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• Indiandefencebudget2012-2013:ananalysis 02
• DOFA:asinglewindowmechanism 08
• Alenia:C-27J‘SPARTAN’Tier1’s 13
• RequestforInformation(RFIs) 15
• RequestforProposal(RFPs) 16
• Listofindustriallicenses(ILs)filedfrom01/01/2012TO29/02/2012 17
• Newprojects/investments/contracts 18
• Jointventuresandalliances 21
• Country-leveldealsandinitiatives 23
• Industrybuzz 24
• Sources 28
April2012 Eye on defence
Dearreaders,
ThefirstquarteroftheNewYearhaswitnessedsomesignificantdevelopmentsintheIndiandefencesector.
Recentlythe7thDefenceExpowasheldinDelhiinthelastweekofMarch.Therewascertainlysomereductioninthefanfareandglamor,whichwasexpectedfollowingtheMMRCAdecision.ThecoincidingoftheDefexpowiththefinancialyearclosingalsohadanimpactwithmostseniorlevelrepresentativesofIndiancompanies
beingpresentonlyforselectedperiodsoftime.
TheUnionBudgetwasalsopresentedintheParliamenton16March2012.Keepingwiththetrendthedefencebudgetwasincreasedbydouble-digitpercentagepoints(17.6%)overthepreviousyear.WiththeMMRCAnowalmostcertaintobesignedwithinthisfiscal,theadequacyofthedefencebudgetislikelytobetested.
Lastbutnottheleast,therewereaflurryofarticlesinallmajornews-papersandtheinternetabouttheamendmentstotheOffsetpolicy.NoticeablytheseamendmentspermittedToTasoffsetsandalsointroducedtheconceptofmultipliers.HowevertherehasbeennoofficialstatementorreleaseordocumentuploadedontheMoDwebsitetothiseffect.
Inourcurrentissue,wehaveanalyzedthelatestdefencebudget;proposedcertainmethodsofimple-mentingtherecentchangestotheoffsetpolicy(officialannouncementawaited)anddescribedtheTier-1’sofAleniaAermacchi’sC-27J“SPARTAN”platform,whichisincontentionformultipleprogramsinIn-dia.
WehopeyouenjoyreadingthisissueoftheEyeonDefence.Ithasbeenourconstantendeavortomakethispublicationmorerelevanttoyouandwouldappreciateyourcommentsandsuggestionsinthisre-gard.
K. Ganesh RajPartnerandLeaderAerospaceandDefencePractice
Indian defence budget 2012–13: an analysisTheGovernmentofIndia(GoI)initsUnionBudget2012-13hasearmarkedINR1,934billion(US$42.97billion)fordefence,increasingitby17.6%ascompareddefenceallocationofINR1,644billion(US$36.536billion)in2011–12.Thedefencebudget2012–13accountsfor12.97%ofthetotalgovernmentexpenditureand1.9%ofGDP.INR795.79billion(US$17.68billion)hasbeenallocatedforcapitalexpenditureandINR1,138.28billion(US$25.29billion)hasbeenallocatedforrevenueexpenditure.Theattacheddiagramshowsthedefencebudgetallocations(includingcapitalandrevenue)inthelastthreeyears:
Share of services In2012–13,theArmywithanapproximatebudgetofINR969.43billion(US$21.54billion)accountsforthehighestshareofaround50%;atadistancefollowedbytheAirForcewithINR475.59billion(US$10.56billion),whichaccountsfor25%ofthedefencebudgetandtheNavy,withanapproximatebudgetofINR217.58billion(US$4.83billion),whichaccountsfor19%ofthetotaldefencebudget.DefenceResearchandDevelopmentOrganization(DRDO)withINR106.35billion(US$2.36billion)allocation,andordnancefactories(OFs)withINR4billion(US$0.088billion)allocationtogetheraccountfor6%ofthetotalbudget.ThepiediagramdepictedbelowgivesusthepercentagesharedbydefenceservicesinDefenceBudget2012–13:
Defence budget = Capital + Revenue
13.33 15.37 17.68
19.4121.38
25.29
32.7436.75
42.97
05
101520253035404550
2010 - 2011 2011 - 2012 2012 - 2013
Am
ount
in U
SD b
illlio
n
Capital Revenue Total defence budget
Eye on defence | 2
Capital expenditureThecapitalexpenditure,whichismeantforacquiringnewweaponsystemsandplatformshasbeenscaleduptoINR795.79billion(US$17.68billion),a15.7%hikefromlastyear’scapitalallocationofINR691.99billion(US$15billion).However,theactualcapitalexpenditure(revisedestimates)wasINR661.43billionin2011–12,whichwillmeanthatactualhikeisaround20%.Inotherwords,thisyeartheMoDsurrenderedINR30.56billion(4.41%)asunspentfromitscapitalhead.But,theoverallshareofcapitalexpenditureasapartoftotaldefenceexpenditurehasactuallyfallento41.11%from42.09%fromthepreviousfinancialyear.
Share of defence services in defence budget 2012–13
Indian Army50%
Indian Air Force24%
Indian Navy19%
OF+DRDO6%
Miscellaneous 1%
Share of capital: Revenue 2011-12
Capital expenditure42%
Revenue expenditure58%
Share of capital: Revenue 2012-13
Capital expenditure41%
Revenue expenditure58%
Eye on defence | 3
Currently,allthethreesegmentsoftheArmedForces,theArmy,theNavyandtheAirForce,areonatransformationdrivetoacquireplatformsandweaponswithcutting-edgetechnology,whichareexpectedtobefinalizedin2012–13.Thegraphgivenbelowshowsthesuballocationsandpercentageshare,outofthetotalcapitaloutlayallocatedtothedifferentservices:
Thecapitalacquisitionsallocationshastocaterforcommittedliabilitiesfortheyearfromtheorderssignedpreviousyearsandarelikelytobeincurredonaccountofthefreshschemes,duringthefinancialyear.Thecommittedliabilitiesasondatearearound65%–70%ofthetotalcapitaloutlay,thusleavingaround30%–35%onlyfornewschemes.Underthecapitalhead,oftheINR795.79billion(US$17.68billion)nearly70%oraroundINR550billion(US$12.22billion)willbeforcommittedliabilities,thusleavingaroundINR250billion(US$5.55billion)forfreshpurchases.Withtheimpendingdefenceacquisitions,theabilityoftheGoItocompletenewpurchasesiscomparativelymorelimitedthanbefore.Amongthedealsinthefinalstagesfor
whichthecapitalexpenditureislikelytobespentuponinclude126fighterjetsforUS$20billion,sixmid-airrefuellingaircraftforUS$2billion,75traineraircraftforUS$1billion,US$647for145UltraLightHowitzers(ULH),197utilityhelicoptersforUS$750million,22attackchoppersvaluedatUS$600millionandGEF414-INS6enginesforindigenousLightCombatAircraft(LCA)TejasandHarpoonanti-shipmissilesestimatedatUS$170million.Besides,aUS$1.18billiondealtoprocure490MICAmissilesforMirage2000Hmultirolefighters,42additionalupgradedSukhoi-30MKIaircraft,around40warshipoftheNavy,includingrefurbishmentofanaircraftcarrierandnuclear-poweredsubmarine,areunderconstructionathomeandabroad.
Revenue expenditureInthebudgetfor2012–13,therevenueexpenditure,whichcaterstotheeveryday“operating”expenditureofthethreeserviceshasbeenraisedtoINR1,138.28billion(US$25.29billion)ascomparedwithlastyear’srevenueallocationofINR1,035billion(US$23.62billion).
IAF38%
Capital expenditure 2012–13: Service wise
IA: Indian Army; IN: Indian Navy; IAF: Indian Air Force; DRDO: Defence Research & Development Organization; OFB: Ordnance Factory Board
IA24%
IN12%
DRDO6%
OFB1%
Naval Fleet17%
Miscellaneous 2%
Revenue expenditure 2012–13: Service wise
IA: Indian Army; IN: Indian Navy; IAF: Indian Air Force; DRDO: Defence Research & Development Organization; OFB: Ordnance Factory Board
IAF16%
IA68%
IN11%
DRDO5%
Eye on defence | 4
Defence budget 2012–13: key statisticsThedefencebudgetfor2012–13hasbeenincreasedby17.6%overthepreviousyear’sallocation.Theincreaseinthedefencebudgethasthefollowingimpactonalmostallkeycomponents(seeTable).Onthepositiveside,however,theratiobetweenrevenueexpenditureandcapitalexpenditurehasimprovedtowardtheformer.
Comparison defence budgets, 2010-11, 2011-2012 and 2012-13
2010–11 2011–12 2012–13
Defencebudget($inbillions) $32.74 $36.75 $42.97
Growthofdefencebudget(%)overPreviousyear
3.98% 11.59% 17.63%
Revenueexpenditure($inbillions) $19.03 $23.62 $25.20
Shareofrevenueexpenditureindefencebudget(%)
60% 58% 59%
Capitalexpenditure($inbillions) $11.95 $13 $17.29
ShareofcapitalexpenditureindefenceBudget(%)
40% 42% 41%
Growthofcapitalexpenditure(%) 25.40% 15.33% 15.70%
Revenue vs. capital expenditureThepercentageshareofcapitalallocationinthedefencebudgetascomparedtorevenueallocationhasseenadeclinethistime.Thisgrowthhas,however,beendrivenprimarilybecauseoftheincreaseinpayandallowanceofthearmedforces,whichhasincreasedby27%toINR631.82billion(US$14.04billion),accountingforaround46%growthofthetotaldefencebudget.
Budget utilizationThedefencebudgetfor2011–12hasbeenrevisedupwardbyINR65.21billion(US$1.44billion)toINR1,709.36billion.However,unliketherevisedestimatefor2010–11,inwhichboththerevenueexpenditureandcapitalexpenditurewerehigherthantheirrespectivebudgetestimates,therevisedesti-matefor2011–12showsanincreaseinrevenueexpenditure(byINR9,576.32millionor10.06%)anddeclineincapitalexpenditurebyINR3,056million(or4.41%).Thus,thisyeartheMoDhasreturnedaboutINR30.56billion(US$0.67billion)butfreshmajorpurchasesin2012areexpectedtobeexecutedin2013,whichgivesanimpressionthatthenextrevisedcapitalbudgetmayevenexceedtheearmarkedINR800billion(US$17.77billion)in2012–13.Returningofunspentcapitalfundsshowsalackofplanning,asisevidentfromthepast.
Utilization of allotted capital budget (amount in USD billion)
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
$=45INR BE RE BE RE BE RE BE RE BE RE
CE 9.32 8.38 10.67 9.11 12.18 10.63 13.33 13.52 15.38 14.7
BE-RE 0.94 1.56 1.56 -0.19 0.67
CE-CapitalExpenditureBE-BudgetEstimateRE-RevisedEstimate
Eye on defence | 5
Itistobenotedthattheprocurementprocesshasthuspickedupandtheallocationshavebeenfullycommittedasagainstsurrenderearlierasshowninthetableandfigureabove.Therevisedestimatefor2011–12alsoshowsonlymarginalsurrenderofaround4%.
Impact analysis IndiahasanannualcapitalexpenditureofaroundUS$15billion,andistheworld’sbiggestimporterofdefenceequipment,accountingfor10%ofglobalarmsimportsbetween2007and2011.WhileIndia’sdefenceimportsareofficiallyputat70%,theactualfigureisconsiderablyhighandislikelytobearound85%,ifimportsmadequietlybydefencepublicsectorcorporations(DPSUs)areincluded.
AlthoughIndia’sdefencespendinghasmorethandoubledinthelastfiveyears—fromINR960billiontoINR1,934.07billion—butthemilitaryestablishmentstillfeelsthatthefinancialoutlayshouldbefurtherincreasedtobeefupcapabilities.Inrealterms,thisincreaseamountstoINR289.92billion(US$6.44bil-lion)inthetotaloutlayfordefencefor2012–13comparedtothedefencebudgetforthepreviousyear(2011–12).However,ifwetaketherevisedestimatesofthebudget2011–12thenthisbudgetedestimatehasseenanincreaseof13.1%fromthepreviousyear’srevisedestimateofINR1,709.36billion(US$37.98billion)in2011–12.TheGoI’sfinebalancingofresources,risinginflationandtheexchangeratevariations(ERV)leadingtosharpdevaluationoftheIndianrupeeagainsttheUSdollar,havecausedthedefenceservice’smodernizationbudgettobeeffectivelyreducedforthefirsttimeindecades.
Theshareofthisyear’sdefencebudget,whichaccountsforonly12.97%(approx.)ofthetotalCentralGovernment’sexpenditurefortheyear2012–13hasseenadeclineascomparedtolastyear.Also,themoneyallocatedfordefenceisbelow2%oftheGDPwhereasahealthydefencebudgetisexpectedtobebetween2.5%and3%ofthecountry’sGDP.Thisyear,thedefencebudgetconstitutes1.90%oftheGDP(estimatedtobeINR101598.84billion(US$2257.75billion).Itwas1.83%oftheGDPin2011–12andwas2.2%in2010–11.Whatissignificantisthatitisthesecondsuccessiveyearwhenthedefencebudgetwaslessthan2%oftheGDP.ThefiguregivenbelowshowsthedeclineinGDPindefencebudget.
Capital budget: Spending
9.316 10.67 12.18 13.33 15.38
-10%-15 %
- 13%
1%-4.5%
0
2
4
6
8
10
12
14
16
18
2007 -2008 2008 -2009 2009 -2010 2010 -2011 2011 -2012
Am
ount
in U
SD b
illio
n
Budget estimate Budget unspent Budget over-spent
Eye on defence | 6
Thearmedforces,andeventheParliament,havebeenaskingforanallocationof3%ofthenation’sGDPtodefenceforalongtimebuttheprojectedGDPofthisyearfallsshort.Itistobeseenthatifoureconomygrowsataround8%perannum,itwillnotbedifficultfortheGoItoallocatearound3%ofGDPforNationaldefence.
Acloserlookatthegrowthofthecapitalbudgetfor2012–13wouldrevealthatthefocusisentirelydrivenbytheNavy,whichhasgota72%hike(toINR241.51billion)initsmodernizationbudget.TheAirForce’smodernizationbudgethasincreasedmarginally(by0.5%)toINR285.03billion,whiletheArmy’shasdeclinedby3%toINR138.04billion.Trendsinservice-wiseallocations,especiallyincapitalbudgets,suggestthatIndia’scurrentmilitarymodernizationisweightedheavilyinfavoroftheAirForceandtheNavy,whichtogetheraccountforINR540billionapproximately(US$12billion).Thisconformstoalargerdefencelandscapewheretheaerospaceaswellasmaritimedomainsarelikelytoplayacriticalroleinfuture.However,whatisofconcernistheincreasingrevenueallocationfortheArmyatthecostofcapitalacquisitions.TheArmy’smodernizationhasalreadybeenhitbycancellationofmajorpurchases,especiallyinartillery,armoredandsoldiermodernizationandcombathelicopterequipment.Theobsoleteairdefencesystems,shortageoftankammunitionanddeficienciesinnight-fightingcapabilitieshasadverselyaffectedtheArmy’scapabilities.UnlesstheMoDcatchesupwithatleastreplenishmentrequirements,theArmyislikelytolagbehindinoverallmodernization,whichinturnwillcausemoreproblems.
Notwithstandingabove,thestrategicshiftinthethreatperceptionfromconventionalwartoasymmetricalchallengeshavetobekeptinmindduringresourceallocationbesidesmaintainingafinebalancebe-tweendefenceanddevelopment.Theeventualobjectiveofwaristobreakdowntheadversary’seconomicprowessbyneutralizingstrategicassets.Ourendeavorshouldbetofocusonthoseareasaswell.Thedefenceforceswilldowellincasetheyrationalizethetooth-to-tailratio.Timehascometodiscardthebaggage,whicharenotrequiredinthepresentoperationalenvironment.
Note: The conversation rate for $: INR has been kept at 1:45 for sake of uniformity and standardization with the previous figures.
Share of defence budget in GDP
0
0.5
1
1.5
2
2.5
In p
erce
ntag
e
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Eye on defence | 7
DOFA: a single window mechanismBackgroundIndiaisprobablytheonlycountryintheworldthathasaninstitutionalizedmechanismforfacilitationofOffsets.TheMoDclearlylistsoutthenuancesofthepolicy,itsprocedures;etc.Yesthereisscopeforimprovement,butthetransparencyshownbytheMoDcannotbeoverlooked.
ThefirstDPPthatincludedOffsetsimplementationwaspromulgatedin2005butthefirsteffectiveDPPinthisregardisalwaysregardedasDPP2006,whereindetailedguidelinesforimplementationofoffsetsdischargewasincorporatedaspartofDPP2006.Atthattimeitwasenvisioned,mostappropriately,thatthereisaneedforagovernmentagencythatislikelytoactasafacilitatorforforeignOEMsandIndianindustryalike.Herewasagovernmentthatincluded―consultancy―perseasoneofthefunctionstotakethisgreatinitiativeforwards.Thethinkingwithinthegovernmentthenwastocreateavibrantstructure,yetprovidetheOEMswithallpossibleassistancetoensurethesuccessofimplementationinOffsets.IfoneobservedthefunctionsandscopeofworkassignedtotheDOFAthen,itisevidentthatthissingleorganizationwasintendedtoworkhard,collectanddisseminateinformation,provideAdvisoryservicestotheindustryaswellastothegovernmentarmsinthisbusiness,provideforane-solutionbycreatingandsustainingadynamicwebsite,bethefrontendforfacilitationandyetremaininthebackgroundtoaidinthedecision-makingprocessoftheacquisitionunderconsideration.
Eye on defence | 8
How it all startedSoonafterthepromulgationoftheDPP2006,DOFAwasfoundedandwasestablishedaspartoftheDDP.AsmallorganizationwasputinplaceheadedbytheJointSecretary(Exports).Soonafter,aweb-sitewasalsolaunched,whichincludedtheextractoftheDPP,theprocedureforimplementationofoffsetguidelines,listofcompaniesthatrequiredanindustriallicenceandafewinteractivefeaturesforqueries.DOFAwasasinglewindowadvisoryfortheIndiandefenceindustryandthevariousassociationssuchasCII,FICCI,ASSOCHAMandforeignOEMs.
DOFA,initsenvisionedform(ofhavingmembersfromtheindustryassociations,andotherstakeholdersasamulti-disciplinaryorganization),existedfornotmorethanthreemonthsorsowhenallthemembersasindicatedinthepolicywereinvitedforDOFAmeetings.Mostprobablytwosuchmeetingswereheldafterwhichitfeltthatsuchanextendedbodywasnotwasreallyrequired.DOFAreallymeanttheChairperson,whoheadedtheorganizationandthePO(CAP)undertheDirectorP&C,whowasassignedtheadditionalresponsibilityofOffsetsaswell.ThisleanorganizationwaseffectiveintheformativeyearsandprovidedthesinglepointadvicetotheServices(TOEC),theMoD(CNC)andtheindustry.
TheeffectivenesscameaboutfromthesingularfocusthatDOFAmaintainedtillthen,―TobeacredibleAdvisoryandFacilitateinimplementation,unmindfulofauthority―.ThenameDOFAisself-explanatory,itisafacilitationagency,andstrivestoprovideservice,provideinformationandadvicetoallthestakeholders.
Lost focusTheyears2006,2007andearlypartof2008witnessedfructificationofsomemajordealssuchastheNavalFleetTanker,theMaritimeReconnaissanceandSurveillanceaircrafts,upgradestotheMig29andprocurementofHelicoptersamongothers.Thesewereabouteightornineinnumberandaccountedformorethanacoupleofbilliondollarsinoffsetsalone.Despitesuchmajorprogramshavingbeenfinalizedandmanymoreunderprocess,DOFAwasneverstrengthenedtoeffectivelytakeontheincreasedwork-load.RevisionstoDPP2006wereatthebehestofsomeverysoundfeedbackfromtheenvironment,whichincludedaprocedureforBankingofOffsetscreditsandremovalofthecompulsorylicensingconditiontoestablishtheeligibilityoftheIndianOffsetpartner.Atthisjuncture,insteadofstrengtheningtheDOFA,itwasfeltmoreprudenttointroduceyetanotherorganizationintheDDP(someonecalledDirectorS1,hithertolookingaftersupplieswingundertheJointSecretary(Supplies),intheDDP)tobemaderesponsibleforbankingofoffsets.
Duetothisnewstructure,severalbankingproposalsthatareinthequeue,onlytwohavebeenapprovedevenafterfouryearsofintroduction.Thecruxofthismattercanpossiblebetracedtothedilutedresponsibilitiesinthenewstructureandasaresult,oneofthemostimportanttoolstobeintroducedintheoffsetpolicyisyettotrulyplayitsroleinoffsetdischarge.
Eye on defence | 9
What is needed?AsharpfocusisexpectedofDOFAtoenabletheorganizationtodischargeitsfunctions.Anypolicy,howeverwellitisintentioned,andhoweverwellitisdrafted,canfail,iftheoriginalgoalsarelostdowntheroad.
• Asingle-windowapproach,fortheindustrytoseekguidanceandthenecessarysupportintheirendeavorstobeabletoefficientlyexploitthisopportunityprovidedbytheoffsetpolicy
• Integratethestrengthsofthegovernmentandincorporateaholisticapproach
• Strategizetheconceptsinimplementationbeforepromulgatingyetanotherpolicyandstructures
Implementation strategyOneofthequestionsthatemergeis,―shouldDOFAremainafacilitationagencyordoesithavesomemeritinupgradingitselfontoanauthorityofsorts―?
Consideringtheenormousamountofmoneyinvolvedintheprocurementprocessandsubsequentlyinoffsets,manyanalystshaveputthefigureofoffsetsatUS$5billioninthenextthreeyears,thenumbersinvolvedareofthehighestmagnitude,wrestingallthecontrolofOffsetsinasinglehandcouldbepotentiallyfraughtwithdanger.AllthismoneyisthroughindustrialparticipationguidedbytheavenuesfordischargeasenunciatedbytheDPP,inthechapter,―Procedureforimplementingoff-sets’provisions―.
Consideringtheavenuesfordischargeandthesubsequentprocessforapprovals,itcanbeseenthatthereisnosingleagencythatiscompletelyresponsibleforapprovals.Thishasadvantagesaswellasdisadvantages.Theprosarethat,distributedresponsibilitydoesnotconcentratepowerinonehandanddivergentviewsareexpectedtobefreelyairedwithoutbeingafraidofconsequences.Thegreatestdisadvantagethishasisthatthereisnotime-boundsolution.Theprocesscanbeindefinitelydelayedandtheblamecanbepassedfromonetoanother.
Eye on defence | 10
Asingle-windowmechanismisexpectedtoresolvemostoftheissuesandwillexpeditethedecision-makingprocess.Theindustry,bothdomesticandforeign,willnothavetokeeprunningfromoneofficetoanother,inanefforttoresolvetheirqueriesandproblems.
DOFAneedstobefocusedonfacilitationandbededicatedtothiscause.Thisisanimportantcause,thoughwithoutanypowersassignedtoit.Theentireindustry,researchanalystsandworldforumsseektoattributemanyreasonstowhyimplementationofoffsetsinIndiawillnotsucceed,bothfromanangleofpoorimplementationbytheMoDaswellasthelackofcapabilitywithintheIndianindustry.Whilethecapabilityhasindeedcomealongwayandwillonlyenhanceinthecomingyears,boththroughorganicand
inorganicmethods,focusoneffectiveimplementationisanimmediateneed.TheMoDmustdecidedlyupholdtheoriginalcauseforfacilitationandencouragetheindustrytoexploitthisimportantforum.TheclarificationsprovidedbyDOFAmust,inmostcases,bebindingonthegovernmentwhileprocessingthecasesatalaterdate.ThiswillencourageOEMstoseeknecessaryadvanceclarificationpriortostructuringtheirproposals.
Thismeans,thenewsinglewindoworganization,whichthegovernmentisintheprocessofestablishing,mustincorporateasoundfacilitationarmandretainasoundAdvisoryinsidethegovernment,bothforinternalpurposestoeducatevariousstakeholders.ThisfacilitationarmcancreateandsustainaninstitutionalmemoryandrefreshtheannalsofMoDandtheindustryinaperiodicmanner.Thisfacilitationarmcanalsoactastheknowledgepartnertothesinglewindowoffsetauthority.TheMoDcandowelltooutsourcethistasktotheindustryonaPPPmodel.
Inordertobeanapostleofknowledge,thefacilitationarmmusthaveintimateinteractionwiththeindustry,bothdomesticandforeign.Thereisalsoarequirementofanin-depthunderstandingoftechnologyasitrelatestodefencepreparednessofthecountry.Towardthisend,thefacilitationarmmustalsoincorporateexpertsinthefieldofeducation,technologistsandhaveaccesstoknowledgethatresidesinthevariousresearchinstitutionsinthecountry.
Eye on defence | 11
ThenewandvibrantOffsetAuthoritythatisintheprocessofbeingformedneedstobeasingle-windowagencythatincorporatesafacilitationarm,whichisalsoaknowledgearm,andaseparateexecutionarm.TheExecutionArmmustnecessarilysynergizethestrengthsavailableinthegovernmenttoformaformidableauthority.
So what are the strengths available within the MoD?DRDOistheTechnologyArmoftheMoDandhasinherentstrengthstoprovideforback-boneresilience.IntimateassociationwiththeDRDOisaninescapablerequirement.Adetailedknowledgeofthetechnologiesbeingharnessedacrossvariouslaboratories,therequirementsoftheArmedForces,technologiesinvogueacrosstheArmedForcesoftheworld,needtobestudiedandgapsidentified.ThenewOffsetAuthoritymaynotdotheentireprocessing,yetitneedstohaveagoodholdonthesubjectforeffectiveexploitation.TheArmedForcesdoincorporateandusenewtechnologiesandhaveafairideaofwhattheyneedincombat,theymustbeintegratedinasoundmannerinthisprocess.Thus,Services,TheIntegratedDefenceStaff,DRDOshouldbeintegratedintothedecision-makingprocess.
ThenewOffsetAuthoritymustintegrateallactivitiesoffacilitation,banking,processingandevaluations,approvals,monitoring(forbankingandpost-contractmonitoring),andcoveralltheactivitiesassociatedwithoffsets.Thiswillensureaccountabilityandeffectivenessinimplementation.Theintegrationwiththeacquisitionprocessmustbefullandtotal,leavingnoroomforanydelaysintheacquisitionsduetothelethargyoftheOffsetAuthority.
ItistimeforMoDtostrategizetheconceptsforimplementationpriortopromulgatingyetanotherpolicyororganization.Thedrawbacksofthepreviousorganizationmustbestudiedandanalyzedthreadbareandtheneffectivecountermeasuresmustbetakenandimplementedinthenewstructures.ThiswillaugurwellbothfortheMoDandtheindustry.
ConclusionThenewoffsetauthoritybeingconceivedbytheMoDmustberobust,wellstaffedbothintermsofqualityandquantityandincorporatethebestpracticesingovernance.Fromthehighesttothelowestlevel,thestaffmustbededicated.Maybeatlevelshigherthanthis,multi-taskingcouldbepermitted.DRDOmustnecessarilyplayadominantroleinacquiringtechnologyandbeabletofillingapssoidentifiedasalsoaggressivelyfindtheroutetoproduction.
Eye on defence | 12
Alenia: C-27J ‘SPARTAN’ Tier 1’sTheC-27Jisamediumcategorytransportaircraftandsharesmanyofitssystems(RollsRoyceengines)withtheC-130JwhichIndiacurrentlyposses.TheC-27JiscurrentlylookingatparticipatinginmultipletendersthathavebeenfloatedbytheCentralparamilitaryandarmedforces.Theaircraftiscapableoftakingofffromunpreparedstripslessthan500meterslongwithamaximumtakeoffweightof30,500kg.TheaircraftisdesignedtooperateinremoteareaslikethoseinJammuandKashmirandtheNorth-Eastfromgravelorsandasbesidesthetwin-engines,ithasanauxiliarypowerunit(APU)thatprovideselectricityandmaintainspressurewithouttheneedtokeeptheenginesrunningwhentheaircraftisonground.
Atpresent,besidestheUS,theC-27JhasbeenorderedbytheairforcesofItaly,Greece,Bulgaria,Lithuania,Romania,Morocco.Slovakiahasalsoselectedtheaircraft.
Eye on defence | 13
No.
Des
crip
tion
3Aile
rons
(L&R
)
4Sp
oile
rs(L
&R)
5Out
boar
dFl
aps(L
&R)
6In
boar
dFl
aps(L
&R)
14Nos
eLa
ndin
gGe
arD
oors
(L&R
)
16Ra
dom
e
18M
ain
Land
ing
Gear
Fai
rings
(L&R
)
22Ce
ntre
Win
gAirf
oilU
nder
side
Doo
r
23Out
erW
ing
Airf
oilU
nder
side
Doo
r
24W
ing
toF
use
Fairi
ng
25Fo
rwar
dFu
sela
ge
26Ce
ntre
Fus
elag
e
27Fw
d/Re
arF
usel
age
28Aft/R
earF
usel
age
30Pi
pes
31W
ires
No.
Des
crip
tion
1Ce
ntre
Win
g
2Out
erW
ing
(L&R
)
7Hor
izon
talS
tabi
lizer
(L&R
)
8El
evat
ors(L
&R)
9Ve
rtical
Sta
biliz
er
10Ru
dder
11Upr
Rea
rem
erge
ncy
Hat
ch
12Pa
ratr
oop
foor
s(L
&R)
13Upr
Fwd
emer
genc
yha
tch
15Si
dem
erge
ncy
door
17Fw
dcr
ewd
oor
19Lo
adin
gra
mp
20Lo
adin
gdo
or
21Upr
ctr
em
erge
ncy
hatc
h
29Nac
elle
(L&R
)
32Pr
opel
lers
Ale
nia
(InH
ouse
fabr
icat
ion
and
asse
mbl
e)
Subc
ontr
acte
d
Eye on defence | 14
Request for Information (RFIs)
January 2012 – 15 April 2012
Date of issue RFI details Response date Issued by Service
6Jan2012 RFIandInteractionwithManufacturersofOperatingTheatreShelterInflatable
11Jan2012 MGO/EM/GS&CRoomNo206
Army
6Jan2012 GeneralPurposeMachineGunforPARA(SF)
20Jan2012 DirectorGeneralofInfantryInfantry-7
Army
6Jan2012 Spares,RepairandOver-haulofMissileTestStation
23Jan2012 DirectorateGeneralOfEME(Electronics)MasterGeneralofOrdnanceBranch
Army
22Feb2012 UnmannedAerialvehicle(UAV)missionsimulatorforUAVcrew
22Mar2012 DirectorateGeneralOfArtillery5 Army
21Feb2012 FullBodyTruckScanners 13Mar2012 MIDte Army
22Feb2012 NightSightforCarbine 10Mar2012 InfDte Army
23Feb2012 OpticalTheodoliteInstrument 15Mar2012 DirectorateGeneralofArtillery5 Army
23Feb2012 ElectroOpticalInstrument 30Mar2012 DirectorateGeneralofArtillery5 Army
15Mar2012 SpecialistVehicle 15April2012 InfDte Army
19Mar2012 Newpowerpackwithminimum360horsepowerengineincludingrunninggearandsuspensionforInfantryCombatVehicle(ICV)BMP-2/2K
30April2012 DGMF Army
13Jan2012 TechnicalAndCommercialInformationForAWIMAXSystem
6Feb2012 JointDirectorofNavalSignals(Networking)DirectorateofNavalSignals
IndianNavy
3April2012 DiverNavigationSystem 20April2012 DirectorateofSpe-cialOps&Diving
IndianNavy
1April2012 SurveillanceRadar 23April2012 HQCACBamrauliAllahabad
IndianAirForce
20Mar2012 DeepSearchMetalMineDetector(DSMD)
2April2012 CRPF CRPF
1April2012 SurveillanceRadar 23April2012 HQCACBamrauliAllahabad
IndianAirForce
9April2012 ComjamAndSigintAircraft 24May2012 PDASR(RoomNo460)AirHQ(VayuBhawan),RafiMarg
IndianAirForce
11Apr 30mmormoreADGun 30Apr2012 DGWE(WE-9)GeneralstaffbranchRoomno208g,southblockIntegratedhqmod(army)Dhqpo,NewDelhi-110011
IndianAirForce
Eye on defence | 15
Request for Proposal (RFPs)
Date of issue RFP details/equipment Response date Issued by Remarks
19Jan2012 GPSforAviationNavigation 19March2012 ArmyCommanderSpecialFinancialPowerCellNorthernCommand
ForArmy
7Feb2012 CounterTerrorismOperationsPlanningToolandWargamingSystem
14April2012 WARDEC ForArmy
7Mar2012 LightWeightBPJacket 12Mar2012 INSAbhimanyu ForNavy,Qty:48
11Jan2012 Portableairsupply&communicationsystem
30Jan2012 CommanderOperationsOfficer
ForNavy
24Feb2012 ExpressionofInterestforTechnicalConsultancyServicesforPhaseIIAofProjectSeabird,NewDelhi
21Mar2012 DirectorGeneralProjectSeabird
ForNavy
23Jan2012 HandHeldLEDTorcheswithAccessories
13Feb2012 SOPROVOSTHQWACIAF
ForIndianAirForce
21Feb2012 RepairoverhaulofRussianoriginaggregatesofIllushinaircraftofIAF
3Apr2012 DEngTIAirHQ(VB)
ForIndianAirforce
27Jan2012 SupplyAndInstallationOfCCTVSurveillanceSystem
27Feb2012 WingCommanderUnitsLogisticsSectionTrainingCommand
ForIndianAirForceQty:12Nos.
30Jan2012 FUZETANDPDANO213P-MK-5(M-2)
28Feb2012 OrdnanceFactoryDehuroad,Pune
ForOFBQty:10190
15Feb2012 SmokelessPyroxylenePropellantPowderfor14.5MMAmmn.
20Mar2012 OrdnanceFactoryKhamariaJabalPur
ForOFB
15Feb2012 SmokelessPyroxylenePropellantPowderfor14.5MMAmmn.
20Mar2012 OrdnanceFactoryKhamariaJabalPur
ForOFB
3Mar2012 PowerUnitPartNo.1155261,completeasperBOMandDrg.AttachedasAnnexure-Ifor155mmFHGun
10April2012 JointGeneralMan-agerGunCarraigeFac-tory
ForOFBQty:06
14Feb2012 ImageIntensifierTube18mmAVGGlassI/P
20Mar2012 OrdnancefactoryDehradun
ForOFBQty:352units
Jan2012 ExplosiveDetectionKit 15Feb2012 DeputyInspectorGeneralofPolice,CentralReservePoliceForce
ForCRPFQty:10Nos.
30Jan2012 HandHeldThermalImagersandAccessories
14Mar2012 Directorate-General,CRPF ForCRFPQty:100
23Feb2012 GlobalPositioningSystem 17Mar2012 CRPF CRPF,Qty:77
4April2012 AmmunitionforShootingcompetition
18May2012 DirectorateGeneral,BorderSecurityForce
ForBSF,Qty:882400Rounds
4April2012 Dopplerradarsystemforvelocitymeasurementofsub-sonicandsuper-sonicprojectiles
29May2012 IndianOrdnanceFactoriesAMMUNITIONFACTORY,KHADKI
ForOFB
2April2012 RubberizedinflatableBoatswith25HPOBM
15May2012 DirectorateGeneral,BorderSecurityForce
ForBSF,Qty75No’s.
January 2012 – 15 April 2012
Eye on defence | 16
List of industrial licenses (ILs) filed from 01/01/2012 TO 29/02/2012Application no. and date Name of the applicant Item of manufacture
1:5/1/2012 MistralSolutionPvt.Ltd. Defenceelectronicshardwareboards
2:6/1/2012 TataAdvancedMaterialsLtd. ManufactureofpartsandaccessoriesN.E.C.foraircraftorspacecraft
3:31/01/2012 VinyasInnovativeTechnologiesPvt.Ltd. Electronicprintedcardboard,assemblies/electronicsubassemblies/militarywireharnessesfordefenceandaerospaceapplication
4:31/01/2012 ElcomemarineservicesPvt.Ltd. Systemintegrationforelectronicsincludingdesignandproductionofcustomizedhardwareandsoftware(GUI/APIbased,aswellasembedded)(NIA620)
5:7/2/2012 TaraAerospaceSystemsLtd. Componentskits/accessoriesforaircraft(rotorcraftsandfixedwingaircraft)
6:13/02/2012 NavanidhiElectronics(P)Ltd. Antennas,HF/VHF/UHF/RFpoweramplifiers,electroMechanicalmasts,securityjammers,mo-bileJammers&cellphonejammers,microwavesystemsandcomponentsforEWequipment,V/UHF,l-bandDigitallytuneablefilters,activenightvisionandfogvisionequipment
7:22/02/2012 PipavavDefenceandOffshoreEngineeringCo.Ltd.
Manufactureoftanks(armoredfightingvehicles)gunTurrets(landandsea),artillerysystems(includingupgradesandoverhaul)
8:22/02/2012 UniqueInstruments&Mfrs-Pvt.Ltd. Manufactureofaircraftandengineparts,ac-cessoriesandsub-assemblies
9:23/02/2012 SriLakshmiExploChemicals Solderingoffuseheaduntoinsulatedtwinwiresofprecutlengths,sleevingandtagging
10:29/02/2012 AshokLeylandDefenceSystemsLtd. Designdevelopment,manufactureassembly,overhaul,repairandupgradeofdefenceequipmenttoincludearmoredfghtingvehicles,otherarmoredcombatvehicles,unmannedground/aerialvehicles,armorprotectedvehicles,specialistvehiclesetc.
Eye on defence | 17
New projects/investments/contracts
Name of entity Project details Value
BharatDynamicsLtd.(BDL)
• BDLplanstosetupasurface-to-airmissileunitinHyderabadwithacapacitytoproduceanestimated6,000sophisticatedmedium-rangemissiles.
• Theplantspreadover630acresisexpectedtobeoperationalby2016andcreateemploymentfor700peopledirectlyand2,000indirectly.
INR300billion
IndianAirForce
―
• GOIhassignedcontractswithM/sThales,FranceandM/sDassaultAviation,France,aswellasM/sHindustanAero-nauticsLimited(HAL),IndiatoupgradetheMirage2000aircraftoftheIndianAirForce(IAF),scheduledtobecompletedby2021.
• AnothercontracthasbeensignedwithM/sMBDA,France,forprocurementofair-to-airmissilesfortheMirage2000aircraft.Thedeliveryofmissilesisscheduledbetween2015and2019.
ContractwithM/sThalesandM/sDassaultAviation:INR101.66billionContractwithM/sHAL:INR20.2billionContractforpro-curementofthemissiles:INR66.25billion
PawanHans
―
• Indiangovernment-ownedPawanHanshassubmittedaproposaltofourcentralministriesseekingthepurchaseof249helicoptersand10seaplanesandtheconstructionof180helipadsacrossIndia.
• Theaircraftandhelipadswillimproveaerialsurveillance,law-and-ordermonitoringandIndia’sresponsetomedicalemergenciesandnaturaldisasters.Thisisalsolikelytomakeatleast30%ofIndia’sdistrictsandmanyremoteareasmoreaccessible.
INR100.30billion
Defencepublicsectorunits
―
• FourdefencepublicsectorunitsaresettingupninemanufacturingunitsinAndhraPradeshthatisexpectedtocreate10,000jobsinthestate.
• ThisincludesBharatDynamicsLtd.(threeunits),BharatElectronicsLtd.(3units),ElectronicsCorporationofIndiaLtd.(2units)andMishraDhatuNigamLtd.(MIDHANI)(oneunit).
INR70billion
GovernmentofIndia
―
• TheRussianAkula-IIclasssubmarine“K-152Nerpa”wascommissionedintotheIndianNavyas“INSChakra”ona10-yearleaseagreement.INSChakra,commissionedatthePrimoryeregioninfarsoutheasternRussiawillsoonbesenttoIndia.
• Withthis,Indiahasbecometheworld’ssixthcountryaftertheUS,Russia,France,theUKandChinatooperatenuclearpoweredsubmarines.
INR46.67billion
GovernmentofIndia
―
• TheGoIispurchasing75PilatustraineraircraftfromSwitzerland.Deliveriesoftheaircraftareexpectedtobeginin2013.
• ThePilatusaircraftislikelytoreplacetheearlierHPT-32trainersthatweregroundedafterafatalaccidentin2009.
INR18.50billion
Poland
―
• Bumar,Polish-basedsupplierofarmamentsanddefencesignedanexportcontractforarmoredunitstotheIndianarmy.
• ItalsosignedanagreementwithBEMLstipulatingco-operationonprojects,includingsalestothird-partymarkets.
INR15.56billion
Eye on defence | 18
Name of entity Project details Value
Pratt&Whitney
―
• Pratt&Whitney,unitofUnitedTechnologies,isexploringtosetupanMRO(maintenance,repairandoverhaul)unit,anaircraftenginecomponentsfacilityandatrainingcenterinIndia.
• Thecompanyisholdingtalkstoset-upaJVwithTatasandL&TandtheproposedunitisexpectedatBangaloreorHyderabad.
INR7.78billion
BharatEarthMoversLimited(BEML)
―
• BEMLinitiatedtheprocessofsettingupanAerospacemanufacturingdivisionnearBangaloreairport.Thefacilitywillbespreadover3,00,000sqftandisexpectedtobereadybySeptember2012.
• ThisAerospaceFacilitywillbecapableofmanufacturingaerospacecomponentsandparts,assemblingofaircraftandhelicopterupto21metersheight.
INR4.45billion
TataMotors
―
• TataMotorsLtd.willinvesttobuildafactorysubjecttosupplyorderof2,000infantrycombatvehiclestotheIndianArmy.
• Thecompanysubmittedabidtwoyearsagotosupplytheinfantryvehicles.
INR3billion
HindHighVacuum
―
―
• ―HindHighVacuum(HHV),avacuumtechnologymajorthatsuppliesequipmentforsatelliteandaircraftprojectstoISRO,HindustanAeronautics,DRDOetc.hasstatedplanstoset-upathirdplantnearBangalorefocusingonthedefenceandaerospacebusiness.
• HHVisopentoaforeignequitystakeoraninvestorinitsexistingplant.
• ThecompanywantstoincreaseitspresencegloballyandaimstomorethandoubleitsturnovertoINR5billionby2014(fromnearlyINR2billionthisfiscalyear).
INR2-3billion
IndianCentralBoardofExciseandCustoms
―
• SmithsDetection,partoftheUK-basedglobaltechnologybusinessSmithsGroup,haswonacontracttosupplytheIndiancustomsauthoritieswithhigh-energy,X-rayscreeningsystems.
• SmithsDetectionwillworkinpartnershipwithBharatElectronicsLimitedandwilldeliverthesystemstotheportsofChennai,Tuticorin,KandlaandMumbaioverthenexttwotothreeyears.
INR1.04billion
KalyaniGroup
―
• KalyaniGroup,adiversifiedIndianconglomeratewillinvestINR1billiontodevelopatowedartilleryguntomeetthefutureneedsofthecountry’sarmedforces.
• Itisdevelopingthegunonitsownwithatechnologypartnerandhashired60expertsforitsdevelopment.
INR1billion
MinistryofDefence
―
• ThedefenceministryispurchasingsixMi-17V-5helicop-tersfromRussiatobeusedbytheUnionHomeMinistrytoassisttheforcesininternalsecurityduties.
• ThesehelicoptersarebeingbuiltbyRussianHelicopters’KazanHelicopterFactory(KVZ)subsidiary.
NA
HindustanAeronauticsLtd.(HAL)
• AnewunitofHALatSeethangoli,KeralawasinauguratedinFebruary.Theunitwillprepareindigenousdesignsandassemblecomponentspurchasedfromabroadforthearmedforcesaircraftandchoppersandstate-of-the-artcommunicationequipment,radioaltimeterusedinradardevicesandnavigationradarcomputers.
NA
Eye on defence | 19
Name of entity Project details Value
BharatElectronics(BEL)
―
―
• TheCoastGuardhasselectedBharatElectronics(BEL)toprovideturnkeysurveillancesolution.
• BELhasalsogivenacontracttoObzervTechnologiestosupplyitwith46ARGC-2400cameras.
• ThisprogramisthefirstphaseoftheIndiancoastalsurveillanceprojectdesignedtocovertheentirecoast.
NA
Russianairplane-buildingcorporation(RAC)-MiG
―
―
• Russianairplane-buildingcorporation(RAC)-MiGcompletedsupplyofshipbornefightersMiG-29K/KUBin-tendedforaircraft-carrierVikramadityatothenavyofIndiainlate2011.
• Thecontractonsupplyof16combatairplanesinthesingle-seatversionK(shipborne)anddouble-seatversionKUB(shipbornecombattraining)wassignedin2004.
• Thecompanyhasalreadystartedproductionofthenextbatchof29suchfightersinaccordancewiththeadditionalcontractsignedwithIndiainMarch2010.
NA
IndianRotorcraft
―
• IndianRotorcraft,aJVcompanyofTataSonsandAgustaWestland,hasproposedtosetupanassemblylineforhelicoptersinHyderbadona10-acresite.TheJVwillcommenceproductionfromJune2013andwillinitiallyproducetheeight-seaterAW119Kelighthelicopter.
• Thefacilitywillbecapableofproducingupto30helicoptersperannum.
NA
TataPowerStrategicElectronicsDivision(SED)
―
• NewZealand-basedRadiolaAerospaceLimitedhaswonafour-yearcontracttoundertakeflightinspectionsofnewnavigationaidsat30militaryairfieldsthroughoutIndia.
• ThecontractisawardedbyTATAPowerSED.TataPowerSEDholdsaprimecontractwiththeIndianMoDtomodernizethefacilitiesatairfieldsoperatedbytheIndianAirForce.
NA
*ThevaluesofthedealshavebeenconvertedtoIndianRupeesusingOandacurrencyconversiontool
1US$=INR51.8521(Valuesason31March2012)
Eye on defence | 20
Joint ventures and alliances
Name of entities Nature of transaction Value
DCNSandSECIndus-tries
―
• ―DCNS,aFrenchnavaldefencecompanysignedacontract(throughDCNSIndia)withHyderabad-basedSECIndustriesforthelocalmanufacturingofequipmentfortheP75Scorpenesubmarines.
• SECwillmanufactureequipmentunderaTOTprovidedbyDCNSIndiaandtheywillbedeliveredtoitscustomer,MazagonDockLimited(MDL).
INR3.1bil-lion
Larsen&ToubroandThalestLtd.
―
• TheelectricalandautomationbusinessdivisionofL&TacquiredThalest,UK-basedproviderofshipcontrolandautomationsystems.―
• Theacquisitionisaimedatexpandingtheautomationofferingsforships.
INR240million
IndustriadeTurboPropulsoresandReginsonEngineeringLtd.andRaghuVamsi
• ―Spanishmanufacturerofturbinesforaircraftengines,IndustriadeTurboPropulsores(ITP),inalliancewithBritishfirmReginsonEngineeringLtd.andIndianfirmRaghuVamsihavesetupaplantinIndiawithanobjectiveofex-pansionanddiversification.
• TheagreementwassignedbyITP’ssubsidiaryTuberiasAeronauticaswiththelocalfirms.
• Theproductionoutputisplannedtodoublein2014whereasthenumberofemployeeswillbemorethan100people.
INR165.98million
RelianceIndustriesLtd.andDassault
• RelianceIndustriesLtd.(RIL)andFrenchDassaultAviationSAhavesignedapreliminaryagreementtoexploredefenceprojectsinalliance.
• Thetwocompaniesareyettoidentifyareaswheretheycancollectivelywork.
NA
TTI,Inc.andRadiantCorp
―
• ―TTIenteredanagreementwithRadiantCorporationtosupplyinterconnects,electromechanical,andpassive(IP&E)components.
• RadiantmanufacturesitsownrequirementsofcompositecablesandrecentlyenteredthefieldofaviationgradecableloomsandwiringharnessestoparticipateinthegrowingoffsetbusinessgeneratedasaresultofaircraftsupplycontractstotheIndianArmedForces.
NA
MahindraandMahindraandRafael
―
• Mahindra&MahindraannounceditsJVwithRafaelthatwillfocusondevelopmentandmanufacturingofproductssuchasTorpedoDefenceSystems,ElectronicWarfareSystems,AdvancedArmourSolutionsandRemotelyOperatedWeaponStationsforFuturisticInfantryCombatVehicles(FICV).
• AmanufacturingfacilityisexpectedtobesetupinPune.Mahindrawillowna74%stakeintheJVwithRafaelandisexpectingaturnoverofUS$500millioninthenext10years.
NA
Larsen&TubroandNexter
―
• Larsen&TubrosignedanagreementwithFrenchdefenceproductscompanyNextertojointlybidfortheIndianarmy’sartillerygunprograms.
• NexterisexpectedtotransfertechnologyforitstowedandmountedgunsystemstoL&T.TheIndiancompanyplanstoassembleNexter’sCaesarandTrajangunsinIndia.
NA
Eye on defence | 21
Name of entities Nature of transaction Value
Larsen&ToubroandSamsungTechwinCo.
―
• ―Larsen&ToubroLtd.enteredanagreementwithSouthKoreandefenceproductscompanySamsungTechwinCo.tomakehowitzergunsinIndia.
• Thecompanieshavealreadysubmittedabidtosupplyupto100gunstotheIndianarmy.
NA
SelexGalileoandDataPatternsPvt.Ltd.
―
• ―SelexGalileoandDataPatterns(India)Pvt.Ltd.willseekapprovalfromtheGoItoformaJVtomakedefenceelectronicsproducts.ThetwocompanieswillestablishanewfacilityatChennai.
• SelexGalileowillholda26%stakeintheplannedjointven-ture(JV)andplanstoemploy100peopleinitially.
NA
ITTExelisandTataAdvancedSystems(TASL)
―
• ITTExelisandTataAdvancedSystemsLimitedhaveformedastrategicalliancetosupportGeneration(Gen)3nightvisionrequirementsinIndia.
• ITTExeliswillprovideTASLwiththetechnologytobuildnightvisiondevicesinIndia,whichwillbefollowedbymanufactureofhighprecisioncomponentsandsub-assembliesofthedevicesbyTASL.
NA
DHSSystemsandBharatElectronics
―
• ―DHSSystemsInternational,manufacturerofsheltersenteredIndianmarket,throughalongtermdealwithBharatElectronicsLimited’sNaviMumbaiunit.
• DHSSystemsInternationalaimstogeneraterevenueofINR1billioninthenextthreeyearsfromthedefenceandhealthcaresectorsinIndiaandalsosetupamanufactur-ingfacilityby2015.
NA
DCNSandIITBombay
―
• ―NavalDefenceCompany,DCNSenteredanagreementwithIITBombayforeducationandresearchprogramsinnavaldefenceandenergy.
• AccordingtotheMoU,R&DprogramswillbecarriedoutjointlybyIITBombayandDCNSResearchteamswhiletrainingofDCNSpersonnelwillbeconductedbyIITBombay.
NA
Eye on defence | 22
Country-level deals and initiatives
Country Nature of transaction Additional details
US ForthefirsttimeinIndo-USwargames,theAmericanswilldeploytheirtanksinthecompany-levelExerciseYudhabhyasscheduledtobeheldintheMahajanfieldfiringrangesintheRajasthandesertinMarch.
Apartfromfieldingthreetanks,theUSwillalsodeployaround200menaccompaniedbyarmoredpersonnelcarriersforthewargames.
IndiawillfileitsRussian-originBMPsalongwithtanksforthewargame.
Russia TheMoDplanstopurchasesixMi-17V-5heli-coptersfromRussiatobeusedbytheUnionHomeMinistry.
Throughthepurchase,theMinistrywillassistitsforcesengagedininternalsecurityduties.ThesehelicoptersarebeingbuiltbyRussianHelicopters’KazanHelicopterFactory(KVZ)subsidiary.
Currently,thedefenceministryisnegotiatingpurchaseof59Mi-17safteritsfirstorderof80suchhelicopterstotheRussiancompany.
Brazil(Defencetalks)
ThetalksbetweentheDefenceministersofIndiaandBrazilwereheldinIndiainFebruary2012.
TopicsofdiscussionrevolvedaroundcooperationinthenavalsectortobuildaircraftcarriersandsubmarinesoftheScorpeneclass,expansionoftheexistingvacanciesforexchangeofmilitaryofficers,andcoursesofhighereducationofferedbythemilitaryschoolsofbothcountries.
OtherkeyareasontheagendaincludedtalksonpartnershipsbetweenBrazilianandIndianarmiestoestablishresearchcentersfordevelopmentofdefenceequipmentthatmeetthefutureneedssuchastheBorderMonitoringSystem(Sisfron),talksrelatedtotheirrespectiveairforces,exchangesbetweenschoolsofpilots,aerospacemedicine,searchandrescueoperationsandparachuting.
Australia TheSocietyofIndianAerospaceandTechnol-ogies(SIATI)andAviationAerospaceAustralia(AAA)haveforayedintoalong-termpacttojointlydeveloptheaerospaceindustryinboththecountries.
Theagreementhassignaledanewlevelofcooperationandthecollaborationislikelytohelpboththeorganizationstoshareknowledge,developdomainexpertiseandtransferskills.
Singapore AirChiefMarshalNAKBrowne,ChiefoftheAirStaff,wentonafourdayDefenceCooperationvisittoSingapore.
Thediscussionissuesrevolvedaroundtheongoingdefencecooperationbetweenthetwocountriestowardexpandingthealreadyrobustbilateralmilitary-to-militarytiesandalsoavisittheSingaporeAirShow.
SriLanka Inauguraldefencedialoghastakenplacebe-tweentheDefenceSecretariesofIndiaandSriLanka.
RegionalsecuritysituationincludingissuesofmaritimesecurityintheIndianOceanregionwerethekeythemesattheinauguralannualdefencedialog.
Japan JapanesedelegationledbyAdmiralHisayasuSuzuki,theCommandant,JapanCoastGuard(JCG),fortheXIHighLevelMeetingandCombinedExercisesmetwiththeIndianCoastGuard(ICG).
Thefive-dayvisit,wasinpursuanceoftheMemorandumofCooperation(MoC),signedbetweenthetwoCoastGuardson24November2006,whichstipulatesthattheheadsofthetwoorganizationsmeetalternatelyinIndiaandJapan,todiscussmaritimeissuesofmutualconcernsandformulateacooperativeapproachtoaddressthese.
SaudiArabia TheIndianandSaudiarmedforcesarelikelytoconductjointexercisesinvolvingSaudiandIndianshipvisitsfrombothsidesandtoworkcloselytocombatseapiracy.
Thejointcommitteewillalsoprepareadraftagreementthatwillbeendorsedbybothsidesinthefieldofhydography.Thetwosidesintendtodiscussthedetailsoftheirfuturedefencecooperation,includingthedetailsofanagreementinthedefencesector.
Eye on defence | 23
Industry buzz
Stronger role of private sector in DefenceTheprivatesector’sroleintheDefencesectorislikelytogetstrengthened,underthe“ArmedForcesLong-termIntegratedPerspectivePlan”soontobemadepublicbytheUnionGovernment.Underthe15-yearplan,theprivatesectorwillhaveagreaterroleinmeetingtherequirementsofthearmedforces,intermsofinvestmentandinresearchanddevelopmentoftechnologysuchaselectronicwarfare.
(Source:“GreaterroleforprivatepartiesinDefencesector,”TheHindu,23February2012,viaFactiva,©2012Kasturi&SonsLtd.)
Electronic warfare proposition attractive for IndiaIndiacouldsoongetaccesstoelectronicwarfare(EW),thescienceofelectronicallydodgingandattackingtheenemy,withanINR250billionbusinesspropositionawaitingthecountry’spublicandprivatesectors.Thecountry’smilitarylabswereequippingthethreeforceswithfuturisticEWorintelligentdevices,includingradarwarners,missilewarners,electronicandleak-proofcommunicationintelligence,jammersanddetectors.Thesewillbefittedongroundvehicles,shipsandalsoonunmannedcombatairvehicles,fighterplanesandevenfuturesatellitestoenhancethemilitary’s”seeingandhearing”ranges.Currently,BharatElectronicsLtd,(BEL)isamajorproviderofEWhardwareandsolutionstothemilitary.
(Source:“ElectronicwarfareoffersRs25,000-crbizforIndiaInc.,”BusinessLine(TheHindu),22February2012,viaFactiva,2012TheHinduBusinessLine.)
Government extends support on Defence PSU JV’s TheofficialguidelinesonformationofaJVbyDefencePSU’sareanattempttowardafairandtransparentframeworktoenablesuchtie-ups.AcaseinpointistherecentcontroversyaroundtheJVbyMazagonDockLtd.,ashipbuilderundertheMinistryofDefence,withtheprivatelypromotedPipavavShipyardforconstructingwarshipsfortheNavy.TheGoIisrespondingtotheseconcerns,withtheguidelinescontainingprovisionsonselectionofJVpartnersbytheDefencePSUs.
(Source:“Indefenceofjointventures,”BusinessLine(TheHindu),13February2012,viaFactiva,2012TheHinduBusinessLine.)
Indian records success in missile test fireIndiahasachievedanotherdefencemilestonebysuccessfullyflight-testingoneofitssophisticatedin-terceptormissilesfromWheelerIslandinOrissa’sBhadrakdistrict.TheinterceptornamedAdvancedAirDefence(AAD),destroyedatargetmissile.Thetestwaspartofacoordinatedairdefenceexercise,whichfeaturedtwomissiles—aninterceptorandatargetmissile.
(Source:“Advancedinterceptormissiletest-firedsuccessfully,”TheTimesofIndia,12February2012,viaFactiva,2012TheTimesofIndiaGroup.)
Eye on defence | 24
Ministry of Defence debars firmsTheMinistryofDefencehasdebarredsixfirms—M/sSingaporeTechnologiesKineticsLtd.(STK),M/sIsraelMilitaryIndustriesLtd.,M/sRheinmetallAirDefence,Zurich,M/sCorporationDefence,Russia,M/sTSKisan&Co.Pvt.Ltd.,NewDelhiandM/sRKMachineToolsLtd.,Ludhiana—fromfurtherbusinessdealingswiththeOrdnanceFactoryBoard,DepartmentofDefenceProduction,MoD,foraperiodoftenyears.ThefirmshavebeenblacklistedbytheCBIontheevidencecollectedagainstthem.
(Source:“MoDDebarsSixFirmsfromBusinessDealingsforTenYears,”PressInformationBureauwebsite,http://pib.nic.in/newsite/AdvSearch.aspx,accessed15March2012.)
Indian IT majors work hard to lure MNC defence playersIndianITcompaniesareworkinghardtoforgepartnershipswithaerospacemajors,asthecountry’sdefencebudgetisexpectedtoreachUS$50billioninthenextthreeyears.SoftwarefirmsareexploringopportunitiesarisingfromoffsetobligationsofmultinationaldefencecompaniesasITadoptionrelatedtocommunication,humanandmachinemanagementinArmedForcesisontherise.Accordingtotheoffsetpolicy,foreigndefencemanufacturershavetobuyfromlocalplayersorformJVstopassback30%ofthecostofthecontract.AcaseinexampleistheWipro’stie-upwithanEuropeanorganizationformanufacturingandglobalsupplyofactuatorsforlandinggears.
(Source:“Softwarecosaggressiveondefenceoffsetpolicy,”FinancialExpress,14February2012,viaFactiva,©2012IndianExpressOnlineMediaPvt.Ltd.)
Hatsoff simulator receives Level D certification AJVofHALandCAE,HelicopterAcademytoTrainbySimulationofFlying(Hatsoff)recentlyannouncedthatoneofitssimulatorcockpitshasreceivedacertificationofLevelD.LevelDisthehighestqualificationforflightsimulatorsandHatsoffhasgotthecertificationforEurocopterAS365N3Dauphinhelicopter.India’sDirectorateGeneralofCivilAviationandtheEuropeanAviationSafetyAgency(EASA)havegiventhecertification.Further,itsthreesimulatorcockpits-aBell412,aHALcivil/conventionalDhruv,andtheEurocopterAS365N3Dauphin-havebeencertifiedasLevel2(JAR)/Level6(FAA)flight-trainingdeviceswhenusedasfixed-base,non-motionsimulatorsinthedockingstationinstalledatthefacility.
(Source:”Simulatorgetsregulators’nod,”DNA-DailyNews&Analysis,13January2012,viaFactiva,2012DiligentMediaCorporationLtd.)
First batch of Mi-17V-5 helicopters made operational in IndiaThefirstbatchofMi-17V-5s,deliveredasperthecontractsignedin2008,hasbeenmadeoperationalbytheIndianAirForces.Acontracton80Mi-17V-5shadbeensignedin2008.Around20helicoptershavealreadybeendeliveredtoIndia.ThesevehiclesarebeingproducedbyKazanhelicopterplant.All80helicoptersareexpectedtobeoperationalby2014.
(Source:”IndiaputsfirstMi-17V-5helicoptersintooperation,”SKRINNewswire,20February2012,viaFactiva,2012SKRIN.)
Delivery of six Scorpene submarines delayedThedeliveryofsixScorpenesubmarines,beingconstructedattheMazagonDockLimited(MDL),Mumbai,underProject-75hasbeendelayed.ThedeliveryscheduleofthefirstsubmarinehasbeenrevisedtoJune2015andthatofthelastsubmarinetoSeptember2018.TheoriginaldeliveryscheduleforthefirstsubmarinewasDecember2012andtheremainingweretobedeliveredwithagapofoneyeareach.
Thedelayinscheduleisbecauseofproblemsinabsorptionofnewtechnology,delayinaugmentationofindustrialinfrastructureatMDLanddelayinprocurementofitemsduetohighcostascomparedtotheearlierindicatedcost.
(Source:“DeliveryofScorpenesubmarinesdelayed:Govt,”19March2012,PressTrustofIndiaLimited,viaFactiva,(c)2012AsiaPulsePtyLimited.)
Cochin Shipyard provides platform supply vessels to SCIIndianshipbuilder,CochinShipyardLtd.,haslaunchedtwoplatformsupplyvesselsforwatertransportcompanyShippingCorporationofIndia(SCI).Theships,BY-85,SCINalanda,andBY-86,SCIYamuna,areplatformsupplyvesselsoftheUT755CDtype,designedbyRolls-RoyceMarineAS,Norway,asubsidiaryofUKengineeringgroupRolls-RoyceGroupplc.
(Source:“CochinShipyardlaunchesplatformsupplyshipsforSCI,”SeeNewsShipping,9January2012,viaFactiva,©2012SeeNews.)
Eye on defence | 25
Police department will get access to Electronic warfare technologiesIndiaissettodevelopelectronicwarfaretechnologiestohelpparamilitaryandpolicefighttheMaoistsandterrorists.DefenceResearchandDevelopmentOrganisation’s(DRDO)ChiefControllerResearchandDevelopment(Avionics)G.Elangovansaidthattheagencyhascreatedaseparatechiefcontroller(R&D)forlowintensityconflicttoidentifyelectronicwarfaretechnologiesthatcanbecustomizedtohelpparamilitaryandpolicemeetinternalsecurityneeds.TheDRDOintendstoinvolvetheprivatesectorinco-developingnicheproductsrequiredforlow-intensityconflictwithanti-nationalelementswithinthecountry.
(Source:“Electronicwarfaretechnologiestobedevelopedforpolice,”Indo-AsianNewsService,22February2012,viaFactiva,2012Indo-AsianNewsService.)
IBM’s security intelligence platform to fight cyber attacksIBM’sQRadarSecurityIntelligencePlatformallowsanalysisofreal-timedatafeedsfrommorethan400differentsources.Thecompanymentionedthatthisplatformhelpsinidentifyingthreatsandhackerswithreal-timeanalysisofthetrafficonthecorporateITinfrastructure.
(Source:“IBM’s‘QRadarSecurity’tofightagainstcyberattacks!,”EFYtimes.com,23February2012,viaFactiva,©2012EFYEnterprisesPvt.Ltd.)
Mahindra Aerospace likely to set up plant abroadMahindraAerospace,theaerospacedivisionofMahindra&MahindraGroupisconsideringsettingupplantsfor8-to18-seateraircraftintheUS,Canada,LatinAmericaandChina.Thisisbeingdonetoestablishitspresenceamongthesemarkets.Mahindrahasplanstoincreaseitsbusinessfive-foldbysellingapproximately100aircraftannuallyby2015.ThecompanyisalsolookingforapotentialtechnologypartneraswellasahangertobuilditsownaircraftinIndiaby2013–14.ItalsoaimstobecomeaTierIcomponentsuppliertoaircraftmakersAirbusandBoeingaspartofthegovernment’sUS$10-billionoffsetprogram.
(Source:KetanThakkar,“MahindraAeroPlansAircraftAssemblyAbroad,”23March2012,viaFactiva,©TheEconomicTimes–BangaloreEdition,©2012.Bennett,Coleman&Co.,Ltd.)
Tatas may make choppers if Sikorsky bags defence deal SikorskyAircraftCo,aUS-basedaircraftmanufacturerisamongthetwocompaniesshortlistedbytheMinistryofDefence(MoD)tosupply16multi-rolehelicopterstotheIndianNavyinaUS$1billiondeal.ItiscurrentlyawaitingalicensefromtheGoItomanufacturecomponentsandassemblehelicoptersfortheIndiandefenceservices.
TataSikorskyAerostructures,joint-venturewithTataAdvancedSystemsLtd,islikelytobenefitifSikorskybagsthedefencedeal.
(Source:KVRamana,”TatasmaymakechoppersifSikorskybagsdefencedeal,”4April2012,DNAMoney,viaFactiva,2012.DiligentMediaCorporationLtd.)
Indian firms to provide food and clothing for space mission TwolifesciencelaboratoriesoftheDefenceResearchDevelopmentOrganisation(DRDO)willprovidefoodandclothingfortheIndianastronauts(Vyomanauts),duringthecountry’sfirsthumanspacemission.TheMysore-basedDefenceFoodResearchLaboratory(DFRL)willprovideready-to-eatfoodinspace,theDefenceBioengineeringandElectromedicalLaboratory(Debel)(bothunderDRDO)willdesignandproducethespacesuitsforthefirstvyomanaut’sofIndia.Bengaluru-basedDebel,whichhasalreadydevelopedNuclearBiologicalandChemical(NBC)protectionsuits,flightclothingandprotectiveequipmentforaircrew,hasbeenassignedtodevelopthehighlycomplexspacesuits.ItisthefirsttimethatspacesuitswillbedevelopedinIndia.
(Source:“Debeltodevelopsuitsforastronauts,”DNA-DailyNews&Analysis,13February2012,viaFactiva,©2012DiligentMediaCorporationLtd.)
DRDO launches explosive detection kitsDRDOlaunchedtheExplosiveDetectionKit(EDK)attheDefenceExpo–2012.Itwaschosenamongmorethan70productsandtechnologiesdevelopedfordefenceapplicationswithpotentialcivilianapplicationsthathavebeenidentifiedforcommercializationundertheDRDO-FICCIATAC(AcceleratedTechnologyAssessmentCommercialization)programme.TheExplosiveDetectionKit(EDK),developedbyPunebasedHighEnergyMaterialsResearchLaboratory,canquicklydetectandidentifyeventracesofexplosives.
(Source:“DRDOtoLaunchExplosiveDetectionandSwineFluDiagnosticKitsatDEFEXPO,”PressIn-formationBureauwebsite,http://pib.nic.in/newsite/AdvSearch.aspx,accessed17April2012.)
Eye on defence | 26
Ashok Leyland launches COLT range of defence vehiclesAshokLeylandDefenceSystemsengagedinthemanufactureofspecializedtacticalandarmoredvehiclesunveiledthefirstoftherangeofCOLTtacticalvehicles-theLightTacticalVehicle(4x4)attheDefenceExpo–2012.TheLightTacticalVehicleisbeingdevelopeditsstrategicpartnershipwithFrench-based,PanhardGeneralDefense,France.
(Source:“AshokLeylandDefenceSystemsunveilstheCOLTrangeoftacticalvehicle,”30March2012,ENPNewsWire,©2012,ElectronicNewsPublishing.)
Tata Motors showcases anti-terrorist combat vehicle and launches Prahar missile launcher and armored vehicles at Defence Expo India 2012TataMotorsshowcasedanewMicroBullet-ProofVehicle(MBPV)atDEFEXPOIndia2012,amobilecombatvehicleforindoorcombatinsideairports,railwaystationsandothersuchinfrastructure.TataMotorslaunchedfourotherdefencevehicles—theTata12x12PrahaarMissileCarrier,theTataLightArmouredVehicle,theTataMobileBunkerandtheTata6x67klRefuelerduringtheevent.
(Source:“TataMotorsshowcasesAnti-TerroristIndoorCombatVehicleconceptatDEFEXPOIndia2012;LaunchesPraharmissilelauncherandarmouredvehicles,”30March2012,ENPNewswire,viaFactiva,(c)2012,ElectronicNewsPublishing.)
Eye on defence | 27
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Eye on defence | 28
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Eye on defence | 29
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