Eye on Defence January 2018

Contents title
Contents subjects
Dear readers,
Wishing you a very Happy New Year!
The Make in India initiative by the Government has been the epicentre for most
of the activity of late in the aerospace and defence sector. Be it new procurement
programs being planned or policy reforms being implemented, indigenization has
been the predominant theme. This edition highlights the major “Make” projects
along with their current progress while also mentioning how the MSME community fares in the
scheme of things. On the flip side, we have summarized the major policy changes announced
by the Government in the recent past. On the commercial aerospace front, we have provided an
overview of the aero engine market globally and in India while identifying some of the activities
of the engine OEMs in the country.
Our first article provides a detailed overview of the three major ‘Make’ programs that have been
in the works for long and have been reviewed in the recent past. We have attempted to present
the main features of the programs under consideration and the key players involved.
Our second article focuses on the MSME community in India, especially in the A&D space,
analysing where they fit in the entire ecosystem and the scope for the companies in the future.
We have summarized the major challenges faced by the MSME community and the steps taken
by the Government to ease regulatory requirements for them while encouraging enhanced
investments and production levels.
The third article is a continuation of our attempt to analyse the commercial aerospace segment
in India. We have highlighted how the major engine OEMs are increasing their presence in India
via both an enhanced order backlog coupled with other initiatives such as opening training
centres and also forming partnerships with Indian companies — both DPSUs and private. With the
growth in air travel and initiatives such as UDAAN, the demand for aircraft and correspondingly
engines is expected to increase.
In our fourth article, we have analysed some of the major policy reforms announced by the
Government and how they would impact the concerned stakeholders. The reforms announced
should enable further easing in the regulatory requirements while enabling a faster and more
efficient system.
Among the other regular sections, we have the global A&D industry buzz, the domestic industry
news, RFIs/RFPs released, new projects and investments, joint ventures and alliances and
country-level deals. On the industrial licensing front, we finally have some activity on the filings;
however, no ILs have been issued.
I hope you find this issue useful. It has been our constant endeavour to make this publication
increasingly relevant to you, and we will appreciate your comments and suggestions in this
regard.
K. Ganesh Raj
Partner and Leader
Contents
“Make” projects:
A visible silver lining? 2
MSMEs: The spokes in
the Indian defence wheel 10
Engine OEMs: The “power”
houses of the aero industry 16
Policy changes: Updates
and developments
from 2017 20
Request for information
(October 2017–
November 2017) 26
Request for Proposal
(October 2017–
November 2017 YTD) 29
List of ILs filed
(September 2017–
October 2017) 36
New projects/investments/
contracts 37
JVs and alliances 40
Country-level deals
and initiatives 42
Industry buzz 43
Global industry buzz 47
Analysis of M&A trends 50
Eye on Defence
January 2018

2 | Eye on Defence
“Make” projects:
A visible silver
lining?
India has a long road ahead in terms of defence
technology and manufacture, especially in the critical
field of armament equipment and platforms. Having
realized the pressing need to address this issue urgently,
the Ministry of Defence (MoD) initiated some measures to
open up indigenous capability building. “Make” programs
aim to serve as catalysts in establishing India-specific,
secure and customized solutions for our armed forces
and contribute to national security while ensuring the
much-needed indigenous life-cycle support. The focus in
this category is on design and development, integration,
installation and commissioning, production, supply,
maintenance, training and technological refreshes/
upgrades throughout the lifetime of the program.

3Eye on Defence |
All three projects — Futuristic Infantry Combat Vehicle (FICV), Tactical Communication System (TCS) and the
Battlefield Management System (BMS) — have been under deliberation for a long time. The total cost of the three
program is estimated to be ~US$20b. However, these programs are yet to see any significant progress. The
Defence Minister has reportedly assured of expediting the major Make in India projects and approvals in a time-
bound manner. The process after the selection of the prototype manufacturer, actual production and placement of
orders will again take considerable time.
FICV
The Indian MoD released a fresh expression of interest (EOI) in 2015 to selected Indian companies to provide
relevant information related to the supply of 2,610 FICVs for the Indian Army. FICV is one of the first programs
under the “Make” category as per the Defence Procurement Policy-2008 (DPP-2008) with 50% minimum
indigenous content (IC). The estimated cost of the FICV program is ~US$8b1. Five consortia submitted their
proposals in response to the EOI by February 20162.
The proposals submitted by the consortia would be evaluated and vendors would be selected for the next stage.
Each of these selected vendors would be referred to as a development agency (DA). The shortlisted DAs are to
be awarded prototype development contracts in collaboration with technical partners based upon Transfer of
Technology (ToT) over a two-year period. As per the DPP-2008, the MoD will fund 80% of the cost of developing
the FICV, while the selected DAs will fund the remaining 20%. For the prototype phase, it is envisaged that 5
prototypes will be produced however, pricing for the 5 prototypes should include the relevant ammunition costs to
perform testing of the prototypes.
The prototypes developed by the DAs would be subjected to extensive user evaluations. Once the prototypes
are validated, subject to completion of successful user trials, a contract for limited series production and regular
production will be awarded to the selected DA.
Since the MoD wants to retain two production lines, the winner would be given 65%—70% of the order with the
runner-up building 30%—35% of the Army’s requirement of FICVs, provided that the latter agrees to build the
winning design at the same cost as the winner. It is also worth noting that the intellectual property rights (IPR) for
FICV will be owned by the Indian MoD.
Sub systems and technology
The DA can collaborate with a foreign OEM as a technology partner for certain key systems/critical areas of the
project. ToT would, however, be required from the technology partner for the indigenous production of FICV.
Critical technology
It is mandatory for the DAs to take an undertaking from the proposed suppliers of critical technology sub-systems
of the FICV, for ToT, manufacturing rights, unhindered supply, full usage/exploitation, upgrade in technology
and export permission to the DA concerned and the MoD. The critical technology sub systems could include
among others the composite armor and all round protection, the gear and turret systems, the weaponry and the
optronics.
“Make” projects: A visible silver lining?

4 | Eye on Defence
The DAs have been meeting OEMs to select their partners, covering all spheres of FICV development. None of
the consortia so far have, however, made any announcement on their partner for the FICV project.
The technology provider should be prepared to provide a memorandum of understanding (MoU) that outlines/
confirms the rights/licenses to the sub-systems it has offered together with a plan for indigenization. The MoU
will need to be accompanied with a not-to-exceed (NTE) price for the prototype phase and production phase.
The indigenization plan needs to outline the Indian co-production partner and show the achievement of a
minimum of % of IC for the prototype phase by value.
Supply chain
The supply chain is likely to be a conglomerate of the DA’s subsidiary companies (along with other companies,
including MSMEs) including those dealing in metallurgy, system design, engineering and software and system
integration.
Probable timeline
Initiated in 2009, the plan was to induct 835 new FICVs by 2017, with another 1,479 coming in by 2022. The
diagram depicts the most optimum timeline now for the induction of around ~2,600 FICVs. Its integration with
the future soldier system and TCS and subsequent operationalization is not likely before 2026.
Present status
The two DAs have not been down selected yet. The project is under deliberation with the MoD since the
Acquisition Wing’s proposal to nominate all the five private consortia against the earlier intention to shortlist
two after realizing that the selection criteria laid more emphasis on commercial and financial strength than
a demonstrated ability to design and develop complex systems, which was the key criteria in the DPP. Hence,
DG Acquisition proposed that all five consortia be asked to submit detailed project reports (DPRs) to down
select the two contenders — who then along with the Ordnance Factory Board (OFB) will be the three entities
competing for the project.
TCS
The TCS program originally christened TCS 2000 as it was scheduled to commence in 2000 was approved by
the DAC in 2012, a first Make in India procurement program under DPP-2008. TCS, which is expected to cost
~US$4b3, will replace the ageing Army Radio Engineering Network (AREN) system, which facilitates order
communication up and down the chain of command in incremental steps. With TCS, commanders would be
able to directly communicate with soldiers on the frontline.

5Eye on Defence |
TCS is a wide area network that is deployed to provide secure
communications infrastructure and a network-enabled operating
environment to tactical forces in a corps zone. The digitized battlefield
communication grid will comprise a network of broadband and high-
capacity mobile radio compatible with the Combat Net Radio (CNR),
capable of handling high-speed data so as to enable commanders to take
near real time decisions.
The project will use a variety of communication applications, including
wired or wireless equipment supporting voice, video, data, fax and other
value-added services. It would employ cutting-edge technologies to
provide a fully mobile secure communication system for the Indian Army,
putting it at par with the most sophisticated tactical mobile systems in
use around the world. Each TCS prototype would include a:
• Transmission system
• Field wireless system based on 4G Long Term Evaluation technology
• Routing and switching systems
• Multiple mobile-platform engineering systems
• Network management system
• Security subsystem
The DAs would have to tie up with overseas defence companies to build
Indian Army—specific 100 Mbps transmission systems, in addition to
other critical systems. The DAs will also have to take undertakings from
overseas equipment manufacturers for unrestricted use of the imported
technologies.
An EOI was issued to a number of companies and the MoD shortlisted
two DAs in early 2014. Each DA is required to build a prototype of the
high-tech TCS system based on the DPR. The Government will then
select the winner, who will be awarded the contract to build seven TCS
for seven corps of the Indian Army. As per the EOI, the contribution of
the Indian industry in acquiring and developing technologies in critical
areas shall be a key criterion in assessment of various proposals.

6 | Eye on Defence
Supply chain
This is a big opportunity for the indigenous private industry to prove its mettle and come up with state-of-the
art prototype.
Probable timeline
Conceived in 2000, the TCS program has been delayed for more than a decade and half. The prototype
development and testing is expected to take about four years, hence the main contract is unlikely before
2022 provided the DAs are selected in 2018. Thereafter, the first system is likely to be available by mid-2024.
Its fielding and operationalization are not likely before end 2025 and integration with Tac C3I system and
backbone networks like ASCON and DCN by 2026.
Present status
The DAs, shortlisted in June 2012, had reportedly submitted the DPR defining every system, sub-system and
capability of the TCS. However, after more than a year and half, the MoD asked the DAs for a revised DPR with
reduced requirements. The revised DPR has already been submitted by the DAs and is under consideration by
the MoD. Given the recent resolve of the Government to fasten the procurements under the “Make” category,
it seems there might be some significant progress in 2018.
BMS
BMS is meant for communications from the battalion headquarters forward to the companies and platoons.
It is expected to enable the Commanding Officer to enhance his situational awareness and command his
battalion through a secure communications network with built-in redundancy. The project was envisaged
to enable a faster decision process by commanders at all echelons, enable better decision due to reliable
operational information provided in real time and have the ability to close the sensor-to-shooter loop by
integrating all surveillance means. BMS will comprise a tactical hand-held computer with individual soldier
and tactical computers at battle group HQ and combat vehicles enabling generation of a common operational
picture by integrating inputs from all relevant sources by the use of GIS and GPS with high data rate.
BMS aims to exploit technology for mission accomplishment in the by:
• Facilitating rapid acquisition, processing and transfer of information
• Enhancing situational awareness
• Acquiring the capability to react to information
• Sharpening the ability to synchronize and direct the fire of weapon systems
• Establishing and maintaining overwhelming operational tempo
The planned timelines for implementation of the BMS program were to be in three phases. The initial phase
got delayed because of indecision within the Army concerning delimitation between BMS and the F-INSAS. The
infantry insisted in handling computer and radio sub systems plus software integration of Project F-INSAS by
themselves, while DGIS was already developing BMS including for the infantry. Eventually, in July 2013, the
DAC approved BMS as a “Make India Project” under DPP-2013.

7Eye on Defence |
BMS consists of a wireless network that links digital devices carried by combat soldiers, interlinking them, their
commanders and a range of battlefield sensors. Each BMS prototype will have four variants for the:
• Infantry Battalion Group
• Combat Group (Armor)
• Combat Group (Mechanized Infantry)
• Special Forces Group
Technologies to be included in each prototype include:
• Geographical information system
• Multi-sensor data fusion system
• Rugged computing devices
• Software-defined radio-based communication System
In November 2013, the MoD issued EOIs for the project worth ~US$6b4. The shortlisted consortia of DAs have
to register special purpose companies for this project. Each of the DAs will separately develop a working BMS
consisting of four prototypes — one each for mountains, plains, desert and jungle terrains — in a time frame
not exceeding three years. The MoD will reimburse 80% of the development cost. Both consortia will share the
contract to mass-produce BMS for the Army, with more production going to the consortium whose prototype
has been chosen.
Supply chain
Indian vendors are capable of manufacturing the latest state-of-the-art electronics; hardware will not be a
challenge.
Probable timeline
After shortlisting of the two DAs, the DPR will need to be approved before the design phase can commence.
Limited laboratory testing would be followed by prototypes development and user evaluations. Successful
development and testing of prototypes could take about three years and series production could commence
after two years of approval. Induction is expected only in or after 2024. The system customized to the specific
Army requirement needs to be first integrated and tested in a controlled environment for which a test bed is to
be established. Only after successful validation trials in the field will the Army equipping begin.Its integration
with the future soldier system and TCS and subsequent operationalization is not likely before 2026.
Present status
The Indian Army has reportedly rejected the program due to reasons such as (1) budget constraints, (2)
uncertainty over final total cost and timelines once prototypes are approved and (3) resource constraints
considering the requirement of regular updates and the expected completion only around the mid of the next
decade5. The Indian MoD recently approved the procurement of 260 software defined radios (SDRs) worth
close to US$70m—US$80m. The equipment, India’s first indigenously developed SDRs, is to be manufactured
by the Defence Research and Development Organization (DRDO)—BEL collaboration.

Interested companies
The Indian companies interested in the above programs include the private companies like Reliance, Tata
Group, Mahindra, L&T and Bharat Forge and public companies including Bharat Electronics Limited. These
Make programs also have generated interest among the foreign OEMs who could be potential technology
partners for each program. The foreign companies who could potentially be interested include General
Dynamics, Rafael Advanced Defence Systems, BAE Systems and Lockheed Martin among others.
Issues
Care has to be taken to ensure that the private sector is not the front for foreign partners to crack India’s
difficult procurement procedures by partnering with an Indian company in a “Make” contract and passing off
existing products under the garb of “joint development.”
Certain technologies, for example, indigenous engine or transmission system in case of FICV, currently may be
beyond the vendors, but there are many achievable technologies and sub-systems, for example, in electronics,
ballistic computation, night-vision devices, fire control systems and gun control systems, that can realistically
be achieved. Domestic companies will go in for tie up with OEMs for critical technologies but the later may
not want to part with their technologies if the IPRs are also passed to the MoD. Also, since the prototype
stage does not guarantee production of the project, domestic companies may not like to keep the IPR of the
prototypes. The desired end product should be a comprehensive indigenous solution that can support the
requirements of the Indian Army throughout the lifecycle of the product. The selected DAs should be able to
get the technology to the country to ensure future upgrade capabilities.
8 | Eye on Defence

Sources:
1. http://www.financialexpress.com/india-news/8-bn-futuristic-infantry-combat-vehicle-deal-fate-under-
cloud-defence-min-to-seek-dpr-from-indian-army/914508/
2. http://www.business-standard.com/article/economy-policy/sitharaman-gives-army-s-delayed-future-
combat-vehicle-project-a-push-117092200560_1.html
3. https://www.defensenews.com/global/asia-pacific/2016/07/13/india-prepares-to-kick-start-delayed-
tactical-comms-project/
4. https://www.defensenews.com/land/2016/03/20/indian-battlefield-management-system-advances/
5. http://www.dailypioneer.com/columnists/oped/fill-the-operational-void.html
6. Union Budget documents (Taking currency exchange rate at INR 65/$)
Market reports
9Eye on Defence |
Despite a slew of important policy reforms in the last three years, there is a need to speed
up decision making, de-layer approval stages, eliminate repetitive process steps and
actually bring in a level playing field so as to unleash and actively promote indigenization.
Defence sector indigenization has a potential to create over a quarter million jobs and
also result in saving foreign exchange over the next decade besides building national
capability and capacity to support platform and equipment requirements across the
spectrum of technologies.
The Government has been insistent on developing a domestic manufacturing ecosystem
and hence within the defence budget there is a separate mention for technology
development under the ‘Make’ programs. In the last two years, the Government has
allocated almost $35m6 in its budget under the category: “Technology Development –
Assistance for prototype development under ‘Make’ projects.

11Eye on Defence |
1. I plan to enter a new defence segment? Is the
market size large enough?
2. Will this acquisition be a good fit in my existing
business portfolio?
3. Am I fulfilling all the defence regulations
stipulated by the MoD?
4. What are the offset regulations and how can
I carry out offset banking today for my future
defence projects?
5. How will GST impact my current and future
operations?
Reach out to us at
eyaerospace.defenceIndia@in.ey.com
Right questions that
could lead to right
business solutions

12 | Eye on Defence
MSMEs: The
spokes in the
Indian defence
wheel
An important pillar in the Indian manufacturing
ecosystem, MSMEs contribute greatly to the growth of
the Indian economy with a vast network of around 36m
enterprises, creating employment for ~80m people1.
The MSME share in India’s GDP is ~6% with a ~33%
contribution to the manufacturing sector and a 45%—50%
share in total exports2. This sector assumes greater
importance now, as the country moves toward a faster
and inclusive growth agenda with the intent of making
India a hub for manufacturing activity.

13Eye on Defence |
MSMEs: The spokes in the Indian defence wheel
The broad classification for MSMEs as per the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006
provisions is as follows:
Manufacturing sector: (Metric —
investment in plant and machinery)
Classification Services sector: (Metric - investment in
equipment)
<=INR25 lakh Micro enterprise <=INR10 lakh
>INR25 lakh but <=INR5 crore Small enterprise >INR10 lakh but <=INR2 crore
>INR5 crore but <=INR10 crore Medium enterprise >INR 2 crore but <=INR5 crore
The share of MSME products in the exports from the country during the last three years reflects their importance to India’s
economy:
Year Share of MSMEs products in exports
2013—14 42.42%
2014—15 44.76%
2015—16 49.86%
Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=168611
The MSME community in India is gearing up to be a part of the defence manufacturing in the country with around 6,000
MSMEs3 already providing components, sub-assemblies and assemblies to the defence public sector units (DPSU), DRDO and
Ordnance Factories Board (OFB) in India. Ordnance factories on their part outsource close to 40% of their production largely
from MSMEs.
MoD: The hub in the wagon wheel
Defence production, hitherto the monopoly of the public sector, was opened up to the private sector for participation in
the year 2001. Thereafter, a number of measures were taken to bring the private sector at par with the DPSUs. DPSUs and
ordnance factories have experienced increasing value of production and order backlogs over the years.
Value of production (INR crore)
DPSU 2012—13 2013—14 2014—15 2015—16
Hindustan Aeronautics
Limited (HAL)
14,202 15,867 16,289 17,273
BEL 6,290 6,127 6,659 7,782
BEML 2,879 2,814 2,999 2,740
BDL 1,177 1,804 2,770 4,300
Garden Reach Shipbuilders &
Engineers (GRSE)
1,529 1,611 1,651 1,707
GSL 507 509 570 726
HSL 484 453 294 593
MDL 2,291 2,865 3,593 4,122
MIDHANI 537 572 640 679
Total DPSUs 29,896 32,622 35,465 39,921
OFB 11,975 11,123 11,364 19,983
Total (including OFBs) 41,871 43,745 46,829 59,904
Source: http://ddpmod.gov.in/about-department-defence-production

With the intention of making it a mandate for DPSUs and OEMs to gradually become only integrators/
assemblers, the Ministry has published the “Outsourcing and Vendor Development Guidelines for DPSUs and
OFBs.” Outsourcing is expected to contribute to developing a capable and cost-effective supply chain. Value
of outsourcing (VoO) is a measure to identify the extent of work passed down the tiered structure and is
calculated as:
VoO = VoP – DI – RM – IVA
where VoP = Value of production; DI = Value of direct import; RM = Value of raw materials purchased from the
domestic market; and IVA = In-house value addition including value added manufacturing and services.
In order to encourage outsourcing, goods and services have been accordingly categorized:
Category Product description Range of products Description
I Low in cost, generic in
nature, less technology
intensive
Screws, rivets, bush,
bearings, PCBs, filters etc.
• Must be considered for
outsourcing to private
vendors
• Know-how and know-why
be made available to the
vendors
II Manufactured under ToT
from licensors/OEMs
Sub system, systems, higher
assembly
• Strategic processes may not
be outsourced
• Necessary technical
assistance may be shared
with potential vendors
III Items not so technology
intensive but imported by
DPSUs/OFBs
• To be identified and assigned
to Indian vendors
• Financial assistance can
be extended under the
development phase
IV Technology sensitive,
strategic and complex items
Focus to achieve self-reliance,
as OEMs neither indulge in
ToT nor support repair and
maintenance for entire product
lifecycle
Source: http://www.makeinindiadefence.com/OutsourcingVendorDevelopmentGuidelines.pdf

15Eye on Defence |
MSMEs: The binding factor in India’s defence manufacturing growth
story
MSMEs reportedly contribute to the extent of 80% in the manufacture of components, aggregates and
assemblies of complex weapon systems and aircraft3. This reflects on the importance of MSMEs to India’s
defence sector. MSMEs are currently striving for a higher product complexity indicating the keenness of the
industry to contribute to more value-added work rather than just a build-to-print requirement. More than 340
industrial licenses have been issued in the defence domain since 2004, with nearly 130 being issued in the last
three years alone with the intent of gradually removing possible roadblocks.
MSMEs are largely dependent upon large conglomerates and the OFB/DPSUs for their business expansions.
The MoD has recently come out with guidelines for outsourcing from the OFB and DPSUs. They have been
instructed to gradually increase their outsourcing to an extent to just remain integrators of systems.
The vendor base of the OFB and DPSUs pans to more than 3,000 companies with HAL alone having a base
of 2,500 vendors4. Comparing this number to the volumes of the over 15 lakh registered MSMEs5, it is very
evident that the potential is huge and the benefits of cultivating the MSME sector can be exponential.
The emerging supply chain dynamics in the aerospace and defence sector in India focuses on increased
participation of Indian companies in order to increase self-reliance. The tiered structure in the out years
is expected to be something like in the figure below where DPSUs and private players (selected as SPs)
would largely be assemblers of the parts manufactured by the tier I, II and III suppliers. This would ensure
accountability at all levels and faster production as every tier would be responsible for its respective product.
MSMEs would therefore have a major role to play in this tiered structure going forward.
DPSUs
participate all
the way till the tier I, II
and sometimes even at the
Tier III/component level
Past Present Future
OEM
Tier I
Tier II
MSMEs and the scope in the Indian defence sector
The defence sector is peculiar in its form with both types of procurements prevailing equally strongly both in
terms of the budget involved and the opportunities it provides for the industry. While the capital procurement
is centralized, revenue is de-centralized. The capital route is time intensive while the revenue route is much
faster, each governed by a different procurement procedure, the former by the DPP and the latter by the
Defence Procurement Manual (DPM).
(1) Procurements
Revenue procurements
Revenue procurements include upgrades, maintenance, repair, overhaul and other services-related
procurements dedicated to the upkeep of the systems already inducted by the services. While the revenue
directorates such as the Master General Ordnance (MGO) in the Army and the sister organizations in the other
services have a system of centralized procurements, there are a number of procurements that are governed

16 | Eye on Defence
and executed from the various commands of the Forces such as the Northern Command and the Eastern Command.
In addition to all this is the procurements from the OFB and DPSUs. Therefore, MSMEs do have a huge potential for
getting interfaced with the industries at large. On the other side, there are the large corporates that are eying for
contracts from the MoD as prime vendors and are hence cultivating MSMEs as part of their supply chain.
Capital procurements
MSMEs have a special mention in the DPP 2016, providing them with adequate reach into the entire system,
sometimes with an incentive and sometimes with mandated entry. The preamble speaks of the requirement
to enhance the role of MSMEs. “Make” procedure in both categories of Make-I and Make-II provide for a first
preference for the MSMEs for all projects with estimated cost of prototype development phase below INR10 crore in
the former and of INR3 crore.
(2) Offsets
A special provision has been provided for choice of MSMEs as Indian offsets partners with foreign OEMs as an
incentive to provide them with 150% offsets credits for any work they do with them. With the offsets opportunity
pegged between US$10b and US$15b6 in the next decade, the opportunity for the MSMEs could translate to
~US$100m—US$200m each year.
The challenges faced
Although MSMEs contribute significantly to the overall economy of the country, they face certain challenges in
terms of extent and reach, including:
(a) Availability of adequate and timely credit
(b) Access to technology
(c) Connectivity with OEMs and other companies
(d) Collateral requirements
(e) Infrastructure capabilities
Steps are being taken by the Government to ensure a level playing field for MSMEs and encourage them to step up
in the value chain.
Getting the act together
Over the years, the Government has taken several steps to build a robust defence industrial manufacturing base.
The steps taken include
• The FDI Policy was revised in November 2015 under which foreign investment up to 49% is allowed through the
automatic route and above 49% through the government route on a case-by-case basis, wherever it is likely to
result in access to “modern technology” for the country.
• Exchange rate variation (ERV) protection has been allowed on the foreign exchange component for all Indian
companies, including private companies in all categories of capital acquisitions provided they are of more than
one-year duration and the variation is more than +/-2.5%.
• The initial validity of the industrial license granted has been increased from 7 years to 15 years with a provision
to further extend it by 3 years on a case-by-case basis.

17Eye on Defence |
• The standard operating procedure (SOP) for the issue of a no-objection certificate (NOC) for export
of military stores has been revised and under it, the requirement of end user certificate (EUC) to be
countersigned/stamped by government authorities has been done away with for the export of parts,
components, sub-systems etc.
• Preference to indigenous manufacturing has been specifically penned down in the DPP 2016 with Buy
(Indian – IDDM) category at the top of the pecking order.
However, despite the ease in regulations and policies, it is always not possible for an MSME to be able to
address a given opportunity in the strategic sector. This calls for a high degree of skills, certifications, capex
and product capability as against the process capability. The concept of “virtual clusters” as envisaged by
the MSME Ministry (http://www.msmevirtualclusters.in/) goes a long way in bringing the capabilities of
MSMEs to the forefront. The niche capabilities of MSMEs can be fruitfully exploited by bringing in MSMEs with
complementary capabilities together to address an opportunity.
Recommendations
We believe a few further changes could go a long way in improving the dynamics of the MSME community in
India and further strengthen the manufacturing industry.
• Given the capital-intensive nature of the A&D industry, the range for MSME classifications needs to be
increased. At least a 3x increase from the current range levels will allow many existing players to gain the
benefits of being an MSME.
• There should be a slab for mandatory outsourcing from DPSUs and the large primes.
• There should be a hand-holding arrangement for MSMEs, especially in cases of big-ticket programs. Breaking
one big project into smaller projects would probably make it easier to identify MSME capability and assign
resources.
However, in such a scenario, it is also critical for MSMEs to not stretch themselves thin by taking multiple
unrelated positions for the sake of growth; they shoxcxzde dscxxzuld rather “commit to an identity” by getting
into A&D portfolio elements closest to their DNA and build a solid value proposition for the long term. This
would ensure an accountable and responsible manufacturing ecosystem in the country.
Conclusion
MSMEs are at the heart of the industry, providing them with such capability in innovation, cost reduction,
flexibility in operations, adaptability, operations research and productivity. It is imperative for the large
conglomerates to cultivate niche MSMEs into their supply chain, for their own benefit as well. They can work
on small margins and in fact work better when challenged.
Sources
1,2, 5 MSME Annual Report 2016-17
3 http://pib.nic.in/newsite/PrintRelease.aspx?relid=132734
4 http://www.hal-india.com/Common/Uploads/DMS/Vendor%20Development%20at%20HAL.pdf
6 https://economictimes.indiatimes.com/news/defence/14-billion-worth-defence-offsets-to-be-discharged-subhash-r-bhamre/
articleshow/56359688.cms

18 | Eye on Defence
Engine OEMs:
The “power”
houses of the
aero industry
Globally, aero engine manufacturers are sitting with
a decent order book and expectations of a further
increasing backlog. One of the predominant reasons
for the growth of the aero engine market is the growing
demand for commercial aircraft globally, which stems
from the increasing disposable income of the population.
In continuation to our recent initiative to address India’s
commercial aerospace ecosystem, in this edition we
attempt to highlight the engine manufacturers and how
they are contributing as well as participating in the Indian
growth story.

19Eye on Defence |
Engine OEMs: The “power” houses of the aero industry
Global scenario
The major engine manufacturers globally have a very healthy backlog comprising orders for at least the next
8—10 years, assuming a 2,500—3,000 deliveries run rate per annum.
55.7%
15.7%
3.0%
11.2%
11.6%
2.9%
50.9%
7.6%
11.0%
10.7%
1.2%
0.2% 18.4%
CFM International General Electric Pratt & Whitney Rolls-Royce International Aero Engines
Engine Alliance Undecided
Deliveries (2016) Backlog (as on 31 December 2016)
Source: Flight Global, Commercial Engines 2017
From both the 2016 deliveries and the backlog for the near future, it is clear that CFM International is the
market leader when it comes to commercial aerospace. With an order book of ~12,900 engines, it holds
more than 50% of the order backlog. Orders for more than 4,600 engines are yet to be confirmed for the
manufacturer (this largely happens when the aircraft ordered have options for more than one engine and the
concerned buyer has not decided yet on which engine to opt for).
Indian scenario
Aero engines is one segment where India has been
completely dependent on imports till date for both
commercial and defence requirements. India has been
procuring from countries including the US (General
Electric, Honeywell and Pratt & Whitney), European
countries (Rolls-Royce and Snecma) and Russia (Klimov
and NPO Saturn) to meet its growing requirements. Even
the proposed first indigenous civilian aircraft, Saras,
is a twin-engine aircraft with P&W Canada PT6A-67A
turboprops.
While a significant portion of India’s backlog for ~2,100
commercial aerospace engines is still undecided, the
remaining firm orders are largely distributed between two
engine manufacturers. Engine orders yet to be firmed
include Indigo’s ~400 fleet order for the A320 family
aircraft.
The majority of India’s order backlog is for the 737 MAX and the A320neo family aircraft, both fuel-efficient
aircraft variants of the legacy 737 and A320ceo family aircraft of Boeing and Airbus respectively.
Pratt &
Whitney
25%
CFM
International
31%
Undecided
44%
Backlog (as on 31 Dec 2016)
Source: Market reports, EY

20 | Eye on Defence
When analyzing the Indian supply chain ecosystem or the manufacturing industry from an aero engines
perspective, it is difficult to bifurcate between commercial and defence, because the industry is in such a nascent
stage that any arrangement with an existing OEM would tend to tread on both the commercial and defence
segments. OEMs such as Rolls-Royce have been sourcing ring forgings from HAL for their civil aerospace engines
since a long time. HAL has been building Rolls-Royce engines under license for India’s Jaguar fleet of fighter
aircraft and the Hawk Advanced Jet Trainer (AJT) fleet. The International Aerospace Manufacturing Private Ltd.
(IAMPL) in Bengaluru is a 50:50 JV between HAL and Rolls-Royce for the production of sub-systems for civil
aircraft engines. Rolls-Royce also supplies marine and energy gas turbines in India.
Safran has offered to partner the DRDO to upgrade the Kaveri so that it can power not only the LCA-TEJAS but
also potentially the AMCA and Rafale in the future. A significant cost of this partnership will be borne out of the
offset obligation of the recently signed Rafale procurement. This could turn out to be a significant leap for the
engine manufacturing ecosystem in India with an acual Indigenous engine being manufactured and available
domestically. This could well be replicated for civil aerospace engines in the near future.
Where does India figure in the scheme of things for
engine OEMs?
OEMs are fast realizing that they must engage with Indian companies if they are to participate effectively in the
Indian market and are accordingly investing in capabilities and manpower while also working on the manufacturing
front. Steps taken by engine OEMs to establish themselves in India include forming JVs with Indian companies,
setting up training centers, sourcing from Indian companies fulfilling their offset obligations by helping develop the
Indian aero–engine program.
Understanding the fact that sourcing from India can happen only if there is a technically adept workforce, the
OEMs have also encouraged training and skill developments centers in India. This would be a win—win situation for
both OEMs and India. Forming JVs with the existing OEMs is an opportunity for Indian players to gradually develop
the skillset and contribute to developing an indigenous aero engine industry.
Engine OEM Recent activities of OEMs in India Primary evident
intent
Pratt &
Whitney
Exploring opportunities to source
components for its engines
Training center for GTF and
V2500 engine customers
Investing more in the
engineering and skills
development aspects
GE F414 engines for the LCA Agreement with Mahindra to
build aero structures in the
Bengaluru facility
Focused on engine
development
programs such as the
F414 for LCA Tejas
Safran Safran to assist DRDO in Kaveri
engine development as part
of offsets obligations from the
Rafale deal
(HE-MRO) HAL—Safran JV for
dedicated helicopter engine
support
Focused on the
Helicopter engine
market and has
presence in the Jet
engine market as well.

21Eye on Defence |
Engine OEMs: The “power” houses of the aero industry
Rolls-Royce Rolls-Royce opened a Defence
Service Delivery Center (SDC) in
Bengaluru to support its engines
and provide repairs and services
A 50:50 JV with HAL—IAMPL
for manufacture of compressor
rings, turbine blades and
nozzle guide vanes
Focused on
servicing its engine
installed base and
manufacturing engine
components
Indian ecosystem in the overall aero engine segment
There have been a few JVs with foreign OEMs in India in the aero engine segment.
Company Particulars Focus areas
Max Aero Aircraft Engines
Private Ltd (MAEPL)
A ~76-24 JV between
Max Aerospace and
Safran
• Initially to provide line support to Snecma M53
engines on Mirage 2000s
• Potential to support CFM56 aircraft engines in
service with Indian airlines
International Aerospace
Manufacturing Private Ltd,
(IAMPL)
A 50-50 JV between
Rolls-Royce and HAL
• Manufacturer of compressor rings, turbine
blades, nozzle guide vanes for engines on civil
platforms with Trent family engines
Conclusion
Irrespective of the methodology/medium, it is now imperative that India develops the capabilities to build an
indigenous aero engine, not just because it is a major portion of the total cost of any aircraft imported but
Sources:
• http://www.business-standard.com/article/companies/rolls-royce-sets-up-bengaluru-facility-to-support-engine-
fleet-117042001117_1.html
• http://www.cassindia.com/inner_page.php?id=86&&task=military
• https://economictimes.indiatimes.com/news/defence/france-offers-eur-1-billion-to-revive-indias-combat-jet-engine-project/
articleshow/53036894.cms
• http://www.thehindu.com/news/cities/Hyderabad/pratt-whitney-customer-training-centre-in-hyderabad/article7637322.ece
• http://www.business-standard.com/article/companies/pratt-whitney-to-source-aircraft-engine-components-from-india-for-
global-ops-113052100930_1.html
• https://www.ainonline.com/aviation-news/aerospace/2015-02-16/snecma-and-max-aerospace-form-engine-mro-india
• http://idrw.org/aero-india-2017-ge-supplies-two-f414-ge-ins6-engines-for-tejas-mk-ii/

22 | Eye on Defence
Policy changes:
Updates and
developments
from 2017
Policy-related changes have, of late, been fast tracked
and more inclusive with the intent to ease regulatory
burden in order to promote defence manufacturing and
ease of doing business. The MoD, in the backdrop of the
Make in India initiative and also the urgent requirement to
upgrade the defence forces, has stepped on the gas in the
last few years.

23Eye on Defence |
The policy changes have been done with the intent to create an indigenous defence manufacturing ecosystem
while also encouraging foreign investments into the sector.
(I) Strategic Partnership Policy:
The SP Model, first mentioned in the Dhirendra Singh Committee report in July 2015 and further detailed out
in the Aatre Committee report in December 2015, was finally approved as a policy. The SP Policy forms the
seventh chapter of the DPP 2016. The intent is to develop a comprehensive industrial ecosystem within the
country while focusing on indigenous manufacturing, initially for the identified segments, which include:
• Fighter aircraft (RFI for 57 Multi role carrier based fighter aircraft (MRCBF) had been issued in January
2017, before the SP policy was finalized. However, it can be assumed it will come under the SP policy
umbrella)
• Helicopters (RFI has been issued by the Indian Navy in August 2017 for 111 utility and 123 multi role
helicopters)
• Submarines (RFI has been issued for the P75(I) program in July 2017)
• Armored fighting vehicles (AFVs)/Main battle tanks (RFI for the Future Ready Combat Vehicle (FRCV) has
been issued in November 2017)
The policy details out the selection procedure of the foreign OEMs and the Indian partners for the identified
segments and clearly pens the major criterion for the evaluations.
This would give an opportunity to Indian OEMs to benefit from the partnership with foreign OEMs in developing
capabilities for the long term. Foreign OEMs would benefit as they would get a big ticket program in India,
making them a trusted name in the government corridors.
(For more details, please refer the July 2017 edition of Eye on Defence.)
(II) Buy (Indian — IDDM):
Focus on indigenization has been re-emphasized in the DPP 2016 as the pecking order of the procurement
category gives the highest preference for Make in India. A new category Buy (Indian — IDDM) was introduced
in the DPP 2016 at the top of the list of procurement categories. Indigenously designed, developed and
manufactured equipment/systems would be given the highest preference wherein a specific percentage of IC is
required to qualify for the category:
• A minimum of 40% IC on a cost basis of the total contract value for products designed and developed
indigenously
• A minimum of 60% on a cost basis of the total contract value for products not designed and developed
indigenously
The domestic industry would be benefitted from this initiative as the sourcing for procurements under this
category would involve the private companies in India, thus leading to the development of a supply chain
involving MSMEs as well. Private OEMs would have to source the desired percentage of the total cost of the
program from Indian companies, which would act as a deterrent because of quality issues coupled with timely
delivery of components. Also, foreign OEMs are not very keen on technology transfers, which is reflected in
the fact that in the last two years, there have rarely been any programs signed under this category.
(For more details, please refer Chapter II of the DPP 2016.)
Policy changes: Significant steps toward a greater objective

24 | Eye on Defence
(III) Defence Products List:
The MoD announced a list of defence products that would require a defence industrial license (IL). All other
items can thus be manufactured without a defence IL. This practically exempts companies working in the civil
aerospace and/or engineering services business from requiring a license. The products that would require ILs
remain in four broad categories:
• Tanks and other armored fighting vehicles
• Defence aircraft, space craft and parts thereof
• Warships of all kinds
• Arms and ammunition and allied items of defence equipment, parts and accessories thereof (other than
small arms of caliber up to 12.7mm and parts, components and ammunition for such small arm)
This relaxation would enable Indian companies to manufacture most of the products without awaiting a license
grant.
(For more details, please refer the Ministry of Home Affairs Notification dated 19 May 2017.)
(IV) Industrial Licensing provisions:
The MoD relaxed the validity of ILs from 3 years to 15 years with a provision to further increase it by 3 years
on a case-by-case basis. Also, under the liberalized Arms Rules, the validity of licenses granted for arms
manufacturing has now been increased to be applicable for the entire lifetime of the company. The lifetime
validity is subject to:
• The licensee setting up a facility for manufacture and/or proof test of arms and ammunition and conducting
their trial runs, within a period of 7 years from the date of grant of a license. The period can be further
extended by three years on a written representation from the licensee.
• If the above is not met, the license shall be suspended or revoked.
The licensee has also been permitted to have enhanced production capacity up to 15% of the quantity
originally approved under the license by giving only a prior intimation to the licensing authority in this regard.
The license fees has also been significantly reduced from INR500 for each arm to a range between INR5,000
and INR50,000. This should result in more transparency in the process while making it faster and easier to
identify and obtain an IL.
The relaxation of licensing provisions would encourage Indian companies to enhance their manufacturing
capabilities with less regulatory hurdles.
(For more details on the amended Arms Rules, please refer the MHA notification G.S.R. 1342(E) dated 27
October 2017.)
(Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=172042)
Under the current procedure for obtaining ILs, an Indian company applies with the DIPP who then forwards
it to the Ministry of Home Affairs for security clearance. Only after the clearance is a license issued. The
Government is reportedly contemplating a time bound mechanism for granting licenses whereby if security
clearance is not granted within a “reasonable” period, then it should be considered deemed approved.
(Source: https://economictimes.indiatimes.com/news/defence/government-mulling-time-bound-mechanism-for-granting-licences-for-
defence-production/articleshow/61342132.cms)

25Eye on Defence |
Policy changes: Significant steps toward a greater objective
(V) Export and import
Appendix 3 of Schedule 2 of ITC (HS) Classification contains the SCOMET List (Special Chemicals, Organisms,
Materials, Equipment and Technologies), which covers dual use (civil and military applications) goods,
services and technology for exports. This is a comprehensive list of items that are either prohibited or require
authorization for exporting due to potential risks of use.
India’s DGFT updated the SCOMET List to be effective from 01 May 2017. The updates, among others,
include the addition of a new category, Category 8, which caters to “Special Materials and Related Equipment,
Material Processing, Electronics, Computers, Telecommunications, Information Security, Sensors and Lasers,
Navigation and Avionics, Marine, Aerospace and Propulsions.” This has been done as part of India’s obligations
as a member of Missile Technology Control Regime (MTCR) and as an adherent to the Nuclear Suppliers Group
(NSG) guidelines.
Also, the addition of the Munitions List under Category 6 brings it in line with the “Wassenaar Arrangement on
Export Controls for Conventional Arms and Dual-Use Goods.” India has been aligning its policies to gain entry
into the global non-proliferation regimes, including the Wassenaar Arrangement (WA) and the Australia Group.
The list was under “Reserved” earlier. Having been populated now, it lists a total of 22 items whose exports
would now be governed by the revised SOP issued by the Department of Defence Production (DDP). The
Military Stores List notified vide Notification No. 115(RE-2013/2009-14) dated 13 March 2015 now stands
revoked.
In December 2017, India became the 42nd member country for the WA, an export control regime that
promotes transparency and greater responsibility in transfer of conventional and dual use goods and
technologies. This is expected to further make it easy for India to acquire defence technologies.
(Source:https://scroll.in/latest/860748/india-gets-entry-to-multilateral-export-control-regime-wassenaar-arrangement)
(For more details, please refer the DGFT Notification No 5/2015-2020, dated 24 April 2017.)
(VI) FDI limits:
The Government has permitted foreign investment up to 49% in the defence sector under the automatic
route along with specified conditions. Further portfolio investment and investment by foreign venture capital
investors (FVCIs) has been allowed up to permitted automatic route level of 49%. Foreign investment beyond
49% has been permitted through government approval in cases that result in access to “modern technology”
for the country.
(Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=158262)
(VII) Offsets:
For procurements in the “Buy (Global)” or “Buy and Make” categories for more than US$300m, a minimum of
30% offset obligations are to be met by the foreign OEM. The Government has in the recent years eased the
execution of the obligations by:
• Lifting the abeyance order on services as a medium of discharge
• Allowing the change of Indian offset partner (IOP) and change of work package within the period of
performance
The increase in the threshold limit from US$45m to US$300m coupled with increased discharge avenue
options and the freedom to select the offset partner would encourage foreign firms to invest in India. There
are relaxations in the discharge of offset obligations; however, steps also need to be taken to improve
infrastructure so as to ensure a proper absorption of the offsets and also monitor the progress in the
discharge.

26 | Eye on Defence
(VIII) Amendments to bank guarantee formats:
The MoD announced a revision of bank guarantee formats for capital acquisitions in the DPP. Amendments
have been made to:
• Bank guarantee for advance
• Performance cum warranty bank guarantee (PWBG)
• Integrity pact bank guarantee (IPBG)
• Additional bank guarantee for Essential Parameters – B
The intent of the changes is to reinforce the MoD as the buyer and also protect its interests in the case of
invocation of guarantee on account of breach of contractual provisions among others.
(Source: https://mod.gov.in/dod/sites/default/files/DPPamen16_0.pdf)
(IX) Article 16 inserted in the DPP 2016
Chapter VI of the DPP 2016, called “Standard Contract Document,” enunciates the agreement between the
Indian Government, MoD and the concerned companies in the contract. Article 16, which was till now left
blank in the Standard Contract Document section of the DPP 2016, has now been inserted with the approval
of the Defence Acquisition Council (DAC).
The article requires the seller to commit to ensuring a minimum percentage of IC on a cost basis of the total
contract value/”Make” portion of the contract (depending on the procurement category) and adhere to it. The
seller is also required to maintain the same IC content at all stages of costing.
(Source: https://mod.gov.in/dod/sites/default/files/article16_0.pdf)
(X) Abolition of the Foreign Investment Promotion Board (FIPB):
FIPB, an inter-ministerial body within the Department of Economic Affairs in the Finance Ministry, was
responsible for processing FDI proposals and recommending them for approval. The Government scrapped
FIPB last year and now individual ministries concerned would be clearing FDI proposals with proposals having
security concerns would need the Home Ministry approval as well.
This is expected to help ease the processing of foreign investment proposals, including for the defence sector.
(Source: https://economictimes.indiatimes.com/news/economy/policy/union-cabinet-scraps-25-years-old-foreign-investment-
promotion-board/articleshow/58825768.cms.)
However, these government policies would require efficient implementation efforts in order for the sector
to flourish as is expected and required. Constant back and forth on contracts/deals would only delay the
development of the sector, leading to gaps in the Defence Forces.

27Eye on Defence |
Request for information (October 2017–
December 2017 YTD)
Date of Issue RFI Details Response Date Issued By Remarks
18 Dec 2017 EOI for Collaboration with BEML
Limited for Co-production and Supply
of Armored Vehicles (MPV, MBPV
and WICV) to Indian MoD/MHA
22 Jan 2018 DGM -Defence
Planning &
Purchase
DDP, BEML
14 Dec 2017 QRs of EOI of Requirement of BP
Sheet
--- DG BSF BSF
14 Dec 2017 QRs of Spares for HHMD Weapon
Scanner
--- DG BSF BSF
13 Dec 2017 EOI for the Reconditioning of Forging
Plant 1 No
31 Jan 2018 Ordnance Factory
Ambajhari
OFB
9 Dec 2017 EOI for Indigenous Development of
DMP-100A Small Size Potentiometer
Transmitter of AN-32 Aircraft
29 Dec 2017 Base Repair
Depot, Chakeri,
Kanpur
Indian Air
Force
8 Dec 2017 QRs of Trial Directives for EO Sensor
(E O Thermal Camera)
--- DG BSF BSF
07 Dec 2017 Modernization of Naval Aircraft Yards
at Goa and Kochi
23 Jan 2018 Dte of Air
Projects and
Plans
Indian Navy
4 Dec 2017 EOI for Shortwave Infrared (SWIR)
optics
1 Jan 2018 IRDE Raipur DRDO
4 Dec 2017 EOI for Combined Day Cum LRF
Receiver Optics
1 Jan 2018 IRDE Raipur DRDO
27 Nov 2017 EOI for Manufacture and Supply of
Rear Cabin
27 Dec 2017 BEML Limited DDP, BEML
27 Nov 2017 EOI for Manufacture and Supply of
Rear Cabin
27 Dec 2017 BEML Limited DDP, BEML
25 Nov 2017 EOI is Invited from Reputed Firms
having Required Expertise and
Facilities for Manufacturing of Engine
Components Required for Engine
Division
23 Dec 2017 AGM-Materials,
BEML Ltd.
DDP, BEML
16 Nov 2017 Short Range Remotely Piloted
Aircraft System (RPAS) for the Indian
Defence Forces, Qty: 60 nos.
28 Dec 2017 Arty Dte Indian
Army
10 Nov 2017 QRs of Passive Night Telescopic Sight
for 5.56 mm INSAS Rifle and LMG
--- DG BSF BSF
9 Nov 2017 Mini Tharmal Imaging Sight (T15-C) 13 Nov 2017 MG Arty Indian
Army
Request for information (October 2017–December 2017 YTD)

28 | Eye on Defence
8 Nov 2017 Future Ready Combat Vehicle,
Qty: approx. 1770 Armored
Fighting Vehicles (in Various Kit
Combinations) in a Phased Manner,
Under the ”Strategic Partnership”
route
20 Dec 2017 DGMF Indian
Army
06 Nov 2017 High Altitude Combat Free Fall
System, Qty: Approximately 530 nos.
15 Dec 2017 Ministry of
Defence (Navy)
DSOD
Indian Navy
06 Nov 2017 Roof Trough Type Splinter Proof for
Shelter for Field Defence 1A
28 Nov 2017 MGO Branch Indian
Army
4 Nov 2017 QRs and Trial Directives for Tethered
Un-manned Aerial Vehicle
--- DG BSF BSF
3 Nov 2017 Gas Turbine Generator for Indian
Navy Ship Board Application
18 Dec 2017 DME IHQ MoD
Navy
Indian Navy
2 Nov 2017 Prefabricated Bus Short Chassis 15 Dec 2017 Dte Gen of Sup
and Tpt
Indian
Army
1 Nov 2017 QRs and Trial Directives for Un-
Attended Ground Sensor
--- DG BSF BSF
31 Oct 2017 QRs of Infantry Weapon Effect
Simulator System
--- DG BSF BSF
31 Oct 2017 Light Machine Gun (LMG) 22 Dec 2017 Inf Dte Indian
Army
31 Oct 2017 Acquisition of Fast Patrol Vessel, Qty:
08 nos.
1 Jan 2017 Directorate of
Ship Acquisition
Indian
Coast
Guard
30 Oct 2017 RFI for 22 Helicopter Mounted
Machine Guns (HMMG) along with
Associated Spares, Equipment and
Ammunition
29 Dec 2017 Dte Of Plans IAF
30 Oct 2017 Procurement of Night Binocular with
Compass and Range Finder, Qty: 208
nos.
30 Nov 2017 Integrated
Headquarters
of Ministry of
Defence
Indian Navy
28 Oct 2017 QRs and Trial Directives for Ground
Surveillance Radar
--- DG BSF and
Comm IT Wing
(Eqpt Section)
BSF
27 Oct 2017 QRs and Trial Directives for EO
Sensor
--- DGBSF BSF
27 Oct 2017 Trailer 70 Tonnes Tank Transporter 12 Dec 2017 Dte Gen of Sup
and Tpt
Indian
Army
26 Oct 2017 Night Binocular with Compass and
Range Finder, Qty: 208 nos.
30 Nov 2017 IHQ MoD Navy
DSOD
Indian Navy

29Eye on Defence |
24 Oct 2017 EOI for Indigenization of K4pm Roller
Bearing for Mi-8/17 Helicopter
5 Dec 2017 Base Repair
Depot Indian
Air Force
(IAF) Station
Chandigarh
IAF
18 Oct 2017 Indigenization of Meteorological
System used in Arty Met Systems
30 Nov 2017 EME Dte Indian
Army
18 Oct 2017 Night Sight for Sniper Rifle (TI) 28 Nov 2017 Inf Dte Indian
Army
16 Oct 2017 QRs of Global Positioning System --- DG BSF BSF
16 Oct 2017 QRs of Through Wall Radar (2D) --- DG BSF BSF
13 Oct 2017 Indigenous Construction of Survey
Vessels, Qty: 05 nos.
4 Dec 2017 Directorate of
Hydrography
Indian Navy
10 Oct 2017 Naval Ship Borne Unmanned Aerial
System (NSUAS), Qty: approximately
50 nos.
7 Nov 2017 Principal
Director Aircraft
Acquisition
Indian Navy
10 Oct 2017 QRs -Technical Specification of Water
Scooters (3&2 Men) for Patrolling in
Dal Lake
--- DG BSF BSF
9 Oct 2017 EOI for Development of 90 KVA
Universal Ground Power Unit (U-GPU)
and ToT for R and H to be carried out
within IAF
8 Nov 2017 Commanding
Officer, CIMD
IAF
5 Oct 2017 Field Test Simulator (FTS) 10 Nov 2017 MoD Directorate
of Naval Signals
Indian Navy
4 Oct 2017 Addendum to Supplementary RFI
for CQB Carbine, Qty: approximately
83,000 carbines
25 Oct 2017 Inf Dte Indian
Army
Request for information (October 2017–December 2017 YTD)

30 | Eye on Defence
Request for proposal (October 2017–
December 2017 YTD)
Date of Issue RFP Detail/Equipment Response
Date
Issued By Remarks
20 Dec 2017 Ammunition Bunker, Qty: 19
nos.
29 Dec 2017 108 Engineer
Regiment
Indian Army
19 Dec 2017 High Resolution Binocular with
Graticule. Quantity: 200 nos.
22 Jan 2018 DG NSG NSG
19 Dec 2017 30 MM Automatic Grenade
Launchers (AGLs) (Qty: 246
nos.) along with its matching
grenades (Qty: 71,340 nos.)
5 Feb 2018 DG ITBP ITBP
19 Dec 2017 Indigenous Development of
Multi Function Display, Part
No. MFI-10-7-01 Along with
Automated Test Equipment for
MIG-29K Aircraft at New Delhi
12 Feb 2018 Directorate of Air
Projects & Plans
Indian Navy
19 Dec 2017 NBCD Items for C-146 28 Dec 2017 Coast Guard Region
(A&N)
Indian Coast
Guard
19 Dec 2017 NIV Digital UHF Portable Hand
Held Radio Sets
8 Jan 2018 Commandant, COD
Kanpur
Indian Army
18 Dec 2017 HELO Starting Converter - INS
Jalashwa
15 Jan 2018 Controller Of
Procurement Vizag
Indian Navy
15 Dec 2017 Sniper Scope with 10x
Magnification for GALIL Sniper
Rifle, Qty: 64 nos.
10 Jan 2018 HQ Northern
Command
Indian Army
15 Dec 2017 Sniper Scope with 10x
Magnification for DRAGUNOV,
Qty: 68 nos.
Command
Indian Army
14 Dec 2017 Image Intensifier Tubes for
PNV Binocular 1910 B and
PNV Sight PR 1614 F
--- DG BSF BSG
14 Dec 2017 Short Range Surveillance
Radar, Qty: 28 nos.
Command
Indian Army
14 Dec 2017 Sky Diving Equipment
(Parachute Sets and
Accessories)
11 Jan 2018 IHQ MoD Navy Indian Navy
13 Dec 2017 Programmable NVG Light for
Night Avn Ops, Qty: 128 nos.
1 Jan 2018 GSO-1 (B) Aviation
Branch
Indian Army
13 Dec 2017 Quadcopter, Qty: 20 nos. 26 Dec 2017 HQ Northern
Command
Indian Army

31Eye on Defence |
13 Dec 2017 Construction of Shooting
Range Including Reflex
Shooting Range at Leimakhong
Military Station
10 Jan 2018 Indian Army
13 Dec 2017 Quotations are Invited for
Supply of Engine for FICV
12 Jan 2018 DGM (Defence
Planning and
Purchase)
Department
of Defence
Production
12 Dec 2017 UHF Radio for 23 IDSR 30 Dec 2017 HQ 1 Corps (Sigs) Indian Army
12 Dec 2017 Manufacturing, Integration,
Testing and Supply Of
Embossed Canister for QRSAM
Article, Qty: 20 nos.
3 Jan 2018 The Director RDEE DRDO
12 Dec 2017 Medium Range Surveillance
Radar, Qty: 21 nos.
8 Jan 2018 GOC-IN-C Indian Army
12 Dec 2017 Mountaineering Equipment
(Climbing Shoes, Helmets,
Sticks, Gloves, Sleeping bags,
Carry Mats, Duffel Bags, Wind
Proof Jacket/Upper and Lower
and Fleece Jacket/Upper)
16 Jan 2018 Directorate of
Adventure
Indian Air
Force
11 Dec 2017 QRSAM Integrated INS-OBC.
Along With Test Jig, Qty: 20
nos.
22 Dec 2017 RCI, DCMM,
HYDERABAD
DRDO
8 Dec 2017 Range Finder Laser Hand Held
LH-30 with Box
2 Jan 2018 controller of
procurement material
Indian Navy
8 Dec 2017 Sports Skydiving (Student)
Parachutes
10 Jan 2018 Chief of the Naval Staf Indian Navy
8 Dec 2017 Rear Sight Elevating Slide to
K-2023, Qty: 2412 Numbers
with a 50% Option Clause
Trichy
OFB
8 Dec 2017 Supply of Production of Power
Cartridges, DRDO
20 Dec 2017 ARDE, DRDO
7 Dec 2017 VHF Hand Held Radio Sets,
Qty: 24 sets, HSL (Hindustan
Shipyard Limited)
19 Dec 2017 Asst. Manager
(Purchase)
HSL
6 Dec 2017 Propellant for AK-47
Ammunition MV 700M/S
(Suitable for Manufacture
Of Cartg. 7.62 MM A-7 with
Velocity 700 +/- 20 Meter/
Second)
Varangaon
OFB
6 Dec 2017 Integrated Surveillance System 21 Dec 2017 Military Hospital,
Bairagarh
Indian Army
Request for proposal (October 2017–December 2017 YTD)

32 | Eye on Defence
6 Dec 2017 Crushing (Small Arms
Cartridge Disfiguring) Machine
Fire Carts Case
26 Dec 2017 Amn Depot , Kanjoli
Line Bharatpur
Indian Army
6 Dec 2017 Thermal Imaging Infrared (IR)
Camera
26 Dec 2017 Indian Naval Academy
Ezhimala
Indian Navy
5 Dec 2017 KU Band Radio Frequency
Trans Receiver (RFT) System
19 Dec 2017 RCI ,DCMM DRDO
4 Dec 2017 Supply of Launch and recovery
system for Unmanned Small
Airship System as per Scope of
Work, Specification, ATP and
Compliance Sheet
29 Dec 2017 Director ADRDE DRDO
1 Dec 2017 Snow Goggles, Qty: 79,245 2 Jan 2017 DDG EM GSC Indian Army
Dec 2017 RFQ for Nitrogen Enriched
Air Flow Sensor for Advanced
Light Helicopter
15 Jan 2018 Helicopter Complex HAL
Dec 2017 High Intensity Search Light for
Advanced Light Helicopter
15 Jan 2018 Helicopter Complex HAL
30 Nov 2017 Tactical Equipment Carrier,
Qty: 18 nos.
13 Dec 2017 DG NSG NSG
30 Nov 2017 Injection Rifle (Tranquiliser
Gun) with Telescope including
Accessories
20 Dec 2017 Air Force Station Agra Indian Air
Force
29 Nov 2017 Hand Held Communication Set
Analog VHF, Qty 10 nos.
6 Dec 2017 Air Force Station,
Ferozepur
Indian Air
Force
28 Nov 2017 Bullet Proof Jacket for
ACV H-196 AND H-198 at
Mangalore
18 Dec 2017 Coast Guard
Dist (Karnataka)
Panambur Post
Indian Coast
Guard
28 Nov 2017 Bullet Proof Jacket for
ACV H-196 AND H-198 at
Mangalore
18 Dec 2017 Coast Guard
Dist (Karnataka)
Panambur Post
Indian Coast
Guard
27 Nov 2017 Combat Management System
(CMS) for 07 Ships of P17A
20 Dec 2017 MDL, Project-P17A Mazagon Dock
Shipbuilders
Limited
27 Nov 2017 Indigenous Development and
Supply of Five Items for Bofors
Weapon System
16 Jan 2017 DG EME/Dte of
Indigenisation
Indian Army
26 Nov 2017 Sight Rear(IC SUP.BY SAF) M7,
Qty: 663 nos.
26 Dec 2017 Small Arms Factory,
Kanpur
OFB
25 Nov 2017 Direct Imaging Equipment
with 3-Year Warranty (1 Year
Standard Warranty And 2 Year
Additional Warranty) as per
Specifications
9 Jan 2018 LRDE DRDO
24 Nov 2017 Helicopter Satellite Tracking
System
26 Dec 2017 Air Force Station
Mumbai.
Indian Air
Force

33Eye on Defence |
21 Nov 2017 Electronic Shooting Range --- DG BSF BSF
18 Nov 2017 Flying Goggles (Anti Ballastic),
Qty: 2 nos.
7 Dec 2017 AOC Indian Air
Force
18 Nov 2017 Jacket Tactical 7 Dec 2017 AOC IAF
17 Nov 2017 LWI Helmet Jaguar Aircrew
Size-3
12 Dec 2017 F.O.R. Air Force
Station, Bhuj
IAF
16 Nov 2017 Mechanical Components of
Mini Helicopter (97 items)
12 Dec 2017 Director, ADE DRDO
16 Nov 2017 Binoculars and Laser Range
Finder, Qty: 10 each
4 Dec 2017 at Air Force Station
Chandinagar Baghpat
IAF
15 Nov 2017 QRs of Wide Band UHF(Tactical
Video Communication System)
--- BSF BSF
15 Nov 2017 Fore Sight (Required through
Metal Injection Molding (MIM)
Technology Route Only)
15 Dec 2017 GM Small Arms
Factory, Kanpur
OFB
15 Nov 2017 Turret Electric Eqpmt, 678-95-
Cb5 KIT’B’
15 Dec 2017 Ordnance Factory
Medak
OFB
15 Nov 2017 Robot Unmanned Ground
Sensors
11 Dec 2017 DG, NSG NSG
11 Nov 2017 Mini ROV, Qty: 12 nos. 4 Dec 2017 DG NSG NSG
9 Nov 2017 Supply, Installation, Configure
and Commissioning of
Surveillance System
14 Dec 2017 Material Purchase
Department, MDL,
Mazagon Dock
Shipbuilders
Limited
8 Nov 2017 NBCD Jacket, Qty: 351 nos. 6 Dec 2017 Directorate of
Procurement
Indian Navy
8 Nov 2017 High Altitude Partial Pressure
Suit for SU-30 Aircrew, Qty:
06 nos.
5 Feb 2017 JD PROC TE CELL IAF
7 Nov 2017 Night Vision Thermal Imaging
Sights, Qty: 02 nos.
29 Nov 2017 Aerospace Safety
Section
IAF
6 Nov 2017 Manufacturing and Supply
of Titanium Domes Interface
Structures and Fasteners etc.
of Sonar USHUS-II on EKM
Class Submarine of IN. HSL
20 Nov 2017 DGM Outsourcing HSL
5 Nov 2017 MiG 29K/KUB Aircraft Power
Cartridges
(Cartridge Initiator 9BM -623,
Qty: 96 nos.
Cartridge TV-10 (Ignition
Tube), Qty: 34 nos.
Cartridge PT-8M-2, Qty: 127
nos.)
26 Dec 2017 Naval Armament
Depot
Indian Navy

34 | Eye on Defence
3 Nov 2017 HHTI Un-cooled Long-Range
Version Binocular/Bi-Ocular
with Two Eyepiece having One
Objective Glass, Qty: 38 nos.
with Spare Battery.
23 Nov 2017 Dte. Gen. ITBP ITBP
3 Nov 2017 Propellant for 7.62mm Ammn
for 7.62mm Small Arms
Ammunition, Qty: 59.5 MT
12 Dec 2017 GM- Ordnance Factory
Varangaon
OFB
3 Nov 2017 Fore Sight, Qty: 1,079 nos. 5 Dec 2017 Small Arms Factory,
Kanpur
DDP
3 Nov 2017 Quad Copter with Thermal
Imaging Camera
27 Nov 2017 HQ Goa Naval Area Indian Navy
31 Oct 2017 Confined Space ROV and
Surveillance ROV, Qty: 03 Each
27 Nov 2017 R and D(E) - DRDO DRDO
30 Oct 2017 Bullet Proof Helmets (BPH),
Qty: 425 nos., and Light
Weight Bullet Proof Jackets
(BPJs), Qty: 225 nos.
27 Nov 2017 Naval Armament
Depot NAD Post
Indian Navy
30 Oct 2017 Procurement of Power
Cartridges for AJT Hawk
Aircraft
(Ejection Seat Cartridge Set
(Part No MBEU92514), Qty:
80 nos.
Command Ejection Cartridge
Set (Part No MBEU60228),
Qty: 40 nos.)
Depot Goa
Indian Navy
28 Oct 2017 Power Cartridges for AJT
HAWK
Depot Goa,
Indian Navy
28 Oct 2017 Dynamic Fuze System 8 Nov 2017 DOMR, DRDL DRDO
28 Oct 2017 Para Boots (Various Sizes) and
Para Goggles (Qty: 300 nos.)
15 Nov 2017 Controllerate of
Procurement
Indian Navy
27 Oct 2017 Development, Fabrication and
Supply CBRN WPS MK-II with
DG Set (CQAL Compiled)
18 Dec 2017 DLJ - DRD DRDO
27 Oct 2017 Sensor Interface Electronics for
Cooled and Uncooled Thermal
Imager
20 Nov 2017 IRDE DRDO
27 Oct 2017 General Service Life Jacket
Orally Inflated, Qty: 8,172 nos.
6 Nov 2017 Deputy Director
Procurement
Indian Navy
23 Oct 2017 Flying Goggles Anti-Ballistic
At Air Force Station Hindan
Ghaziabad, Qty: 25 pairs
9 Nov 2017 Air Force Station
Hindan Ghaziabad
IAF

35Eye on Defence |
23 Oct 2017 Protective Combat Gloves
At Air Force Station Hindan
Ghaziabad
9 Nov 2017 Air Force Station
Hindan Ghaziabad
IAF
20 Oct 2017 Small Explosive Namely Delay
Pyro - 1 2 3
30 Oct 2017 DRDL Hyderabad DRDO
20 Oct 2017 HF Tx/Rx LHP-265D, Qty:
500 nos. with Associated
Accessories
9 Nov 2017 DIG(Proc) ITBP
18 Oct 2017 Integrated Surveillance System 7 Nov 2017 Commanding Officer
10 Assam
Indian Army
17 Oct 2017 A set of Diving Equipment
Consisting of Scuba Set
including Full Face Mask,
Regulator Assembly, Octopus,
Cylinder and BCD Harness,
Neoprene Suit (3/5mm), Fins,
Booties, Underwater Cutting
Rod and Underwater Welding
Rod for IA
24 Oct 2017 10 Engineer Regiment Indian Army
17 Oct 2017 Bulletproof Jacket and Helmet
(Personal Protective Bullet
Proof Headgear and Personal
Protective Clothing GPV Style,
Qty: 85 nos. Each)
31 Oct 2017 INS RAJALI Camp
post Arakkonam
Indian Navy
17 Oct 2017 RFQ for Construction of Piers
with Installation of Cranes,
Landside Tunnels, Mechanical,
Electrical and Plumbing (MEP)
Services and Other Associated
Works (MWC-03) Project
Seabird Phase IIA, Naval Base
Karwar, Karnataka for IN
30 Dec 2017 Director General
Project Seabird
Indian Navy
16 Oct 2017 MEMS Based Compass, Qty:
03 nos.
16 Oct 2017 Development of Night Sight of
CSWS for PISTOL and UBGL
Version, Qty: 40 nos.
16 Oct 2017 Optical Lenses for HD IR
Detector, Qty: 02 sets
13 Oct 2017 Light Weight Jackets with 3
Layer Cotton Texturized Fabric
Breathable and Water Proof,
Qty: 516 nos.
3 Nov 2017 Procurement Officer Indian Army
14 Oct 2017 Turret Electronic Equipment,
678-95-Cb5 KIT’B’
4 Nov 2017 Ordnance Factory
Medak
OFB

36 | Eye on Defence
14 Oct 2017 Coast Guard Life Jackets for
Army Aqua Nodal Centre, Qty:
40 nos.
2 Nov 2017 Comdt. Army AD
College
Indian Army
13 Oct 2017 NVG Compatible Portable
Helipad Lights, Qty: 50 sets
1 Nov 2017 Air Force station
Naliya
IAF
12 Oct 2017 Flying Goggles (Anti-Ballistic),
Qty: 20 nos.
31 Oct 2017 Air Force Station
Chabua
IAF
11 Oct 2017 Helmet Airborne (various sizes
– Small, Medium and Large),
Qty: 21,062
23 Nov 2017 DIR OS GS and C Indian Army
9 Oct 2017 Advanced Composite
Communication System for
Delhi, Mumbai and Mysore,
Qty: 03 sets
8 Nov 2017 Directorate of
Procurement
Indian Navy
6 Oct 2017 Assault Rifles (7.62 x 39 mm)
Folded Butt. 2. Accessories
with each Assault Rifle (7.62 x
39 mm), Qty: 29,823 nos.
8 Nov 2017 Dte. Genl. CRPF CRPF
6 Oct 2017 Conditioning of 120 mm
FSAPDS Round as per Specn
12 Oct 2017 MMD, ARDE DRDO
5 Oct 2017 VHF UHF Dual Band Digital
Transceiver Sets
30 Oct 2017 AIR Force Stn
Bhisiana, Bathinda
IAF
3 Oct 2017 Pocket Laser Range Finder,
Qty: 18 nos.
24 Oct 2017 ACSFP Branch Indian Army

37Eye on Defence |
List of ILs filed (September 2017–October 2017)
Application
no. and date
Name of the applicant Item of manufacture
28
27-10-2017
M/s Vihaan Networking Ltd. Radar
25
27-10-2017
M/s Accord Software and Systems Pvt.
Ltd.
GNSS Electronic Warfare (EW) Systems
22
09-10-2017
M/s Star Aerospace Pvt. Ltd. Night Vision Devices
21
18-09-2017
M/s Oshocorp Global Pvt. Ltd.
Syn Camouflage Net, Camouflage Snipper Suit,
Multispectral Camouflage Net
19
18-09-2017
M/s Alpha-Elsec Defence & Aerospace
Systems
II based Night Vision Device-Binocular,
Monocular, Goggles, Parts, Assemblies and Sub-
Assemblies
18
15-09-2017
M/s Bharij Fabricators Bulletproof Vehicles
16
13-09-2017
M/s Reliance Infrastructure limited
Electronic Counter Measure (ECM) and
Electronic Counter Counter Measure (ECCM)

38 | Eye on Defence
New projects/investments/contracts
Name of entity Project details Value*
The MoD and the
Indian Navy
►
►
• ► The MoD has approved the procurement of 111 helicopters to
enhance the military capabilities of the Indian Navy by indigenously
allowing Indian manufacturers to partner with foreign firms. The
MoD is yet to identify a foreign helicopter manufacturer and an
Indian defence company to form a JV for the project.
• According to the plan, 16 helicopters will be procured from the
country of the foreign firm while 95 will be manufactured in India.
• The MoD has also approved the procurement of upgraded Sonars
for its destroyers and frigates for the Indian Navy. These Sonars will
provide a significant boost to the Navy’s anti-submarine warfare
capabilities.
INR219b
DAC and US Defense
Security Co-
operation Agency
►
• ► The DAC has approved the purchase of 10 C-17 Globemaster III
heavy-lift transport aircraft from the US Defense Security Co-
operation Agency for IAF.
• According to the contract, delivery of the planes would begin 24
months after signing of the contract and the US would have to
source 30% value of the order from India.
INR180b
HAL
►
►
• ►HAL has secured a contract from the MoD to deliver 41 Advanced
Light Helicopters (ALHs) to the Indian Armed Forces by 2022.
• Under the contract, 40 ALHs will be delivered to the Indian Army,
while one will be sent to the Indian Navy.
• HAL is also planning to set up a store of components for India’s
frontline Sukhoi 30 MKI fighters to ensure better operational
availability of Sukhoi fighters.
INR100b
Cochin Shipyard Ltd.
(CSL)
• ►CSL has secured a contract for supplying eight vessels to the Indian
Navy. The company won the order against a competitive tender
where both private and public sector shipyards had participated.
INR54b
GRSE
►
• ►GRSE has secured a contract to build four vessels for the
hydrographic branch of the Indian Navy.
• GRSE will deliver the first vessel three years after the deal is signed
and the rest of the vessels subsequently every one year thereafter.
INR21b
L&T MBDA Missile
Systems Ltd
►
• ►L&T MBDA Missile Systems Ltd, a 51:49 JV between L&T and
France-based MBDA, plans to set up its missile-integrated facility
at one of the shortlisted states of Tamil Nadu, Maharashtra and
Gujarat.
• The facility will work on developing missile system, supply anti-tank
guided missiles for coastal batteries and high-speed target drones.
INR5b
The MoD and Zen
Technologies
• ►Zen Technologies has received approval from the MoD for supplying
defence equipment (simulators) to the Indian Army.
• The order is split into INR1.56b for equipment (expected to be
executed during FY19) and INR680m of annual maintenance
contracts (AMCs), which will accrue over the five years following the
warranty period of two years.
INR2.2b

39Eye on Defence |
The IAF • ► IAF has initiated infrastructure upgrade at its frontline base in
Ambala for deployment of the first squadron of Rafale jets
• The upgrade includes setting up of 14 shelters, hangers and
maintenance facilities at the base.
• The Rafale jets will be capable of carrying nuclear weapons and
other missiles and are scheduled to be delivered by September
2019.
INR2.2b
Kalyani Rafael
Advanced Systems
(KRAS)
• ►KRAS, a JV between Kalyani Strategic Systems and Israel-based
Rafael Advanced Defense Systems, has inaugurated a weapon
systems facility in Hyderabad, Telangana, to design, develop and
manufacture weapon systems for the Indian Armed Forces.
INR700m
BEL
►
• ►BEL has set up an NFTR near Bengaluru to calibrate and test radars
with Active Electronically Steerable Array (AESA) based antenna
arrays.
• The facility is expected to play an important role in absorbing
foreign technology as well as deploying an indigenous system for
AESA radars.
INR300m
BDL
►
• ►BDL has inked a deal with RCI to provide medium range surface-to-
air missiles (MRSAMs) to the Indian Army.
• The contract includes production, deliveries and product support of
MRSAM systems.
INR290m
DRDO and MKU
Limited
• ►DRDO has transferred the technology of Bullet Proof Jacket (BPJ)
to MKU Limited for manufacturing jackets for the Indian Army and
Para-Military Forces.
• The technology is one of the most matured personal protection
systems developed by DRDO.
NA
Bharat Dynamics
Limited (BDL),
Research Centre
Imarat (RCI) and the
Indian Army
• ►BDL has signed a deal with RCI to provide MRSAM to the Indian
Army.
• The contract includes production, deliveries and product support of
the MRSAM system.
NA
Dassault Aviation
and Reliance
Aerospace
• ► Dassault Reliance Aerospace Ltd. (DRAL), a 51:49 JV between
Reliance Aerostructure and Dassault Aviation, has laid the
foundation stone for a manufacturing facility in Mihan, Nagpur,
Maharashtra.
• The company aims to manufacture several components for both the
Rafale fighters from France and the Falcon 2000 series of civil jets
in the facility.
NA

40 | Eye on Defence
Russian Helicopters ► Russian Helicopters has finalized the financial aspects of a contract
for the overhaul of three Mi-26 helicopters for IAF.
As part of the contract, the company has also offered the overhaul
of two Mi-35 helicopters, repair, and modernization of five Ka-31
choppers for the Indian Navy, in addition to long-term agreement for
repair and maintenance of the Mi-17 helicopters.
NA
*The values of the deals have been converted to Indian rupees using the conversion rate US$1 = INR64.
Sources:
1. “Kalyani group-Rafael JV inaugurates India’s first defence sub-systems unit,” Business Standard, 3 August 2017, via Factiva
2. “Indias HAL wins $951.9m contract for advanced light helicopters,” The Ghanaian Times, 8 September 2017, via Factiva
3. “Def Min okays chopper procurement for Navy,” DNA - Daily News & Analysis, 1 November 2017, via Factiva
4. “Zen Technologies bags order worth Rs 2.24 bn,” MyIris News, 31 October 2017, via Factiva
5. “India : BDL inks deal to supply MRSAM to Indian Army,” National Iraqi News Agency, 27 September 2017, via Factiva
6. “Rs 2500 cr Indian Navy 4 vessel project bagged by Garden Reach Shipbuilders,” Financial Express, 13 September 2017, via
Q-tech Synergy Newsletter
7. “ITI wins Rs 7,000 crore order for ASCON from Defence,” Economic Times, 21 September 2017, via Q-tech Synergy Newsletter
8. “Defence Acquisition Council Meeting,” Pib.Nic, 27 September 2017, via Q-tech Synergy Newsletter
9. “DRDO Transfers Technology for Bullet Proof Jacket,” Pib.Nic, 4 October 2017, via Q-tech Synergy Newsletter
10. “Ambala, Hasimara IAF bases being readied for Rafale jets,” Economic Times, 1 October 2017, via Q-tech Synergy Newsletter
11. “Cochin Shipyard lowest bidder for Rs 5,400 cr Navy contract,” MoneyControl, 10 October 2017, via Q-tech Synergy Newsletter
12. “L&T to invest ₹500 cr in missile-integrated facility,” Business Line, 27 October 2017, via Q-tech Synergy Newsletter
13. “India kicks off project to build six N-subs,” Hindustan Times, 2 December 2017, via Factiva
14. “India Again Seeking US Deferment on C-17 Aircraft Purchase,” Sputnik News, 9 November 2017, via Factiva
15. “Dassault and Reliance Aerospace inaugurate manufacturing facility in Mihan, Nagpur,” Qatar Tribune, 1 November 2017, via
Factiva
16. “India is Advancing its Radar Technology Capabilities,” iHLS, 5 September 2017, via Q-tech Synergy Newsletter
17. “BDL to set up 5-MW solar photovoltaic unit in Telangana,” Business Line, 28 August 2017, via Factiva
18. “Rs 4,000 crore store for Sukhoi spares,” The Asian Age, 24 October 2017, via Factiva
19. “Russian repair for India’s ‘biggest military choppers in the world,” Times Now News, 1 November 2017, via Factiva

41Eye on Defence |
JVs and alliances
Name of the
entities
Nature of transaction Value
Ashok Leyland and
Rosoboronexport
►
• ►Ashok Leyland and Russia-based Rosoboronexport have signed
an MoU to participate in a bid for supplying 2,600 combat
vehicles to the Indian Army.
• Under the project, approximately 80% of the manufacturing
cost would be funded by the Government.
INR600b
Yantar Shipyard
and Goa Shipyard
►
• ►Goa Shipyard plans to sign a contract with Russia-based Yantar
Shipyard for the purchase of four missile-carrying frigates for
the Indian Navy under Project 11356.
• Under the contract, two frigates will be built in Russia and sent
to India, whereas another two will be built at the Goa Shipyard
with assistance on technology transfer from Russia.
INR256b
HSL and Hyundai
Heavy Industries
Co. Ltd. (HHI)
►
• ► HSL and HHI plan to partner for building Fleet Support Ships
(FSS) for the Indian Navy. The agreement is expected to be
inked in mid-2018.
• The first ship will roll out from the Hyundai facility in South
Korea and the rest from HSL.
INR95b
Force Motors
Limited and
Rolls-Royce Power
Systems
►
• ► Force Motors Limited and Germany-based Rolls-Royce
Power Systems have entered into a 51:49 JV to set up a
manufacturing facility for producing engines for power
generation and rail application, and complete power generation
systems, including associated spare parts for Indian and global
markets.
• The plant is expected to be operational by 1Q19.
INR30b
Russian
Helicopters and
HAL
►
• ►Russian Helicopters and HAL have entered into a JV for co-
development and co-production of 200 Ka-226T multi-role
military choppers within nine months. The contract is expected
to be signed in early 2018.
• Under the contract, the first 60 rotorcraft will be manufactured
in Russia and the subsequent 140 will be assembled in India.
NA
Saab and the
Adani Group
►
• ►Sweden-based Saab and the Adani Group plan to enter into a
JV for producing a broad portfolio of products including UAVs
and helicopters for the Indian Armed Forces and fighter jets to
IAF.
• Additionally, they plan to build the JAS 39E Gripen (Gripen E)
fighter for IAF.
NA
Larsen & Toubro,
Godrej, HAL
and Indian
Space Research
Organization
(ISRO)
• ►Larsen & Toubro, Godrej and HAL plan to join a consortium,
being put together by ISRO, to build Polar Satellite Launch
Vehicles (PSLVs) to be launched by 2020.
NA

42 | Eye on Defence
Lotus Aviation
Technology (LAT)
and Aerospace
Equipment
Company (AEC)
• ►LAT has signed an agreement with Russia-based AEC for the
maintenance, repair, modernization and partial manufacturing
of components of Su 30MKI aircraft and Russian origin
helicopters in India.
• The agreement is in line with the Government’s Make in India
program.
NA
Mahindra Defence
Systems and
Lockheed Martin
►
• ►Mahindra Defence Systems and Lockheed Martin have entered
into a partnership to meet the increasing demand for C-130J
military flight training by dedicating the Mahindra’s C-130J
Super Hercules simulator training center to IAF.
• Lockheed Martin’s Rotary & Mission Systems division will
provide lifecycle support to C-130J Super Hercules pilots and
aircrew.
NA
CSL and Hooghly
Dock & Port
Engineers Limited
• ►CSL and Hooghly Dock & Port Engineers Limited have entered
into a 76:24 JV, named Hooghly Cochin Shipyard Limited
(HSSL), for upgradation and modernization of shipbuilding
infrastructure at two shipyard sites of Salkia and Nazirgunge in
Kolkata.
NA
Sources:
1. “Business and Economy: SAAB Ties Up with Adani Group to Manufacture Gripen in India,” Management Compass, 31 October
2017, via Factiva
2. “L&T, Godrej, HAL, Isro to sign pact to build PSLV rockets,” Business Standard, 30 October 2017, via Factiva
3. “Lotus Aviation ties with AEC to Maintain Russian Aircraft,” India Strategic, 15 September 2017, via Factiva
4. “Force Motors to Form Joint Venture with Rolls-Royce Power Systems,” Financial Deals Tracker, 14 September 2017, via Factiva
5. “Ashok Leyland Ltd; Futuristic Infantry Combat Vehicle (Ficv) Project In India,” Projects Tiger, 11 September 2017, via Factiva
6. Mahindra Defence Systems, Lockheed Martin commemorate C-130J training center for Indian Air Force at Hindon, NCR,
ATSMAI, 30 August 2017, via Factiva
7. “Cochin Shipyard forms JV with Hooghly Dock & Port,” The Times of India, 23 October 2017, via Q-tech Synergy Newsletter
8. “Saab-Adani Group JV to make drones, military choppers, eyes $1-bn jet deal,” Business Standard, 6 November 2017, via
9. “Russia aims to deliver 200 Ka-226T military choppers to India in 9 years,” Business Line, 5 December 2017, via Factiva
10. “Hyundai-HSL to build first of five Fleet Support Ships,” The Hindu, 14 September 2017, via Q-tech Synergy Newsletter
11. “India to ink $4-b contract with Russia for four missile-carrying frigates,” Business Line, 27 October 2017, via Q-tech Synergy
Newsletter
JVs and alliances

43Eye on Defence |
Country-level deals and initiatives
Country Nature of transaction Additional details
Russia • ►In October 2017, Exercise INDRA-2017,
the first ever Tri Services Joint Exercise
between Indian and Russian Armed Forces
was conducted in Russia, giving the Indo-
Russian defence cooperation a major
boost.
• The scope of the Exercise included
professional interactions and establishment
of joint command and control structures
between the Indian and Russian armed
forces.
The US
►
►
• ► In November 2017, during the fourth
meeting of the Joint Working Group on
Aircraft Carrier Technology Cooperation
(JWGACTC), India and the US discussed
plans for future cooperation under
different aspects of aircraft carrier
technology, including design optimization
and trials procedure.
• Earlier, in October 2017, the US had
announced that it would provide
Electromagnetic Aircraft Launch System
(EMALS) technology for the Indian Navy’s
future aircraft carrier.
• Due to its flexible architecture, EMALS can
launch a wide variety of aircraft weights
and can be used on several platforms with
differing catapult configurations.
• Previously, during the India visit of the
US defence secretary James Mattis in
September 2017, the US had agreed
to share some of its most advanced
technologies with India to boost defence ties
between both the countries
• Additionally, the countries discussed the
broadening of maritime cooperation in the
Indo-Pacific region, as well as eradication of
terrorism.►
Japan • ►During the bilateral annual defence
ministerial dialogue in Tokyo between
Indian Defence Minister Arun Jaitley
and his Japanese counterpart Itsunori
Onodera, the two countries decided
to begin technical discussions for joint
research on unmanned ground vehicles
and robotics.
• India and Japan aim to work toward
including anti-submarine warfare training in
their expanding military-to-military ties.
• The two countries also aim to enhance their
cooperation on counter-terrorism, which
will include a joint field exercise between the
armies of the two countries in 2018.
Belarus • ► During the India visit of the President of
Belarus, Alexander Lukashenko, the two
countries decided to enhance bilateral
cooperation.
• India and Belarus aim to explore joint
development and manufacturing in the
defence sector under the Make in India
initiative.
Sources:
1. “Malabar 2016: Indian Navy, US Navy & Japan’s JMSDF hold exercise to boost ties,” The Financial Express, 10 June 2016,
via Factiva
2. “Parrikar sees investment potential in Vietnam,” The Times of India, 15 June 2016, via Factiva.
3. “India, Oman sign 4 agreements on defence cooperation,” United News of India, 22 May 2016, via Factiva
4. “India, U.S. reach preliminary agreement on sharing military logistics amid China challenge,” Reuters, 13 April 2016, via
5. “Russia, India Sign Agreement on S-400 Defense Systems Deliveries - Official,” Sputnik News, 27 April 2016, via Q-tech
Synergy Newsletter

44 | Eye on Defence
Industry buzz
IAF conducts air-to-air refueling (AAR) on Embraer AEW&C aircraft
IAF has completed an AAR mission on Embraer Airborne Early Warning and Control (AEW&C) transport
aircraft. The AEW&C system can be used to detect, track and identify threats and for guidance and interception
control, display of air situation picture and multi-sensor data integration.
(Source: “IAF conducts air-to-air refueling on Embraer AEW&C aircraft,” The Guardian, 2 December 2017, via Q-tech Synergy
Newsletter)
IAF plans to install a two-layer air defence system
IAF is seeking to install a two-layer air defence system that can take out enemy combat aircraft, drones or
helicopters and enhance the country’s protection. The new air defence system is planned to protect important
installations in New Delhi, including the President’s house, Parliament and other vital assets and points.
(Source: “Delhi: IAF to install two-layer air defence system capable of taking out enemy combat aircraft, drones,” Mail Today, 9
November 2017, via Q-tech Synergy Newsletter)
IAF completed trials of the S-400 missile in Russia
IAF completed field evaluation trials of the S-400 missile in Russia. The missile can fly at supersonic and
hypersonic speeds to intercept all kinds of targets between 120 km and 400 km. Acquisition of the missile is
expected to give IAF a competitive edge over China, which has already installed this system.
(Source: “Russian S-400 air defense missile systems: IAF completes trials, price negotiations to begin soon,” News Nation, 6
September 2017, via Q-tech Synergy Newsletter)
Indian Army to equip troops with mini-UAVs
The Indian Army plans to equip its troops deployed on Pakistan and China borders with 600 drone planes to be
purchased at an estimated cost of INR9.5b. The pilotless planes would also be handed over to National Rifles
for their operations.
(Source: “Indian Army to equip troops with mini-UAVs,” Defence News India, 11 November 2017, via Q-tech Synergy Newsletter)
The Indian Navy is augmenting its infrastructure in Andaman
The Indian Navy plans to extend its 3,500 ft. existing runway in Andaman to 10,000 ft. by 2021 in order to
increase its presence in the Indian Ocean. The Navy plans to shift its second floating dry dock to the islands on
the eastern seaboard to service a large number of ships operating in that area.
(Source: “Navy goes full throttle to augment infrastructure in Andaman,” Deccan Herald, 19 October 2017, via Q-tech Synergy
Newsletter)
INS Tarasa commissioned into Indian Navy
INS Tarasa, a water jet fast attack craft, has been commissioned into the Indian Navy. Tarasa was indigenously
built by GRSE, which is 50m long and powered by three waterjets, which give it speeds of over 65 kmph.
(Source: “Indian Navy commissions Water Jet Fast Attack Craft at Mumbai,” Pib.Nic, 26 September 2017, via Q-tech Synergy
Newsletter)

45Eye on Defence |
The MoD is amending its Defence Procurement Manual to enable the
Indian Army to procure the latest technology
The MoD is amending its Defence Procurement Manual to incorporate provisions that will enable the Indian
Army to procure the latest technologies in cyber informatics and warfare, nano technology and robotics, at a
market projection of INR250b.
(Source: “Indian Army builds defence against outdated technology,” Economic Times, 9 November 2017, via Q-tech Synergy
Newsletter)
The MoD plans exemption in Customs Duty on the import of defence
spare parts
The Indian Defence Ministry is considering Customs Duty exemption on the import of defence spare parts in
order to bring the Indian firms at par with foreign OEMs, which are provided tax exemption on the projects
they develop. According to the current norms, while foreign OEMs in the country are given tax concessions on
imported items, Indian companies are not.
(Source: “Indian defence companies may get customs duty relief,” Business Line, 30 October 2017, via Q-tech Synergy Newsletter)
The MoD is expecting new operations divisions
The MoD is expecting three new tri-service agencies in the fields of cyber warfare, space and special
operations to be introduced shortly. These agencies would be headed by officers of Major General rank and
equivalent in the Navy and IAF.
(Source: “Coming soon: Ministry of Defence’s cyber, space, special operations divisions,” The Indian Express, 16 October 2017, via
Q-tech Synergy Newsletter)
The MoD is considering 100% FDI in the defence sector
The MoD is open to 100% FDI in defence if firms are willing to provide full technology transfer as India and the
US are set to enter a critical phase of co-development and co-production. However, industry representatives
have raised concerns, such as trade-offs between the L1 model (lowest price) versus technology transfer and
the overall best value and capability that India is looking to buy and develop.
(Source: “India Tests 500 Kg General Purpose Bomb From Su-30MKI Aircraft,” Defence World, 11 September 2017, via Q-tech
Synergy Newsletter)
The MoD to roll out a drone policy soon
The MoD is likely to introduce the draft drone policy soon. The new policy is expected to empower the
anti-terror force NSG and industrial security agency CISF to shoot down low-flying objects such as drones
and gliders, which could carry out terror attacks. The two forces will acquire defence mechanisms such as
electromagnetic systems with inbuilt radar, radio frequency jammer and detector.
(Source: “NSG, CISF may be empowered to shoot down ‘rogue’ UAVs,” The Times of India, 10 September 2017, via Q-tech Synergy
Newsletter)
Indian Government amends Arms Rules to spur Make in India
The Ministry of Home Affairs has liberalized the Arms Rules to boost the Make in India manufacturing policy of
the Government and promote employment generation in the field of manufacturing of arms and ammunition.
The new rules have eliminated the condition that small arms and light weapons could only be sold to the
Central or state government with the approval of the Union Home Ministry.
(Source: “Govt amends Arms Rules to spur Make in India,” Live Mint, 31 October 2017, via Q-tech Synergy Newsletter)
Industry buzz

46 | Eye on Defence
Cabinet approves umbrella scheme of Modernization of Police Forces
(MPF)
The Cabinet Committee on Security (CCS) has approved the implementation of the umbrella scheme of MPF
for CY18 to CY20. The financial outlay for the scheme over the three-year period is INR251b, out of which the
Central Government’s share will be INR186b and the states’ share will be INR64b.
(Source: “Cabinet approves umbrella scheme of Modernisation of Police Forces,” PM India, 27 September 2017, via Q-tech Synergy
Newsletter)
NITI Aayog to encourage domestic manufacturing of lightweight
body amours
NITI Aayog plans to set up an inter-ministerial empowered committee to prepare a roadmap to encourage
domestic manufacturing of lightweight body armors for the army and para-military forces. The tentative
requirement is of over 50,000 bulletproof kits for the MHA in addition to the Army’s requirement.
(Source: “Niti Aayog to prepare roadmap for making lightweight body amours,” Business Line, 24 September 2017, via Q-tech
Synergy Newsletter)
DRDO and IAF completed flight-testing of Guided Bombs
DRDO and IAF successfully tested the indigenously developed lightweight glide bomb Smart Anti Airfield
Weapon (SAAW) from IAF aircraft in the ranges at ITR, Chandipur, Odisha. SAAW will soon be inducted into the
Armed Forces.
(Source: “Successful Flight Test of Guided Bombs,” Pib.nic, 3 November 2017, via Q-tech Synergy Newsletter)
DRDO has successfully tested Electromagnetic Railguns (EMRG)
DRDO has successfully tested the 12 mm square bore EMRG that can fire projectiles at Mach 6 (six times the
speed of sound). Such railguns are known to be one of the future technologies of warfare, as they use kinetic
and laser energy instead of controlled explosives for firing missiles.
(Source: “Indian Scientists Successfully Fire Electromagnetic Railgun (Mach 6) Test Shot,” Sputnik News, 7 November 2017, via
DRDO has successfully conducted flight trial of “NIRBHAY” sub-
sonic cruise missile
DRDO has conducted test flight of “NIRBHAY,” India’s first indigenously designed and developed long range
sub-sonic cruise missile, which can be deployed from multiple platforms and has the capability to loiter and
cruise at 0.7 Mach, at altitudes as low as 100m.
(Source: “DRDO Conducts Successful Flight Trial of ‘NIRBHAY’ Sub-Sonic Cruise Missile,” Pib.nic, 7 November 2017, via Q-tech
Synergy Newsletter)
DRDO successfully completes trials for the Astra — Beyond Visual
Range Air to Air Missile (BVRAAM)
DRDO conducted the final development flight trials of Astra - BVRAAM in Odisha. A total of seven trials were
conducted against Pilotless Target Aircrafts (PTA) successfully.
(Source: “Successful Development Trials of Astra Missile,” Press Information Bureau, 15 September 2017, via Q-tech Synergy
Newsletter)

47Eye on Defence |
DRDO begins the trial of Trawl system to locate mines
DRDO has undertaken the trial of Trawl system for locating land mines and creating a safe lane for vehicles.
The system is developed to meet the requirements of the Army and is capable of breaching a variety of
landmines including passive and active influence mines.
(Source: “DRDO undertakes trial of Trawl system to locate mines,” Economic Times, 15 September 2017, via Q-tech Synergy
Newsletter)
DRDO successfully tests the Precision Guided High Speed Low Drag
(HSLD) bomb
DRDO has successfully tested the precision guided HSLD bomb weighing 500 Kg from the Su-30MKI aircraft.
These bombs are effective against ground targets and can be carried on various in-service aircraft such as
Jaguar, MiG and other advanced combat aircraft.
(Source: “India Tests 500 Kg General Purpose Bomb From Su-30MKI Aircraft,” Defence World, 11 September 2017, via Q-tech
Synergy Newsletter)
DRDO completes the testing of the Advanced Towed Artillery Gun
System (ATAGS) at the Pokhran Ranges
The DRDO has completed trial testing of the ATAGS at the Pokhran Ranges, being indigenously developed for
the Indian Army. During the testing, the 155 mm 52 caliber gun-howitzer fired three shells creating a record
distance of 47.2 km against maximum ranges of 40—45 km. The ATAGS is developed by DRDO in partnership
with Tata Power - Strategic Engineering Division.
(Source: “World-record ‘gun salute’ to incoming defence minister Nirmala Sitharaman,” Business Standard, 5 September 2017, via
Industry buzz

Eye on Defence January 2018

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