Overseas Companies Seek Tie-Ups Through India's OFB

[cobra commando]

NEW DELHI — A new Indian procurement policy that gives priority to state-owned defense companies has prompted Elbit Systems and Thales to forge ties with the Ordnance Factory Board (OFB), which administers 41 weapon factories, and promise to transfer high technology in return for firm orders, an OFB source said. Under Defence Ministry changes to procurement policy last year, state-owned companies get first priority in weapon procurement, and overseas defense companies will be the last option. The overseas companies will capitalize on firm orders with OFB in return for transferring technology, the OFB source said. No executive from Thales or Elbit was available for comment. Elbit of Israel has agreed to transfer technology for the production of thermal imaging systems to the state-owned electro-optics factory in Deharun, which will supply Indian artillery, armored and paramilitary forces. This deal alone can assure business worth more than $150 million to Elbit with repeat orders expected, the OFB source said. Thales, a major French electronics group, has agreed to transfer technology for night-vision systems to a Dehradun-based OFB factory that was awarded a contract worth $150 million to supply the devices. The demand for night-vision devices and optic systems is worth more than $400 million per year. This year, BAE Systems offered to help OFB with its $2.5 billion modernization of the 41 aging ordnance factories. A BAE executive said its plan, submitted to OFB, promises to increase productivity and reduce manufacturing waste.


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[Hari Sud]

I prefer not. OFB and others are in-efficient organizations.

Possibility of success are not the greatest.

Wait until the FDI in Defence sector is raised to 49% and then it would become profitable for private sector to tie up with foreign arms vendors.

 

[JBH22]

This year, BAE Systems offered to help OFB with its $2.5 billion modernization of the 41 aging ordnance factories. A BAE executive said its plan, submitted to OFB, promises to increase productivity and reduce manufacturing waste.

What's the rationale of maintaining state owned manufacturing plants?

Is it to protect employment or does the state does not want this to fall in private sector hands.

If I'm not mistaken the private-public sector partnership works well in EU,US or Russia. Govt can maintain stake in OFB but privatising it might be feasible.