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Eye on Defense- Dec 2012
 

Eye on Defense- Dec 2012

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    Eye on Defense- Dec 2012 Eye on Defense- Dec 2012 Document Transcript

    • Eye on defence December 2012 Dear readers, I would like to take this opportunity to wish all of you a Merry Christmas and a very happy New Year. India is the largest importer of arms in the world, which is due to our volatile neighborhood. Therefore, the Ministry of Defence (MoD) and the Government of India have always stressed upon the need to become self reliant to meet our defence needs. Under the Defence Procurement Procedure (DPP), the “MAKE” procedure is one of the important ways by which this agenda of indigenization is being pushed forward. In this issue of Eye on Defence, we have tried to throw some light on this topic and also tell you about some of the “MAKE” programs that provide exciting opportunities for the domestic defence industry to play an important role in nation building.Contents The DPP is an evolving document and the latest edition of DPP 2013 is expected in the first couple of months of 2013. Throughout its evolution, the DPP has taken steps to harmonize• Introduction 1 with the extant regulations of the Government of India. One of the areas where this harmonization is really needed is to define a “defence” product. Due to multiplicity of lists,• The Wassenaar Arrangement there is considerable ambiguity regarding the products on which an Industrial License (IL) is and its relevance in the mandatory and products on which the 26% FDI limit applies. It should be noted that whereas Indian context 2 DPP 2006 made it mandatory for the Indian Offset Partner (IOP) to have an IL, this condition• Impact of “Make” procedure was removed in DPP 2008 and further relaxed in DPP 2011. The “Wassenaar Arrangement” on Indian defence and its lists are likely to present itself as a suitable solution to this problem and we analyze this industrial capability 7 aspect.• MSME development: vital for an The private sector was permitted to enter defence production in 2001 and we have seen some inclusive defence industrial base 12 remarkable achievement by large Indian conglomerates, thereafter. However, the same cannot be said about the micro, small and medium enterprises (MSMEs), which form the majority of• Request for Information (RFIs) 15 the industrial base of this country. The Revised Defence Offset Guidelines-2012 has taken a• Request for Proposals (RFPs) 16 bold step of introducing multipliers for providing a boost to the prospects of the MSME’s. In this issue, we try to highlight some of the other steps that could further help their cause.• List of Industrial Licenses (ILs) filed for the month of September Among the regular sections, we have industrial license applicants, new projects and 2012 - October 2012 19 investments, joint ventures and alliances, country-level deals and the latest buzz in the industry.• New projects/investments/ contracts 20 I hope you find the last issue of this year useful. It has been our constant endeavor to make this publication increasingly relevant to you and will appreciate your comments and• Joint ventures and alliances 23 suggestions in this regard. • Country-level deals and initiatives 25 • Industry buzz 27 K. Ganesh Raj • Sources 32 Partner and Leader Aerospace and Defence Practice
    • The Wassenaar Arrangement andits relevance in the Indian contextHow did it come into being?After the end of the Cold War, members of the formerCoordinating Committee for Multilateral Export Controls(COCOM) export control regime recognized that COCOM’sfocus on restricting exports to the former Soviet Union andEastern bloc was no longer an appropriate basis for exportcontrol. There was a need to establish a new arrangementto deal with risks posed to regional and internationalsecurity and stability due to the spread of conventionalweapons and dual-use goods and technologies.Accordingly, at a High Level Meeting (HLM) on 16November 1993 in The Hague, representatives of 17COCOM member states agreed to terminate COCOM andestablish a new multilateral arrangement, temporarilyknown as the “New Forum.” This decision was confirmedat another HLM in Wassenaar, Netherlands, held on29–30 March 1994. COCOM ceased to exist on 31 March1994. Participating states agreed to continue the use ofCOCOM control lists as a basis for global export controlson a national level until a new arrangement could beestablished. Agreement to establish the “WassenaarArrangement” was reached at the HLM held on 19December 1995. The first Plenary Meeting of the now-operational Wassenaar Arrangement was held on 12–13December 1996 in Vienna.What is it and what does it hope to achieve?The Wassenaar Arrangement (WA) is the first multilateral,voluntary export controls regime for conventional armsand dual-use goods and technologies. It categorizes allarms and dual-use items under two lists — Munitions Listunder eight categories (derived from the UN Register ofConventional Arms), and Sensitive Dual Use Goods andTechnologies list. The WA countries maintain effectiveexport controls for the items on the agreed lists. This isachieved through voluntary exchange of information atannual conferences by the WA members.The objective of WA is to contribute to regional andinternational security by controlling the transfer ofweapons and sensitive technologies to destabilizingelements. It seeks to achieve this through the following:Eye on defence | 2
    • • Promoting transparency and increased responsibility Control lists in transfers of conventional arms and dual-use goods and technologies, and therefore, preventing In order to place an item on the lists, member states take destabilizing accumulations into account the following criteria:• Preventing the acquisition of conventional arms and • Availability outside participating states dual-use goods and technologies by terrorist groups • Ability to effectively control the export of the goods and organizations as well as by individual terrorists • Ability to make a clear and objective specification of• Enhancing co-operation to prevent the acquisition of the item armaments and sensitive dual-use items for military • Controlled by another regime, such as the Australia end-uses if the situation in a region or the behavior Group, Nuclear Suppliers Group or Missile Technology of a state is, or becomes, a cause for serious concern Control Regime to the participating states Participating states practice export control on all items set forth in the Munitions List and the List of Dual-UseMember states Goods and Technologies with the objective of preventingMembership in the WA is universal and non- unauthorized transfers or re-transfers of those items.discriminatory for countries meeting the established 1. Munitions List: The Munitions List has 22 categories,criteria: which are not labeled. Conventional arms appearing• Produce/export arms or associated dual-use goods in this list fall under eight broad weapon categories and technologies — battle tanks, armored combat vehicles (ACVs), large-caliber artillery, military aircraft/unmanned• Implement national policies that do not permit the aerial vehicles, military and attack helicopters, sale of arms or sensitive dual-use items to countries warships, missiles or missile systems, and small arms whose behavior is a cause for concern and light weapons. (The ACV, aircraft, and helicopter• Adhere to international non-proliferation norms and categories include models designed to perform guidelines reconnaissance or conduct command of troop’s missions).• Implement fully effective export controls 2. Dual Use List: List of Dual Use Goods andMembers of the WA are obligated to maintain rigorous Technologies has a Basic List, which are furthernational export control systems. The latest list of 41 divided into two annexes — 1) Sensitive List and 2)countries that are part of the WA is: Very Sensitive List • Argentina • Finland • Malta • Slovakia • Australia • France • Mexico • Slovenia • Austria • Germany • Netherlands • South Africa • Belgium • Greece Hungary • New Zealand • Spain • Bulgaria • Ireland • Norway • Sweden • Canada • Italy • Poland • Switzerland • Croatia • Japan • Portugal • Turkey • Czech Republic • Latvia • Republic of Korea • Ukraine • Denmark • Lithuania • Romania • United Kingdom • Estonia • Luxembourg • Russian Federation • United StatesEye on defence | 3
    • • The Basic List is composed of ten categories • Basic List of Dual Use Goods and technologies: Semi- based on increasing levels of sophistication. The annual notifications of licenses issued, transfer of categories are — special material and related items and denials for items in the Basic List of dual- equipment; materials processing; electronics; use goods and technologies telecommunications and information security; • Sensitive and Very Sensitive List of Dual Use Goods sensors and lasers; navigation and avionics; and Technologies: Semi-annual notifications of marine; aerospace and propulsion. licenses issued and transfer of items for items in • Sensitive List: Items on Annex 1 of the WA’s list the Sensitive or Very Sensitive Lists. Members are of dual-use goods and technologies represent required to report any denials of transfers or licenses critical items that are keys for the development of items in these lists within 30–60 days. of military applications. It includes material • Any member who undercuts such denials (i.e., export for stealth technology, equipment that can be the denied item to the same end-user) within three used for submarine detection, advanced radar, years of the denial is supposed to report the issuance and jet engine technologies. of the export license within 30–60 days. • Very Sensitive List: Items on Annex 2 of the WA’s list of dual-use goods and technologies represent the most critical items for use in military Critical points applications. Participating atates are expected to In the context of export control and clear categorization exert extreme vigilance for items included in the of arms and dual-use goods and technologies, the very sensitive list. following points are to be noted: • WA is just a body for exchanging and collectingAdministration information. It is not a treaty. Hence, there is no legal, binding aspect to it.The WA Plenary is the decision-making and governingbody of the WA. It is composed of representatives of • All decisions at the WA are made by consensus,all participating states who normally meet once a year, even for induction of new members. Thus, a singleusually in December at Vienna, where the WA has country can block any proposal. Often, there is noestablished its headquarters and a small secretariat. consensus regarding the scope of WA, the countriesThe Chairman of the Plenary is appointed annually on a that are “states of concern” or the constituents of arotational basis among participating states. The Plenary “destabilizing” transfer.has established a General Working Group and an Experts’ • The Arrangement does not have an observerGroup, which meet periodically. Official language of the category. Information exchanged in the ArrangementWA is English. remains confidential to the participating nations andInformation exchanged in the WA can include any matter is treated as privileged diplomatic communication.that individual participating states wish to bring to the • The decision to transfer or deny an item is theattention of other members, such as emerging trends sole responsibility of each participating state, andin weapons programs, projects of concern and the the Arrangement does not impede bona-fide civilaccumulation of particular weapon systems. transactions.The WA’s specific information exchange requirements • All measures undertaken with respect to theinvolve: Arrangement are according to national discretion.• Munitions List: Semi-annual notifications of arms • The Arrangement considers exports to non-members transfers, licenses issued and denied to all non- only, and is not directed against any state or group of participating states, covering eight categories states. of Conventional Arms (including model and type information)Eye on defence | 4
    • • The Arrangement does not interfere with the rights of nations. This places increased onus on India to commit of states to acquire legitimate means with which to a global regime of defence and nuclear cooperation, to defend themselves pursuant to Article 51 of the promoting transparency and responsibility in exports of Charter of the United Nations. sensitive items.• There is a periodic review of information and control The WA has 41 participating countries — and accounts for lists to account for technological advancement. more than 90% of global production of defence goods. Therefore, becoming a part of these regimes will help India• Apart from the above, WA regularly endorses fully and effectively integrate itself into the global defence voluntary ”best practices” to dispose off surplus industry, increase its ability to bypass strict licensing military equipment and approves non-binding criteria requirements that have prevented it from procuring to guide exports of small arms and light weapons. It sophisticated defence equipment and technologies in the also effects agreements to exercise increased control past. It will also enable India to gain full benefits of free on arms brokers and commitments to better regulate commerce in the goods covered by these regimes. exports of dual-use goods purchased by recipients subject to arms embargos if the item is intended for a military end use. Defining “defence” Globally, defence goods and services are defined clearlyThe Indian context as part of comprehensive lists and, thus, what constitutes “defence” is easily identifiable — enabling a clear definitionAs part of its export control regime for sensitive items, of the defence industry. However, in India, there is no suchIndia enacts The Foreign Trade Development and list that specifies what constitutes a defence product. TheRegulation Act (FTDR) of 1992; the Atomic Energy Act matter of defining the defence nature of their product hasof 1962; the Customs Act of 1962; and the Weapons of intrigued both foreign and OEMs.Mass Destruction (WMD) Act of 2005. To define a defence product, they have to refer to at leastBesides these laws, India had notified, under the four different lists, depending on the purpose of definingForeign Trade Act in 1995, a detailed list of “dual-use” their product:items called SMET (Special Material, Equipment andTechnology). This list was revised in 1999, 2005 and 1. Indian Trade Classification Harmonized System2007, and is now called the SCOMET (Special Chemicals, (ITC HS) Code: It is maintained by the Ministry ofOrganisms, Material, Equipment and Technology) list. In Commerce’s Director General of Foreign Trade (DGFT)2008, India’s SCOMET controls were harmonized with for the purpose of India’s external trade. The list isthe NSG (Nuclear Suppliers Group) and MTCR (Missile not defence-specific. It caters to items of defence,Technology Control Regime). dual-use and even products that can be considered to be commercially off-the-shelf in nature. For instance,Exports control for items related to aerospace and under the HS Code 88 (aircraft, spacecraft and partsdefence is governed by the SCOMET list in India, which thereof) there are sub-categories such as “gliders,”outlines the procedure, process and factors relating to “balloons” and “under-carriages and parts thereof,”the licensing of controlled items. which are commercially available products or, at best, dual-use items.Increasing cooperation 2. National Industrial Classification (NIC) Codes of theIndia has been pushing for a membership in the worlds’ Ministry of Statistics and Programme Implementation:four major export control regimes — the Nuclear According to the requirements of the Department ofSuppliers Group (NSG), Australia Group (AG), WA and the Industrial Participation and Production, companiesMissile Technology Control Regime (MTCR). India’s claim wanting to apply for an industrial license are requiredto these regimes is based on the stringent export control to provide the “item code” from the National Industrialsafeguards that it has instituted in recent years. Opening Classification (NIC) Code list of 1987, which hasup of India’s civil nuclear cooperation program with other only two codes — 359.4 (manufacture of arms andnuclear regimes also signals India’s joining of an elite club armaments) and 308.2 for (ammunition) — for theEye on defence | 5
    • entire defence manufacturing sector. It does not specify This lack of clarity on what constitutes defence goods what constitutes arms, armaments, dual-use items or and services can lead to some very serious difficulties. components that go into arms and ammunition. For foreign OEMs, the lack of a clear definition has led3. Product List: This list is as articulated in the MoD’s to many of them offering, as part of offsets, goods and Defence Procurement Procedure (DPP) for the services, which are not part of any of the international discharge of offset obligations by foreign vendors. definition of such goods. As a result, there was a Although this list provides some details of items in possibility of India ending up with goods and services 27 categories under three broad headings — defence that cannot be seriously considered as advancing the products, products for internal security and civil Indian defence industrial base. According to the CAG aerospace products, it does not define dual-use report of 2012–13 on defence offsets, since 2005 India products or deal with component-level products and has signed 16 offset contracts with various vendors for raw material for defence production. INR184.45 billion. To discharge offset obligation, an Indian company needs to become an Indian Offset Partner (IOP). To become an IOP, the defence manufacturer needs Conclusion to provide an item code from the NIC (1987) in the It is therefore essential for India to adopt a strict application. Ideally, the “product list” should be in line definition of the defence industry, goods, services with the NIC Code to enable the IOP and OEM to finalize and technologies — preferably along the lines of WA. products for offset discharge with ease. However, this is This is likely to be done in one of the following ways: not what actually happens. • Adopting the WA Munitions List, Basic List,4. Special Chemicals, Organisms, Material, Equipment Sensitive and Very Sensitive List as standard and Technology (SCOMET) List: The SCOMET list is lists of reference for the defence industry in maintained by the Ministry of Commerce’s, DGFT. India. Although defence goods and technologies are covered • Defining an indigenous list that clearly lays out in Category 3 (material, material-processing equipment defence goods, services, technologies, dual-use including technologies); Category 5 (aerospace items and raw material for the defence industry. systems, equipment including production and test equipment, related technology and specially designed This is expected to help India to get maximum components and accessories thereof); and Category benefits from the offset policy. It is also expected 7 (electronics, computers and information technology to simplify the process of licensing for Indian including information security). It does not have a manufacturers, and clearly help define the Indian separate dedicated section for them. It also does not offset partners for offset projects with OEMs, does not coincide with any of the lists mentioned resulting in better governance of such projects. above.Eye on defence | 6
    • Impact of “Make” procedure on Indian defence industrial capability The defence industry in India has been dominated by the Emergence of private sector in Indian government-owned and managed Defence Public Sector defence industry Undertakings (DPSUs), Ordnance Factory Board (OFB) and Defence Research and Development Organization With the aim to achieve self-reliance in defence (DRDO) labs. Private sector units, which comprise production, certain project categories were promulgated around 5,200 small and medium enterprises (SMEs), are under defence procurement procedures (DPP) to supplying around 20%–25% of raw material, components, encourage indigenous development. and sub-assemblies to the defence sector. The chart and • “Buy & Make”: This involves purchase from a foreign table given below depicts the total imports done by the vendor followed by licensed production/indigenous country and the total output generated by the DPSUs manufacture in the country. Private sector/public and OFB since 2004–2011. It is pertinent to mention sector can also participate in licensed production in here that OFB and DPSUs source around 30% of their this category. inputs from the private sector.Imports vs. domestic turnover Years Imports OFB DPSU 6 (US$ billion) Turnover Turnover (US$ billion) (US$ billion) 5 2004-05 2.14 1.24 2.25 4 2005-06 1.05 1.38 2.61Amount in $ billion 3 2006-07 1.33 1.24 3.17 2 2007-08 2.21 1.39 3.35 1 2008-09 1.80 1.45 4.08 0 2009-10 2.20 1.74 5.18 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2010-11 2.85 2.24 5.20 Notes: Imports OFB Turnover DPSU Turnover 1. The import only include the complete equipment directlySource: Compiled by Q-Tech Synergy procured by MOD and does not include the subsystems imported by DPSU/OFB. 2. The figures indicate the turnover of OFB/DPSU and not necessarily supplied to Defence. • “Buy & Make (Indian)”: The RFP will be issued only to Indian vendors, who are assessed to have requisite technical and financial capabilities to undertake such projects. • “Buy” (Indian): This implies out-right purchase of existing products from an Indian vendor. • “Make”: This will mean indigenous design and production of a high tech and complex system.Eye on defence | 7
    • The “Make” category, in the acquisition process, is akin 35to the acquisition procedure followed in major weapon- 30producing countries and formulated to ensure design, 25 In numbersresearch, development and production of indigenous 20defence equipment through optimal utilization of 15the potential of the Indian industry. The underlying 10principle to formulate a separate procedure for the 5‘’Make’’ category of procurements is to enhance the 0indigenization component in acquisitions. To genuinely 2005 2006 2007 2008 2009 2010 2011 2012promote indigenous research and development in the (Till Nov)defence sector, DPP provided for cost sharing, in the JV MoUratio of MoD (80%) and industry (20%). Projects covered Source: Compiled by Q-Tech Synergyunder the “Make” decision are expected to include hightechnology complex systems to be designed, developed Major projectsand produced indigenously. The aim of the procedure is Some of the indigenous defence programs, wherein theto undertake indigenous research, design, development private sector has contributed in a significant way inand production by the Indian defence industry. These collaboration with DPSUs and also individually, includeprojects are to be undertaken by select Indian companies Pinaka MBRLs, some of the fielded upgrades, Rohini/from the Indian industry/defence PSUs/OFB/consortia on Revati Radar Program, Dhanush system, and variousa level playing field. This procedure will also be adopted other ongoing programs such as MAFI Program, VLF/for all upgrades categorized as “Make.” VHF, ATV and various shipbuilding projects. The introduction of “Make” (Indian) option in 2009 hasIndian private industry: capability provided an opening in the defence industry, which earlier was the exclusive preserve of DPSUs/OFs, toIndia’s manufacturing private sector has proved its mettle the private sector. The promulgation of the Defenceand international competitiveness in the past decade, and Production Policy in 2011 further emphasizes thesome companies such as TATA, L&T, Mahindra, Kirloskar, Government of India’s (GoI’s) endeavor to build a robustetc., have already been working in high technology space indigenous defence industrial base by proactivelyand missile manufacturing for decades. It has strengths encouraging increased involvement of the Indian privatein design, engineering, finance and marketing. About 75– sector in design, development and manufacture of80 private sector companies have till date received 179 defence equipment.industrial licenses for production of a variety of defencesystems and sub-systems. There are large and smallindustries that have, over the years, built capabilities andcapacities, through partnership with public sector entities Battle Field Management System -such as DRDO and also with foreign companies. Many $2.5 bnlarge industry houses have either built new facilitiesor carved out capacities within their own design andmanufacturing capacities for the defence sector.After the defence sector opened up, considering its Make indiansignificant commercial potential, a number of joint projectsventures (JVs) and Memoranda of Understanding (MoUs) ($17bn)have been forged between foreign and Indian partners.JVs are the best route for the “Make” programs and alsofor discharge of offsets in the “Buy” or “Buy and Make” Tacticaloptions. Since 2005 more than 250 JVs/MoUs related FICV - $12.5 bn Communication System - $2 bnto defence in various sectors have been forged by Indiancompanies.Eye on defence | 8
    • MoD has classified some major projects under the “Make” While it is prerequisite for the private players in defencecategory. Currently, three large defence contracts, to develop capability in design and system upgrade bycomprising tactical communications system (TCS), investing in Industry R&D and Human Resources, attemptFuture Infantry Combat Vehicle (FICV) and the Battlefield should be made toward developing innovative technologyManagement System (BMS) projects for the Indian Army, and manufacturing methods to increase cost efficiency,worth a combined INR750 billion, best epitomize this besides ensuring healthy competition. Technologynew approach. Set to be awarded by the MoD in the near developed or gained from any development/”Make”future, all three projects will be designed, developed project must be leveraged further. It is expected thatand built in India. The private sector will jostle for these the private sector will play an active role in indigenouscontracts along with the public sector. Companies such as defence programs and contribute to the Indian defenceTata Motors, Tata Power, Mahindra and Mahindra, Ashok industrial capability by catching up with the public sectorLeyland, L&T, Wipro and Infosys are all part of a consortia in the domestic defence market share as depicted in thebidding for these contracts. Another project in the figure below.pipeline under this category is 1,300 light bullet-proofvehicles worth INR7.2 billion (US$144 million). Domestic market share public vs. private 60Way ahead Amount in $ billion 50 40India has emerged as the world’s biggest importer 30of defence equipment according to a recent report, 20accounting for 10% of global arms imports between 2007 10 0and 2011. Moreover, during the next 10–15 years, India 2012-13 2014-15 2016-17 2018-19 2020-21 2022-23 2024-25 2026-27will need to replace a considerable proportion of its majorsystems and also adopt new technology to keep pacewith the defence technologies. Accordingly, the defence Domestic Production Public Sector Valuespending is expected to grow at the rate of 7% to 8% Private Sector Valueannually over the next few years offering opportunitiesto domestic and foreign suppliers. Thus, the focus of the Source: Compiled by Q-Tech SynergyGoI is clearly to increase the level of indigenization andreduce dependency on foreign companies significantly.Eye on defence | 9
    • Market share (domestic/private/public in US$ billion) 2012-13 2014-15 2016-17 2018-19 2020-21 2022-23 2024-25 2026-27 Domestic 5.30 7.25 10.20 14.72 21.63 30.10 39.74 50.08 Production Public Sector 3.71 4.78 6.33 8.54 11.68 15.05 19.87 25.04 Value Private Sector 1.59 2.46 3.88 6.18 9.95 15.05 19.87 25.04 ValueIn case the GoI is looking forward to developing a strong • Taxation provisions to be rationalized for Indianindigenous industrial base via “Make” programs, it vendorsneeds to meet justified expectations through policyinitiatives. Most importantly, the basic need is to create a • IPR of technology to be held jointly by the Indiancompetitive environment by providing a level playing field company and GoI or only the Government.to the competitors. The MoD could help by implementing • Permanent body to replace integrated projectsome of the changes, mentioned below, in the next management teams (IPMT) where continuity andrevision of the DPP, which is expected soon: domain expertise likely to be questionable• Make requirements of the defence (LTIPP) available • FDI limit and permission to export in the context of to the industry the projects under the “Make” and “Buy and Make”• Do away nomination of DPSU on preferential basis category• Selection criteria for projects to be specified • Creation of a forum for interaction between GoI and industry to address issues that could become• Methodology of deciding indigenous contents and impediments time frame • A uniform value addition principle to be applied for• SME’s role in “supply chain” needs to be promoted both manufacturing and services sectors, so as to• Protection from exchange rate variation to be provide equal opportunity to companies in these available to Indian vendors sectors and avoid potential manipulation by foreign vendors• Parity in payment terms for Indian and foreign vendorsEye on defence | 10
    • Conclusion The indigenization initiative via the “Make” program has potential to reduce dependence on imports from foreign OEMs to the desired level. Figure 5 below depicts the conservative estimated scenario in about 15 years, which can be achieved for imports vs. indigenous production, i.e., a 50:50 ratio rather than the often repeated ratio of 30:70. Imports vs. domestic opportunities 2012-13 2014-15 2016-17 2018-19 2020-21 2022-23 2024-25 2026-27 Imports 12.38 16.13 20.72 26.17 32.45 38.31 43.05 50.08 Indigenous production 5.30 7.25 10.20 14.72 21.63 30.10 39.74 50.08 (domestic opportunity) The added but often-overlooked benefit of reducing reliance on defence imports is the positive impact on the Indian economy. In its 2005 report on defence acquisition, the Vijay Kelkar Committee quoted that a mere 25% reduction on foreign dependence will lessen foreign exchange outgo by approximately INR85 billion, also creating about 120,000 new jobs, and accelerating manufacturing GDP growth by 8%. There is an inherent benefit in the “Make” procedure — the defence budget’s capital expenditure gets utilized in the national economy and helps in generating skilled employment, subsequently spin off will be there to be seen.Eye on defence | 11
    • MSME development: vital for aninclusive defence industrial baseThe defence procurement procedures (DPP) have categories. This is good news for India Inc. It also placesundergone changes with far-reaching consequences. an added responsibility on India Inc. in terms of formingOnly one big overhaul remains to be executed for partnerships and alliances. The various consortia formedthe industry to make rapid progress. The defence- in various parts of the world — especially the successfuloffset guidelines that have been announced recently ones such as EADS, Finmeccanica, Safran, UTC — isare completely new in their outlook as the MoD has likely to set the path for introspection. If there is antried to incorporate the best global practices. We now opportunity for some of our companies to form suchhave a sound set of offset guidelines, which are well- powerful alliances, it can be a game changer. The comingdocumented, have been formulated in an exceptionally together of complementary capabilities is a force in itself.professional manner and have been put up in the public Besides repatriating a portion of the foreign exchangedomain. The policy has been put up on the government back into the country, defence offset as a tool waswebsites (www.mod.nic.in) and is accessible to everyone. introduced to, “Create a Defence Industrial Base.” AThis is a rare occurrence since not many countries widespread and sound base cannot alone be formedhave their policies up on open websites like us. The through the growth of large conglomerates. This canMoD and the industry associations follow up each of happen only if we are able to take the larger segment ofthese announcements with a number of seminars and the industry on board with us in this journey of progress.conferences to generate goodwill and broad-based One cannot over-emphasize the importance of the smallawakening. Thus, the policy is proliferating among the scale sector to create a robust defence industrial base.domestic industry, the OEMs and the academia quite Only when progress is distributed and capability, alongwell. with inclusive growth, is prevalent everywhere can theDefence accounts for 2.5 % of the GDP and around nation have a decent industrial capability. Therefore, “the15% of the Central Government’s expenditure. Our man and machine story” is very important.defence budget has the third-highest growth rate (9.3%) In this context, there is positive news regarding the smallafter Russia and China. According to the 13th Finance and medium enterprises. There is a good amount ofCommission Report, the total defence capital budget synergy between the policies of various ministries whenallocation during the 12th Plan is likely to be INR4,455 it concerns the small industries sector. While we all arebillion. The capital acquisitions budget ranges between aware of the multiplier incentive provided to the small75% and 85% of the total capital expenditure, and is likely segment by the MoD, there are extant regulations suchto be around INR3,564 billion. The “India Inc.” growth as the MSMED Act of 2006 and the Public Procurementstory is for real and the current level of expenditure Policy that are in sync. The Public Procurement Policysupport for the armed forces is expected to be sustained is currently on an advisory note stage and is likely toby successive governments. Therefore, in mathematical become mandatory in a couple of years. The proceduresterms, this is a progress in continuum. The volatile to source from the small segment must be put into placesituation of our neighboring countries is also a reason as soon as possible.for the accelerating defence expenditure. Where do themicro, small and medium enterprises (MSMEs) figure in The multiplier effect for MSMEs, as an Indian Offsetthis growth story? Partner (IOP), provided in the DPP is very significant. Now, it is a question of how this can be put to good use,Streamlining procurements in the MoD is a work-in- both by foreign OEMs and Indian MSMEs. This calls forprogress, and as things stand today, the MoD is seeking a discussion, and organizations such as National Smallincreased participation from the local industry. The Industries Corporation (NSIC) can play a significant role“Buy and Make (Indian)” category and the “Make” in this growth story. The government can only providecategory is expected to be the focus during the planning enablers and it is up to the industry to capitalize on theseprocess, resulting in more enquiries in these twoEye on defence | 12
    • and “dress-up” to avail the desired benefits. The benefits interest rates. Funding support with managementof various policies must flow to the MSMEs directly and assistance can also be a very good idea. The MSMEswe must see this growth happening in the next two can then concentrate on what they do best and whileyears itself. These MSMEs are our backbone and we the funding organization comes up with managementmust strengthen them so that we can stand erect as an techniques for vibrant progress.industry. The interesting story of the iPhone is relevant here.It is truly said, “If India lives in villages; the industry lives Some time back the TIME magazine reported that, ofin MSMEs.” the US$379 that the iPhone costs, US$70 goes into raw material; US$9 goes into manufacturing (which,There are often talks of hand-holding of the MSMEs incidentally, takes place in China); and US$300 residesto help them graduate to the next level. Hand-holding in the US where the IP is owned. There are, therefore,does not mean spoon-feeding; it is merely providing no short cuts for design and development. Investmentsenablers. The policy initiatives must be put to good use in research and development (R&D), and design andto help them progress and gain access to the benefits. development are essential if we are to make progress inThe GoI requires more from the MSMEs than what the real terms. The offset guidelines, by themselves, provideMSMEs may require from the GoI. The government is for investment in R&D as a valid method of dischargeaware of this situation and, thus, there are enablers at of offset obligations. However, this, somehow, has notvarious policy levels. We must be able to explore options seen the light of the day. Now, in the recently issuedfor funding them at rates that are affordable by the guidelines, R&D has been clubbed with services. Thissmall units. This low rate might be generated through offers great scope for investment in R&D of eligibleinnovative ideas, such as raw material assistance, creditguarantees and foreign line of credit with reducedEye on defence | 13
    • products as a valid method of discharge of offset An additional route for the discharge of offset by FDIobligations. Niche technologies reside in MSMEs as they investment through venture capital funds in the MSMEare able to create and sustain technology. They also hold sector needs to be explored. While the new defencethe technology close to their chest. Development of the offset policy makes it attractive for the foreign OEM byMSME sector is the key to building a robust industrial assigning a multiplier of 1.5 for every unit of capitalbase. invested in the MSME sector, it still does not provideDefence Public Sector Units (DPSUs) are bound by the a solution to the viability gap in funding that exists inPublic Procurement Policy and need to proactively source the MSME sector. Due to high risk and long gestationup to 20% of their annual procurement from MSMEs. periods, assets are not created to secure debt fromThere are also around 358 items reserved for the MSME banks for various scaling up activities related to plantsector, which should be rigorously followed. There is, and equipment, talent acquisition, R&D, working capitalhowever, a need for revising the list to make it relevant and other operations. As a result, many companiesfor the currently evolving scenario. with core competencies in the defence sector are or are expected to be unable to absorb the offset workCollaboration between MSMEs is the key to success. The that the OEM is willing to discharge to the MSMEs.small segment industries hold the key to development Introduction of venture capital funds as an avenue forsince they hold niche capabilities. The call of the day is to offset discharge is expected to help create a suitableestablish strong linkages between MSMEs domestically financial platform through which OEMs can dischargewith the tier II/III companies abroad to achieve increased their offset obligation. This is anticipated to not only helpsynergies. While the offset guidelines have allowed the the OEM in faster discharge of their offset obligationstier I companies to discharge offset on behalf of the but also provide the much-needed viability gap fundingOEMs, this is not very strictly restricted to the tier I that continues to plague the MSME sector. This calls forcompanies alone. A tier I company such as Pratt and serious consideration, as this is a viable route to takeWhitney, GE or Snecma will also have its own tier I and MSMEs to the next level.tier II. Therefore, the offset authorities must be able tosee this fundamental linkage and, make a policy inclusivefor holistic growth.Eye on defence | 14
    • Request for Information (RFIs)October 2012 – December 2012 Date of issue RFI details Response date Issued by Service 3 Dec 2012 Passive Surveillance and 31 Dec 2012 DASR (EW) Indian Army ELINT system 7 Nov 2012 Modular Bridge mounted on 10 Dec2012 Comb Engrs – 5/CE Dte Indian Army High Mobility Vehicle Engineer-in-Chief’s Branch, Integrated HQ of MoD (Army) 18 Oct 2012 Practice Ammunition for 18 Nov 2012 DGMF Sena Bhawan Indian Army T72,T90 (125mm) and IHQ HQ of MOD(Army) Arjun (120mm) Tank 17 Oct 2012 Project ASCON Phase-4 5 Dec 2012 Dte Gen of Signals Indian Army (Army Static Switched Communication Network) 27 Sep 2012 155MM / 105MM Blank 30 Oct 2012 Directorate General Indian Army Ammunition of Artillery (Arty-5), General Staff Branch 12 Nov 2012 Quotations for Procurement 20 Dec 2012 Directorate of Indian Navy of 02 Nos 09 KL Air Craft Procurement Refuellers along with initial spares 20 Sep 2012 High speed expendable 30 Nov 2012 Directorate of Staff Indian Navy aerial target Requirements Integrated Headquarters of MoD (Navy) 27 Nov 2012 ION of Partner for Aircraft 10 Dec 2012 Vehicle Factory --- Refueller Jabalpur 26 Sep 2012 Expression of Interest: 12 Oct 2012 Prov Branch Dte.Gen., CRPF QRs/Specification for Mine CRPF, New Delhi Protected Vehicle (MPV)Eye on defence | 15
    • Request for Proposal (RFPs)October 2012 – December 2012 Date of issue RFI details Response date Issued by Remarks 4 Dec 2012 Harness for Bullet Proof 25 Dec 2012 Ord Branch, HQ For IA Jacket Northern Command Qty: 7810 Nos. Udhampur (J&K) 4 Dec 2012 Ballistic Helmet with Inbuilt 9 Jan 2013 GOC-in-C, Northern For IA MIC/ Headphone Command Qty: 24 Nos. 1 Dec 2012 Digital Night Vision Devices 26 Dec 2012 GSO 1 Avn For IA Qty: 6 Nos. 29 Nov 2012 Air Borne Tactical Vest 17 Dec 2012 HQ Central Command For IA ST Branch Qty: 250 units 28 Nov 2012 Fabrication of Mockup for 22 Dec 2012 Simulator For IA Devp of Tank Troops Tactical Development Division Training Simulator (T4S) 27 Nov 2012 Tactical Vest 27 Dec 2012 GOC-in-C For IA Qty: 4000 Nos. 10 Nov 2012 Mounting of GPS (for Arjun 3 Dec 2012 Comdt COD Agra For IA Tank) Qty: 7 Nos. 31 Oct 2012 Bullet Proof Shield 17 Nov 2012 GOC-in-C, HQ Northern For IA Command Qty: 50 Nos. 19 Oct 2012 Spares for Rifle 7.62 mm 17 Dec 2012 DDG PPO For IA 58P/58V(Ex-Czech) 12 Oct 2012 Fiber Reinforced Plastic 19 Oct 2012 Headquarters Western For IA (FRP) Boats Command Qty: 10 Nos. 1 Oct 2012 Bomb ML 120 MM Mortar 26 Nov 2012 DDG PPO , AMGO(SSA) For IA Smoke PWP Ammunition MGO/PPO-5 Qty: 9605 Nos. with FUZE DA NO-162 MK 9 (M-1)/DA 4A or equivalent 5 Dec 2012 Portable Colour Doppler 24 Dec 2012 Directorate General of For IAF cum USG Machine Medical Services (Air) 4 Dec 2012 Light Driving Simulator 1.5 14 Feb 2013 Directorate of For IAF Configuration with 6 DoF Procurement Indigenous Purchase Wing 25 Nov 2012 Optical Device for IL-76 24 Jan 2012 Directorate of For IAF Procurement, Indigenous Purchase WingEye on defence | 16
    • Date of issue RFI details Response date Issued by Remarks 16 Nov 2012 Brake Parachutes for Hawk 5 Feb 2012 Dte of Armt & Safety For IAF MK-132 Eqpt, Air Headquarters Qty: 218 Units 1 Nov 2012 Communication Equipments 16 Nov 2012 HQ WAC IAF Subroto For IAF Park 25 Oct 2012 Heliflex Antenna for GP 328 14 Nov 2012 LP Cell, 9 BRD, AF For IAF Pune Qty: 200 Nos. 22 Oct 2012 Low Cost Security 26 Nov 2012 SO Provost HQ MC, For IAF Equipments IAF- Nagpur 18 Oct 2012 Simulator Training for 8 Nov 2012 Directorate of OPS For IAF Boeing 737-200 Aircraft (IEW) Air HQs (Vayu Bhawan) 16 Oct 2012 Night Vision Goggles 11 Nov 2012 Controller of For IN Procurement Qty: 70 Nos. Material Organisation (Mumbai) 26 Sep 2012 Passive Night Vision 20 Nov 2012 DG, CRPF For CRPF Monocular (Procurement Cell Qty: 3804 Nos. of Provisioning Directorate) 26 Sep 2012 Passive Night Vision 21 Nov 2012 Directorate General, For CRPF Binocular & Kit Prov CRPF Provisioning Dte. Binocular: 3241 (Procurement Cell) Nos. and Kit: 22 Nos 22 Sep 2012 Mobile Signal Booster Dual 6 Nov 2012 Commandant 2 Signal For CRPF Band 2 Sig Bn, CRPF, Hyderabad Qty: 15 Nos. 15 Nov 2012 Hand Held Thermal Imager 20 Nov 2012 Directorate General, For BSF (Biocular) Border Security Force Qty: 355 Nos. 12 Oct 2012 Life Saving Eqpts, Life 30 Oct 2012 AC/WW For Inspector For BSF Jackets and Life Buoys General FTR HQ BSF Qty: 286 Nos. SB 26 Sep 2012 New Trimble (GPS) for MI-17 30 Oct 2012 DG BSF, Air Wing For BSF IV Helicopter Qty: 04 Nos. 29 Oct 2012 RDX-TNT 60-40 Type-A and 18 Dec 2012 Ordnance Factory Issued by OFB Type-B Badmal Qty: Type-A is 205 MT and Type-B is 275 MT 20 Oct 2012 Automatic Case Gauging 18 Dec 2012 Indian Ordnance Issued by OFB Machine for 5.56 mm Factories Varangaon Qty: 04 Nos. Cartridge CaseEye on defence | 17
    • Date of issue RFI details Response date Issued by Remarks 20 Oct 2012 Automatic Case Gauging 18 Dec 2012 Indian Ordnance Issued by OFB Machine for 7.62 mm A-7 Factory Varangaon Qty: 01 No. Cartridge Case 17 Oct 2012 Proximity FUZE for FB 40 30 Nov 2012 Ordnance Factory Issued by OFB (Filled) for 40MM PFFC Khamaria, Jabalpur Qty: 69700 Nos. Ammn 17 Oct 2012 Supply Erection 11 Dec 2012 Ordnance Factory, Issued by OFB Commissioning of Lead Varangaon Swaging Press for 5.56 mm Ammunition 17 Oct 2012 Supply Erection 11 Dec 2012 Ordnance Factory, Issued by OFB Commissioning of Lead Varangaon Swaging Press for A-7 Ammunition 3 Oct 2012 Supply Erection 27 Nov 2012 Ordnance Factory Issued by OFB Commissioning of Automatic Varangaon, Primer Filling Plant for 5.56 Maharashtra mm Ammunition 3 Oct 2012 Supply Erection 27 Nov 2012 Ordnance Factory Issued by OFB Commissioning of Automatic Varangaon, Primer Filling Plant for Maharashtra 7.62mm Ammunition with conversion kit for 5.56 mm ammunition 20 Nov 2012 Deep search mine/metal 12 Dec 2012 DG CISF For CISF detector Qty: 21 Nos. 9 Dec 2012 Long range electro optic 9 Feb 2013 ADRDE*Aerial Issued by DRDO payload Delivery Research & Development Establishment 4 Dec 2012 FRP speed boat 8 Jan 2013 ITR*Integrated Test Issued by DRDO Range LabEye on defence | 18
    • List of industrial licenses (ILs) filed fromSeptember 2012 - October 2012 Application no. Name of the applicant Item of manufacture and date 65 Micropack Ltd. Manufacture of printed circuits for defence and aerospace 03/09/2012 66 Rangsons Defence Solutions Pvt. Ltd. Design/development/manufacture /service of electronic 11/09/2012 systems and communication systems including parts and accessories for RF and MW; optic and surveillance systems; interconnects; metal and composites used in defence and aerospace application 67 HBL Power Systems Ltd. Air conditioners and parts thereof 14/09/2012 68 Bharat Forge Ltd. Telecommunications— manufacture and upgrade of combat 14/09/2012 surveillance systems 69 Nallabolu Industries Pvt. Ltd. Slurry/emulsion 17/09/2012 70 Spectrum Antenna & Avionics Airborne antennas, avionics systems Radomes 21/09/2012 Systems Pvt. Ltd. antennas parts 71 Pipavav Defence And Offshore Development and manufacture of C4I systems including 26/09/2012 Engineering Co. Ltd. CMS, BMS, IPMS and IBS, Electro-optical systems, underwater systems including sonars, and avionic 73 Realtime Techsolutions Pvt. Ltd. Blocks/segments of combat simulators, command control 03/10/2012 centers management systems, platform management- systems and complete ATES, simulators, command control centers 74 Sakthi Aerospace Pvt. Ltd. Parts and accessories N.E.C. for special purpose non- 04/10/2012 electrical machinery/equipment NEC- parts of rifle, gun and carbine 75 Atul Ltd. Phosgene Carbonyl Chloride, Carbonyl Di-Chloride, Carbon 04/10/2012 Oxy-Chloride 76 Sandeep Metalcraft Pvt.Ltd. Sub-assemblies of arms and ammunition weapon parts, 04/10/2012 safe and arm mechanism, timers, cartridge SAA parts 77 Applied Electro Magnetics Pvt. Ltd. Specially designed software for Command Communication, 17/10/2012 Control, Computer and Intelligence (C4I) applications, VOIP- based voice communication equipment and control system 78 Vinir Engineering Pvt. Ltd. Open die forging, closed die forging, CNC machined 30/10/2012 components and assemblies for defence industries Eye on defence | 19
    • New projects/investments/contracts Name of Project details Value* entity Indian Army • The Very Short Range Air Defence System (VSHORADS) contract for nearly INR323.1 billion 1,000 launcher systems and more than 6,000 missiles has progressed into ► a crucial phase. The current phase will involve quality assurance tests at ► Bengaluru and a checking of the electronics systems on the three remaining contenders in Ladakh. • There is a three-way competition between the French MBDA Mistral, Sweden’s SAAB RBS 70 NG and Russia’s KBM new generation Igla-S. • In the current phase, there will also be discussions on transfer of technology to the default license manufacturing partner, Bharat Dynamics Ltd. Indian Air • India signed a deal with Russia for 40 Su-30MKI fighter aircraft, which will INR188.5 billion Force be upgraded to the Super Sukhoi configuration. ► • The first delivery is expected in 2014–15 and with the addition of these 40 aircraft the total number of Sukhoi will reach 270. ► • The delay in the signing of the contract with France’s Dassault for 126 Rafale fighther jets has also necessitated the need to procure Super Sukhois. Indian Air • The GoI has shortlisted Boeing, with its Chinook helicopter, to procure 15 INR129.24 billion ► Force heavy-lift choppers for IAF. ► • The cost of the contact is estimated to be worth INR 53.85 billion (US$1 billion). ► • India also plans to buy 22 AH-64D Block III Apache helicopters from Boeing at an estimated cost of INR75.39 billion (US$1.4 billion). Indian Air • The Union Cabinet approved a plan to produce 200 air versions of the INR80 billion Force and Brahmos cruise missile and to procure 10,000 Invar missiles from Russia Indian Army for the T-90 tanks of the Army. ► • Under the proposal, 10,000 Invar missiles will be procured by Russian manufacturers and another 15,000 missiles will be license manufactured by the Bharat Dynamics Limited (BDL) under the transfer of technology. Bharat • BDL plans to set up a missile production unit at Ibrahimpatnam in Andhra INR25 billion Dynamics Pradesh. Limited • This is likely to generate direct and indirect employment for around 700 ► and 2,000 people, respectively.Eye on defence | 20
    • Name of Project details Value* entity Indian Armed • India will purchase 10 thousand each of Konrurs-M guided anti-tank missiles INR12 billion (for Forces and the Invar guided anti-tank missiles from Russia. anti-tank missiles from Russia) ► • In addition to the 10 thousand Invar guided antitank missiles delivered from Russia, another 15 thousand will be manufactured in India by BDL. Indian Army • The Cabinet Committee on Security cleared the proposal to procure 10,000 INR12 billion Konkurs-M anti-tank guided missiles for the Army from Russia. ► • The Konkurs-M weapon systems will augment the anti-tank arsenal in the Army. Defence • The DRDO has identified a new missile launch site at Machalipatnam in INR10 billion Research and Andhra Pradesh for which it has asked the Government of Andhra Pradesh Development for 260 acres of land. Organisation (DRDO) Defence • The DRDO has launched an ambitious project to develop India’s own field INR3–4 billion Research and gun (a 155-mm field gun) in association with the ordnance factories and the Development private players. Organisation Indian Navy • The US Navy placed an order for the lightweight air-launched Mk-54 INR2.4 billion torpedoes from the US-based Raytheon for the Indian Navy. (for the Indian ► and Australian • The torpedoes will be deployed on the eight P-8I long-range maritime ► navies) aircraft being built by Boeing. • The Mk-54 can be deployed from a surface ship, helicopter or fixed wing aircraft to track, classify and attack underwater targets. Boeing • The US government has awarded Boeing a contract to build “Beddown INR1.1 billion Infrastructure Facilities” for the C-17 heavy lift transport aircraft ordered by ► the Indian Air Force (IAF) at Hindon Air Force Station, near New Delhi. • Beddown infrastructure is a type of facility that is specific to a particular aircraft type at a particular base. This is the first phase of construction expected to be executed by 2013. Hindustan • HAL opened its strategic electronics factory at Kasaragod in Kerala to INR660 million Aeronautics produce advanced avionics systems for aircraft and helicopters. (Phase-I) Limited (HAL)Eye on defence | 21
    • Name of Project details Value* entity CRPF • The GoI has floated a multi-country tender to procure around 4,000 NA specialized “human detecting” night vision devices apart from more than ► 3,000 binoculars for use in the dark for naxal operations. • The mandatory requirement of these night vision gadgets, according to the tender, is to "detect and recognize human beings within 125–200 metres in star lit conditions without moonlight". Indian Air • The IAF has contracted for 230 Sukhoi Su-30MKI fighter jets from Russia, NA Force of which 140 will be manufactured at HAL in India by 2013–14. ► • These new jets will replace the phasing out of MiG-21s and MiG-27s. ► • In addition, India has finalized another contract for 42 more Su-30MKI fighters, to be built under licence from Russia at HALs Nashik facility, taking ► the total number of Su-30s in service to 272. This has made India the worlds largest operator of the Su-30 type. • Furthermore India is in talks with Russia to upgrade its fleet of Sukhoi Su-30s with new radar and avionics, beginning with the first 50 Sukhois inducted in 1997. Tata Steel • Tata Steel has inaugurated its second aerospace service center in Xi’an in NA China, boosting its aerospace operations in the country. ► • The company opened its first service center in Suzhou in 2009. ► • The new facility is approximately 600 miles south west of Beijing, the region that accounts for 40% of the total aerospace manufacturing capacity in China. Indian Army • In 2013, India will receive the first tank digital control systems developed in NA cooperation with two Russian companies — Uralvagonzavod and Sozvezdie. ► • These digital tanks enable the commanders to command units on the battlefield in real time mode connecting all armored vehicles into a unified information network. Indian Coast • Northrop Grumman Corporation will supply advanced shipboard navigation NA Guard systems for 20 fast patrol vessels for the Indian Coast Guard. ► • The shipset will be delivered starting late 2012 till 2015.*The values of the deals have been converted to Indian Rupees using Oanda currency conversion tool1US$ = INR53.85 (Average of the value from 1 October 2012 to 12 December 2012)Eye on defence | 22
    • Joint ventures and alliances Name of Nature of transaction Value* entities Indian Air • India has signed a joint venture (JV) with Russia under which the latter will INR60 billion Force, HAL, supply 200 high-precision supersonic cruise missile BrahMos to the IAF. BrahMos • On the back of this deal, India has set up another manufacturing and system Aerospace integration plant in Thiruvananthapuram for missile production. ► • The integration of the air version of the missile will be done by HAL and the ► missiles will be retrofitted on the Russian-built Sukhoi Su-30 MKI fighter jets. United Aircraft • An Indo-Russian project, to jointly design a transport aircraft for militaries INR32.31 Corporation of both the countries, was kicked off in Moscow on 3 December. billion (US$600 and HAL million) • In October, India entered an agreement with the Russian company for the ► preliminary design phase (PDP) contract for Multirole Transport Aircraft. Ten months after the PDP contract, the detail design phase (DDP) contract ► will be signed to complete the design and development of MTA. ► • The project is being executed by 30 engineers from Indias state-run aerospace company HAL and its Russian counterpart the United Aircraft Corporation (UAC). SAAB AB • SAAB AB, a Swedish aerospace and defence company, signed an MOU INR2.01 billion and Pipavav concerning a strategic investment in Pipavav Defence and Offshore Defence and Engineering Limited (Pipavav). With this deal, SAAB has acquired a good Offshore platform for growth in the Indian market. Engineering • After the investment, SAAB has approximately a 3.5% shareholding in Limited Pipavav. Quest Global • India-based engineering services provider “QuEST Global” has set up a JV INR550 million and SAAB AB with Swedish defence and security company SAAB AB to establish an aero- structure assembly venture. ► • QuEST will hold a 74% stake in the new company, which will be based in ► Belgaum (Karnataka). • The unit will commence its operations in mid-2013 and manufacture specific parts and assemble substantial sections of commercial aircraft such as Boeing 787 Dreamliner and Airbus A320 and A380. Pipavav • Pipav has incorporated a JV with the DPSU, Mazagon Dock. NA Defence and • The 50:50 JV named “Mazagon Dock Pipavav Defence” will construct Offshore surface warships for the Indian Navy. Engineering Limited and Mazagon DockEye on defence | 23
    • Name of Nature of transaction Value* entities Defiance • India-based Defiance Technologies Ltd., a Hinduja Group company providing NA Technologies engineering, manufacturing and enterprise services and solutions for and Ausy Group various industries has signed an MoU with Ausy Group of France (which specializes in high technology and engineering) to set up a JV to address ► defence offset requirements in India. ► • Defiance will hold a majority stake in the joint venture. • The JV will meet Ausy’s customers’ commitment for the sourcing obligation as mandated by defence offset policy norms of India and allow Ausy to be listed in the offset defence supplier list. Axis • Axis Aerospace and Technologies Ltd. is looking for acquisitions to expand Aerospace and its offering in engineering services for civil, commercial and defence offset Technologies markets. Ltd. ► • The company has set up a dedicated offshore development center with its subsidiary (CADES) to develop fuselage for Airbus. Its new facility at Kirloskar Business Park will provide solutions, including product development and manufacturing processes for aerospace, defence, automotive and heavy engineering industries. ► • It also plans to set up a 75-acre supply chain cluster in the upcoming NA aerospace park near the Bengaluru international airport at Devanahalli, around 40 km from the city center, to provide manufacturing and allied support facilities to global aerospace and defence firms. Kaman • Kaman Aerospace Group, Inc., a subsidiary of Kaman Corporation and NA Aerospace Kineco Pvt. Ltd. signed a definitive agreement to form a manufacturing JV Group and in India. The new company will be named Kineco Kaman Composites India Kineco Private Pvt. Ltd. Ltd. • The venture is based in Goa and will manufacture advanced composite ► structures for aerospace, imaging/medical and other industries. Mahindra • M&M renewed talks to buy US-based aircraft maker, Hawker Beechcraft. NA and Mahindra The company had earlier lost its bid to the Chinese firm Superior Aviation (M&M) Beijing Co. ► • Beechcraft is likely to invite bids again for a sale process as its talks with the Chinese firm is likely to have failed.*The values of the deals have been converted to Indian Rupees using Oanda currency conversion tool1US$ = INR53.85 and 1SEK = INR8.07 (Average of the value from 1 October 2012 to 12 December 2012)Eye on defence | 24
    • Country-level deals and initiatives Country Nature of transaction Additional details United • The India Navy along with its US counterpart • The US Navy’s Undersea Rescue Command States held Indo-US submarine rescue exercise shipped a submarine rescue system – a “INDIAEX-2012.” The navies practiced the deep-submergence rescue vessel (DSRV) or rescue of trapped submarines under the sea. a submarine rescue chamber (SRC) to the exercise area off Mumbai. • The DSRV or SRC will dive deep underwater to “mate’’ with “disabled’’ submarines to rescue sailors in intricate maneuvers rarely practiced by Indian sailors. Russia • The twelfth meeting of the India-Russia • The Commission reviewed and discussed the inter-governmental Commission on Military status of some of the major issues in military Technical Cooperation was held in New Delhi. technical cooperation. • The Commission also endorsed the protocols of the meetings of the Working Group on Shipbuilding, Aviation and Land Systems, (WG SALS) and the Working Group on Military Technical Cooperation (WG-MTC), which were held in New Delhi on 27–28 August 2012 and 30–31 August 2012, respectively. Spain • India and Spain signed an MoU under which • The two sides agreed to exchange defence- they will encourage collaboration between related experience and information, and ► their defence industries and exchange of encourage visits of personnel and collaboration personnel. in the defence industry and similar areas of cooperation. • The MoU was signed by the Indian Defence Minister, AK Antony, and his Spanish • The MoU on defence was among the five pacts counterpart Pedro Morenés Eulate. signed after comprehensive talks between the Prime Minister, Manmohan Singh, and the visiting King Juan Carlos I on bilateral, regional and international issues. Indonesia • India and Indonesia decided to significantly • The two sides exchanged views on issues enhance their defence cooperation in the relating to regional and global security, first ministerial level biennial defence dialog bilateral exercises involving services, training, between Defence Minister, Mr. AK Antony, co-production of defence equipment and and his Indonesian counterpart, Mr Purnomo ammunitions and visits at high levels. Yusgiantoro.► • The two sides also exchanged views on the emerging scenario in Afghanistan and West Asia.Eye on defence | 25
    • Country Nature of transaction Additional details Nigeria • Nigeria and India agreed to strengthen their • Mrs. Obada stressed on expanding the synergy bilateral ties in the defence sector. between two countries to move the MOU forward and focus on the recent security • The need to strengthen the bilateral relations challenges facing Nigeria. was stated by the Acting Minister of Defence, Mrs. Olusola Obada when students of the • In the MoU signed between India and Nigeria National Defence University of India, led by in 2007, India had pledged to assist Nigeria to Indias High Commissioner to Nigeria visited raise its defence capabilities. her in Abuja. Singapore • The Indian Defence Minister, AK Antony, and • Both ministers agreed to continue with the the visiting Minister of Defence of Singapore, on-going interactions between the defence Dr. Ng Eng Hen, exchanged views on the establishments of the two countries, through global and regional security scenario. regular joint military training and exercises etc. • India and Singapore agreed to further • They also discussed the security situation in enhance the bilateral defence relationship to the Asia-Pacific region and acknowledged the contribute to regional peace and stability. role of the ASEAN Defence Ministers Meeting (ADMM) plus framework to promote dialog in the region. Japan • General Haruhiko Kataoka, Chief of Staff, • The visit assumed special significance in the Japan Air Self Defence Force was in India light of improving military cooperation and from 19–21 Nov 2012 for a three-day consolidation of existing ties between the two goodwill visit. countries.Eye on defence | 26
    • Industry buzzGovernment decided to divest its 10% India moves a step closer to missile shieldstake in HAL plans for DelhiThe Cabinet Committee on Economic Affairs has India plans to set up a missile defence shield in NCR byalready approved divestment of a10% equity in HAL 2014. As part of the plan, India tested its experimentalthrough an initial public offer in the domestic market. ballistic missile defence (BMD) system. It successfullyIn a written reply to the Rajya Sabha, the Minister of test-fired a supersonic interceptor missile, whichState for Finance, SS Palanimanickam, said that the GoI destroyed a “hostile” ballistic missile off the Odisha coast.has decided to divest its stake in nine other companies (Source: “India test-fires missile shield, hits the target,” Freeincluding a 10% stake sale each in Rashtriya Ispat Press Journal, 24 November 2012, via Factiva, © 2012 IndianNigam Ltd, Oil India and National Mineral Development National Press Bombay Ltd.)Corporation as well as a 12.15% stake in NationalAluminium Company Limited, 10.82% in Steel Authorityof India Limited, 9.50% in National Thermal Power IAF plans to induct first combat dronesCorporation, 9.33% in Minerals and Metals Trading IAF plans to induct Harop combat drones from IsraelCorporation (India), 5% in Bharat Heavy Electricals by next year for that were brought two years back withLimited and 4.01% in Hindustan Copper. This move is in a deal value of INR5 billion. The unmanned combat airline with the GoI’s plan to achieve the budgetary target of vehicle (UCAV) will give IAF the capability of hittingINR300 billion set for the financial year 2012–13. high value targets such as enemy missile and radar(Source: “Govt to divest minority stake in 10 PSUs including sites without sending its manned fighter aircraft. It willHAL, OIL and NMDC: Finance Ministry,” Metis Energy Insider, 9 enhance India’s firepower in conventional and low-December 2012, via Factiva, © 2012 Metis Business Solutions intensity conflict.Pvt. Ltd.) (Source: “IAF to induct first killer drones,” Press Trust of India, 4 October 2012, via Factiva.)US reluctant to provide full militaryknowhow for anti-tank guided missiles Pune airfield plans to get modern defenceIsrael has upstaged the US to supply third-generation systemanti-tank guided missiles (ATGMs) to the Indian Army, The Indian Air Force’s (IAF) airbase at Lohegaon, Puneworth approximately INR53.85 billion (US$1 billion). The will be equipped with network-centric all-weather airplan to go in for the American FGM-148 Javelin ATGMs defence weapon system called ”Akash,” which will protecthas been shelved because of Washington’s reluctance the airfield from enemy air strikes. The Akash weaponto provide full military knowhow — licensed “transfer system can shoot down fighter aircraft, choppers,of technology ‘’, which can allow India to indigenously unmanned aerial vehicles (UAVs) or cruise missiles upmanufacture the “tank killers’’ in large numbers. This has to a range of 30 km. Akash is an indigenous weaponsrekindled fears in the Indian defence establishment about system developed by the DRDO in partnership withthe US not being a reliable long-term supplier of cutting- Bharat Electronics and is currently in the induction phase.edge military technology. The deal, if finalized, will be thethird major missile program between India and Israel. (Source: Vishwas Kothari TNN, The Times of India - Pune Edition, 4 October 2012, via Factiva, © 2012 Bennett, Coleman(Source: “Israel pips US in anti-tank guided missile supply to & Co., Ltd.)India,” Agence France Presse, 30 November 2012, via Factiva,© 2012 Plus Media Solutions Pakistan)Eye on defence | 27
    • IAF plans to upgrade UAV fleet of three negotiations are now focusing on the cost of transferring technology, the cost of maintenance, total life cycle costdefence services in a stipulated time period, and the unit cost of eachThe IAF plans to upgrade the UAVs of the three defence aircraft acquired. The negotiations are expected to enterservices under a project worth INR50 billion. The three the final stage in January 2013 with a draft contractservices operate a fleet of more than 150 UAVs procured drawn up by February.from the Israeli Aircraft Industries. The upgrade will (Source: “Indian Fighter Talks Continue Following Selectionenhance the snooping capabilities of these UAVs. The Inquiries,” Aerospace Daily & Defence Report, 5 OctoberIAF will also be capable of operating these aircraft from 2012, via Factiva, © 2012 McGraw-Hill, Inc.)far-off distances and control them through satellitecommunication system. Procurement of light utility helicopters(Source: “IAF to upgrade UAV fleet under Rs 5,000 crore faces hurdleproject,” Press Trust of India, 2 October 2012, via Factiva.) The procurement for 197 light utility helicopters to replace the Indian Army’s current fleet of Cheetah andJaguar fighters to be equipped with Chetak helicopters, have hit a roadblock because ofmissiles corruption allegations questioning the probity of the deal. AugustaWestland, an associate of Finmeccanica is underThe Indian Air Force (IAF) will soon choose a winner in a investigation in Italy for alleged kickbacks. India’s Defenceprotracted bid to buy new short-range infrared homing Minister, AK Antony referred the file of procurementmissiles for more than 125 Jaguar fighters. The IAF to Central Vigilance Commission, which recommendedoperates Jaguars for deep penetration and maritime cancellation of the deal.strike, carrying both conventional and nuclear weapons.The IAF issued a RFP to Honeywell Aerospace, the US- (Source: “Hurdle in Cheetah-Chetak replacement,” The Times ofbased aircraft engines and avionics manufacturer to India, 28 October 2012, via Factiva, © 2012 Bennett, Coleman“completely re-engine’’ Jaguars and provide 270 F-125IN & Co., Ltd.)turbofan engines. IAF plans to finish the “design anddevelopment’’ phase with Honeywell on the initial two Additional funds allocated to the Tejasfighters by 2015–16 and the remaining 123 fightersby 2023–24 by HAL under transfer of technology from Light Combat Aircraft programHoneywell. The MoD has allocated additional INR15 billion to(Source: Rajat Pandit, “India to give power punch to Jaguar the Tejas Light Combat Aircraft (LCA) program. Thefighters,” The Times of India, via Factiva, 17 October 2012; additional amount will boost the projected INR140.47“Missile Race For Indian Jaguars In Home Stretch,” Aerospace billion budget and will be spent on a production line forDaily & Defence Report, 5 October 2012, via Factiva, © 2012 HAL to build 20 fighters for the Indian Air Force’s order.McGraw-Hill,Inc.) The additional money had to be allocated because, so far, the company has not been able to establish a production line even to build eight Tejas fighters a year.Negotiations with Rafale to enter final (Source: Ajai Shukla, “Rs 1,500 cr more for combat aircraftstage Tejas as HAL fails to meet targets,” Business Standard, 9The GoI is likely to conclude negotiations with Dassault December 2012, via Factiva, © 2012 Business Standard Ltd.)Aviation for 126 Rafale fighters within six months. Theinquiries into the selection process have concluded andcontract negotiations have reached a crucial stage. TheEye on defence | 28
    • China unleashes its line of second fifth- Karnataka Government is likely to unveilgeneration stealth jets Aerospace policyChina has unleashed its line of second, fifth-generation The Karnataka Government is likely to come out withstealth combat aircraft. China’s recent test flight of its “Aerospace Policy-2012,” to attract aerospaceJ-31, is indicative that China is catching up with the US, industries and emerge as a relatively low cost aerospacethe pioneer of stealth technology platforms. This has manufacturing and MRO hub in Asia and the Middle East. Inincreased the need for India’s indigenous air combat the policy, the Government is expected to unfold a 10-yearcapability enhancement. perspective plan on the aerospace industry. It is eyeing an investment of INR377 billion (US$7 billion) in the next 5 to(Source: “NW18: Focus: Catching up time for India, as Chinazooms with stealth jets,” The Times of India, 5 December 2012, 10 years.via Factiva, © 2012. NewsWire18 Ltd.) (Source: “Karnataka to come out with Aerospace Policy in Dec,” United News of India, 21 November 2012, via Factiva.)Chaturvedi committee recommends civilaviation focus for HAL UNIDO and SIATI have come up with a work-Report of the BK Chaturvedi committee, submitted to plan to support Indian Aerospace SMEsthe MoD in October, has made various recommendations The United Nation Industrial Development Organisation andon restructuring HAL. These include — civil aircraft focus Society of Indian Aerospace Technologies and Industriesfor HAL, strengthen or plug technology gaps within, pay have entered a co-operation work plan to create a long-termscale reforms and pay parity with Maharatnas such as development program for aerospace SMEs in India. The rolethe National Thermal Power Corporation, empowerment of SMEs in the Indian aerospace industry is poised to growof executive management and chief executives to head with billions of dollars on the offer as part of offset clauseindependent business units. for defence equipment purchase.(Source: Madhumathi D.S., “HAL likely to venture into civil (Source: “UNIDO, SIATI to support Aerospace SMEs,” United Newsaviation sector,” The Hindu, 3 August 2012, via Factiva, © of India, 21 November 2012, via Factiva)2012 Kasturi & Sons Ltd) Labor unions stall private sector entry intoNorthrop Grumman, Lockheed looks to warship buildingcompete for aerostat radars contract The MoD’s move to speed up warship building by involvingThe IAF has decided to seek bids for six aerostat radars private sector has been delayed because of resistance byworth more than INR21.54 billion (US$400 million). labor unions to transfer work to the newly formed privateNorthrop Grumman and Lockheed Martin are expected to JVs. Mazagaon Dock has a significant order book andbe among the contenders for the contract. had formed JVs with two private sector warship builders,(Source: “Northrop Grumman, Lockheed to compete for Indian Pipavav and L&T, to speed up the building of surfacecontract, Defence News says,” Theflyonthewall, 2 November warships and submarines, respectively. Mazagaon Dock has2012, via Factiva.) not given a single order to the JVs but has instead engaged a consultant, IDBI Capital, to advise the shipyard on the operations to be transferred to the JVs. (Source: Ajai Shukla, “Unions stall private-sector entry into warship building,” Business Standard, 8 October 2012, via Factiva)Eye on defence | 29
    • India plans to scale up the Navy’s undersea Tarkash commissioned into Indian Navy atcombat capabilities Yantar ShipyardIndia will spend more than INR550 billion (US$10 billion) INS Tarkash, the second of the three stealth Frigates,to scale up the Navy’s undersea combat capabilities to has been commissioned into the Indian Navy at Yantardeter China. The contract also includes induction of next Shipyard, at Kaliningrad, Russia. This has bolsteredgeneration submarines. According to the Navy Chief, the Indian Navy’s role as a key facilitator to promoteAdmiral DK Joshi, the MoD’s acquisition council has given peace and stability in the Indian Ocean region andgreen signal to buy six submarines and a global tender also strengthened Indo-Russian military technicalfor the same will be floated soon. cooperation.(Source: “R55,000- cr sub purchase okayed,” The Hindustan (Source: “Tarkash joins Indian navy: Announcement,” UnitedTimes, 5 December 2012, via Factiva, © 2012 HT Media News of India, 9 November 2012, via Factiva.)Limited) CRPF plans to buy advanced UAVs to fightIndia’ first nuke submarine set to be Naxalsoperational by end-2013 Central Reserve Police Force (CRPF) plans to purchaseThe Indian Navy plans to get its first indigenously built unmanned aerial vehicles that it can operate withoutnuclear-powered submarine, INS Arihant, operational by the help of any external agency. The UAVs are expectedthe end of 2013. The 6,000-tonne submarine will be put to combat the Maoists and lift real-time images. Thethrough rigorous sea trials by the middle of 2013 before Expression of Interest states that the air vehicle shouldits commissioning. Nuclear-powered submarines can lurk be easy to handle and have low heat and noise, whichdeep sea closer to the enemy waters for months without is inaudible at 3,000 ft. It should also have low radarbeing detected. INS Arihant will be the second nuclear- signatures to avoid detection and engagement bypowered submarine of India, while China already has 10 adversary.nuclear submarines. (Source: Vijaita Singh, “CRPF to buy advanced UAVs to fight(Source: “India’s First Nuke Submarine to be Ready by 2013- Naxals,” Indian Express, via Factiva, © 2012 Indian Expresssend,” New India Express, 4 December 2012, via Factiva, © Online Media Pvt. Ltd)2012 The New Indian Express Group)Eye on defence | 30
    • Why choose team EY? Unique team Offset Industrial End to end experience structuring connects solutions ► Team member was a ► Offset Structuring ► Team has members ► Industrial License part of the team that worth US$2.4 billion from the auto practice — Application wrote the Indian executed successfully India’s only proven manufacturing ► FIPB approval Defense Offset policy in ► Total experience of 66 competence 2006 man years in the Armed ► Due-diligence services Forces ► We have offices in ► Team member helped in Bengaluru, Pune founding DOFA ► MoD experience of 14 ► Transaction Advisory Hyderabad and Chennai man years for M&A where these ► Team member has manufacturing and IT ► Tax mitigation in offset written a complete book capabilities reside contracts on Offsets with the CII ► Creation of a compliant offset schedule ► Half yearly offset progress report Unparalled support and advantage for youEye on defence | 31
    • Sources1. “Smart strategies for defence indigenization,” Forum for 6. http://www.usibc.com/sites/default/files/committees/files/ Strategic and Security Studies website, http://fsss.in/agni- enhancingroleofsmesinindiandefenceindustry.pdf, accessed 5 volume/SMART_STRATEGIES.pdf, accessed 27 November December 2012. 2012. 7. “Enhancing Manufacturing Capability for Efficient2. “Defence Procurements, Policy, Procedure, Process and Offsets Absorption,” IDSA website, http://www. Practice: An Industry Perspective,” Defence and Security idsa.in/jds/3_1_2009_EnhancingManufacturing Alert website, http://dsalert.hubpages.com/hub/Defence- CapabilityforEfficientOffsetsAbsorption_JDPatil,%20 Procurements-Policy-Procedure-Process-and-Practice-An- MBhargava, accessed 25 November 2012. Industry-Perspective#, accessed 27 November 2012. 8. “Cabinet okays Rs 8,000-cr plan to fit IAF with Brahmos,”3. “Ajai Shukla: Indigenising defence - the 70:30 fallacy,” Deccan Herald, 19 October 2012, via Factiva, © 2012 The Business Standard website, http://www.business-standard. Printers (Mysore) Private Ltd. com/india/news/ajai-shukla-indigenising-defence7030- 9. Saurabh Joshi, “Boeing to set up C-17 facility at Hindon,” fallacy/437201/, accessed 27 November 2012. StratPost, 16 October 2012, via Factiva, © 2012 StratPost4. “India’s Growing defence industry,” Asia-Pacific Business and Media Pvt. Ltd. Technology Report website, http://www.biztechreport.com/ 10. “India set to buy 40 Super Sukhoi jets for $3.5 bn,” Financial story/1299-india%E2%80%99s-growing-defence-industry, Express, 2 October 2012, via Factiva, © 2012 Indian Express accessed 1 December 2012. Online Media Pvt. Ltd. 5. “How DPSUs / Ordnance Factories Could Spearhead 11. “Indian VSHORADS competition progresses,” SP’s MAI, 1 Transformation of Indian Defence Industrial Base,” IDSA October 2012, via Factiva, © 2012 SP Guide Publications Pvt. website, http://www.idsa.in/event/ How DPSUs Ordnance Ltd. Factories Could Spearhead Transformation of Indian Defence Industrial Base, accessed 1 December 2012.Eye on defence | 32
    • 12. “Raytheon supplies Mk-54 Torpedoes for Indian Navy aircraft,” 27. “Kaman and Kineco Sign Agreement to Form a Joint Venture Indo-Asian News Service, 20 October 2011, via Factiva. in India,” Business Wire, via Factiva, 9 October 2012.13. “CCS clears 10,000 Russian anti-tank missiles for Army,” 28. Nisha Poddar, “M&M renews talks to buy US based aircraft Press Trust of India, 25 October 2012, via Factiva. maker Hawker Beechcraft,” ET Now, 19 October 2012, via Factiva, © 2012 Bennett, Coleman & Co., Ltd. 14. “HMT to make weapons, missile parts,” Business Line (The Hindu), 29 October 2012, via Factiva, © 2012 The Hindu 29. “Pipavav Defence and Offshore Engineering incorporates Business Line. JVC,” Accord Fintech, 6 December 2012, via Factiva.15. “Boeing’s Chinook set to win Indian heavy-lift chopper tender,” 30. Ashutosh Joshi , “Saab to Invest SEK250M in India’s Pipavav Indo-Asian News Service, 29 October 2012, via Factiva. Defence for 3.5% Stake,” Dow Jones Global Equity News, 1 November 2012, via Factiva, © 2012 Dow Jones & Company,16. “Tender out for 4k night vision devices for CRPF,” The Times of Inc. India, via Factiva, © 2012 Bennett, Coleman & Co., Ltd. 31. “Saab AB, QuEST enter deal to set joint venture for17. “Indian government shortlists Boeing for helicopter deal,” BBC aerostructure assembly,” The Economic Times, 29 November Monitoring South Asia, 6 December 2012, via Factiva, © 2012 2012, via Factiva, © 2012 The Times of India Group. The British Broadcasting Corporation) 32. “India in R6,000-crore JV with Russia for BrahMos’ air18. “Ministry of Defence: Setting Up of Units in AP,” India Public version,” Financial Express,17 November 2012, via Factiva, © Sector News, 4 December 2012, via Factiva, © 2012 Contify. 2012 Indian Express Online Media Pvt. Ltd. com 33. “Defiance Tech ties up with French firm to bid for defence19. “Rafale fighter deal to be concluded soon: Indian envoy,” Press deals,” Business Line, 8 December 2012, via Factiva, © 2012 Trust of India, 6 November 2012, via Factiva, © 2012 The The Hindu Business Line. Press Trust of India Limited. 34. Senator Iroegbu, “India to Further Strengthen Defence Ties20. “Tata Steel inaugurates second aerospace service centre in With Nigeria,” All Africa, 16 October 2012, via Factiva. China,” Accord Fintech, 8 November 2012, via Factiva, © 2012 Accord Fintech. 35. “India and Indonesia Agree to Significantly Step Up Defence Cooperation it’s a Turning Point: Antony,” PIB website, 1621. “India will buy Russian “tank brains”,” WPS: Defence & October 2012, http://pib.nic.in/newsite/AdvSearch.aspx, Security, 9 November 2012, via Factiva, © 2012 WPS Russian accessed 10 December 2012. Media Monitoring Agency. 36. “India and Russia agree to take Forward their Defence Co-22. “IAF Begins its Great Sukhoi Shift with New Airbases,” The Operation,” PIB website, 10 October 2012, http://pib.nic.in/ Standard, 10 November 2012, via Factiva, © 2012 The newsite/AdvSearch.aspx, accessed 10 December 2012. Sunday Standard. 37. “India, Spain ink agreement on defence cooperation,” The23. “HAL to open Strategic Electronics Factory in Kerala on Nov Hindu, 27 October 2012, via Factiva, © 2012 Kasturi & Sons 17,” Press Trust of India, 15 November 2012, via Factiva, © Ltd 2012 The Press Trust of India Limited. 38. Rajat Pandit,“Indian and US navies hold submarine rescue24. “India finalises 42 more Su-30MKIs from Russia,” SP’s operations,” The Economic Times, 27 October 2012, via Aviation, 19 November 2012, via Factiva, © 2012 SP Guide Factiva, © 2012 The Times of India Group. Publications Pvt. Ltd. 39. “Chief of Staff, Japan Air Self Defence Force on A Visit to25. “DRDO identifies new missile launch site (the organisation India,” PIB website, 19 November 2012, http://pib.nic.in/ intends to invest Rs1,000 crore),” Indian Business Insight, 25 newsite/erelease.aspx, accessed 12 December 2012. November 2012, via Factiva, © 2012 Informatics (India) Ltd. 40. “India and Singapore Review Security Ties,” PIB website, 2126. “Axis Aerospace eyes acquisitions,” Indo-Asian News Service, 9 November 2012, http://pib.nic.in/newsite/erelease.aspx, October 2012, via Factiva. accessed 12 December 2012.Eye on defence | 33
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