Indian private sector involvement in defence R&D and defence production

WolfPack86

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India to ink two landmark military aircraft deals in next few months
India is gearing up for two major long-pending military aircraft deals, together worth over Rs 50,000 crore, in the new year. The contracts for 83 indigenous Tejas fighters and 56 medium-transport aircraft through a Tata-Airbus joint venture are set to be inked within the next few months.

The over Rs 37,000 crore order for 83 Tejas Mark-1A jets from defence PSU Hindustan Aeronautics Ltd will be the biggest-ever deal in the indigenous military aviation sector. These 83 fighters, the deliveries of which will begin three years after the contract is inked, will have 43 “improvements” over the 40 Tejas Mark-1 already ordered by the IAF.

The Tata-Airbus project to build 56 twin-turboprop -295 aircraft, which will replace the old Avro-748 aircraft of IAF, in turn, will be the first time an Indian private sector company will enter the defence aerospace arena.

While Airbus will supply the first 16 aircraft in two years after the contract is inked, the rest 40 will thereafter be built in India within eight years, in the project which was initially valued at Rs 11,929 crore.

Both the projects have been sent to the Cabinet Committee on Security (CCS) for the final approval. “The Tejas contract will be the first to be approved by the CCS. It is likely to be inked in early-February. The C-295 project, with the participation of Tata as the Indian production agency will follow subsequently,” said an official on Tuesday.

The overall cost of acquiring the 83 single-engine Tejas fighters and their support package has been cut down from the earlier around Rs 56,500 crore being demanded by HAL after protracted negotiations, as was reported by TOI last year.

The IAF’s two Tejas squadrons, the “Flying Daggers” and “Flying Bullets” at Sulur, have till now inducted only around 20of the original 40 Tejas Mark-1 fighters, which were all slated for delivery by December 2016 under two contracts worth Rs 8,802 crore inked earlier.

The 83 Tejas Mark-1A fighters will have 43 “improvements” to improve maintainability, AESA (active electronically scanned array) radar to replace existing mechanically-steered radar, air-to-air refuelling, long-range BVR (beyond visual range) missiles and advanced electronic warfare to jam enemy radars and missiles.

After these 123 fighters, IAF is also looking to induct 170 Tejas Mark-2 or the MWF (medium weight fighter) jets with more powerful engines and advanced avionics. But IAF is banking upon the first 123 Tejas to add to its fighter squadrons, which is down to just 30 (each has 18 jets) when at least 42 are required for the requisite deterrence against Pakistan and China.

The C-295 project, which has been pending for almost a decade, is meant to replace old Avro aircraft, first inducted in the early-1960s, as well as take on some “tasks” of the ageing AN-32 fleet, which has witnessed two major accidents in which 42 military personnel were killed in the Bay of Bengal in July 2016 and Arunachal Pradesh in June 2019, as was reported by TOI earlier. The C-295 aircraft can even find some buyers in the civil aviation market, say officials.
 

samsaptaka

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One general question - This whole L1 tender thing. Isn't it unfair to pvt companies when compared to DPSUs ?
Because the salaries of DPSU is paid by the govt, so they can always afford to bid low and emerge as L1 bidder. But the pvt companies have to develop the product AND pay salaries AND make a profit. How can this ever work out for them ? Should not the govt ADD the staff salaries of the DPSUs when considering their bid to the total amount ?
 

Arjun Mk1A

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One general question - This whole L1 tender thing. Isn't it unfair to pvt companies when compared to DPSUs ?
Because the salaries of DPSU is paid by the govt, so they can always afford to bid low and emerge as L1 bidder. But the pvt companies have to develop the product AND pay salaries AND make a profit. How can this ever work out for them ? Should not the govt ADD the staff salaries of the DPSUs when considering their bid to the total amount ?

Are you sure DPSU operates like that?

Their handling is pretty much same as regular private companies. But the biggest difference they have GOI protection to bail them out from every situation.

Bailing out is the problem since they are basically using our money to bail them out.


Apart from this generally GOI talking about this L1 issue for some time. Let see in future we will select the vendors who provide the most optimized tender instead of lowest one which compromise on various other fronts.
 

samsaptaka

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Bailing out is the problem since they are basically using our money to bail them out.
Yeah which is why they take a risk and bid low, overpromise and under deliver with huge delays and no accountability.
 

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