadorai, Chairman of Tata Advanced Systems, said. He added that this will build on the partnerships that TASL already has in the rotorcraft market, allowing it to offer a full range of products to potential customers.

"The collaboration, which is in line with the government's Make in India initiative, holds potential not only in the domestic market, but will strengthen India's position in the international market,” he said.

TASL, which is focused on providing integrated solutions for aerospace, defence and homeland security, has become a significant player in the global aerospace market.

"We are honoured to build on our relationship with TASL to leverage its experience and knowledge to customise, integrate and manufacture specific local Bell Helicopter solutions for India,” said Mitch Snyder, President and CEO of Bell Helicopter.

Bell Helicopter has been supplying helicopters to India for more than six decades - the first Bell Helicopter was delivered to the country in 1953. Today, there are more than 90 Bell aircraft operating throughout India in several sectors, including commercial, civil and government, and military operations.

 

[Indx TechStyle]

Saab Grintek Defence and Tata Power SED sign MoU

 

[Yumdoot]

Defence manufacturing: Another panel to finalise strategic partner model
Experts feel that there are fundamental issues with the strategic partnership model which are difficult to be resolved at this stage. Amit Cowshish, a former financial advisor (acquisition) in the ministry and says that “there is a lack of clarity on what the strategic partnership means. The ideas that are being bandied around, if I may say for the want of a better word, are nonsensical. They are talking about awarding the contract to a private player on ‘cost-plus basis’. The ministry has no expertise to do this, and we will get objections from other competitors and likely objections from the CAG.”
The ministry, government sources said, is keen on the strategic partnership model. Cowshish, however, argued that “the defence ministry has to be practical about it. The procurement cases must move forward without waiting for this model. We first need to create capability in the ministry before implementing the model. That should be our focus now.”

Here's Amit Cowshish for you.
http://www.nifm.ac.in/NIFMNEW_ContactImages/Amit cowshish.pdf

I am sorry but Amit Cowshish ji is sorely mistaken. Merely because the rest of the world is following a particular model of privatization does not mean we should too. They have money and no real needs. We have extraordinary real needs and no real money.

In fact before they try to develop the accounting and policy skills, they should first learn what the private sector interface in exactly these skill areas are capable of. Most private sector professionals who will be feeding information to the MoD in this regard, without exception have a damn tough time matching and reconciling their tax accounting with the financial accounting with their MIS. You give them 12 monthly MIS and they will not be able to create an yearly MIS that will match with other accounting records.

In such a case unless these people are grilled properly there is no hope in hell that your money is going to be used properly. You would imagine that a contract value fixed with no interference is going to be better but then you will need to keep tabs that the tech is actually learnt and not just a front for painting and packaging CKD kits. This later control is actually much more difficult to manage. For example, one of the Ex.-Mahanubhav Officer, in a recent scam simply forwarded the Software CD as an offset. Beat that. And you were complaining that DRDO does tech import only.

If you are serious that Indian private sector should come in as a learning partner then saddle them with your own systems suite and ask them to fit in. In doing so a Cost plus model will give them security that during the time they mature from a Software CD forwarder to a real R&D and Manufacturing set up they will not be allowed to fall.

At a later stage when these private sector partnerships with strategic partnership model have matured, you can begin to give greater leeway. But do that before that and Lockheed will control Tatas like a durban.

The cost plus model will actually force the MOD staff to get its own mind clear about what they want to achieve and they will be forced to take ownership of project failures that emanate from incompetent brouchertitis.

 

[Indx TechStyle]

French defence major Thales bets big on India, scouts for more partners

Thales Group CEO Jean-Bernard Levy

NEW DELHI: French defence major Thales is keen on increasing its over six-decade-old footprint in India and aims at roping the country in a much bigger way into its global supply chain.

Maintaining that Thales has "ambitious plans" involving India, which currently contributes less than 2.5 per cent to the company's 14 billion Euro annual turnover, a top executive said they are looking at more joint ventures besides the ones already in place with state-run BEL, Samtel and L&T.

"We have ambitious plans for the future...we believe that we can go much further. We see our activities in India not only as the right approach to get some business here but we also see our activities as a way to increase our footprint in other countries through export from India," Pascale Sourisse, Thales' Senior Executive Vice President (International Development) told PTI here.

She said the company's strategy in India is defined not only by a regional or domestic view but should be seen as involving the country in the group's global strategy.

"We believe India will play a big role in the global strategy of Thales going forward. Our assessment is we need to do much more. Currently what we have done is to actually work on our purchasing policy to identify more Indian companies that can be suppliers," Sourisse said.

Talking about the company's tie-ups with educational institutes like the IIT, Mumbai and Indian Institute of Science, Bangalore, she said India has a lot of engineers and the firm believes the country needs to have a stronger policy in the field of innovation.

Talking about the joint ventures with BEL in radar technology, Samtel for avionics and L&T for software development, she said the aim is to use them more in the company's supply chain.

She said they are also looking at involving other Indian companies and even the 300-strong Thales workforce in India in programmes in other countries.

"There is a lot to do but we are confident that with the right focus we can improve the share of India in our global supply chain very substantially," Sourisse said.

Even though Thales, which is present in India since 1953, is slowly spreading its wings in the Indian civilian sector, like smart city projects and railways, besides the military segment, she said defence will continue to be the main focus.

She said defence sector contributes more than half of the 300 million Euro turnover the company has in India.

"Our strategy for India is to grow this number of 300. India should participate in projects for other customers. We expect India to be one of our large (contributor) countries in Thales organisation," she said.

She also hoped that the much anticipated Rafale fighter jet deal will be inked soon. Thales is a major partner in the project. She said the company hopes that India will continue to purchase additional aircraft.

READ MORE:
Thales in India|Thales|Indian Defence industry|French Defence Major

 

[Indx TechStyle]

India Can Be A Global Player In Defence Technology If Backed By A Vibrant SME Sector !

India is the world’s largest defence importer and has steadily held this position for the previous 5 years. It is the 6th biggest defence spender internationally and the 2nd largest spender in Asia, according to a report released by the Stockholm International Peace Research Institute (SIPRI), whose findings are based on data given by countries to the UN. India spent $51.3 billion in 2015, an increase of 0.4% from the previous year.

In order to bring about a change in the status, India has started encouraging greater participation from the private sector, including the Defence sector SMEs. Experts say a robust defence SME sector can help India emerge as a global power. It is with this objective that the Defence Procurement Policy (DPP) 2016 seeks to make SMEs the cornerstone of India’s defence preparedness. Modi government’s defence document sets the tone for procurement with a clear emphasis on “Make in India” and self-reliance and provides more say to the indigenous SME sector. Although a vibrant SME sector is crucial to India’s defence plans, its voice often went unheard before. In departure from the precedent, the Ministry of Defence has finally paid heed to the SMEs, startups and other middling players.

Along with the introduction of a new category of procurement, increased localization has been provided for in the existing categories. This has been done to boost locally designed, developed and manufactured products. Although these features had been present in earlier defence documents in more subtle ways, they now have pride of place. The emphasis on localization is obvious keeping in view India’s heavy reliance on imports for defence preparedness—a decisive factor in case of war. India is the world’s largest importer of arms; it spent $51.3 billion in 2015 with 80–90% of aircraft manufacturing materials being sourced from foreign sources. In such a context, small and medium enterprises can play a big role in making the country self-dependent. According to a survey conducted by Deskera, an IT firm working in the SME sector, 65% SMEs want a greater role in the defence sector.

New “Buy Indian” Procurement Category

“Buy (Indian (Indigenously Designed, Developed and Manufactured)” is a brand new category that has been introduced and has been prioritized over all other existing categories, imparting greater momentum to the “Make in India” program as well as promoting in-house design capabilities. If implemented properly, the role of domestic defence enterprises, particularly in the private sector, is set to increase manifold.

Higher as well as flexible local input requirements

The Government has enhanced indigenous content requirement under the existing “Buy (Indian)” category from the earlier 30 to 40%. It has also provided flexibility to authorities in determining the local content requirement on a case-to-case basis. The requirement has also been extended to the “Buy and Make (Indian)” category.

“The new procurement measures that have been introduced would go a long way in meeting a key demand of the local defence industry and enterprises. The small and medium enterprises sector has long been complaining that the IC requirement is rigid and that it has to be brought in sync with the reality on the ground. Especially with regard to critical aerospace items, India’s local industry capability stands at a bare minimum. Even achieving 20% localization is a difficult task if we look at the current state of India’s industrial development. The local industry has always been vocal about such concerns,” said a defence expert on condition of anonymity.

Local industry finds prioritization

The Ministry of Defence (MoD) has divided the “Make” projects into two: (a) Make-I (government funded) and (b) Make-II (industry funded). While the Government would bear the cost for funding prototype development for the first category, the industry would shoulder the burden in the latter category. The government has also increased funding for prototype development from 80 to 90%, with 20% of the cost to be paid in advance.

“SMEs will also have the first right to develop prototype for projects worth up to Rs. 10 crore.In other words, designated projects would be offered to big industry players only when the former are not interested in taking them up. This will give local industries a decisive say,” added the defence expert.

Industry experts also say that such measures would lead to enhanced collaboration between Indian and foreign players, leading to greater technology transfers and making the local industry competitive vis a vis global standards. Apart from increasing self-reliance and employment, such collaborations have also been found to lead to innovative technological spin-offs in the domestic industry as in the case of Japan and Korea.

“One positive aspect about the new policy is that it also tries to involve the defence establishment in the development process. This will instill a sense of ownership among the armed forces whose involvement is critical to any successful development of defence equipment,” said the expert.

What can India learn from other Asian powerhouses: Japan and South Korea?

Japan was a nation in disarray after World War II. But the assimilation of military technology and creation of domestic arms production capability led to the development of civil commercial technologies that served the country’s long-term goal to become a technology superpower. Japan went for rapid, robust and diversified industrialization. Now, Japan is largely self-sufficient, with more than 90% of its requirements for military products being met by suppliers from within the country, including small and medium enterprises. Similarly,South Korea’s defense exports went up from $144 million in 2002 to $3.6 billion in 2014, with an average annual gain of 31% over the past few years. Despite having a robust defence sector comprising small and medium enterprises, the country is taking steps to bolster its defence sector. For example, in 2015, South Korea’s military procurement agency, the Defense Acquisition Program Administration (DAPA), established a special committee to technically assist a selected group of small and medium enterprises seeking to expand in defence. The committee comprising subject-matter experts not only provides consultancy but also assistance related to marketing, bidding, and administrative procedures to the SMEs.

“Japan and Korea have done wonders in their defence sector, primarily because they have a vibrant small and medium defence technology enterprise sector. We must learn from their model and try to incorporate it in our system,” said Shashank Dixit, CEO, Deskera.

Right now, it’s too early to predict how successful the defence technology policy would prove to be in ensuring a greater participation from the SME sector. We can only wait and watch. It will become apparent only later.

 

[Indx TechStyle]

Govt considering venture capital fund to invest in small defence firms
Concept aimed at providing an easier way for foreign manufacturers to meet complex local sourcing obligations, known as offsets

Photo: Bloomberg

Mumbai: India is evaluating an innovative model to allow foreign arms manufacturers to meet complex local sourcing obligations when striking a major deal with the world’s sixth biggest military spender.

The defence ministry’s idea is to float a venture capital (VC) fund that will infuse foreign funds into small defence firms in India.

Offsets are a provision in India’s defence procurement procedure that requires any foreign arms manufacturer securing an order worth more than Rs.2,000 crore to source components worth 30% of the value of the order from Indian makers.

The defence ministry’s idea is that original equipment manufacturers or OEMs, such as Dassault Aviation SA of France and Lockheed Martin Corp. of the US, will have more channels available for the discharging of their offset obligations.

“With the intent of expanding the avenues for offset discharge, there is a thought process that OEMs could be allowed to discharge part of their offset obligations through investments in the ministry of defence approved VC funds which in turn would invest in micro, small and medium enterprises (MSMEs) in defence equipment manufacturing or research and development (R&D),” the defence ministry said in a note reviewed by Mint.

The VC fund will enable MSMEs to access funds to secure the technologies the country needs and thus contribute to the growth of Indian defence manufacturing and exports, so far crimped by a lack of access to funds.

Local manufacturing of defence equipment is an important part of Prime Minister Narendra Modi’s Make in India programme, but the country continues to import nearly 60% of its defence equipment.

Of late, Indian companies have shown interest in the defence equipment business and have applied for licences from the ministry of commerce to locally manufacture military equipment, including airplanes and warships.

India moved up one spot in the global rankings to reach the sixth position in 2015 for military spending, according to the Stockholm International Peace Research Institute, which monitors developments in military spending worldwide.

A senior executive with a large US defence manufacturer said that the company has received the note from the Indian defence ministry and that it is studying the concept, which it finds interesting.

The concept note said, “This is envisaged to be achieved by harmonising the subscription to the VC fund by vendors, investment by VC fund in MSMEs and performance of the eligible offset discharge activities by such MSME demonstrated by having credible linkages between them.”

In the proposed mechanism, the vendors will have the flexibility to invest in any VC fund registered with the Securities and Exchange Board of India (Sebi), which would in turn invest through equity into enterprises that are engaged in manufacturing eligible products or providing eligible services.

“However, only upon approval from the ministry of defence would the said fund be eligible to aggregate investment from vendors and deploy the entire amount in equity of Indian enterprises engaged in eligible products and services,” it said.

There are two distinct sides to this proposal, said Ankur Gupta, vice-president, aerospace and defence at consultancy firm EY India.

“Offsets are meant to be a tool to leverage India’s buying power; deepen and broaden the defence industrial base; help Indian companies become a part of the global supply chains and promote technology transfer. On the other hand, MSMEs traditionally are hard pressed for capital. In this (aerospace and defence) sector, where working capital cycles in steady state operations can stretch up to six months, performance bonds or bank guarantees are the norm, and domestic cost of capital is 14-16%, any help from an ‘investment’ angle will serve as a shot in the arm for them,” Gupta said.

“Whether the invested capital can address the most pressing requirements and the ‘original’ objectives vis-a-vis offsets get diluted or encouraged remains to be seen. The impact will largely depend on how the OEM investments are channelled and managed by the designated authorities. Nonetheless, it is an innovative concept and one which will throw up some interesting results when and if implemented”, added Gupta.

The concept note said that initially the vendors shall have an option of discharging up to 25% of their total offset obligations through the avenue of investment through VC fund.

It also has to be ensured that subscription to the VC fund generates directly corroborated realization of the stated objectives of the offset policyholder in a substantive manner, the note said.

TOPICS:
DEFENCE POLICY|OFFSETS|VENTURE CAPITAL|DEFENCE MINISTRY|MANUFACTURING

 

[Indx TechStyle]

L&T's shipbuilding arm ties up with US firms for design, equipment supply

Larsen & Toubro is looking at joining hands with US majors for designing and equipment suppliers to design and build future shipbuilding contracts. The vessels will be built at a facility near Chennai. Speaking at the Indo-US Partnership Conclave 'The march towards $500 billion trade', organised by IACC along with the state ofTamil Nadu, B Kannan, CEO & MD, L&T Shipbuilding said the company is in touch with some US-based firms, for its future projects.

For ship design it has tied up with Alion, for ship equipments the company will procure Low Frequency Sonar from Harris Group, hull mounted sonar from Raytheon, AUVs from Bluefin Robotics Corporation, data acquistion system from Seabotix Inc, data acquistion from Teledyne and aircraft elevators for ships from Pan Marine.

The ship building facility of L&T is located at Kattupalli, around 40 km from Chennai.

The company is currently engaged in two major defence programmes. It is supplying 54 interceptor boats for the Indian Coast Guard, of which 20 have already been delivered and rest is expected to be supplied in a year's time.

It is building offshore patrol vessels to the Indian Coast Guard. A floating deck for Indian Navy, to be positioned near Andaman Nicobar Islands is also under development and will be delivered next year, he said.

Besides, it is also designing a landing platform dock to carry helicopters, whoch would be helpful for rescue and emergency operations. The company is expecting to bag a contract from the Indian Navy on this, he added.

The company has an order book of close to Rs 2,000 crore, he said.