India's military shopping spree

Discussion in 'Defence & Strategic Issues' started by SpArK, Jan 13, 2011.

  1. SpArK

    SpArK SORCERER Senior Member

    Oct 24, 2010
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    India's military shopping spree

    NEW DELHI, India — Nearly 30 years after its inception, India's supersonic light combat aircraft was finally cleared for induction into the air force this week — four years behind schedule, $500 million over budget and still propelled by an American-made engine.
    Now, New Delhi is getting ready to double-down.
    "After the Tejas [aircraft] accomplishes a series of milestones, the country is poised for a major turning point," Defense Minister A.K. Antony said at the test flight ceremony in Bangalore on Monday.

    With a whopping $100 billion earmarked for defense purchases this decade, India has its sights set on simultaneously modernizing its moribund military and jumpstarting its own lame duck defense industry.

    But there's a long way to go. Shortly before YouTube videos surfaced of a Chinese stealth fighter, India's Defense Research and Development Organization (DRDO) in all seriousness unveiled a domestically designed and developed... airship.

    "There's a gap between their ability and their claims," said Anit Mukherjee, a research fellow at the Institute for Defense Studies and Analyses. "They may not be able to do a Fiat, but they claim to be able to build a Ferrari."

    Meanwhile, the stakes couldn't be higher. A modern military is essential if India is to take a larger role in Asia and the Indian Ocean — where China is swiftly gaining influence. The DRDO is 40 years behind schedule and $1.6 billion over budget, the defense minister said in May. And its most ambitious and vital projects have by and large been failures.

    While that might be embarrassing for India, it's a huge opportunity for U.S. suppliers like Lockheed Martin, Boeing and Northrop Grumman. But Washington will need to cut some of the red tape associated with U.S. arms deals to leverage American industry's cutting-edge defense prowess to reshape U.S.-India relations. And New Delhi will need to defeat the rearguard resistance to private industry posed by the left to transform its domestic defense industry.

    "There are three gods in Hinduism: Brahma, the creator; Shiva, the destroyer, and Vishnu, the preserver. You will need all three to reform our aerospace sector," said former Air Vice Marshal Kapil Kak, who now heads a think tank called the Center for Air Power Studies.

    The first step will be Shiva's job: destroying — or radically restructuring — the existing system.

    India's department of atomic energy has built a nuclear bomb and its space agency has sent a rocket to the Moon. But since 1992, when APJ Abdul Kalam declared that India should aim to make 70 percent of the equipment used by its military by 2005, the DRDO has "invented" radar and sonar systems, combat rifles, an artillery gun and cold weather gear for soldiers posted on the Siachen glacier — all of which it could have bought off the shelf elsewhere (including North Face).

    Various ballistic missiles have failed in the testing process. Army personnel say the Arjun tank doesn't shoot straight. And even after it gets a second-generation engine in 2014, again from General Electric, critics say the Tejas — which was jointly produced by the DRDO and state-owned Hindustan Aeronautics Ltd. — will not be able to compete with state-of-the-art fighters.

    "DRDO has not produced anything that would change India's strategic condition in any way," said Sunil Dasgupta, a defense expert with the Brookings Institution. "After all, that's the entire point of military research and development."

    As a result, India is preparing for a foreign shopping spree. According to a recent study by the consultancy firm KPMG, India is expected to buy $100 billion in foreign weapons by 2022. In the pipeline already are a $10 billion contract for 126 multi-role combat aircraft, a $7.6 billion tender for 12 stealth frigates, a $3.5 billion deal for seven submarines and a $3 billion contract for 197 light helicopters, among other items.

    But Indian industry could benefit, too, if New Delhi plays its cards right. If it succeeds in leveraging its planned big-ticket purchases and its attractiveness as a manufacturing center for global suppliers to encourage technology transfers, KPMG argues, India could become one of the world's key sourcing destinations for defense systems and equipment, fueling technology spinoffs for a host of industries.

    "If you look very conservatively, over the next 20 years, India will require about 1,200-1,500 aircraft in the civil sector alone," said Kak. "If you take the military aircraft, the military and civilian infrastructure, and you put it all together I see in the next 20 years a market of between $250 and $300 billion."

    That's not the only reason the intersection of the commercial and military aerospace industries presents exciting prospects. There's a lesson in history, too. Prior to India's 1991 economic liberalization, the country's automobile sector was in much the same condition as its aerospace industry is today — with only two state-owned manufacturers, both relying on outdated designs to generate a pittance in sales.

    Since opening to joint ventures and later direct foreign competition, however, India's car industry has grown more than tenfold in sales and manufacturing capacity — producing nearly 2.5 million cars a year, compared with less than a million in 2003. More than 40 Indian auto parts companies generate $100 million or more in annual revenue — supplying components to virtually every carmaker in the world. And half a dozen of the world's largest auto companies have invested $500 million or more in the past year to make India a global hub for small car manufacturing.

    Aerospace could be looking at its own reform-era boom, following the government's decisions to open up the defense industry to domestic private companies and allow limited foreign direct investment in defense in 2001. Already, Mahindra Defence Systems has inked a deal with Seabird. Tata Advanced Systems has formed agreements with Boeing, Israel Aerospace Industries and Sikorsky Aircraft. And Larsen and Toubro has signed pacts with the European Aeronautic Defence and Space Company (EADS), Boeing, Raytheon, the Russian Aircraft Corporation (RAC MiG), Saab Gripen and Lockheed Martin.

    "The Indian aerospace industry, both military and civil, stands uniquely poised today, on the threshold of catapulting itself into the global arena," the consultancy PricewaterhouseCoopers wrote in a recent industry report.
    But both New Delhi and Washington will have to break existing paradigms for U.S. suppliers to seize the opportunity and bolster the ongoing transformation of U.S.-India relations.

    For decades, India has preferred to buy arms from Russian defense companies, due to the erroneous impression that its state-owned firms are less prone to corruption — especially after allegations of kickbacks from Sweden's Bofors brought down Rajiv Gandhi's government in 1989. Moreover, Indian strategists until recently deemed American companies to be unreliable weapons suppliers, following America's gunboat diplomacy in the 1971 war between India and Pakistan, the U.S. decision to equip Pakistan's air force with the F-16 in the 1980s, and the imposition of sanctions in response to India's nuclear tests in 1998.

    At the same time, America's private defense firms — in contrast to state-owned rivals — will likely have deep reservations about the demands India is making in return for access to its large and fast-growing weapons market. The terms of the multi-role combat aircraft contract, for instance, require that a massive 50 percent of the total outlay be outsourced back to Indian industry in what is known in the industry as "offsets." And the absence of any significant privately owned Indian defense companies will make meeting that requirement difficult for American firms — which unlike their Russian rivals are reluctant to form joint ventures with state-owned enterprises.

    "I don't think Indian officials accept this idea that government can fund research without actually conducting it. There are no startups, no programs whereby people can come together in garages to develop new technology," said Dasgupta, who co-authored "Arming without Aiming: India's Military Modernization," with the Brookings Institute's Stephen P. Cohen. "That is something that needs to happen in order to foment the activity that breeds innovation."
    To overcome those obstacles, Washington will need to cut some of the red tape associated with U.S. arms deals and begin to treat India like the "strategic partner" it is meant to be instead of a subordinate ally.

    For example, India at first baulked at signing America's boilerplate logistical supply agreement and proliferation security initiative, because some Indian policymakers feared it would force India into toeing the U.S. line on foreign policy.
    Meanwhile, New Delhi will need to shake off its fears about private firms in the defense sector — whether related to corruption or sovereignty. At the simplest level, that means opening defense and aerospace further to foreign direct investment and removing the remaining tax incentives and the like that give state-owned firms a cost advantage. But it also means formulating a defense industrialization policy that identifies and prioritizes the technologies and capacities it wants to acquire, and amending the existing offset policies, according to KPMG.

    Currently, India doesn't offer its foreign suppliers any offset multipliers — which encourage technology transfer by giving desired technologies a greater offset value than the contract's actual dollar amount. (For example, if India assigned jet engine technologies a multiplier of 7, then choosing a local company to manufacture $100 million in components would earn the foreign firm $700 million in offsets). But most importantly, India will need to re-envision its current narrow definition of privatization — which doesn't allow for government-funded research unless one of its moribund government labs does the work.

    "The biggest long-term thing is to create a procedure whereby research can be independent from the state," said Dasgupta. "If that can happen somehow the pace of innovation will get faster."
  3. Tshering22

    Tshering22 Sikkimese Saber Senior Member

    Aug 20, 2010
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    Gangtok, Sikkim, India
    The only world power of her size that is totally foreign made... what a shame.


    To UPA government for neglecting 60 years of defence, 60 years of development and 60 year worth of time to become self-reliant.
  4. S.A.T.A

    S.A.T.A Senior Member Senior Member

    Mar 28, 2009
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    The article addresses some of the major impediments that has stunted India's emergence as a leading military hardware producing nation,it also contrasts DRDO's performance and success rate at churning out cutting edge state of the art military products,compared other organizations and their achievements,like ISRO and AEC,despite all of them receiving approximately the same level of funding.There in lies the rub,what sets apart DRDO,as India's leading defence research organization,from that of of the Space agency and the Atomic research agency.While ISRO and AEC have a very narrow focus as far as the technology spectrum goes,space vehicles and atomic devices respectively,DRDO has set out to focus on a vast panorama technology and innovations,whose diversity in technology is only matched by the diversity in their application.

    DRDO is often accused of biting more than they can chew,rather DRDO's bane is that it has been made to chew more things at a time than any single research organization can effectively handle,without compromising on performance and quality,not to mention serious lacunae in project management skills and schedule adherence. There is without a doubt other prevailing factors,many f them outside DRDO's power to control or predict,but it must also be recognized that there is a serious problem with the technology objectives that DRDO has been mandated with to achieve.

    Any research organization that has been mandated ,whether by the govt or the organization itself taking on the onus,to take up such a diverse set of technologies from Missiles to Infantry Tanks to Combat Aircrafts to state of the art Submarines,is a fit candidate for logistical and management nightmares of epic proportions.Any projects success depends on how focused the organization is towards the objective,which is to see the project delivered, as far as objective go the narrower the better their rate of success.

    DRDO is too bloated an entity for a just a research organization and has taken up too many projects to be able to deliver on them and deliver them on schedule.Like ISRO,which has its periscope firmly trained on space vehicles and space technology,or the AEE,which is focused on Nuclear technology,DRDO should be restructured and its resources,funding infra,personnel should be split and reorganized.preferably the DRDO must be focused on technology and products for the Army.Steps must adopted towards forming Research organizations that exclusively cater to the Air force,the Navy and the strategic sector,Funds,infra and personnel that makeup the present DRDO must split between these new entities.
    SHASH2K2 likes this.
  5. Kunal Biswas

    Kunal Biswas Member of the Year 2011 Moderator

    May 26, 2010
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    If DRDO is having such problem better do something abt it..
    OFB needs some kicks for not making the weapons upto its top quality.. ( INSAS RIFLE, 9MM CARBINE )

    They need better salary and world class labs!
    They need land for test sites, they need respect & support..

    Many Indians know but the situation but remain quite when most needed..
    shame on them..
  6. shuvo@y2k10

    [email protected] Senior Member Senior Member

    Apr 4, 2010
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    even though we are far from self reliance but drdo has made good progress in the missile and electronic warfare fronts.
  7. Kunal Biswas

    Kunal Biswas Member of the Year 2011 Moderator

    May 26, 2010
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    Actually IA used 80% small scale technology which is DRDO deigned and home made..
    IA logistical vehicle from light to medium is indigenous..
    IA rifle, Motar 81/120mm and 105mm Light cannons are Indigenous..
    IA man-portable surveillance radar and infrared cameras from large to small ones are Indigenous..
    Lot more..

    We Indians are very much Self-Reliance, But Some of Our vital equipment are still foreign and can prove fatal in long term wars..
    I wish we have 85-90% major hardware indigenous..

    For that Gov should immediate implement hard steps to improve DRDO from inside out..
    If we don't we will never succeed in implementing a strategy on two fronts 101% successfully..
  8. sandeepdg

    sandeepdg Senior Member Senior Member

    Sep 5, 2009
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    To give 'irregulars' punch, forces go shopping for hi-tech weapons

    NEW DELHI: India is slowly but surely strengthening its "irregular'' or "unconventional'' warfare arm. Modernisation of the special forces of Army, Navy and IAF, trained to undertake covert missions deep behind enemy lines and hit high-value targets with precision, is now finally gathering steam.

    The latest weaponry to be inducted into the Army's seven Para-SF and three Para-SF (airborne) battalions, Navy's marine commandos and IAF's Garud force are 5.56mm TAR-21 Tavor assault rifles and 7.62mm Galil sniper rifles.

    Defence ministry sources say the deliveries of the around 5,500 Tavor rifles and 220 Galil rifles to the three special forces, which together number almost 10,000 top-notch combatants, were completed this month.

    "The procurement case for the three special forces was taken up in a consolidated manner by the integrated defence staff. The rifles have come with associated equipment like sights, under-barrel grenade launchers and the like,'' said a source.

    Other specialised equipment has either been inducted or is finally in the pipeline after several delays. These range from M4A1 carbines, all-terrain multi-utility vehicles, GPS navigation systems, modular acquisition devices to laser range-finders, high-frequency communication sets, combat free-fall parachutes and even underwater remotely-operated vehicles from countries like the US, Israel, France and Sweden.

    Incidentally, there is also now a joint tri-Service doctrine for the special forces, which focuses on the increasingly dominant role played by such highly-trained forces at all levels of war, be it tactical, operational or strategic.

    The doctrine does chart out the ideal command and control organisation necessary for joint special forces tasking, joint planning aspects at theatre-level, including operational, environmental and intelligence requirements.

    But as of now, there is no firm decision to go in for a tri-Service Special Forces Command, tasked with planning and executing clandestine warfare, on the lines of the Strategic Forces Command which deals with nuclear weapons.

    Indian special forces, unfortunately, have for long largely been treated as adjuncts to regular troops, restricted more to the tactical arena rather than being considered strategic assets to be used sparingly but with decisive effect.

    The Army, on its part, has chalked out major plans for its special forces, which includes more battalions and dedicated Army Aviation Special Operations Squadrons, with helicopters and aircraft.

    The need to strengthen the special forces was underlined during the 10-month-long troop mobilisation along the Indo-Pak border under Operation Parakram in 2002.

    The Army doctrine holds the special forces have to undertake strategic and tactical surveillance of vital enemy targets, gather intelligence, hit-and-run operations, laser-designated bombing and other such operations in times of war.

    During low-intensity conflicts, they can undertake "seek and destroy missions'' as well as "trans-border operations''. Hostage-rescue, anti-terrorist operations and assistance to friendly foreign governments would be their other peace-time missions.
  9. Illusive

    Illusive Senior Member Senior Member

    Jun 20, 2010
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    The problem is that most people don't even know what DRDO is. Most of my friends or many people I have met wants to do CA or MBBS. Why, beacuse there's money, there's exposure, perks. What do scientists in India get, respect, thats it? I mean there should be advertisements to help public know more about these organizations, to help students grow more interests in defence research, get pvt. firms in for investment and sure they are gonna draw public interest. Naturally you'll get better performance and results than what we get now.
    Not everyone is a patriot and not all patriots are intelligent.
    Tshering22 likes this.
  10. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

    Dec 17, 2009
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    Someone mentioned DRDO biting off more than they can chew. That is simply the case. You can't expect an organisation with a budget of a couple billion dollars to reinvent all the military wheels. They even have them working on bug-spray.. wth? It needs to be refocused on critical technologies and whatever that can be bought COTS should be. No reason to invent crap like bugspray, polar socks, and mozzie netting. It is already done.
  11. bhramos

    bhramos Elite Member Elite Member

    Mar 21, 2009
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    Defence Scientist or Defence related get more money then the others, but in black. for example . A project starts in 2000yr with 10cr and has time 10yrs, but even in 2020 its incomplete and its budget raised several folds... and most of the projects happen in the same way in India...
  12. black eagle

    black eagle Senior Member Senior Member

    Nov 22, 2009
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    India likely to sign defence contracts worth Rs 46,000 crore

    NEW DELHI: India, the tenth largest defence spender, is expected to sign defence offsets contracts worth over Rs 46,000 crore in the next five to ten years.

    "In the 11th Plan, the value of offsets contracts is likely to be more than Rs 10,000 crore... In addition, (offsets worth) Rs 4,818 crore are at the contract negotiation stage and Rs 31,500 crore are at other stages," Minister of State for Defence M M Pallam Raju said here on Wednesday.

    Under the Defence Procurement Procedure (DPP), foreign vendors have to reinvest at least 30 per cent of the deals worth over Rs 300 crore in the Indian defence, civil aerospace or internal security sector.

    With India planning to spend over USD 100 billion for the modernisation of its armed forces, there will be investment of USD 30 billion in the three sectors.

    The Minister said offsets provide an opportunity for small and medium enterprises to emerge as suppliers for Indian defence companies and earn a significant revenue out of these propositions.

    Raju said 12 offsets contracts worth Rs 9,943 crore have already been signed and more than 85 public and private sector companies have benefited from them.

    As India looks to procure an increased number of platforms such as unmanned aerial vehicles, Airborne Early Warning Systems, refuelling tankers, battle tanks and missile systems, it would need to develop a robust industrial base, he said.

    Raju said a committee has been formed under a senior officer to study the existing offsets policy and it would recommend further changes in it on basis of the suggestions provided by the stakeholders including private sector defence companies.

    To increase self-reliance in defence sector and to promote indigenous defence and related sectors, Government has come up with its first-ever Defence Production Policy.

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