Indian defence industry exports watch

[Indx TechStyle]

Russia helping to kick start India’s military industrial complex
Having helped lay the foundations of modern India’s State-owned defence industry in the 1960s, Russian weapon manufacturers are entering into fruitful partnerships with India’s blue chip private sector companies.

BrahMos Aerospace persuaded a number of private Indian companies to become subcontractors. Source:EPA

When Russia offered full transfer of technology and rights for local assembly of the MiG-21 interceptor in India in 1966, it was the first such deal between a developed country and a developing one. With Moscow supplying the jet’s entire production facility, the MiG-21 formed the nucleus of India’s military industrial complex. From its factories in Koraput and Kanpur, Hindustan Aeronautics Ltd built 657 of these hardy jet fighters over the next 40 years.

Licensed production of weapons was the monopoly of government owned companies like HAL. And like all monopolies, HAL often messed up. Some of the blame must go to the defence brass and politicians who connived to scuttle indigenous weapons in order to take kickbacks from foreign manufacturers. But HAL isn’t blameless – it would often give unrealistic deadlines or lower cost estimates and, with exceptions, inevitably fail to deliver a world class weapon.

India’s defence manufacturing landscape is, however, changing with the private sector stepping in. Private sector companies were initially reluctant to work for the government because there was no guarantee the weapons they were subcontracting for would be purchased by the armed forces. In most cases they were right as India’s defence industry has a history of cancelled weapons. The private sector was therefore reluctant to invest in defence.

India interested in Russian security system
Godrej bets on BrahMos

The game changer was BrahMos Aerospace– the Indo-Russian missile joint venture – which persuaded a number of private Indian companies to become subcontractors. Among the first off the blocks was Godrej Aerospace, a subsidiary of the 199 year old Godrej conglomerate. It became a key contractor, manufacturing airframes for the supersonic BrahMos missile.

The Mumbai-based company’s association with the missile project started with the signing of a MoU between BrahMos, Defence Research & Development Laboratory (DRDL) and Godrej in August 2000.

Initially, in January 2001, Godrej was awarded an order that included the supply of the airframe section plus wings, fins, nose‐caps and nose‐cap motors. Making these complex, precision components robust enough to function at supersonic speeds required Godrej to understand 1200 Russian drawings, 2500 Russian manufacturing standards, 25 various types of metallurgies and acquire 25 specialised technologies provided by Russian missile maker NPO Mashinostroyeniya.

Under the programme, Godrej Aerospace has designed and developed 5000 process sheets for various manufacturing processes, inspection and quality assurance. More than 2000 tools, jigs and fixtures were developed and qualified for the final desired output.

According to A. Sivathanu Pillai, former CEO BrahMos Aerospace, “Godrej’s investment in exclusive facilities for BrahMos has made it a partner of choice. This has given us the confidence to deepen our relationship with Godrej by awarding them with additional orders for BrahMos missile airframe assemblies as well as by increasing their scope of work for BrahMos.”

Rockets and Reliance

India cleared the purchase of the S-400 air defence missile for $4.5 billion in December 2015. A week later, Reliance Defence signed an agreement with Russia’s AlmazAntey, manufacturer of the S-400, to jointly develop and maintain a variety of weapons for India’s military. TOR-1M missiles, radars and automated control systems come under the scope of the deal.

Russian, Indian companies to co-produce coastal defence systems

Interestingly, Reliance Defence is a complete newcomer with zero experience in the defence industry. Despite this, the Anil Ambani-owned company has received approval for 12 industrial licences for manufacturing aircraft, helicopters, unmanned aerial vehicles, all-terrain combat vehicles, night-vision devices, sensors, navigation and surveillance equipment, propulsion systems and simulators.

In this backdrop, the deal with Almaz-Antey looks like Reliance’s attempt to forge close ties with Russia to jumpstart its ambitions to develop a defence business from scratch. The company also plans to bid for contracts for local manufacture of helicopters, submarines and ships.

Shipping news

High octane defence deals are often the most exciting part of India-Russia summits. Not surprisingly, global attention was focussed on the S-400 missile defence system and the PAK-FA stealth fighter when Prime Minister Narendra Modi visited Moscow in December. However, if India ever goes to war, the first strikes may be launched from the Krivak III (Talwar) class stealth frigates.

The Russian military establishment has chosen Anil Ambani’s Pipavav Shipyard to build three to four Talwar-class frigates (Project 11345) for the Indian Navy. The shipyard has received an official letter confirming the partnership from Alexander Fomin, Director of the Federal Service for Military-Technical Cooperation (FSMTC). The order could be worth in excess of $3 billion, making it the Indian private sector's biggest-ever warship-building project.

India has already bought six Russian-built Talwar class frigates, the last of which was delivered in 2013.

“We are ready to transfer technology to ensure the construction of these ships in India. The new ships that will be built will be different and more modern than the Talwar class that have been delivered," says Alexi Dikiy, director for military technical cooperation at USC.

India to modernize Soviet air defence system by itself

More importantly, we are witnessing the fusion of made in India warships and made in India missiles. Defense Industry Daily (DID) says the latest Talwar frigates are fitted for eight supersonic BrahMos anti-ship missiles. They will be also equipped with a Russian 100mm gun, a Shtil air defence system external link (upgraded SA-N-7), 2 Kashtan SA-N-11 air defence gun/missile systems, four 533mm torpedo tubes, and a Ka-28 anti-submarine warfare helicopter.

The Talwar class frigates will play a key role in India’s Maritime Strategy 2015 that aims to dominate the blue waters and strike on land. For decades India has wanted to dominate the Indian Ocean but lacked the capability. The new strategy – backed by a 200-ship fleet – is to project sea power not just into the Indian Ocean but the Pacific as well.

Future outlook

As India’s turbocharged economy grows, its military is being upsized to keep in step. With the country’s political leadership having shed its decades long – and short sighted – Gandhian policy of treating weapons with a mixture of contempt and shame, India is no longer shy of manufacturing and exporting high-octane defence hardware. These are exciting times for India’s private sector defence companies and Russia has got off to a strong start by finding well-connected partners for joint ventures.

 

[Indx TechStyle]

Restructuring of DRDO Undertaken

Defence Research and Development Organisation (DRDO) is involved in R&D of Defence Technologies / Systems & is not directly involved in acquiring infrastructure for defence manufacturing in the country. A Committee under the chairmanship of Dr. P. Rama Rao was constituted to conduct a comprehensive review of Defence Research and Development Organisation (DRDO).

The following recommendations of the Committee have been implemented after approval of Government:

Nomination of Nodal Officers for structured interaction between DRDO and Services.
Introduction of Integrated Financial Advice (IFA) Scheme for financial decentralization.
Appointment of a dedicated Chief Controller for Human Resources (HR).
Creation of Seven Technology Domain based Clusters each headed by one Director General.
Restructuring of DRDO HQrs, Creation of Directorate of Systems Analysis and Modelling (SAM) and Directorate of Quality, Reliability and Safety (QR&S).

DRDO undertakes joint development with Indian industries as well as transfers technologies to the industries for manufacturing of products & systems in India. DRDO Guidelines for Transfer of Technology has already been promulgated to facilitate Make in India.

Defence Procurement Procedure (DPP) 2016 has also been promulgated to facilitate Make in India; wherein acquisition of systems through design and development by DRDO has been elaborated.

PIB

 

[Indx TechStyle]

IDN TAKE: Allocation of Defence Budget for Modernization

Around 31% of the total allocation from defence services Budget estimates has been allocated for modernisation i.e. Capital Acquisition of Armed Forces.

Internal Audit of defence expenditure is routinely conducted by the Defence Accounts Department (DAD). Reports of this Internal Audit are shared with the concerned Services/ Agencies. Responses received are examined and Internal audit conclusions arrived at, thereafter necessary action is taken as and when required.

Government constantly reviews the security scenario and accordingly decides to induct appropriate defence equipment to keep the Armed Forces in a state of readiness to meet any eventualities and remaining equipped with modern weapon systems. Modernization of Armed Forces is a continuous process based on threat perception, operational challenges, technological changes and available resources. The procurement of defence equipment under the ‘Capital’ head is made as per Defence Procurement Procedure (DPP) which contains timelines for completion of procurement process. There has been a thrust on indigenous manufacture of defence equipment through the collaborative efforts of Defence Research & Development Organization (DRDO), Defence Public Undertakings, Ordnance Factory Board and the Private Sector.

Pendencies in procurement cases can occur due to several reasons, such as insufficient and limited vendor base, non- conformity of offers to the Request for Proposals (RFP) conditions, field trials, complexities in contract negotiations, stakeholder consultations, lead time for indigenization etc.

During the last three financial years (i.e. from 2013-14 to 2015-16), 150 contracts have been signed with Indian public sector vendors, Ordnance Factory Board (OFB), Indian Private sector vendors for Capital Procurement of Defence Equipment such as Ships, Frigates, Missiles, Rockets, Simulators, Tanks, Aircrafts, Helicopters and Radars for the Armed Forces.

Admin - IDN

 

[Indx TechStyle]

IDN TAKE: Boosting Indigenous Defense Production

The Defense Production Policy promulgated by Government of India aims at achieving substantive self-reliance in the design, development and production of equipment, weapon systems, platforms required for defense in as early a time frame possible; creating conditions conducive for the private industry to take an active role in this endeavor enhancing potential of SMEs in indigenisation and broadening the defence R&D base of the country.

In pursuance to the aforesaid policy, progressive development of competence level of Indian public and private industry and in line with the ‘Make in India’ initiative, the Government has taken several policy measures to give a boost to indigenous production of defence equipment requirement, which inter-alia, include preference to ‘Buy (Indian-IDDM)’, `Buy (Indian)’ and `Buy & Make (Indian)’ categories of acquisition over ‘Buy (Global)’ category in defence procurement; liberalisation of Foreign Direct Investment and Industrial Licensing Policy; level-playing-field between private sector and public sector through removing anomalies in taxation in Customs/Excise duty etc.

HAL is an autonomous entity and therefore based on the available opportunities, it takes decisions for diversification into other areas of aerospace sector which includes manufacture of commercial aircrafts also. However, such diversification plans are contingent upon financial viability of the projects and the requirements of Indian Armed Forces.

Admin - IDN

 

[Indx TechStyle]

India may contribute to Australia-French submarine project

Sidhu is also hopeful that Australian uranium exporters, which are private entities, would be able to supply the much needed metal to Indian recipients for power generation. (Representative Image)

NEW DELHI: India may contribute to a submarine project involving Australia and France by obtaining sub-contracts in the initiative in what could be Delhi's first such foray in an international defence venture.

"India and Australia as decided during PM Narendra Modi's visit to Australia in 2014 have ventured into the areas of defence collaboration and joint research. While India's DRDO chief visited Australia, our top defence scientist visited this county to explore joint defence ventures. As part of this collaboration Indian firms may obtain sub-contracts in Australia's submarine project with France," Australia's High Commissioner to India Harinder Sidhu told ET in an exclusive interaction on the growing bilateral strategic and defence partnership.

India has experience with working on French submarines and this expertise can contribute to the Aussie-French project, said Sidhu. The Modi government has been working on a defence exports plan to friendly countries across continents. Couple of months back, France won $40 billion deal to build a fleet of 12 submarines for Australia. French state-owned defence firm DCNS won the contract with Australia, increasing defense budget to safeguard its strategic and trade interests in the Asia-Pacific region.

Pointing out that Indian Navy and Army Chiefs visited Australia during the past 12 months, the envoy said that this signals expanding defence partnership that has been marked by Delhi's growing interest in the Asia-Pacific region.

But it is not just defence that's driving India-Australia strategic ties as Canberra is pushing India's membership in the coveted Nuclear Suppliers Group (NSG) notwithstanding strong opposition from China. "Australia strongly supports India's bid for mem bership of the NSG and was disappointed that consensus was not reached on India's application for admission to the group at its recent plenary meeting... Australia will continue to work with other participating governments to resolve questions around admission of states not a party to the Treaty on the Non-Proliferation of Nuclear Weapons. We consider it important for significant nuclear suppliers to be inside the tent rather than outside," said the Indian-origin High Commissioner.

Sidhu is also hopeful that Australian uranium exporters, which are private entities, would be able to supply the much needed metal to Indian recipients for power generation in future. Delhi and Canberra had signed civil nuclear deal in 2014, eyeing Australia's uranium reserves which are highest in the world.

However, uranium is not the only item that Australia is hoping to export as it seeks conclusion of Comprehensive Economic Cooperation Agreement to increase volume of bilateral trade. "This will have head-turning impact on IndiaAustralia economic partnership," the High Commissioner said, pointing out that Australia could be the market for Indian auto exporters. Australia is one of the biggest importers of motor cars.

READ MORE:
Submarine|Nuclear Suppliers Group|Narendra Modi|France|DRDO|Defence|Australia

 

[Indx TechStyle]

India's BrahMos supersonic cruise missiles, mounted on a truck, pass by during a full dress rehearsal for the Republic Day parade in New Delhi, India.
Image Credit: REUTERS/Kamal Kishore
The Future of India's Defense Exports
Can India reach its ambitious target of exporting $2 billion in defense technology per year?

Long among the world’s top importers of weapons, India now wants to turn its military related trade into a two-way affair by enhancing defense exports from its soil. This new emphasis on exporting military wares has yielded early results with Indian defense exports doubling over the course of the past year to about $330 million. India’s defense minister Manohar Parrikar, however, has set his sights higher and wants annual military exports to touch $2 billion in a couple of years. While the initial growth in sales has been driven by exports of military stores due to the removal of excessive controls, reaching Parrikar’s target would require Indian diplomacy to re-orient itself toward securing weapons contracts for major indigenously-developed systems under the aegis of the government’s “Strategy for Defense Exports” (SDE). SDE, which is overseen by the Department of Defense Production (DDP) in India’s Ministry of Defense (MoD) is intended to boost Prime Minister Narendra Modi’s “Make in India” scheme while consolidating Indian influence abroad.

In the initial phase, India’s defense sales effort is likely to concentrate on homegrown missile and naval systems, which have high indigenous content in terms of components. Of course, India will also progressively leverage the various international collaborations it has built up through years of co-production and co-development as it joins global export control regimessuch as the Missile Technology Control Regime (MTCR). While India will try to export certain classes of tactical systems as widely as possible, weapons with greater strategic import will obviously be offered to select partners. Overall, India is likely to focus on a few key defense partners with which it has maximum strategic congruence for building up its position in the global defense market.

In keeping with that objective, Parrikar was accompanied by a large industry delegation comprising representatives from India’s main arms manufacturers during his visit to Vietnam in June. Military industrial ties were believed to be high on the agenda during Parrikar’s interaction with his Vietnamese counterpart, General Ngo Xuan Lich. On the sidelines of the visit, Parrikar stated that “India’s help in modernizing the Vietnamese military will not just strengthen the diplomatic and military bond between both the nations but also open the doors of strategic exports.”

Indeed, not only is India set to take a final decision on how it might transfer the BrahMos to Vietnam, it has begun discussions with Hanoi to sell the Defense Research and Development Organization (DRDO) developed Varunastra 533 millimeter heavyweight torpedo that was recently inducted into the Indian Navy (IN). Currently capable of being fired from a domestically developed ship based launcher, Varunastra is also being adapted for deployment from torpedo tubes sported by India’s submarine fleet, including the Russian-origin Kiloclass units. So besides potentially equipping Vietnamese surface vessels, the Varunastra may also someday find its way onto Vietnam’s own Kilo class boats, especially given India’s involvement in training Vietnamese submariners.

As per India’s training and military cooperation agreements with Vietnam, it must also assist the latter in maintaining and upgrading equipment of Russian origin that is common to the militaries of both countries. Accordingly, Indian industry is looking to partner with Vietnamese firms to augment military platforms with weapons and sensors that Vietnam may not be able to affordably source from elsewhere. For example, India is reportedly set to upgrade two Soviet-era Petya-class frigates of the Vietnamese Navy with new sonar and torpedo launchers, a new fire control system, and a new antisubmarine rocket launcher system. Incidentally, Petya class boats can easily be equipped with 21 inch/533 mm torpedo launchers. And there is a strong possibility that initial Varunastra sales to Vietnam may form a part of this upgrade package. Other systems of Soviet origin in the Vietnamese military that have been identified for upgrades in collaboration with India include T-54/55 main battle tanks and BMP family infantry fighting vehicles, all which will receive new thermal sights and fire control systems. New Indian software defined radios are also likely to be purchased by Vietnam to upgrade both infantry and armored units.

Domestic modernization programs of both Russian as well as Western origin systems have given Indian industry a lot of experience in the arena of integrating equipment from diverse sources with different industry standards. This in turn has allowed Indian industry to emerge as a supplier of sensor and navigation upgrade packages for platforms of diverse origin besides being able to offer standard spares and maintenance services for the same. These capabilities are now getting reflected in the growth in exports that has taken place of late. For instance, last year India exported select avionics for Malaysia’s Su-30 MKM fighters, which are similar to India’s own Su-30 MKIs, and the two countries agreed to set up a “Su-30 forum” last November for exchanging information on training, maintenance, and technical support. With India beginning to train Vietnamese pilots for their own Su-30 MKV2s, one can expect similar exports to Vietnam too in the future.

Indian exports in the recent past have included light helicopters to Afghanistan, Nepal, and Namibia, DRDO developed HMS-X2 sonars to Myanmar (the same sonar likely to feature in Vietnam’s Petya class upgrade), and protective armor to NATO members like Turkey. A range of spares, mechanical components, and electronic assemblies are also being supplied to global majors as a result of offset agreements. A significant driver of this growth has been the simplification and streamlining of the DDP’s standard operating procedure for the issuance of no objection certificates (NOC) related to exports of military stores by domestic companies.

One other particularly noteworthy export has been that of the 1,300-ton offshore patrol vessel (OPV) MCGSBarracuda to Mauritius in December 2014. Built by DDP-controlled Garden Reach Shipbuilders & Engineers (GRSE) for $50.8 million, the Barracuda is India’s first ever export of a home built warship. Besides the Barracuda, India’s government owned Goa Shipyard Limited is currently building two OPVs for the Sri Lankan Navy, as well as eleven fast attack craft (FAC) and two fast patrol vessels for Mauritius. India has supplied Sri Lanka and other Indian Ocean Region (IOR) countries with refurbished boats in the past, but is now looking to export new OPVs, interceptor craft, corvettes, and frigates to littoral states in the region. As per an Indian naval official, most countries in the IOR littoral seek “sub-20 meter boats for harbor patrol, 50-60 meter boats for their territorial waters, and 80-110 meter boats for their EEZ surveillance.”

East African countries such as Mozambique have certainly been looking towards India to help build their coastal fleets for a while and India may now finally be in a position to deliver. This is underlined by the fact that Indian defense shipyards have enhanced their capacity and productivity via recent modernization efforts and are now in a position to compete for foreign orders. GRSE has actually emerged as the lowest bidder for a two-frigate tender floated by the Philippines Navy (PN). However, even as defense shipyards have augmented themselves, some very modern private shipyards like Indian defense major L&T’s Kattupalli facility, which have been designed to build warships, are underutilized at the moment. As such, L&T is set to supply 10 fast interceptor craft of a type that it is already producing for the Indian Coast Guard to Vietnam for a contract worth about $90 million. This is being facilitated by the $100 million credit line extended to Vietnam by India for the purchase of critical defense equipment. During his visit to Vietnam, Parrikar reportedly assured the Indian private sector of the full support his ministry, DRDO, and public sector defense units to “realize the national aspiration of exports of defense items to friendly nations at competitive price.”

Spare capacity is certainly going to be a key consideration in arriving at a decision to actually export any indigenously-developed system. As Parrikar himself recently stated, “The government had taken a very conscious decision about 4-5 months ago that 10 percent of the missile capacity will be permitted to be exported if producers manage to get export orders subject to parameters set by the Union Government and External Affairs Ministry.” In that light, the Indian government’s desire to push for sales of the Akash surface-to-air missile (SAM) system hold credibility, since annual production numbers for the missile is now in the high hundreds due to sizable orders from both the Indian Air Force (IAF) and Army. Potential customers for the Akash would include Vietnam, other ASEAN states, and a few customers in Africa. A smaller group from the same set of countries would also be offered the Pragati surface-to-surface missile with a range of 150 kilometers, the export version of the Prahaar, which resumed testing recently. The Pragati/Prahaar shares a common airframe and some avionics with India’s endo-atmospheric ballistic missile interceptor, Advanced Air Defense (AAD), creating possibilities for driving down costs through greater economies of scale. Another missile that is at the cusp of production and has been earmarked for export sales is the Astra beyond visual range air-to-air missile, which is compatible with the Su-27/30 family.

SDE notes that “the objective of (India’s) Defense Production Policy will not be achievable without having a well thought out export strategy, so that the industry is assured of access to export markets in addition to domestic market for investing in the sector.” However, in the initial years it will actually be capacity that will drive exports and not the other way around. Be that as it may, India seems cognizant that the successful export of military systems is contingent upon factors other than cost or project delivery. While it has chosen not to create a separate defense policy, it has moved to institutionalize the SDE under the rubric of the Ministry of Commerce’s (MoC) overall foreign trade policy thereby underlining the geoeconomic motivations behind India’s defense export drive.

A Defense Exports Steering Committee (DESC) headed by the secretary of DDP has been set up, with representatives from the Military, MoC, MEA, and occasionally even industry and academia for deliberating and taking decisions on the export of indigenously-developed “sensitive defense equipment” and to suggest specific steps that can boost exports. SDE calls for the use of “specific incentives and promotion schemes” to promote defense exports wherever possible. The need to provide soft financing for Indian defense exports to weaker countries has been clearly noted and MoC’s “Buyer’s Credit” facility is also expected to be leveraged. This assumes significance in light of the fact that Indian private companies face stiff competition from their Chinese counterparts in many emerging markets on account of the higher cost of capital in India.

Now, even as India brings various stakeholders together in committee mode, the need to develop proficiency on defense industrial issues in India’s Ministry of External Affairs (MEA) cannot be understated. SDE expects Indian embassies abroad to understand the requirements of their host countries and it is the MEA that actually controls the extension of line of credit to other countries. It also decides a “negative list” of countries to which most defense exports will be prohibited. Unfortunately, at the moment, the MEA is rather understaffed and needs to pay more attention to countries that are most likely to be markets for Indian defense exports. The MEA will also need to build a cadre of specialists focused on defense matters, something that is lacking at the moment.

India’s military, meanwhile, will have to up the ante on its own diplomatic initiatives. The Indian Navy (IN) has taken a lead in this arena and has been instrumental in securing warship exports in the IOR through the understanding it has built up with the countries in the region. Moreover, IN’s focus on indigenization has been central to creating the capacity for export as is evidenced above. Indeed, while Sri Lanka and Egypt may want to import the HAL Tejas, it remains to be seen whether that can happen anytime soon given current production capacity, which is based on modest IAF orders. In any case, weapons used by a domestic military usually find favor more easily abroad.

An early test for India’s diplomatic ability to secure military orders has, however, already presented itself. Though GRSE emerged as the lowest bidder and scored high on technical criteria during standard post-qualifications inspections by officials from Manila, its bid for the frigate supply tender valued at $437 million nevertheless stands disqualified at the moment on financial grounds. GRSE apparently does not fulfill the net financial contracting capacity criteria used by the Philippines Government to assess the financial capacity of a contractor to make good on delivery. This is due to the fact that Philippines will not make tranche payments for these frigates and GRSE’s current turnover is deemed as insufficient.

However, it must be said that GRSE currently has several ships on order from the Indian Navy including large stealth frigates and in any case has an implicit sovereign guarantee given that it is a defense shipyard. This point will need to be adequately conveyed through diplomatic channels and IN will have to do its bit to persuade its PN counterparts as well.

While incentives may be used to push Indian defense exports in several categories, there are certain weapons which are widely sought after chiefly on capability grounds by foreign nations. The BrahMos is of course a stand out example, with apparently 15 countries including Vietnam, Indonesia, UAE, Chile, Malaysia, the Philippines, South Africa, Algeria, Greece, Thailand, Egypt, Singapore, Venezuela, Brazil, and even Bulgaria reportedly expressing interest. However, systems such as the BrahMos, though MTCR compliant, will be sold on the basis of a balance of interests. Vietnam, with its key position in the South China Sea theater and its closeness to Russia, the United States, and Japan is an obvious choice, especially since some in India see it as “our Pakistan.” There have been reports that the UAE is also very keen for the BrahMos and that a decision is expected soon, but one should remain skeptical about this given India’s ambitions in Iran. India will likely be even more judicious about the air-launched BrahMos once that enters production since all ASEAN Su-27/30 operators may be eyeing it. But then, that is a story for another day.

By Saurav Jha

 

[Indx TechStyle]

L&T Defence & Aerospace sources 50% parts from SMEs

L&T Defence & Aerospace, India’s biggest private sector defence company, has said that 50% of its sourcing is taking place from SMEs.

In an interaction with DH, Senior Vice President and Head of L&T Defence & Aerospace Jayant D Patil said that the company is focussing on areas including warships, submarines, communications, engineering equipment, artillery and missile systems.

“Currently, we have 1,100 SME partners for our eight defence manufacturing plants spread across the country. But L&T treats about 70-80 of them as partners with placement of repeat orders. These companies have continuous work from us,” Patil said.

He pointed out that no PSU can match with L&T in this aspect of ecosystem creation, as it is sourcing 50% of components from SMEs.

Patil also added that the company is committed to, and is focussing on indigenisation, having begun as partner to DRDO three decades ago to design and develop indigenous technologies and products.

Design centres

“Today, we have five R&D centres, also called design centres, across the country. Our Bengaluru centre, where we have 200 employees, handles product development, including embedded systems software for avionics and military communication segments,” he said.

L&T Defence and Aerospace is looking at acquisition and JVs very carefully. “As we believe in indigenisation of products and systems, our approach to merger and acquisition is selective, and so is global collaboration. We have attained 60-90% indigenisation,” he said.

“It is better that we design products as they create high value with indigenous technology to support the armed forces through product life cycle. Also, we can save on cost because we know how to make changes, undertake upgrades and develop next generation products,” he said.

On the export front, he said that the company is doing business of Rs 150 crore a year, and this is confined to five countries. “We expect that it will increase at least three to four-times in the next five years,” Patil said.

The company is also eyeing to secure at least Rs 50,000 crore worth of orders over three years in defence across the areas of focus.

India has become the world’s fourth largest spender on defence, following an increase of 13.1% in its 2016-17 overall defence budget, according to research firm IHS.

However, this year’s capital budget has not grown over revised estimates of last FY.

From the dubious distinction of largest importer of defence equipment in the world, Indian policymakers are taking definite initiatives to indigenise the sector and have categorised 3.1 lakh crore worth of acquisition programmes over the past two years with almost 85-90% being ordered from Indian companies.

 

[Indx TechStyle]

Here's the thread tracking activities of Reliance Defence.

 

[Indx TechStyle]

Indian Arms Sales to Latin America - IDSA
Sanjay Badri-Maharaj
July 05, 2016

As India embarks on a quest to boost its currently paltry arms exports, the Latin America-Caribbean region offers India both markets and potential partnerships. India is not a stranger to the Latin America-Caribbean arms bazaar and its efforts have been rewarded with some successes, with vehicles and helicopters securing sales among the region’s military and police forces. Nonetheless, these sales represent but a small step and there is considerable potential for both enhanced sales and joint ventures in the defence sphere. Among the successes there have also been embarrassing quasi-failures which, while not fatal to India’s desire to enhance defence exports in the region, have demonstrated the need for a more systematic and coordinated approach with appropriate support from the Indian Government and financial institutions.

India’s trade with Latin America-Caribbean has grown at roughly the same rate as China’s in the 21st century, though its volume is ten times less.1 However, India’s defence relationship with the region is relatively static and compared to China’s determined push to forge links with the military leadership in the region, through bilateral contact and training as well as arms sales, has been much more reticent. India has so far taken very tentative steps to strengthen military-to-military relations and its arms sales to the region. While this may be understandable given that there are capable arms industries in several countries – Brazil, Chile, Peru and Colombia (with Argentina maintaining prowess despite a decline in its indigenous defence manufacturing) – with well-developed military education systems too, there is ample scope for enhanced cooperation and arms sales to the smaller nations of the region which lack such facilities, and which have pressing needs that can benefit from Indian support, financial assistance and possible equipment transfers.2 Even the larger countries may see benefit in forging partnerships and joint-ventures with the Indian companies.

The Latin America-Caribbean region includes the tiny islands of the Caribbean, many English-speaking, the Guianas – Guyana, Suriname and French Guyana – and the small nations of Central America, south of Mexico. In all of these countries, India has much to offer in respect of training, equipment (lethal and non-lethal) and overall security cooperation. Indeed, as the potential for pirate attacks increases in the region and the spectre of terrorism looms large, Indian expertise in these spheres could be of considerable interest to the region. Furthermore, the United Nations (UN) peacekeeping operations provide the opportunity for enhanced cooperation as Brazil, Uruguay, Argentina and Colombia have contributed extensively to the UN peacekeeping forces worldwide. The armed forces of smaller Caribbean countries such as Trinidad & Tobago and Jamaica served with distinction during peacekeeping operations in Haiti. In the quasi-related spheres of disaster management and humanitarian assistance, Latin American and Caribbean forces routinely undertake such activities and could again benefit significantly from the Indian experience in this regard with the exchange of personnel and exercises. This would inevitably lead to a higher Indian defence profile in the region, possibly facilitating Indian defence sales in due course.

In stark contrast to China, India’s military training links with the region are limited. China has actively encouraged officers from the region to attend its training schools for specialised and staff training.3India has not accorded sufficient priority to the same with an attendant absence of presence and profile in the region. China’s policy of encouraging military training links has built up a cadre of officers who may now be open to considering purchase of Chinese weapons, and it may be no coincidence that China’s arms sales to the region have soared.4 These sales have been supported by a sustained Chinese diplomatic effort which has targeted not just military stipulated requirements but also the political leadership of certain countries, such as Argentina, Bolivia and Venezuela, who have been amenable to Chinese arms sales as a way of asserting independence in an area hitherto dominated by the influence of the United States (US).5

India’s arms sales, to the Latin America-Caribbean region, by way of comparison, have been limited and represent a combination of commercial sales through private sector companies and sales from the Indian defence public sector undertakings (DPSUs). It does not seem, however, that these sales were part of a cohesive arms export drive in the region. In the absence of the required diplomatic and banking and possibly support from the Indian financial institutions, the scope for expanded sales is not as promising as it might otherwise be.

Among the more prominent sales of Indian defence products in the region have been:

• The sale of two Mahindra Rakshak armoured vehicles and one Mahindra Rapid Intervention Vehicle to Guyana Police Force.6
• 139 Ashok Leyland 4x4 trucks to the Honduran Army.7
• Mahindra 4x4 vehicles to Argentina, Uruguay and Belize.8
• 29 Mahindra Marksman vehicle to the Chilean Carabineros Special Forces
• Two civil model Dhruv helicopters to Peru.9
• Seven Dhruv helicopters to Ecuador (now withdrawn from use following accidents), and
• Three Chetak helicopters to Suriname

These sales are modest, but not insignificant. However, two sales have been plagued by some degree of controversy, occasioned in part by poor post-sales support and poor contract coordination with the purchaser. The sale of Dhruv helicopters to Ecuador was widely hailed, and rightly so, as a major breakthrough for Indian arms export. However, after a number of crashes (several of which were caused by pilot error), the helicopters were withdrawn from use, citing, among other things, poor spares support from Hindustan Aeronautics Limited (HAL).10

The sale of Chetaks to Suriname was plagued by poor contract management and “financial and administrative obstacles”, which led to the helicopters being ready long before pilots were ready to be trained, leading to a delay in delivery of the helicopters.11 In addition, an apparent disconnect between the user and the supplier in negotiating the contract led to Suriname acquiring Chetaks rather than the Dhruvs that they reputedly preferred. It should be noted that on this latter point, HAL always seemed clear that it was selling Chetaks to Suriname rather than Dhruvs, but the issue remains a point of minor contention between the parties. Even the sale of the Mahindra Marksman to Chile has had its share of controversy as a litany of complaints about poor visibility, security flaws and off-road performance have been levelled at it, and it is not known if Mahindra & Mahindra is working on any remedial steps to overcome the criticism.12

In none of the above cases has the Indian Government been the prime mover, providing support, reassurance and a method of informal dispute resolution to prevent minor issues becoming major ones. This was despite the fact that Suriname used US$ 13m from a US$ 16m Indian line of credit to make the purchase. Little interest was thereafter shown in making the procurement flow smoothly with “financial and administrative problems”, as stated earlier, playing a part in delaying the delivery of the helicopters. In fact, it was the proactive approach of the Indian ambassador to Suriname that enabled the delivery of the Chetaks and its acceptance by the Suriname Government. Had a similar proactive approach been followed in Ecuador and Chile, the issues and concerns raised by the customers could have been dealt with without acrimony. This confused and somewhat half-hearted approach to defence sales to the Latin America-Caribbean region is hindering Indian efforts to raise its global profile. It is also noteworthy that the US though uncomfortable with China’s profile in the region has not objected to it strenuously. It is therefore unlikely to be hostile to a greater Indian presence in the region.

The way forward is clear: India must accord priority to its defence ties with the region. More defence attaches are needed and Indian defence sales must have Delhi’s full political and diplomatic support. In addition, Delhi should consider monitoring projects or sales in which DPSUs are involved. Moreover, tie-ups with regional defence companies should be encouraged, with COTECMAR of Colombia and ASMAR of Chile being potential partners for Indian shipyards and Embraer of Brazil having the potential for joint-ventures with HAL. While India has not taken the initiative to date, there is an unrealised potential that should be acted upon as India seeks to forge international partnerships and increase its global clout.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

• 1.Evan Ellis, “Time to talk about India and Latin America”, Latin America Goes Global, June 08, 2015 (Accessed June 30, 2016)
• 2.Michael Pelzer, “Bullets From Brazil: Growing Military Industrialism in Latin America”, WOLA, March 21, 2014 (Accessed June 30, 2016)
• 3.Gabriel Marcella, “China's Military Activity in Latin America”, Americas Quarterly, Winter 2012 (Accessed June 30, 2016)
• 4.Evan Ellis, “Should the U.S. be worried about Chinese arms sales in the region?”, Latin America Goes Global, May 11, 2015 (Accessed June 30, 2016)
• 5.Kamilia Lahrichi, “China’s Growing Military Sway in Latin America”, Asia Sentinel, August 04, 2014 (Accessed June 30, 2016)
• 6.“More vehicles for the Police Force”, August 27, 2005 (Accessed July 03, 2016)
• 7.“US$ 10.5mn order for Ashok Leyland from Honduras”, Business Standard, January 12, 2009 (Accessed July 03, 2016)
• 8.Evan Ellis, n.1.
• 9.Praveen Bose and Ravi Menon, “HAL secures copter order from Peru”, Business Standard, June 24, 2008 (Accessed July 03, 2016)
• 10.“Ecuador cuts Dhruv helicopter contract with HAL after 4 crashes”, The Times of India, October 16, 2015 (Accessed July 03, 2016)
• 11.“India Gives 3 Chetak Helicopters to Suriname”,Defense-Aerospace.com, March 16, 2015 (Accessed July 03, 2016)
• 12.Gustavo Villarrubia and Juan Pablo Figueroa, “Carabineros spends US$ 3.5 million in armored cars that have serious security flaws”, CIPER, August 21, 2013 (Accessed July 03, 2016)

Keywords:
India
Defence Industry
Latin America

 

[Indx TechStyle]

India's L&T, Samsung Team Up For $700 Million Howitzer Deal

AFP, AFP/Getty Images
South Korean Army K-9 155mm self-propelled Howitzers fire rounds during air.

NEW DELHI - In the biggest-ever order for India's private sector, Larsen & Toubro (L&T) has won a $700 million contract to produce 100 tracked 155mm howitzer guns at Indian facilities, jointly with Samsung of South Korea, for use by the Indian army.

The contract is likely to be inked with L&T in the next two months as all formalities are completed, said an official at the ministry of defense here.

The L&T-Samsung team, offering the K-9 Vajra-T gun, beat an offering for the 2S19 MSTA weapon from Rosoboronexport of Russia.

India To Unveil Strategic Partners Policy for Big-Ticket Projects

"More than 50 percent of the work share is with L&T," a senior L&T executive said. Samsung will supply the turret of the gun. The weapons will be produced at L&T’s newly set up manufacturing facilities near Pune in central India.

Besides the 100 guns to be produced, the company hopes to close additional deals to boost what analysts say is a slim profit margin on a relatively small number of howitzers. “In case the gun is found attractive and the users [Indian Army] are happy with the performance of the supplied product, it is possible that the self-propelled wheeled program, which is also under planning stage, could get merged and this could increase the total numbers," one company executive said.

A senior Indian army official, however, said the 100 weapons are what’s operationally required by the ground service, suggesting the number is unlikely to increase.

No executive from Samsung was available for comment.

Samsung may be hoping for a large market with at least 250 to 300 guns, says Rahul Bhonsle, retired army brigadier and defense analyst. Though the market size is about 250-300 for tracked guns in the long run, Bhonsle said “huge budgetary constraints” may leave the number at 100 in the near term.

Despite the big order for the L&T-Samsung team, the two companies are not committing to form a joint venture on an equity-sharing basis to execute the contract.

"There is no plan to have a JV formed as this is a one-off contract with no possibility of follow on orders. A JV can only be formed if there is a sustainable business plan with visibility of orders over future years," said one L&T executive.

"Competition in the 155 mm gun market is very tough,” says Bhonsle. “As of now, Samsung is following a model of engaging with local partners for production or assembly of its gun platforms separately in each market. Thus, much will depend on how the K-9 venture rolls out for a matured partnership with L&T.”

The tender for the tracked guns was released in 2011, which itself was a re-bid of an earlier tender from 2007 that was issued to India's Tata Power SED, L&T, Bharat Earth Movers Limited (BEML) and Rosoboronexport of Russia.

The Indian army plans to replace all existing field guns with a variety of 155mm weapons at a cost of more than $6 billion. As part of this purchase plan, named Field Artillery Rationalization Plan, the army plans to buy a mix of around 3,600 new guns by 2020-25 for over 220 of its artillery regiments.

 

[salute]

Indian Arms Sales to Latin America - IDSA
Sanjay Badri-Maharaj
July 05, 2016





Among the more prominent sales of Indian defence products in the region have been:

• The sale of two Mahindra Rakshak armoured vehicles and one Mahindra Rapid Intervention Vehicle to Guyana Police Force.6
• 139 Ashok Leyland 4x4 trucks to the Honduran Army.7
• Mahindra 4x4 vehicles to Argentina, Uruguay and Belize.8
• 29 Mahindra Marksman vehicle to the Chilean Carabineros Special Forces
• Two civil model Dhruv helicopters to Peru.9
• Seven Dhruv helicopters to Ecuador (now withdrawn from use following accidents), and
• Three Chetak helicopters to Suriname

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

• 1.Evan Ellis, “Time to talk about India and Latin America”, Latin America Goes Global, June 08, 2015 (Accessed June 30, 2016)
• 2.Michael Pelzer, “Bullets From Brazil: Growing Military Industrialism in Latin America”, WOLA, March 21, 2014 (Accessed June 30, 2016)
• 3.Gabriel Marcella, “China's Military Activity in Latin America”, Americas Quarterly, Winter 2012 (Accessed June 30, 2016)
• 4.Evan Ellis, “Should the U.S. be worried about Chinese arms sales in the region?”, Latin America Goes Global, May 11, 2015 (Accessed June 30, 2016)
• 5.Kamilia Lahrichi, “China’s Growing Military Sway in Latin America”, Asia Sentinel, August 04, 2014 (Accessed June 30, 2016)
• 6.“More vehicles for the Police Force”, August 27, 2005 (Accessed July 03, 2016)
• 7.“US$ 10.5mn order for Ashok Leyland from Honduras”, Business Standard, January 12, 2009 (Accessed July 03, 2016)
• 8.Evan Ellis, n.1.
• 9.Praveen Bose and Ravi Menon, “HAL secures copter order from Peru”, Business Standard, June 24, 2008 (Accessed July 03, 2016)
• 10.“Ecuador cuts Dhruv helicopter contract with HAL after 4 crashes”, The Times of India, October 16, 2015 (Accessed July 03, 2016)
• 11.“India Gives 3 Chetak Helicopters to Suriname”,Defense-Aerospace.com, March 16, 2015 (Accessed July 03, 2016)
• 12.Gustavo Villarrubia and Juan Pablo Figueroa, “Carabineros spends US$ 3.5 million in armored cars that have serious security flaws”, CIPER, August 21, 2013 (Accessed July 03, 2016)

Keywords:
India
Defence Industry
Latin America

this defence sale is just a vehicle sale nothing else .

 

[Indx TechStyle]

this defence sale is just a vehicle sale nothing else .

No problem, our sales to Africans too was started with vehicles.

 

[Indx TechStyle]

No corruption in defence procurements in last two years: Manohar Parrikar

The DPP 2016 envisages signing of an integrity Pact between Government and the bidders for all capital procurement/schemes of Rs 20 crore and above.

NEW DELHI: The government today asserted that no case involving corruption in defence procurements undertaken during the last two years has come to light.

In a written reply to Rajya Sabha, Defence Minister Manohar Parrikar also said new Defence Procurement Procedure incorporates provisions to ensure the highest degree of probity, public accountability, transparency, fair completion and level playing field.

"No case involving corruption in defence procurements undertaken during the last two years has come to light," he said.

The DPP 2016 envisages signing of an integrity Pact between Government and the bidders for all capital procurement/schemes of Rs 20 crore and above.

Earlier such pacts were required only for cases involving Rs 100 crore and above.

DPP 2016 provides that a foreign vendor is required to disclose full details of any such person, party, firm or institution engaged by them for marketing of their equipment in India, either on a country specific basis or as a part of a global or regional arrangement, Parrikar said.

It also stipulates conditions for appointment of agents.

It further provides that the seller has to confirm and declare to the buyer that it is the original manufacturer of the stores contracted and that no agent has been engaged to influence or manipulate award of the contract, or indulge in corrupt and unethical practices.

READ MORE:
Manohar Parrikar|DPP 2016

 

[Indx TechStyle]

No separate norms for defence PSU ventures

The Cabinet has approved the abolition of existing guidelines for establishing of joint venture companies by defence public sector units.

The guidelines issued in February 2012 will not be required for separate joint ventures by defence public sector units.

Following the decision, guidelines issued by the Department of Public Enterprises and the Ministry of Finance from time to time and applicable to all central public sector enterprises will also be applicable on defence public sector units for setting up joint ventures, a government spokesperson said after the Cabinet briefing.

“The decision will help meet the goal of indigenisation in the defence sector and provide a level playing field between defence public sector units and the private sector,” an official statement said.

“All nine defence public sector units – Mazagon Dock Ltd, Goa Shipyard Ltd, Garden Reach Shipbuilders & Engineers Ltd, Hindustan Shipyard Ltd, Bharat Electronics Ltd, Hindustan Aeronautics Ltd, Bharat Earth Movers Ltd, Bharat Dynamics Ltd and Mishra Dhatu Nigam Ltd – will be benefited through this decision,” the statement added.

Natrip estimate revised

The Cabinet also approved a revised cost estimate of ₹3,727.30 crore for National Automotive Testing and R&D Infrastructure Project (NATRIP).

“This approval ensures completion of projects under NATRIP which is an important initiative of the government for establishment of global test centres in India,” an official statement said.

In another decision, the Cabinet also approved the policy for award of waterfront and associated land to port dependent industries in major ports and its operationalisation.

“The policy will result in uniformity and transparency in the procedure for awarding captive facilities. It will enable optimal utilisation of capacities in major ports and increase revenue to the major port authority,” an official statement said. The policy will be applicable to all the major ports.

Under the policy, concession will be granted to port dependent industries (PDI) for setting up dedicated facilities in major ports for import and/or export of cargo and their storage before transportation to their destination, for a period not exceeding 30 years. Extension of concession period on conditions including under-utilisation of asset as per the Concession Agreement may be allowed, the statement said.

After a maximum of 30 years of operation, the waterfront and associated land in a major port will be allotted for construction of berths, offshore anchorages, transhipment jetties, single point moorings and other such facilities.

India-Cambodia treaty

The Cabinet also approved a bilateral investment treaty between India and Cambodia. “The treaty seeks to promote and protect investments from either country in the territory of the other country with the objective of increasing bilateral investment flows,” an official statement said.

The Cabinet also decided to rescind an earlier government decision to set up the Concurrent Evaluation Office for managing Concurrent Evaluation Network (CENET) in Ministry of Rural Development.

In another decision, the Cabinet approved the establishment of a new AIIMS at Bhatinda in Punjab under the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY).

The institution will have a capacity of 750 beds and will come up at an estimated cost of ₹925 crore. The Cabinet also approved the amendment of the Central Agricultural University Act to include Nagaland under the jurisdiction of CAU, Imphal.

 

[Indx TechStyle]

Defence electronics may generate $72 bn biz: IESA

India’s defence electronics business will add $72-billion market opportunities within the next 10-year period, and the government has decided to form a task force to come up with new policy initiatives.

In an interaction with DH, India Electronics and Semiconductor Association (IESA) President M N Vidyashankar said the organisation has presented a report before Defence Minister Manohar Parrikar, last Monday in New Delhi.

"IESA presented the report before the defence minister on the opportunities in defence electronics, both platforms and systems, and quantified it at $72 billion. We gave him the smallest details on sectors to understand how the IESA reached this volume. The Defence Ministry will soon appoint a task force to look at tapping the low hanging fruits in this business segment,” said Vidyashankar.

The IESA president also said the meeting had the participation of the Defence Ministry Secretary, the Additional Secretary of DeitY, the Joint Secretary of DeitY, Directors of DeitY, and all service chiefs. If the low hanging business opportunities are capitalised soon, Vidyashankar said India will get many marketing and manufacturing opportunities in this sector.

"A few things can be done immediately to make this happen. The task force will identify these areas and monitor their implementation. While India’s information technology industry generated a total of $150 billion revenue for the past 30 years, defence electronics is giving us $72 billion within a decade,” he said.

He said the IESA report has used the heat matrix to identify the core competencies of Indian companies in the defence electronics.

"The report has brought out a mapping, which elaborates on the current capability of the private sector. It also explains what all capabilities will be achieved within the next two years, five years and 10 years. The report also elaborates on what all capabilities the private sector can achieve in platforms, systems and subsystems with foreign partnership and joint ventures,” he said.

Vidyashankar said India has 700 companies working in this area and once they tap the $72 billion opportunities, it will cross 2,000 companies. "We are eminently placed in the design aspect of defence electronic systems, and now it is important to convert this capability into a very efficient ecosystem for manufacturing,” he said.

Vidyashankar said that DEFTRONICS 2016, the third edition of the annual aerospace, defence & internal security event to be held in Bengaluru on August 4 and 5, will be organised in association with Nasscom.

"This year’s theme is 'Building India’s Strategic Electronics Ecosystem’ for greater self-reliance and global relevance - defence, aerospace and internal security sectors,” Vidyashankar said.

 

[cobra commando]

Zen Technologies bags Rs 30- cr defence order from Egypt

New Delhi, Jul 28 (PTI) Zen Technologies, simulation technology based training solutions companies in India, has been selected by Egypt to provide range of training equipment including smart target systems for its military. The order worth about Rs 30 crore is the largest international order bagged by the company. Zen Technologies emerged as the front runner against tough international competition from global firms, a company statement said. Ashok Atluri, CMD, Zen Technologies said the firm over the years has emerged as a strong player in the field of defence training simulation in India and it has been their endeavour to expand presence abroad, specifically the Middle East and African region. "The order from the Egyptian Government (MoD) is a reflection of our commitment towards providing the best training tools to security forces to tackle and neutralize both external and internal threats," he said. Atluri added that various players globally have been showing intense interest in their training solutions especially Combat Training Centre and hence they are looking forward to more breakthroughs in the coming months.

Zen Technologies bags Rs 30- cr defence order from Egypt

 

[Indx TechStyle]

India Lifts Veil on Army as Modi Moves to Spend $150 Billion

An Indian T-90 tank.
Photographer: Sam Panthaky/AFP via Getty Images

• Private-sector executives climb on tanks, speak with soldiers
• ‘We’ve seen the army open up under this current leadership’

For private-sector executives in India who normally get only snippets of information to design components of complex military hardware, climbing into tanks and talking to combat soldiers is an eye-opener.

Earlier this month, more than 200 representatives of defense companies -- big and small, local and foreign -- got unprecedented access to India’s secretive military. At two events in the western city of Ahmednagar, they crawled inside tanks, learned about the army’s equipment needs and spoke with troops on the front lines in Kashmir, a region also claimed by main rival Pakistan.

“You could feel how the soldier would adjust themselves in a tight space,” said Rajesh Khurana, an associate vice-president at Bharat Forge Ltd., a major Indian manufacturing defense firm, who noted that he personally climbed inside of a tank. "It was a pretty intimate affair."

The new-found transparency is part of Modi’s efforts to transform the world’s biggest arms importer into a defense manufacturing powerhouse as he spends $150 billion over the next decade to modernize the armed forces. Closer collaboration with the military would increase the technological capacity of local companies and create jobs as more than 10 million Indians join the work force each year.

Opening Up

“We’ve seen the army open up under this current leadership," said Jayant D. Patil, a senior vice-president with Larsen & Toubro Ltd., which makes parts for everything from missiles to submarines. “The army is trying to build a relationship with the private sector. They’re communicating what their real needs are and want us to know what kind of problems they see in their day to day life -- and then industry can build solutions."

For the past few decades, publicly owned defense companies have repeatedly failed to do just that.

Almost two-thirds of the army’s contracts for critical weapons and equipment concluded from 2007 to 2012 -- worth nearly $4.5 billion -- were delayed, India’s national auditor said in a report this week. The foot-dragging was so severe that it “hampered" the military’s modernization plan and impacted defense preparedness, the report said, blaming the delays in part on a “heavy dependence" on imported weapons.

Arms Imports

Nitin Wakankar, a defense ministry spokesman, had no comment on the auditor’s report. In response to questions, the army said the Ahmednagar events stemmed from Modi’s campaign for companies to “Make in India." The policy aimed to “harness the preparedness of the Indian private industry towards meeting the felt-needs of the armed forces" and “reduce dependence on foreign vendors," it said.

The government’s move to open itself up to private industry marks a “very, very significant departure” from the norm, said Anit Mukherjee, an assistant professor at Singapore’s S. Rajaratnam School of International Studies. “It will be a significant step toward fulfilling ‘Make in India.’”

India relies on imports for 60 percent of its defense requirements, much of which has come from Russia due to a previous Cold War alliance between Delhi and the Soviet Union. Of late, it has bought more weapons from the U.S., becoming one of the top markets for American defense companies.

The Ahmednagar events featured executives from Mahindra & Mahindra Ltd., Tata Group, Larsen & Toubro and Bharat Forge. Participation among foreign defense companies was limited to those with India offices, including Honeywell International Inc. and Dassault Aviation SA.

‘Blind Guess’

All attendees had to be Indian nationals, vetted and approved by the army. The invitations to small-and-medium-sized defense firms were a first in a sector that prizes scale and a country that tends to favor conglomerates.

Subimal Bhattacharjee, a security expert and former India country head for U.S.-based defense firm General Dynamics Corp., said the military went beyond merely talking about its equipment: Army officials, who wanted a new engine design, actually gave six Russian-made infantry combat vehicles to two private companies.

“You have a chance to see the vehicle with the whole team, to have a clear understanding of what can be done," said Bhattacharjee, who attended the event. “You don’t have to make a blind guess. You have a vehicle to yourself that you can play around with and understand better."

Defense Failures

India’s defense companies have a long track record of failing to deliver. A 40-year effort by the government to develop a battlefield tank has yet to produce anything the army can use. Similarly, a project to produce an anti-tank guided missile has seen repeated setbacks, forcing India to acquire them from Russia, France and Israel.

The army had previously refused to discuss procurement projects unless they received a formal request, Deepak Sinha, a retired army veteran who oversaw procurement for the Indian Special Forces, said in an e-mail. And even then the military never told defense contractors about “procurement philosophy or future plans," he said.

“The army has always preferred to keep interaction with business houses to the minimum," said Sinha, who served in the military for more than three decades. “This interaction with business executives would certainly be a first, and a very good omen at that."

 

[Indx TechStyle]

MOD - Transforming India- Key Accomplishments - July 2016[PDF File]
Credit: @PARIKRAMA
[PDF]http://mod.gov.in/writereaddata/accomplishments.pdf[/PDF]

 

[Indx TechStyle]

Texmaco inks Mou with Rosoboronexport for defence equipment

In an interview to CNBC-TV18, Sandeep Fuller, ED & CEO of Texmaco Rail and Engineering spoke about the MoU that the company signed with Russia's Rosoboronexport for defence products.

He further added that the products will be developed in Russia and made in India.

Below is the verbatim transcript of Sandeep Fuller's interview to Ekta Batra & Prashant Nair.

Ekta: Tell us more about this Memorandum of Understanding (MoU), what does this mean in terms of production tie up with you?

A: Rosoboronexport happens to be the leading exporter of defence equipment and it is a Russian government company which exports all the defence equipment that are canalised out of Russia. We have a tie up with them for the manufacture of future combat vehicles, co-development of the future combat vehicles and the upgrades of the combat vehicles which are right now slated to be taking place.

We also have an agreement with them for development of ammunition for the armed forces. However, Texmaco is a leading engineering and manufacturing set up and we expect to work with them for the co-production of these items for the Indian defence sector.

Prashant: This Company is already doing the things that you described; you are entering the MoU for, modernising armoured vehicles, ammunition, etc. What are you going to do as part of this? Essentially, what I am asking is why does the Russian company need an Indian partner? If they are already supplying all these things, what is the need for the MoU from their perspective?

A: From their perspective, this is a Make in India item and they will need to do this co-engineering in India and the manufacture in India. And the manufacture in India will obviously help in developing our technologies and our capabilities in the defence sector.

Prashant: So, this is going to be built inRussia and assembled here? How will it work?

A: No, it is going to be developed in Russia, then co-engineered in India and after that, it will be manufactured in India.

Ekta: How much of your business comes from defence currently and how much of a ramp up do you expect? When does execution begin?

A: As of now, we have only been producing wagons for the defence sector which is a very small percentage of our turnover, but as time goes by, perhaps, when we developed the BMP-2s and start doing the upgrades for the Indian army, we could expect a very percentage of our turnover coming from this sector.

Prashant: Is there any capital commitment as part of the MoU? If there is none at this point in terms of actual commitment, what do you think you need to bring to the table in terms of capital to get this going?

A: We already have a very large establishment doing manufacturing. There will be specialised equipment required by way of a capital commitment and I think we are in a position to invest that much to get on those special equipments.

As far as the manufacturing capability goes, let me tell you that we have one of the best manufacturing facilities available.

 

[Indx TechStyle]

Modernization of Ordnance Factories

The obsolescent 105mm Indian Field Gun needs immediate replacement

Performance of Ordnance Factories is being regularly reviewed by Ordnance Factory Board. Some of the major steps taken in this regard are as follows:

(i) Modernization of Ordnance Factories to keep pace with the latest technology and to maintain the production capacity in tandem with the requirement of Armed Forces. As compared to an expenditure of Rs.2927 crore in the 11th Plan, already an expenditure of Rs.4239 crore has been incurred during the first four years (2012-16) of the 12th Plan. In 2016-17, an expenditure of Rs.1169.67 crore is envisaged.

(ii) To improve upon the production planning in Ordnance Factory Board (OFB), Army has started placing 5 years roll-on indents for ammunition items.

(iii) Quality Audit Groups (QAG) have been formed at 10 centers as an independent authority for giving impetus to and ensuring quality in Ordnance Factories.

(iv) 13 Ordnance Development Centres (ODCs) with identified core technologies have been created to take up product development and improvement in core product areas.

Ministry has been delegating powers to Ordnance Factory Board (OFB) from time to time for providing operational freedom and expedite decision making process by them.

PIB