Indian Procurement


Senior Member
Nov 25, 2009
India's rapidly growing defense programs attracted a number of major global contractors to the biennial Def- expo land and naval exposition here in February. Many were looking to establish or firm up partnerships with local manufacturers to meet the offsets mandated for procurement awards by the defense ministry.

Though eager for business, most contractors want the government to relax the cap on ownership levels that has been imposed on joint ventures. The current foreign direct investment (FDI) limit favors Indian companies on a 74-26% basis over foreign OEMs, a level that many contractors say provides no incentive for technology transfer.

India's Defense Procurement Procedure (DPP) mandates a 30% offsets clause for projects valued at more than $65 million. At present, only $43 million worth of offsets are being realized—$2 billion, though, are in negotiation. A revised DPP 2010 policy is in the works.

Rafael Advanced Defense Systems of Israel, for example, has requested that the government increase the FDI limit to 49% for a joint venture it plans with government-owned Bharat Electronics Ltd., to produce advanced infrared imaging seekers for Python 5 air-to-air missiles. The Pythons, along with Derby surface-to-air missiles (SAMs), are part of the 18 Spyder mobile air-defense systems India ordered to replace Russian-made OSA-AKM and ZRK-BD Strela-10M/SAM systems.

Rafael Chairman Ilan Biran, however, acknowledges that the lure of India's defense jobs is enough to overcome his objections to the FDI restrictions. "The ultimate solution [for business] is forming joint ventures," he told DTI.

The value of Defexpo was such that it was the only show in which Northrop Grumman showcased all five of its business units. The company highlighted capabilities in airborne early warning and control systems with its E-2D Advanced Hawkeye aircraft for maritime reconnaissance, and exhibited fire-control radars, unmanned aerial vehicles (UAVs), coastal surveillance and marine navigation systems and ships, and multirole electronically scanned array radar.

"India is an important market," says John Brooks, president of Northrop Grumman International and vice president of Aerospace Systems. "We are ready to meet the country's current and evolving homeland security priorities. Our focus is to link together and network these systems to create solutions that respond to India's requirements for a coordinated national defense structure. We believe the DPP 2010 will focus on accelerating and simplifying *procurement."

In addition to recently specifying BAE Systems' M777 ultra-light howitzer (DTI March, p. 9), the Indian army has been shopping for advanced technologies in a number of areas. According to a report by the Confederation of Indian Industry, these include: weapon-locating radars, UAVs, battle tanks and antitank guided missiles; integrated communication platforms that support voice, data, image, applications and networking; rockets and missile systems; robotics for surveillance, reconnaissance, and ordnance detection and disposal; combat modeling and simulation software, and directed-energy weapons.

With large orders for protective gear in the pipeline for the army and paramilitary forces—among them 87,000 bullet-resistant vests, shields and helmets—BAE Systems and local company Anjani Technoplast are joining forces to supply survivability products and personnel protection materials.

"Anjani will manufacture protective equipment using Tensylon, a polyethylene ballistic material developed by BAE Systems for lighter and stronger body armor and vehicle armor," says Vijay Kumar Gupta, chairman and managing director. Anjani recently submitted bullet-resistant vest samples using Tensylon inserts to the Central Reserve Police for its bid of 59,000 protective jackets. "If Anjani gets the contract, the jackets will be made at our facility near New Delhi," adds Gupta.

"Bringing Tensylon ballistic tape to India is a critical first step for our companies," says Tony Russell, president of BAE's security and survivability business. "Together with Anjani's production base in India and BAE's global presence and investment in survivability technologies, we are leveraging our strengths to support India's first responders."

BAE is also evaluating manufacturing other survivability systems and accessories in India, including Molle, the Modular Lightweight Load-Carrying Equipment system, a widely used design for rucksacks and other gear that distributes component weight, improving a soldier's comfort and field efficiency.

BAE says its commitment to grow capabilities in India—not just in manufacturing, but design, development, testing and support—is a step forward in fulfilling the government's aim of procuring 70% of defense equipment domestically.

The company's recent joint venture Defense Land Systems India, with Mahindra & Mahindra, reflects this. Defense Land Systems focuses on the manufacture of up-armored light vehicles, special vehicles, mine-protected vehicles and artillery systems.

The venture unveiled plans at Defexpo for the Mine Protected Vehicle India (MPVI). This will be a locally built vehicle that provides high levels of protection at an economical price. The vehicle seats 18, and has a high power-to-weight ratio and high torque, making it suitable for much of India's terrain, especially the mountainous regions of Jammu and Kashmir.

Armored vehicles made locally by another company, Shri Lakshmi Defense Solution, include a blast-protected version and a fast-attack model that reportedly withstands a 24-kg. (53-lb.) bomb. "Our armored vehicles exceed 165 kph. (102 mph.) over most terrain," says Anil Kumar Verma, director. "The side walls are made of blast-protective materials [and] provide excellent protection."

The company signed an agreement with Ukrinmash, a Ukrainian state foreign trade and investment company, to manufacture and market 8 X 8 and 6 X 6 armored personnel carriers for use by the army in United Nations peacekeeping missions.

Another deal announced at Defexpo was between Ashok Leyland of India and South Africa's Paramount Group. The companies will build an assembly plant to manufacture mine-resistant armored vehicles. Ashok Leyland will invest more than $10 million in the plant over the next year before the first vehicle comes off the line. Components will initially be made in South Africa. The vehicle, to be called Stallion, will combine the design of two Paramount mine-resistant vehicles, Marauder and Matador, with Ashok Leyland's four-wheel-drive chassis.

In February, India's Larsen & Toubro (L&T) and Raytheon teamed up in response to a proposal for upgrading the army's 2,418 T-72 tanks. Raytheon will provide infrared imaging sights and electronics to improve target accuracy and increase system lethality on the battlefield for tank battalions. L&T will provide fire-control systems and sensors, and integrate technologies in the tanks.

"Through collaboration with L&T on this important proposal for the Indian army, we have confirmed the complementary capabilities leveraged across our companies," says Fritz Treyz, vice president of Raytheon Network-Centric Systems India. "Together, we are exploring other opportunities to provide network-centric modernization solutions to meet growing demands in India and the global marketplace."

India's Defense Research Development Organization (DRDO) selected Israel's Orbit Technology Group as a vendor for the Audio Management Solution over IP (Amsip) program. Amsip is a voice over Internet protocol (VOIP) interface designed for use with Orbit's digital audio management products. The system enables the use of TDM and IP-based end devices by aircraft and ship crews. Orbit says it is offering navies worldwide its OrSat-G Marine Satellite Communication System, which enables global satellite connectivity in all weather and sea conditions, providing uninterrupted broadband satellite communication for applications such as Internet, television, video and VOIP.

Amsip is a secure digital audio-management system with IP interface that enables a flight crew to select and control onboard communication systems and devices. The system provides the focal junction for inbound and outbound communications, including radio, public address systems, warning systems and crew intercom.

Rockwell Collins, meanwhile, was awarded a contract to supply electronic counter-countermeasure radio modules from government-owned Electronics Corp. of India Ltd. The deal includes hand-held GPS receivers featuring graphic user interfaces and moving maps for precision navigation capability. The component hardware card sets will be integrated into ground-based ultra-high-frequency radios for use by Indian armed forces in command and control of ground-to-ground and ground-to-air communications.

"India is looking at more cohesive armed forces and homeland security," says Thud Chee Chan, vice president and managing director of Asia-Pacific for Rockwell Collins. "We are [therefore] looking at building up the indigenous industry, and ready to work for local companies and partner with them." Indian Procurement Needs&channel=defense

black eagle

Senior Member
Nov 22, 2009
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- India targets $50bn for military procurement

India is earmarking $50bn for near-term aerospace and defence (A&D) programme procurement, experts have estimated.

Aviation Week forecasts that the Indian government will make the purchases over the next five years.

"While the Medium Multi-Role Combat Aircraft (MMRCA) competition-popularly referred to in the Indian media as the 'mother of all deals'-receives great attention, there are other areas where the Indian government has declared an interest," according to an Aviation Week & Space Technology article.

"Fixed-wing aircraft, rotorcraft, guided weapons and space asset requirements, spread across the four services and the paramilitary forces, will make India one of the heaviest buyers of military equipment in the world this decade."

India represents a "significant, growing and globally minded" A&D market, according to Iain Blackhall, civil aviation publisher, Aviation Week.

"India's civil aviation market is projected to increase more than 18% annually, and the government has pledged a strategic focus on aerospace and $80bn in procurement by 2015. This is a key market for the A&D industry," Blackhall added.

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