This document provides an overview of ammunition production in India. It discusses that ammunition production is dominated by government ordnance factories which are unable to meet the full requirements of the military, leaving an opening for private sector involvement. It analyzes the market for different types of ammunition and notes that artillery and tank ammunition each make up around 30% of the market. It also reviews the Ordnance Factory Board's targets and production shortfalls in meeting demands.

1. Contents title
Contents subjects
Dear readers,
In our continued effort to provide an in-depth analysis of the defense industry,
this edition of Eye on Defense covers those segments of defense manufacturing,
which are sub-systems to enhanced platforms or equipment.
Our first article focuses on ammunition required for pistols, hand guns, artillery
and rocket launchers. From a market perspective the article throws light on growth of the
ammunition market, which is directly related to the number of weapon systems produced
each year. The existing market has been classified according to the type of weapon and size of
ammunition required for each of these weaponries with a view on the cost structure of typical
ammunition. In the current set-up the ordnance factories are unable to meet the ammunition
requirements of military forces providing a window of opportunity to the private sector for
active participation in this market, which hitherto has been limited.
Our second article focuses on one of the crucial sub-systems of any transmission system
hydraulic systems. The market for hydraulic systems is relatively low in India due to its niche
technology and equipment-focused product development. In this issue we have provided an
overview of the overall hydraulic market and then broken it down up to the defense industry.
In addition, there is a point of view on the growth drivers and the main application of hydraulics
across the three military forces. We have also mapped the supplier landscape, enlisting key
hydraulic players in India, what products they manufacture and key partnerships with foreign
players specific to the defense segment.
Among the regular sections, we have industrial license applicants, RFIs/RFPs released, new
projects and investments, joint ventures and alliances, country-level deals and the latest buzz in
the industry.
I hope you find this issue useful. It has been our constant endeavor 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
Introduction 1
Ammunition production 2
in India
Hydraulic sub-systems and 10
their defense applications
Request for Information 17
(March 2016–May 2016)
Request for Proposal 19
(March 2016–May 2016)
List of Industrial 23
Licenses (ILs)
filed for
March 2016 – April 2016
New projects/investments/ 26
contracts
JVs and alliances 27
Industry buzz 32
Eye on Defence
July 2016

2. 2 | Eye on Defence 3Eye on Defence |
Ammunition is an important part of operational logistics,
designed for one time use, with conflicting requirements.
These have to function under adverse operating
environmental conditions to counter/engage the enemy in
battlefield where the man and machine are stressed the
most and only the best survives. These are high energy
material and thereby, inherently unstable and prone to
deterioration/decomposition even under normal storage
conditions. The designed shelf life is given according to the
life of the subsystem, which has the lowest shelf life under
normal conditions of storage. However, the operational
exposure of ammunition products varies and hence,
functional life may be different. Some basic issues specific
to ammunition are:
• Ammunition contains high-energy material and is
designed to be as lethal as possible during its use and
as safe as any other equipment during its handling.
Ammunition production in India
Target, allotment of funds
and supplies by OFB
The annual production plan of OFs is based on targets
mutually agreed with indentors, i.e., Army, Navy, Air Force,
Central and State Police etc. OFB also receives long-term
demands of various ammunition items from the Army, Navy
and Air Force. The OFB interacts on regular basis with the
user, to match their annual requirements. The production
program for ammunition, weapons and vehicles, material
and components as well as armored vehicles are fixed for
one year and generally there has been a shortfall of more
than 34% in meeting such targets.
OFB has been falling short of agreed target by 30%–35% yoy
to fill in the demand.
• It is designed for optimum performance during
assigned life and needs to be manufactured and stored
under controlled conditions.
• The system mostly comprises a combination of
electronic, mechanical, chemical or structural sub
systems, which cannot be fully tested in the integrated
forms without partial or full destruction.
• The functioning of ammunition consists of irreversible
reactions or a process. Therefore, all sub-systems need
to be tested independently before integration. .
• The deterioration of ammunition during storage
has considerable economic as well as catastrophic
consequences. The ageing ammunition assets can
turn into liability if not properly taken care of. Hence,
the exceptions during each stage must be predicted,
detected, identified, and mitigated to prevent
unacceptable risk involving safety and performance.
Product segment and share
The generic classification of ammunition is by calibre or end use as shown in the table below.
Ammunition type and end use Examples Remarks
Small calibre
Below the standard 25 mm mainly
for Infantry and Para Military
Forces
• Includes 5.56 mm NATO standard, 7.62 mm for
Rifle LMG, MMG,
• 9mm carbine and pistol
• 12.7mm AA, HMG and ammunition, 23mm
aircraft gun
• Artillery and Tank
ammunition contributes
around 30% each of the
market share and air
defense and small arms
ammunitions share is
around 20% each.
• Army, accounts for
around 75% of the
Ordnance Factory Board
(OFB) issue of products
on a year-to-year basis.
Medium calibre
Calibre 25-40 mm mainly air
defense ammunition
• 30mm ammunition BMP-2K (HE/T, AP/T, HE/I);
Ghasha and Aden ammunition,
• 40mm L70 AA gun and HET and TPT
ammunition
Large calibre
40 mm and above mainly tank and
artillery ammunition
• 105mm light field gun and ammunition gun HE,
HESH, smoke and illuminating
• 130mm HE and 155mm HE, smoke, illuminating
and ERFB version
• 125mm HE, HEAT and FSAPDS ammunition
Ammunition type and end use Examples Remarks
Mortar and Rocket Launcher
ammunition
• 51mm, 81mm and 120mm mortars and HE,
smoke, illuminating
• 84mm Rocket Launcher ammunition (TPT, HE,
HEAT and illuminating)
Dominance by the
government sector
The manufacture and production of ammunition in India is
fully controlled by the Government of India and is regulated
under a licensing system established by the Arms Acts
(1959) and Arms Rules (1962). Sections 5 and 7 of the
Arms Act (1959) and Article 20 of Arms Rules (1962)
prohibit the manufacture, transfer and repair of any arms
and ammunition without a license. Through the licensing
mechanism, the Government of India regulates categories
and types of arms and ammunition, which may be
manufactured and the transactions, which may be carried
out in their respect.
OFs under the aegis of Director General Ordnance Factories
(DGOF) are engaged in the manufacture of most categories
of ammunition. The Ammunition and Explosives (A&E)
Division in OFB, through its ordnance factories, produce
a wide range of conventional ammunition such as small
arms ammunition all calibres, artillery shells, mortar
bombs, fuses, cartridges, charges, initiators, primers and
pyrotechnic signal smoke. The ammunition and explosive
division is the biggest in value additions to ordnance
factories. The group has two sub-groups of factories, the
one which supplies high energy chemicals and the other
which does the filling and integration of ammunition. The
chemical group of factories are part of the A&E Division
and work as feeder factories, which provide high explosives
(TNT, RDX and their compositions), propellants (SB, DB,
TB, rocket propellants and composite/liquid propellants),
initiatories and pyrotechnics, to the respective filling
factories. For sustaining the production activities in A&E
group of factories, various raw materials, input material
(semi-finished stores), as well as finished products are
procured / supplied through trade (indigenous/import), or
through OF production facilities.
Some of the ammunition has 100% restriction on training
mainly due to non-availability.

3. 4 | Eye on Defence 5Eye on Defence |
The assessed competitiveness of OFB is given below:
• Small calibre: OFB’s prices are not competitive in this
segment. Ammunition for 5.56mm, 7.62mm and 9mm
calibre are available at lower prices internationally.
• Medium calibre: OFB enjoys a cost advantage for
medium calibre ammunition. Stores such as 30mm
Aden ammunition and 40mm L-70 ammunition are
cheaper than prevalent international prices. L-70 40
mm HE ammunition is being sold in bulk in south-east
Asia.
Year Target
accepted
under roll on
indent
BE projected
by OFB
Actual
allotment by
ministry
OFB supply
value
Percentage
of BE to
target
Percentage
of supplies
to target
Percentage
of slippage
{(Col.2-
Col.5)/
Col.2}X 100
(In INR billion)
2009-10 43 27 28 27 64 64 36
2010-11 51 36 37 37 69 72 28
2011-12 56 39 41 37 69 66 34
2012-13 58 38 39 37 64 63 37
(Source: DGOS letter dated 30 Sept 2013 as reported in CAG report No 19 of 2015)
The value of production of OFs for supply to defense and non-defense sectors during the last 5 years according to MoD
annual report is as shown in diagram. The projection of various sub segments beyond 2012-13 has been projected based on
previous trend.
The ammunition production is around 30% of total turnover;
the ammunition production of OFB for the year ending
2015–16 was around INR40 billion, which meets the
60%–70% requirement of defense services and para military
requirement. Normal ammunition annual import is around
INR12.5–15 billion. Some missiles are being made by Bharat
Dynamics and Brahmos to the tunes of around INR7.5–10
billion and some low-end pyro and training ammunition is
being supplied by the private sector.
Sourcing cost element and
competitiveness
The OFB sources around 30%–35% of its total purchases
in the form of raw material, components and sub-systems
through indigenous sources from the private sector. On
an average, PSUs, material within OFB and ex-import
contributes to 6%, 34% and 6%, respectively. The value
addition by OFB in ammunition production is around 24%.
Type of components and their materials used for each
ammunition and their percentage cost distribution depends
on type of ammunition. However, the cost break-up from
small arms ammunition is indicative of cost elements and
their share.
OFB Value of production* Approx. value of ammunition Approx. value of weapon,
vehicle & misc.
Amount in INR billion
2011-12 124 37 87
2012-13 120 37 83
2013-14 111 35 76
2014-15 114 36 78
2015-16 131 40 91
OFB Value of Production & Its Sub Category
Amount in INR Billion
200
150
100
50
0
2011-12 2012-13 2013-14 2014-15 2015-16
Approx. value of
ammunition
Approx. value weapon,
vehicle & misc.
Ammunition Procurement Source
Import
20-25%
PSU+O
FB
75%-80%
PSU+O FBImport
Source: Complied by Q-Tech synergy
Input Material
OFB
34%
Value Addition
24%
Ex Govt
Sector
6%
Pvt Sector
30%
Ex Import
6%
OFB - Total Issue vs Import Break-up
Source CAG report 2015 on Amn
Small Arms Ammunition Elemental
Production Cost
Packing
12%
Hardware
- Cartridge case
- Bullet
- Primer cup
- Anvil
71%
Explosive
- Propellant
- Filling
17%

4. 7Eye on Defence |6 | Eye on Defence
• Large calibre: OFB is also cost effective in large calibre
ammunition. Prices of 81mm and 120mm mortar
ammunitions are comparable, while prices of 84mm,
105mm and 106mm are comparatively less than the
market price.
Reasons for non-
indigenization
While mapping for inadequate indigenous capability in
ammunition production and why have these not been
indigenized or sufficiently achieved following trends have
been observed. Currently the OFB does not enjoy the
requisite flexibility (as DPSU) for Transfer of Technology
(ToT) tie up. The OFB has only been in a recipient role
in design and development. The technology transfer is
generally in the nature of a follow up of an acquisition
process. In most cases the major factors are:
• Inadequate transfer and absorption of technology
• Poor quality of indigenously manufactured parts
• Lack of economic order quantities resulting in high
production cost
• Lack of coordination between production agencies
Private sector in ammunition
production
Changes to the defense policy are allowing private or
publically listed Indian companies to enter this sector. The
MoD aims to increase indigenous capability and other
competitors may be forming a JV with Indian companies.
With the opening of the defense industry, several private
sector companies have applied for licenses to manufacture
armament products. For decades, only a handful of private
Indian companies have been permitted to make shell casings
and parts for various ammunition, which were then sent on
to the OFB for completion. In the recent past, the private
industry has shown a keen interest in the opportunities on
offer and many large industries have shown an inclination
to assume the role of system integrators by investing in
R&D and infrastructure and develop capabilities in defense
production.
The private sector is primarily engaged in the manufacture
of some categories of ammunition for civil use, pyrotechnic
and energetic. From being suppliers of raw material,
components and sub-systems, private sector companies
are becoming partners in the manufacture of complete
advanced equipment and systems. With the opening of
the defense industry to the private sector, some of the
industries had applied and received a letter of intent for
small arms and ammunition; however, the case did not
progress as Ministry of Home Affairs (MHA) was unable to
issue the licenses. A draft Arms Act-2015 was put in the
open domain in mid-2015 for comments from all sections
of stakeholders, wherein private industries will be allowed
to manufacture and proof test arms and ammunition of
all kind including the ones being used by military. It was
mentioned that within a short period this act is likely to be
promulgated. The same is yet to be formalized and hence,
the issue of IL for manufacture of ammunition is also in
flux. The authority for licensing in this category is MHA
and not DIPP and provisions exist for both fresh applicants
and entities that are already holding licenses. Although in a
recent move by the government, FDI limit for defence has
been made applicable to manufacturing of small arms and
ammunition covered under Arms Act 1959. This opens new
door of opportunity for the private sector.
The large standing army that the countries maintain when
compared to other elements of armed forces and the
constant procurement of large quantities of ammunition on
a regular basis for conflicts and training alike is the main
market driver. Although this market is considered self-
sustaining as nations continually procure and replenish their
aging stock on a continual basis and do provide training for
its troops to maintain readiness levels, there are nonetheless
certain factors such as regional conflicts, defence spending
modernisation etc. which have a considerable impact on this
market.
With an annual production capacity of ammunition of
all types, the OFs are unable to meet even the annual
replacement requirement of the military, not counting other
civil requirements including police forces. In addition there
is a potential of indigenizing ammunition, which is currently
being imported. Hence, there is scope and opportunity for
the private sector to come in to fill the gap just to meet the
domestic demand.
References
• “Defence ministry to ask pvt players to produce
specialist ammunition,” The Indian Express, 3
September 2015, via Factiva
• “Report No. 19 of 2015 - Union Government
(Defence Services) Army and Ordnance Factories
(Performance Audit of Ammunition Management
in Army),” Comptroller and Auditor General of India
website, http://www.cag.gov.in/content/report-no-19-
2015-union-government-defence-services-army-and-
ordnance-factories-performance, accessed 15 June
2016
• “Ordnance Factories Board,” Wikipedia, https://
en.wikipedia.org/wiki/Ordnance_Factories_Board,
accessed 15 June 2016
• Indian Ordnance Factories website
• “Manufacture of small arms and ammunition in private
sector,” Defence Pro-Ac website, http://www.defproac.
com/?p=2482, accessed 10 June 2016
• Annual report 2014-15, Ministry of Defence website,
http://mod.nic.in/writereaddata/AR1415.pdf, accessed
12 June 2016
• Annual report 2015-16, Ministry of Defence website,
http://mod.nic.in/writereaddata/Annual2016.pdf,
accessed 12 June 2016
7Eye on Defence |

5. 8 | Eye on Defence 9Eye on Defence |
Market segmentation for hydraulic systems
Categories
Industrial hydraulics Mobile hydraulics
• Machine tools
• Plastics
• Steel plants
• Material handling
• Others (windmills/civil aerospace/ energy/civil
engineering, marine, ship lift and transfer systems,
offshore applications etc.)
• Earth moving and construction machinery: drilling
rigs, industrial/ agricultural tractors
• Mining
• Defense: transmission, rudder control, which are used
in aero planes, rockets and spaceships, pumps on
naval vessels
• Material handling equipment: cover general areas
such as rail equipment, road building and, commercial
vehicles, industrial tractors defense platforms etc.
It is estimated that around 58% of this market is in the mobile segment and the rest is industrial market.
Indian Hydraulic Market
Segmentation-By Application
Mobile
Hydraulics
58%
Industrial
Hydraulic
42%
Hydraulic sub-systems and their
defence applications
Hydraulics and pneumatics are sources of fluid power
derived from the motion and pressure of a fluid, such as
water or air. A hydraulic system consists of the hydraulic
fluid plus three major mechanical components, “pressure
generator” or hydraulic pump, the hydraulically powered
“motor” which powers the component concerned and
the system “plumbing” which contains and channels the
fluid throughout as required. No other medium combines
the same degree of positivity, accuracy, and flexibility,
maintaining the ability to transmit maximum power in
minimal bulk and weight. Equipment that use hydraulic fluids
include excavators and backhoes, hydraulic brakes, power
steering systems, transmissions, garbage trucks, aircraft
flight control systems, lifts, and industrial machinery.
Overview of Indian hydraulic
industry
The Indian hydraulic industry started in the early sixties,
primarily with an objective of import substitution of some
of the hydraulic products being used by the industry in
various applications including defense. Since most of the
Indian industries have been set up based upon the variety
of technological sources, the range of their specifications
is very wide. Hydraulic cylinder, the main entity in the sub
segment market in India has been growing significantly due
to the rise in construction activities, in the transportation,
mining, residential, commercial, and energy industries.
A cylinder barrel, piston, piston rod, rod gland, cushions,
seals, and a cylinder base are the components of a hydraulic
cylinder. As more government and private players are
investing in infrastructure, there is increased demand for
construction equipment, including specialized hydraulic
cylinders; however, fluctuating demand among end-users
is impeding market growth. Pneumatic cylinders are also
gaining prominence, since they use less power and require
less maintenance than hydraulic cylinders.
While there has been a continued overall growth in
the hydraulic products business due to large variety of
specialized products to meet specific individual applications,
volume growth in individual products has been very
low. With low volumes and high development costs with
respect to tooling, casting and forging, the industry has
not been able to adopt modern production methods.
Current production technology in use is largely dictated
by production volumes, quality requirements and costs.
Since the Indian industry has to manufacture a large
variety of products with low volumes, the industry is not
able to use the modern high production lines. Most of the
manufacturers, with exception to some (who have installed
dedicated SPMs and CNC machines for the manufacture of
components), are currently using general purpose machines
with special tooling and some special purpose machines for
specialized metal-cutting operations. Although the industry
has shown a reasonable growth over the years, it is still far
away from the volumes, which is likely to lead to adopting
modern production methods. Moreover, the limited demand
is being shared by more than 20 firms (few major) resulting
in uneconomical volumes for most of them. It is unlikely that
the situation will change drastically in the coming decade
due to variety of factors mentioned above.
Broadly, the hydraulic products from the application angle are classified as Mobile Hydraulics and Industrial Hydraulics:

6. 10 | Eye on Defence 11Eye on Defence |
Hydraulics sub-systems in defense platforms
The major components or elements that make up a hydraulic system, generally comprises of — pumps, actuators, valves,
accessories and storage unit and these can be further sub divided into various categories. In defense these are an
indispensable part and are widely used on variety of platforms such as naval vessels (pumps/actuators); guns (actuators) and
armored/specialized vehicles.
Hydraulics sub-systems in defense platforms
Land systems
• Recoil systems for guns
• Elevation and traversing mechanisms for guns
including the power pack
• Hydro-pneumatic suspensions for armored vehicles
• Missile systems and launchers, radar systems
• All support vehicles to include cranes, light recovery
vehicles, heavy recovery vehicles, armored recovery
vehicles
• All kind of dozers, bridge layer tanks, tank
transporters, txn system to include shock absorbers,
gun control systems armored fighting vehicles,
artillery and air defense guns
Naval Systems
• Ocean going vessels, fishing boats
• Missile systems — supersonic missile system, ballistic
missiles
• Radars and sonars
• Ventilation drive for landing crafts
• Hydraulic powered rotors
• Ship building
• Amphibious floating bridge and ferry system
• Pumps
• HP air and ac compressors
• Torpedo tube launchers
• AC and reference plants
• Stabilizer system
• Gas turbine and gas turbine generator
• Steering gear
• Motors and power systems
• Electronic warfare systems
• Weapons — all gun control, gun fire control system,
close in weapons, super rapid gun mount
• Anti-submarine warfare fire control system (ASW
FCS)
Aero Systems
• Doors and hatchways
• Shock absorption systems
• Bomb bay doors
• Gun turrets
• Auto pilot
• Control surfaces, e.g., elevators, flaps, spoilers, etc.
• Transmission and rudder control, which are used in
aero planes, rockets and spaceships.
• Landing gears
• Fuel systems
• Air conditioning
• Dive, landing, speed and flap brakes
• Landing gears, wing flaps, etc.
Demand pattern
The industrial applications involve equipment used in
water management and recycling, and pulp and paper
industries. Hydraulic cylinders are used in mobile and
industrial applications such as earthmoving, material
handling, and agriculture machinery. The demand pattern
of Industrial and Mobile Hydraulics is as shown in diagram
below.
Industrial Hydraulics Subdivision
Machine Tools
16%
Plastic
Industry
12%
Steel Plants
36%
Material
Handling
12%
Others
24%
Mobile Hydraulics Segments
Mining
31%
Defense
8%
Earth Moving
& Construction
61%
Defense market
Indian Hydraulic System Market
Defence Share 2012-2025 (IN $ Million)
1214
1676
Industrial Hydraulics Mobile Hydraulics Defence Share
15
32
65
134
191
139
397
288
809
691
2012-13 2016-17 2024-252020-21
Source: Open Sources & Projections by Q-Tech Synergy
Defense is a sub-segment of the mobile hydraulic segment
and is estimated to have a share of 8%–10%. The country is
looking to procure weaponries/equipment worth INR10,720
billion (US$160 billion) in next ten years for its defense
services modernization program undertaken by the three
armed forces. The requirement of hydraulics such as
valves, cylinders, accumulators, pumps etc., in the defense
sector is growing rapidly due to the rapid utilization growth
in upgrades due to products with miniature pneumatics,
process valves, servo drives, hydraulic power steering
with new controls, sophisticated PLC and microprocessor
controls. The Indian market size for the hydraulic market
components was around INR22–24 billion (US$330–350)
million in 2012 and growing at the rate of ~20%–25%
on year-on-year basis for the last three years and would
continue to do so for the next few years. Expected growth
in 2015 is approximately INR38–40 billion (US$570–600)
million at a CAGR of around 20% while the projected growth
in 2016 is anticipated to be around INR46–49 billion
(US$685–725 million) and the share of the mobile segment
is likely to be about INR26–27billion (US$395–400 million),
with defense requirement estimated to be about INR2–3
billion (US$30–35 million) in 2016–17 growing at a CAGR
of around 20%–25%. Considering the various modernization
program undertaken by the Indian Defense Services (Refer
Fig.), it is to be seen that the major requirement will be from
the Indian Army followed by the Indian Navy and then the
Indian Air Force.

7. 12 | Eye on Defence 13Eye on Defence |
It is difficult to lay down the percentage of hydraulics used in
defense platforms, since it varies from platform to platform.
The number and types of hydraulic systems on-board an
equipment/platform depends upon its size and type of
propulsion. In gun systems the requirements are different as
compared to naval vessels or aircraft, which make more use
of hydraulic systems. Even in naval ships the requirement of
hydraulic system differs depending upon the tonnage. For
instance in a typical naval vessel that has a tonnage of less
than 3,000 tons, there are anywhere between 100–400
motors and approximately 30–150 pumps of all types. For
a vessel that has a tonnage in excess of 3,000 tons, there
are approximately 400–1,500 motors. The aircraft carrier
is the largest variety in this type and is driven by up to eight
boilers. The number of pumps could range from 120–450.
However, the same can be estimated by taking annual
requirement and capital procurement (not considering the
revenue procurement). The capital budget for the year
2016–17 is INR938 billion (US$14 billion) and estimations
depict that India will be spending around INR2 billion
(US$32 million) on hydraulics for defense equipment and
consequently the share of hydraulics comes to around
0.5%–1% of the total capital budget. Therefore, considering
the on-going and future programs, the estimated defense
requirement of hydraulics accounts for 0.5%–1%.
Key players and their main
offerings
The market is very fragmented, comprising of both large
and small niche players. Currently, there are four to five
major players dominating the market, which include PSU
BEML, Wipro Infrastructure, Dantal, UT Ltd. and Oscar.
• Wipro is the leader in the single/double/triple
acting cylinder segment for mobile hydraulics tubes
manufacturer and the only private player to export
hydraulics for civil aerospace platforms.
• Hyva leads in the telescopic cylinder segment.
• Bosch was founded in 1886 and is headquartered in
Stuttgart, Germany. It supplies technology and services
to its clients through its subsidiaries worldwide. The
group recorded revenue of INR4,355 billion (US$65.05
billion) in FY14.
• Dantal Hydraulics was established in 1990 and is
headquartered in Gurgaon, India. It offers a variety of
Furthermore, almost all major manufacturers of hydraulic
equipment have collaboration with foreign companies.
few companies, like Polyhydron, Oscar and Dantal are
manufacturing products indigenously. There has been very
little attempt to develop indigenous technology for these
products, although barring few items, all other equipment
have been indigenized. Activities are more in the form of
development of existing products, product modifications,
product applications to suit specific customer’s
requirements and not in the area of new products
development. The companies in the sector being small to
medium in size, will focus more on on product development
and re-engineering than pure research work. Some of the
other companies into hydraulics manufacturing and their
tie-ups are discussed in the table given:
Bosch
3%
Wipro
45%
Mobile Segment - Market Share
Oscar
5%
Veljan
8%
Dantal
21%
Hyva
16%
Others
2%
Vendors landscape
Company Product manufactured Collaboration (If any)
BEML Pumps, motors, cylinders and valves ---
WIPRO Ltd., Bangalore Cylinders CESA, Spain
Bosch (G.L. Rexroth Industries Ltd.),
Bangalore
Pumps, motors, valves, cylinders, power packs Mannesraann Rexroth, Germany
Hagglunds Denison Ltd., Hyderabad Pumps, valves, motors, power packs Originally with Abex Denison, the US,
now taken over by Hagglunds Denlson
Larsen & Toubro Ltd. (Earth Moving
Machinery & Hydraulic Division),
Bangalore
Pumps, motors, cylinders POCLAIN Hydraulics S A, France;
SAUER Sundstrands, SA
Dynamatics Ltd., Bangalore Gear pumps, mobile valves, power packs DOWTY, U.K
Escorts Herion Ltd., Faridabad Valves, power packs Herion Werke KG, Germany
Oscar Pvt. Ltd., Calcutta Hydraulic cylinders Indigenous Development
SAI India Ltd., Bangalore Motors SAI Spa., Italy
Vickers Systems International Ltd.,
Mumbai
Pumps, motors, valves, cylinders, power packs,
steering unit, accessories
Vickers Inc., USA
Yuken India Ltd., Bangalore Pumps, motors, valves, cylinders, power packs,
accessories
Yuken Kogyo Ltd., Japan
Source: http://www.dsir.gov.in/reports/techreps/tsr147.pdf
products such as hydraulic cylinders, hydraulic systems,
aircraft hydraulic service trolleys, car parking systems,
and AC/DC mini power packs.
• Veljan Denison was established in 1974 and is
headquartered in Hyderabad, India. It provides pumps,
motors, valves, and custom-built power systems/
manifold blocks.
• Oscar provides high performance hydraulic cylinders
for steel mill application, construction equipment,
heavy earth-moving equipment and allied fluid power
applications. It is closely associated with DRDO as
a developmental agency from the concept stage to
product realization.
Taking into account the various on-going modernization drives of the defense forces, which is likely to continue for more than
a decade, the hydraulics market presents significant growth potential over the next decade providing ample and lucrative
opportunities to suppliers.
As a major and vital industry connected with the capital
equipment industry, there is no national level research
and development and technology coordinating institution.
A national fluid power technology center with industry
participation requires to be created, which can work toward
developing future technologies, provide test facilities and
co-ordinate efforts in the area of standardization and
performance certification of the products of the industry.
Castings for hydraulic components are of high grade and
precision, and require mechanized molding machines,
electric furnace and elaborate quality control equipment.
Manufacturers of hydraulic components always had
problem in establishing a source, which can meet their
requirements of castings. Since the castings required for
Way forward
hydraulic components are of small size, foundries do not get
attracted toward developing the same. Basic manufacturing
technology is available but foundries require mechanized
equipment for molding and for preparation of elaborate
testing facilities. Investment required for creating such
facilities could not be justified for the returns. Hydraulic
components manufacturers continue to face high castings
rejections ranging from 10% to sometime up to 50%. If
Indian companies could develop castings in quality as
required by the hydraulic component manufacturers, there
is a good scope for export of these castings in large volumes
to their parent companies. There is a need for technology
input to such foundries and incentives to foundries, which
should import foundry equipment and export high grade
castings for hydraulic components.

8. 14 | Eye on Defence 15Eye on Defence |14 | Eye on Defence
References
• “Executive Summary – Hydraulic components and
systems,” Department of Scientific and Industrial
Research website, http://www.dsir.gov.in/reports/
techreps/tsr147.pdf, accessed 11 January 2005
• “Hydraulic cylinder market India,” Slide Share, http://
www.slideshare.net/RajniRanjan1/hydraulic-cylinder-
market-india-rajni-ranjan, accessed 12 June 2016
• “Hydraulic systems,” NPTEL website, http://nptel.
Date of
Issue
RFI Details Response
Date
Issued By Remarks
26-May-16 Mini UAV 15-Jun-16 MG Arty For IA
13-May-16 QR for Ground Penetrating Radar (Hand Held) --- DG BSF For BSF
05-May-16 EoI for Long Rang Reconnaissance and
Observation System (LORROS)
--- DG BSF For BSF
02-May-16 Checking and Testing Vehicle for Missile Firing
Circuit of T-90 Tank
30-Jun-16 EME Dte For IA
21-Apr-16 Night Sight Thermal Imager for Rifle AK-47 09-May-16 DG of Weapons and
Equipment (WE-8/9)
For IA
21-Apr-16 Night Image Intensifier for Rifle AK-47 09-May-16 DG of Weapons and (WE-8/9) For IA
21-Apr-16 Corner Shot Weapon System for Under Barrel
Grenade Launcher
18-May-16 DGRR For IA
21-Apr-16 Corner Shot Weapon System for Pistol 18-May-16 DGRR For IA
12-Apr-16 Free Fall Simulator (Vertical Wind Tunnel) 12-May-16 Dte of Ops For IAF
04-Apr-16 Expression of Interest for Transfer of Technology
of Bullet Proof Jacket
29-Apr-16 Defense Materials
Research & Development
Establishment
Issued By DRDO
04-Apr-16 Construction & Delivery of Four 250 Men Ferry
Craft
03-May-16 Directorate of Ship
Production
For IN
30-Mar-16 70 MM Rockets 30-Jun-16 Dte Of Plans For IAF
22-Mar-16 QR for Mini All Terrain Vehicles (ATV) DIG Transport For BSF
21-Mar-16 EoI for Indigenous Development of DC Insulation
Measuring Instrument for Submarines
15-Apr-16 Dte of Indigenization For IN
18-Mar-16 Naval Airfield Integrated Security System 20-May-16 Directorate of Naval Air Staff For IN
15-Mar-16 ATGM Upgrade of BMP-2/2K 15-Apr-16 DGMF For IA
15-Mar-16 Mobility Upgrade of BMP-2/2K 30-Apr-16 DGMF For IA
15-Mar-16 Multi station ship handling simulator 30-Apr-16 Directorate of Information
Tech
For IN
08-Mar-16 EoI for Transfer of Technology of Bullet Proof
Jacket
22-Mar-16 Defense Materials
Research & Development
Establishment
Issued By DRDO
04-Mar-16 QR for Out Door Reflex Shooting Range --- Dy Inspector General (Trg) For BSF
04-Mar-16 QR for Electronic Shooting Range --- Dy Inspector General (Trg) For BSF
02-Mar-16 Armament Upgrade of BMP-2/2K to Include
Sighting and Fire Control System
15-Apr-16 DGMF For IA
ac.in/courses/112103174/pdf/mod5.pdf, accessed 11
December 2013
• “Introduction to Hydraulics and Pneumatics,” NPTEL
website, www.npt el.ac.in/courses/112106175/
Module%201/Lecture%201.pdf, 26 November 2013
Request for Information
(March 2016–May 2016)

9. 16 | Eye on Defence 17Eye on Defence |
Request for Proposal
(March 2016–May 2016)
Date of
Issue
RFP Detail/Equipment Response
Date
Issued By Remarks
07-May-16 Carrier Ammn 17A for 81mm ILLG MKII 18-May-16 Ordnance Factory, Dehu
Road
Issued By OFB
06-May-16 FUZE Percn. DA NO.162 MK-8 (M-2) Brass With Cap
Empty
02-Jun-16 Ordnance Factory Chanda Issued By OFB
06-May-16 FUZE Percn. DA NO. 117 MK-20 Empty Body 02-Jun-16 Ordnance Factory Chanda Issued By OFB
06-May-16 LWI Helmet Size 1 and 2 Microphone Dynamic and Oxygen
Mask Mic Lead for Jaguar Aircrew
26-May-16 DTE of Proc Air HQ
Vayubhawan
For IAF
06-May-16 Held GPS 07-Jun-16 Chief Logistic Officer For BSF
05-May-16 Helicopter Satellite Tracking System with Accessories;
Qty: 08 Nos.
05-Jul-16 HQ CAC For IAF
04-May-16 Adjustable Boroscope (Arty/Armd Guns) Qty: 40 Nos. 24-Jun-16 EME Dte For IA
04-May-16 Advance Target Systems for existing indoor shooting
Range Qty-06 and, 02 Nos Horizontal Moving Target
09-Jun-16 GC Provisioning HQ NSG
Provisioning
For NSG
02-May-16 Chromatising Plant: Qty: 1 No. 14-Jun-16 OF Ambajhari Issued By OFB
02-May-16 Missile Loading Gear Assemble Set 12-May-16 Office of the COMCOS For IN
29-Apr-16 OOW-ROR Simulator With Accessories for INA Ezhimala 19-May-16 INA EZHIMALA For IN
29-Apr-16 Six Lane Automated Target Operating System for Indian
Naval Academy Ezhimala Under Two Bid System
19-May-16 Indian Naval Academy
Ezhimala
For IN
28-Apr-16 Explosive Detection Kit; Qty: 05 Nos. 19-May-16 Comdt SS BN For ITBP
28-Apr-16 8x8 Vehicle (BEML Tatra ER(L)) 09-May-16 ERDE Issued By DRDO
27-Apr-16 Simulator Development for communication Links 16-May-16 Advanced System
Laboratory
Issued By DRDO
27-Apr-16 Realization, Supply and Installation of Early Warning &
Advance Response Network System (e-WARN)
31-May-16 Research & Development
Establishment
Issued By DRDO
27-Apr-16 Surveillance system for Transducer Test Facilities 08-Jun-16 Naval Physical
Oceanographic Laboratory
Issued By DRDO
27-Apr-16 Foldable Butt for Rifle 5.56MM INSAS(Steel Compt)
Considering of Butt Frame Assy
09-May-16 RIFLE FACTORY
ISHAPORE
Issued By OFB
26-Apr-16 Paddle Boats, INS Kadamba, Karwar, Qty: 08 Nos. 12-May-16 The Commanding Officer,
INS Kadamba
For IN
26-Apr-16 Bomb Disposal Detection and Surveillance equipment 25-May-16 Directorate General SSB For SSB
21-Apr-16 Under Water Breathing Kit; Qty: 17 Nos. 03-Jun-16 Directorate General of
EME, MGO’s Branch
For IA
21-Apr-16 Under Water Breathing Kit; Qty: 17 Nos. 03-Jun-16 Directorate General of
EME, MGO’s Branch
For IA
21-Apr-16 i-stat abg cartridge cg; Qty: 08 box 10-May-16 Defense Institute of
Physiology & Allied
Sciences
Issued By DRDO
20-Apr-16 FSAPDS Shot Insitu Molding with Rubber; Qty: 450 Nos. 12-May-16 ARDE Issued By DRDO
19-Apr-16 Bullet Resistant Jackets Standard Size 1500 Nos. and
Large Size 1500 Nos. All B.R. Jackets are required with
360 degree protection and BFS 44mm
04-Jul-16 MHA For SSB
18-Apr-16 Life Jacket; Qty: 1301 Nos. and Life Buoy; Qty: 109 Nos. 18-May-16 MHA For BSF
18-Apr-16 Towing System for Advanced Towed Artillery Gun System 03-May-16 VRDE Issued By DRDO
Date of
Issue
RFP Detail/Equipment Response
Date
Issued By Remarks
17-Apr-16 Supply, Erection & Commissioning of Automatic Primer
Filling Plant for 5.56 mm Ammunition; Qty: 01 No.
14-Jun-16 Ordnance Factory,
Varangaon
Issued By OFB
14-Apr-16 Various Types of Fuses 20-Apr-16 Controller of Proc.
Material Org. Naval Store
For IN
14-Apr-16 Steel Wire Ropes Assorted Sizes 26-May-16 Controller of Proc.
Material Org. Naval Store
For IN
13-Apr-16 Simulated Animation Training Package 26-Apr-16 Ekm Submarine Training
For Vpn
For IN
12-Apr-16 Mask Face Extreme cold weather; Qty: 6560 Nos. 02-May-16 DIG (Proc) For ITBP
12-Apr-16 Integrated Access Control Systems 29-Apr-16 Research Centre Imarat Issued By DRDO
12-Apr-16 Global Positioning System 19-Apr-16 Controller of Proc.
Material Org. Naval Store
For IN
11-Apr-16 Vertical Take-Off Landing (VTOL) UAV System 05-May-16 Centre for High Energy
Systems and Sciences
Issued By DRDO
11-Apr-16 Laser Safety Googles 05-May-16 Centre for High Energy
Systems and Sciences
Issued By DRDO
11-Apr-16 Fuse B-15(F)(IMP) DRG NO.3-024045-3 09-May-16 Ordnance Factory Chanda For OFB
11-Apr-16 Inspection Barges; Qty: 12 Nos. 09-May-16 Directorate of Information
Tech
For IN
08-Apr-16 EC Dinghies; Qty: 69 Nos. 26-May-16 Directorate of
Procurement
For IN
04-Apr-16 Long Range IR Missile Simulator 28-Apr-16 DARE Issued By DRDO
04-Apr-16 ENG ASSY TATRA T-815 (6x6); Qty: 40 Nos. 18-May-16 MGO PPO For IA
02-Apr-16 Satellite Data Simulator, DRDO 20-Apr-16 Research Centre Imarat Issued By DRDO
01-Apr-16 IGLA Launching Mechanism; Qty: 80 30-Jun-16 Directorate of GWM For IAF
31-Mar-16 Concealable Body Armor; Qty: 340 Nos. 05-May-16 MHA For NSG
25-Mar-16 Low Draught Power Boats; Qty 04 Nos. 15-Apr-16 Training Office Ins Chilka,
Odisha
For IN
23-Mar-16 Technological Solution for Comprehensive Integrated
Border Management System
20-May-16 Provisioning Directorate
(Procurement Cell)
For BSF
21-Mar-16 DSMD (Deep Search Mine/Metal Detector); Qty: 55
Nos.
12-Apr-16 DIG (Proc) For ITBP
18-Mar-16 CBRN products and technologies for Detection,
Protection, Decontamination, Medical Management and
Test Facilities
18-Apr-16 Defense Research
& Development
Establishment
Issued By DRDO
15-Mar-16 Grenades 30 MM HE for AGL; Qty: 2,00,421 Nos. 11-May-16 Commandant (Proc) For BSF
14-Mar-16 Supply and up gradation of land based Integrated Bridge
System
18-Apr-16 Directorate of Electrical
Engg
For IN
11-Mar-16 Fuse K3M HE; Qty: 226 sets 12-Apr-16 Ammunition Factory
Khadki
Issued By OFB
09-Mar-16 Radio Communication Service Monitor, qty:02 Nos. 07-Apr-16 SLO(PROV) For IAF
08-Mar-16 CBRN Equipment for 16 Lines 31-May-16 Air HQ (PB) For IAF
08-Mar-16 Hand Held GPS for Fighters Transport and Helicopters and
Ground Based Units, Qty: 2318
21-Apr-16 Air HQ (VB) For IAF

10. 19Eye on Defence |
List of Industrial Licenses (ILs) filed for
March 2016 – April 2016
Application
no. and date
Name of the applicant Item of manufacture
25
08-03-2016
M/s Premier Explosives Lt Site mixed explosives
26
08-03-2016
M/s Gulf Oil Corporation Limited Industrial Explosives Slurry Nitrate mixture
27
08-03-2016
M/s Beezaasan Explotech Pvt. Ltd. Class 2.0 Explosives (Slurry / Emulsion Explosives/B)
28
08-03-2016
M/s Sasan Power Limited Manufacture of explosives
29
08-03-2016
M/s Defence Land Systems - India Limited Unmanned Land/Aerial/Water Vehicles, Remotely Piloted
Vehicles or Equipment for Defense
30
08-03-2016
M/s Zetatek Industries Limited Environmental Testing Equipment and Chambers
31
15-03-2016
M/s Orissa Explosives Slurry Explosives Emulsion and Bulk Explosives
32
18-03-2016
M/s Ideal Industrial Explosives Limited Manufacturing of S.M.S/S.M.E Explosives
33
22-03-2016
M/s Merlinhawk Aerospace Pvt. Ltd. Elektrone Power Pack
34
22-03-2016
M/s Defence Land Systems – India Limited All types of Directed Energy Weapon (DEW) Systems,
related countermeasure equipment and test mode
35
22-03-2016
M/s Defence Land Systems – India Limited All types of communication equipment frequency
36
22-03-2016
M/s Gulf Oil Corporation Limited Industrial explosives
37
30-03-2016
M/s Force Motors Limited Armored fighting vehicle & service spare parts, thereof
38
07-04-2016
M/s IDL Explosives Ltd. Industrial Explosives Including Bulk Non Explosives
emulsion Matrix.
39
13-04-2016
M/s Dinex India Pvt. Ltd Launcher
40
19-04-2016
Ideal Detonators Pvt. Ltd Cast Booster
41
21-04-2016
M/s Exploshaktichemicals Private Limited Ammonium Perchlorate
42
21-04-2016
M/s Walchandnagar Industries Limited Body armor or protective garments of level III such as
jackets/vests, patka
43
26-04-2016
M/s Ideal Detonators Pvt. Ltd. Manufacturing of Slurry/ Emulsion Explosives
44
27-04-2016
M/s Bharat Explochem Pvt. Ltd. Nitroglycerine and Nitric/ Glycol esters
45
27-04-2016
M/s Aerospace Technologies Pvt. Ltd. Metal working service activities
18 | Eye on Defence

11. 20 | Eye on Defence 21Eye on Defence |
Cases Approved In the 2nd Licensing Committee Meeting
(2016 Series) Held On 06 May 2016
S. No. Name Of The Applicant Application No. & Date
1. M/S Dyna Flow Technologies India Pvt. Ltd. 320/SIA/IL/2014
DT: 11.11.2014
2. M/S JSW Projects Ltd. 07/SIA/IL/2015
DT: 04/02/2015
3. M/S VEM Technologies Ltd. 29/SIA/IL/2015
DT: 09/04/2015
4. M/S VEM Technologies Pvt. Ltd 66/SIA/IL/2015
DT: 30/07/2015
74/SIA/IL/2015
DT: 19/08/2015
81/SIA/IL/2015
DT: 31/08/2015
5. M/S Gulf Oil Corporation Limited 76/SIA/IL/2015
DT: 20/08/2015
6. M/S Blue Stampings & Forgings Ltd. 83/SIA/IL/2015
DT: 01/09/2015
7. M/S Kalyani Strategic Systems Limited 101/SIA/IL/2015
DT: 13/10/2015
8. M/S N.N. Detonators Pvt. Ltd. 63/SIA/IL/2015
DT: 02/07/2015
9. M/S Deccan Explotech Pvt. Ltd. DIL: 35 (2014)
DT: 28/10/2014
10. Gulf Oil Corporation Limited 75/SIA/IL/2015
DT: 20/08/2015
11. Sri Vishnu Explosives Pvt. Ltd. DIL: 31 (2011)
DT: 16/12/2011
Name of entity Project details Value*
Defence Acquisitions Council
(DAC) and Indian Navy
• DAC has approved purchase of weapons and sensors
package for the seven new stealth frigates of the
Indian Navy.
• The frigates will be equipped with long-range surface-
to-air missile (LR-SAM) systems, jointly developed
by Defence Research and Development Organisation
(DRDO) and Israeli Aerospace Industries.
INR130 billion
DAC and Indian Air Force (IAF) • ►DAC has granted Acceptance of Necessity (AoN) for
purchase of 244 air-defense guns, capable of shooting
down small radar cross section targets such as drones,
missiles and low flying objects, for the IAF.
• ►The air-defense guns will be acquired under the “Buy
and Make” category.
~INR72 billion
Cabinet Committee on Security
(CCS) and Indian Army
• ► CCS cleared the following four deals for the Indian
Army:
• ► Acquisition of 65,000 new-generation 84mm rockets
(worth INR12 billion)
• ► 4,000 hand-held thermal imagers with laser-range
finders (INR14 billion)
• ► 5,000 Milan-2T anti-tank guided missiles (INR20
billion)
• ► 30 indigenous “Swati” weapon-locating radars (INR 20
billion).
INR66 billion
Ashok Leyland • Ashok Leyland won contracts to supply 450 units of
Field Artillery Tractor (FAT) 6x6 and Super Stallion
vehicles to the Indian Army. It was also awarded a
contract for 825 units of 4x4 ambulance to Indian
defense forces.
INR8 billion
LONGBOW LLC and IAF
►
• ►LONGBOW LLC, a JV of Lockheed Martin and Northrop
Grumman, has been awarded a contract to supply 12
fire-control radar systems (FCRs) and spares to IAF.
• The FCRs will be used to improve all-weather targeting
capability on the Apache helicopters.
~INR7.8 billion
New projects / investments / contracts

12. 23Eye on Defence |22 | Eye on Defence
Tata Power SED and Border
Security Force (BSF)
►
►
• Tata Power SED has received an order for 40 hand-
held thermal imagers (HHTIs) from BSF.
• The contract also includes an option of acquiring 400
more HHTIs at the same price, according to the BSF
requirements.
• Tata is also bidding for a bigger contract of 4,000
HHTIs for the Indian Army.
INR200 million
Reliance Defence
►
• ► Reliance Defence has received 16 new industrial
licenses (IL) taking its total number of ILs to 27.
• The new ILs are allotted for manufacturing of
equipment ranging from small arms, heavy weapons,
armored vehicles, explosives, electronic warfare
systems, missiles, UAVs and directed energy weapon
systems, laser systems for target destruction and C4I
systems for all defense platforms.
NA
*The values of the deals have been converted to Indian Rupees. 1US$ = INR67
Sources:
1. “MoD gives nod to 7 stealth frigates worth Rs 13,000 crore,” The Times of India, 12 March 2016, via Factiva
2. “Procurement of 244 guns for Air Force approved,” The Hindu, 11 March 2016, via Q-tech Synergy Newsletter
3. “Big boost: Army to get ammo worth Rs 15,000 cr,” The Times of India, 19 March 2016, via Factiva
4. “Ashok Leyland wins defence contracts worth Rs 800 crore,” The Times of India, 1 April 2016, via Factiva
5. “Lockheed, Northrop land $116.7 million deal with Indian military,” Aswat Masriya, 3 May 2016, via Factiva
6. “Tata Power SED wins order for supply of night vision to BSF,” The Times of India, 2 May 2016, via Q-tech Synergy Newsletter
7. “Reliance Defence receives 16 new industrial licenses for equipment manufacture,” Business Standard, 5 May 2016, via Q-tech Synergy
Newsletter
Name of the entities Nature of transaction Value
Reliance Defence Ltd. and Rafael
Advanced Defense Systems Ltd.
• Reliance Defence Ltd. and Israeli defense
manufacturer Rafael Advanced Defense Systems Ltd.
have signed a cooperation agreement to focus on the
production, development and supply of air defense
systems, air-to-air missiles and surveillance balloons. ►
• The tie-up aims to win future deals worth US$10 billion
from the Indian armed forces.
INR690 billion
Reliance Defence Ltd., SC
Ukroboronprom, SE Antonov,
and SE SpetsTechnoExport
• ►Reliance Defence entered contracts with three
Ukrainian defense players SC Ukroboronprom, SE
Antonov, and SE Spets Techno Export.
• Reliance Defence and SC Ukroboronprom will work
jointly for several projects in aircraft building and
aviation overhaul, modernization of armored vehicles,
maintenance of marine machines and supply of UAVs.
• With SE Antonov, Reliance Defence will work for
tenders of HAL and production of passenger and cargo
aircraft.
• Reliance Defence and SE SpetsTechnoExport, will
jointly develop infantry fighting vehicles for the Indian
Army.
NA
Adani Aero Defence, Alpha
Design Technologies and Elbit
Systems
• ►Adani Aero Defence, Alpha Design Technologies and
Elbit Systems (Israel) have entered a JV to offer UAVs
to the Indian defense forces.
• The JV will focus on production of Hermes 450 and
Hermes 900 UAVs to the Indian armed forces.
NA
Bharat Electronics Ltd. (BEL) and
Thales
• ►BEL and Thales have entered a 74:26 JV, BEL-Thales
Systems Limited (BTSL), for production of PHAROS, a
fire control radar for both gun and missile systems.
NA
Ashok Leyland Defence Systems
(ADLS) and Lockheed Martin
• ► ALDS has entered an agreement with US-based
Lockheed Martin, to jointly develop light specialist
vehicles and light armored multi-purpose defense
vehicles for the Indian armed forces.
NA
JVs and alliances

13. 25Eye on Defence |24 | Eye on Defence
Tata Power SED and Saab • ►Tata Power SED has entered a strategic collaboration
with Swedish defense company, Saab, for joint
manufacturing of self-protection systems for land-
based platforms.
• The partnership involves transfer of technology from
Saab to Tata Power SED.
NA
Bharat Electronics Ltd (BEL) and
Rosoboroneexport (Russia)
• ►BEL and Rosoboroneexport signed an MoU to co-
operate for the joint development of various sub-
systems of major defense projects under the offset
clause of the Defence Procurement Procedure (DPP).
NA
OIS Advanced Technology (OIS-
AT) and SAMP (France)
• ►OIS-AT and France-based SAMP have entered a JV to
manufacture advanced penetrator bombs in India.
• The JV will also focus on development of customized
defense equipment for India.
• Penetrator bombs are specialized weapons used
with precision by Air Forces to be able to penetrate
hardened enclosures.
NA
Sources:
1. “Rafael signs $10b deal with Indian defense firm. Israeli, Indian companies to cooperate on air defense systems”, The
Jerusalem Post, 30 March 2016, via Factiva
2. “Reliance Defence inks pact with 3 Ukrainian firms”, Business Line, 30 April 2016, via Factiva
3. “Adani ties up with Elbit, Alpha for unmanned aircraft systems”, Live Mint, 21 March 2016, via Factiva
4. “Thales and BTSL partner to jointly develop PHAROS fire control radar”, Market Line, 4 May 2016, via Factiva
5. “Ashok Leyland partners Lockheed Martin for army combat vehicles”, India Infoline News Service, 23 March 2016, via
Factiva
6. “Saab and Tata Power SED in JV”, Vayu Aerospace & Defence Review, 1 June 2016, via Factiva
7. “OIS-AT and SAMP in JV”, Vayu Aerospace & Defence Review, 1 June 2016, via Factiva
Country Nature of transaction Additional details
Japan and
the US
• ►India, Japan and the US successfully
conducted the 20th edition of their annual
naval exercise, Malabar-16. The objective of
the exercise was to increase interoperability
amongst the three navies.
• INS Satpura, INS Sahyadri, INS Shakti and INS Kirch
from the Indian Navy participated in the exercise.
• The Japanese Navy was represented by JS Hyuga, a
helicopter carrier with SH 60 K integral helicopters
and Long Range Maritime Patrol aircraft.
• The US Navy was represented by ships from CTF 70
of the US Navy’s 7th fleet.
Oman • ►India and Oman signed four MoUs and a
protocol on defense cooperation during
the two day visit of Indian Defense Minister
Manohar Parrikar to Oman.
• ► The MoUs included defense co-operation, marine
crime prevention, and other maritime issues.
• ► A protocol was signed between the IAF and Royal
Air Force of Oman about flight safety information
exchange of military aircraft.
Vietnam • India and Vietnam have identified major
categories for defense cooperation,
which includes upgrade of thermal sights,
shipbuilding programs, missile systems
from India and software defined radios from
Vietnam.►
• ► India is also planning to export advanced cruise
missile system including BrahMos supersonic missile
to Vietnam.
The US • ►India and the US have agreed in principle to
share military logistics, primarily to counter
the growing maritime assertiveness of China
in the South China Sea. The agreement terms
are likely to be penned by end of June 2016.
• ► India and the US are also expected to conclude
an agreement on exchanging information on
commercial shipping and aircraft carrier technology.
Russia • India and Russia have signed an agreement
for deliveries of five S-400 air defense
systems.
• ► The S-400 is Russia’s next-generation air
defense system, carrying three different
types of missiles capable of destroying aerial
targets at short-to-extremely long range.
Country-level deals and initiatives
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
Q-tech Synergy Newsletter
5. “Russia, India Sign Agreement on S-400 Defense Systems Deliveries – Official,” Sputnik News, 27 April 2016, via Q-tech
Synergy Newsletter

14. 26 | Eye on Defence 27Eye on Defence |
IAF prepares 10-year
modernization plan
The IAF has prepared a 10-year modernization plan
highlighting the technologies and services that it will focus
on. The plan also includes a list of 174 parts required
by the IAF by 2026. The plan will be shared with private
sector players to give them clarity on the requirements of
IAF. However, only 10%–15% of the total allocated budget
of INR25,000 billion are expected to be procured from
domestic private players.
(Source: “Indian Air Force prepares 10-year modernisation
plan,” The Economic Times, 18 April 2016, via Q-tech Synergy
Newsletter)
BrahMos successfully test
fired by IAF
IAF successfully test fired supersonic cruise missile BrahMos
against a land-based target from a defense base in the
western sector at Pokhran. The missile will now undergo an
air launch test from a fighter aircraft. It is the fastest anti-
ship cruise missile in the world and can attain speeds up to
Mach 2.8.
(Source: “IAF successfully test-fires BrahMos from Pokhran,” The
Indian Express, 31 May 2016, via Factiva)
Indigenous Smart Anti-
Airfield Weapon (SAAW)
tested successfully
India’s Smart Anti-Airfield Weapon (SAAW), jointly
developed by DRDO and IAF was successfully test launched
from a Jaguar aircraft by the Aircraft Systems Testing
Establishment (ASTE) in Bengaluru. The weapon is
scheduled for another test in Jaisalmer with Su-30 aircraft
for multiple weapon trails. India is the first country in the
world to develop such Smart Diameter Bombs (SDB).
(Source: “India's first fully indigenized anti-airfield weapon
tested,” The Times of India, 23 May 2016, via Q-tech
Synergy Newsletter)
Super-sonic interceptor
missile test fired
successfully
The DRDO successfully test fired its super-sonic interceptor
missile off the Odisha coast of the Bay of Bengal. The
interceptor missile was engaged against a naval version
of Prithvi missile launched from a ship anchored inside
Bay of Bengal. The successful test of the interceptor is an
important step for India to have a multi-layer ballistic missile
defense system.
(Source: “India successfully tests supersonic interceptor missile
capable of destroying enemy missiles”, The Indian Express, 15 May
2016, via Q-tech Synergy Newsletter)
Indian Navy launches
integrated underwater
harbor defense and
surveillance system (UHDSS)
and mine warfare data
center (MWDC)
The Indian Navy has launched its state-of-the-art harbor
defense systems, the IUHDSS and MWDC, to enhance its
surveillance capability and response to security threats
at the naval dockyard in Visakhapatnam. The IUHDSS is
a multi-sensor system capable of detecting, identifying,
tracking and generating warnings for all types of surface
and underwater threats. The MWDC facility will serve as the
nodal center for maintaining an underwater information
database of harbors along the Indian East coast.
(Source: “Indian Navy launches underwater vigil system in
Visakhapatnam,” The Business Standard, 12 May 2016, via Q-tech
Synergy Newsletter)
Scorpene class submarine,
Kalvari, undergoes sea trials
India’s first scorpene class submarine Kalvari, is undergoing
sea trails. The submarine have already completed several
preliminary tests on the propulsion system, auxiliary
Industry buzz
equipment and systems, navigation aids, communication
equipment and steering gear. During the next few months,
the submarine will undergo a few new trials such as surface
trials, diving trials, weapon trials, noise trials etc.
(Source: “First India-built Scorpene class submarine 'Kalvari'
undergoes sea trials,” Domain B, 3 May 2016, via Factiva)
Water Jet Fast Attack Craft
(WJFAC), INS Tarmugli joins
the Indian Navy
India’s first Follow-on Water Jet Fast Attack Craft (WJFAC),
INS Tramugli, joined the Indian Navy. The 320-ton ship,
built indigenously by Garden Reach Shipbuilders and
Engineers Ltd (GRSE), can achieve speeds in excess
of 30 knots and will be deployed for coastal patrol and
surveillance operations along the East Coast of India. The
ship is capable of operating in shallow waters at high speeds
and is equipped with enhanced fire power.
(Source: “INS Tarmugli Joins the Indian Navy,” Press Information
Bureau, 23 May 2016, via Factiva)
Department of Industrial
Policy and Promotion (DIPP)
launched new intellectual
property rights (IPR) policy
DIPP launched the new IPR policy with an objective to
increase IPR outreach, speed up approvals, enhance
commercialization, and enforce norms. The DIPP aims
to reduce the average time for clearing pending IPR
applications to 18 months from five to seven years, and the
time for registering trademarks from 13 months to 1 month
by 2017. The focus areas of the new IPR policy include
awareness campaign on IP generation and administration
and implementation of IP-related laws.
(Source: “Register trademarks in just one month,” Business
Standard, 14 May 2016, via Q-tech Synergy Newsletter)
MoD releases Defence
Procurement Policy (DPP)
2016
Indian Defense Minister, Manohar Parrikar, announced the
clearance of the DPP-2016 that will replace the current
DPP-2013. One chapter of strategic partners in the policy
is still under considerations and will be finalized by end
of June. The key changes in the DPP-2016 include a
new procurement class, Indian Designed, Developed and
Manufactured (IDDM) as the most preferred category for
buying defense equipment.
(Source: “New defence procurement policy cleared,” Business
Standard, 6 February 2016, via Q-tech Synergy Newsletter)
Government of India (GoI)
changes FDI norms for 100%
FDI in defense sector
The GoI changed its FDI norms for up to 100% foreign
direct investment (FDI) in the defense sector. Earlier also
the foreign players were allowed to invest more than 49%
through the approval route; however, according to the new
norms, the condition of access to “state-of-art” technology
for FDI of more than 49% is changed to companies with
modern technology can invest for more than 49% in the
defense sector.
(Source: “Govt relaxes FDI norms, allows 100% in aviation,
greenfield pharma,” Business Standard, 20 June 2016, via Factiva)
India likely to start exporting
indigenous Light Combat
Helicopter (LCH)
India is likely to start exporting light combat helicopters
(LCH) developed by the HAL. As a platform, the LCH has
passed all requirements and has a viable platform. Two
countries including Vietnam have expressed interest in the
LCH. The LCH is designed to provide air support to land
forces and to counter enemy armored vehicles, including in
mountainous terrains.

15. 29Eye on Defence |28 | Eye on Defence
(Source: “India May Start Exporting Domestically-Built Combat
Helicopters in Near Future – Company,” Sputnik News Service, 15
April 2016, via Factiva)
HAL tests its indigenously
developed trainer aircraft
HAL’s basic trainer aircraft, the Hindustan Turbo Trainer-40
(HTT-40), made its maiden flight, after completing its
ground run phases in May 2016. The aircraft will be used
for the first stage training for all flying cadets of the IAF,
Indian Army and the Indian Navy. The IAF have already
ordered 70 aircraft for its training needs.
(Source: “HAL’s indigenous trainer aircraft makes first flight,”
Press Trust of India, 31 May 2016, via Factiva)
For more information, visit www.ey.com/in
Connect with us
Assurance, Tax, Transactions, Advisory
A comprehensive range of high-quality services to
help you navigate your next phase of growth
Read more on ey.com/IN/en/Services
Our services
Centers of excellence for key sectors
Our sector practices ensure our work with you is
tuned in to the realities of your industry
Read about our sector knowledge at ey.com/IN/en/Industries
Sector focus
Easy access to our
knowledge publications.
Any time.
http://webcast.ey.com/thoughtcenter/
Webcasts and podcasts
www.ey.com/subscription-form
Follow us @EY_India Join the business network from EY
Stay connected

16. 30 | Eye on Defence 31Eye on Defence |
Our offices in India
About EY
EY is a global leader in assurance, tax, transaction and
advisory services. The insights and quality services we
deliver help build trust and confidence in the capital
markets and in economies the world over. We develop
outstanding leaders who team to deliver on our
promises to all of our stakeholders. In so doing, we play
a critical role in building a better working world for our
people, for our clients and for our communities.
EY refers to the global organization, and may refer to
one or more, of the member firms of Ernst & Young
Global Limited, each of which is a separate legal entity.
Ernst & Young Global Limited, a UK company limited
by guarantee, does not provide services to clients. For
more information about our organization, please visit
ey.com.
Ernst & Young LLP is one of the Indian client serving
member firms of EYGM Limited. For more information
about our organization, please visit www.ey.com/in.
Ernst & Young LLP is a Limited Liability Partnership,
registered under the Limited Liability Partnership Act,
2008 in India, having its registered office at 22 Camac
Street, 3rd Floor, Block C, Kolkata - 700016
© 2016 Ernst & Young LLP. Published in India.
All Rights Reserved.
EYIN1604-030
ED None
This publication contains information in summary form
and is therefore intended for general guidance only. It is
not intended to be a substitute
for detailed research or the exercise of professional
judgment. Neither Ernst & Young LLP nor any other
member of the global Ernst & Young organization can
accept any responsibility for loss occasioned to any
person acting or refraining from action as a result of
any material in this publication. On any specific matter,
reference should be made to the appropriate advisor.
MM
EYreferstotheglobalorganization,and/orone
ormoreoftheindependentmemberfirmsof
Ernst&YoungGlobalLimited
Ernst & Young LLP
EY | Assurance | Tax | Transactions | Advisory
For more information , please contact:
K. Ganesh Raj
Partner and Leader
Aerospace and Defence Practice
Ernst & Young Pvt. Ltd.
Tel: + 91 120 671 7110
Email: ganesh.raj@in.ey.com
Ankit Tyagi
Associate
Corporate Finance Strategy
Aerospace & Defence
Ernst & Young Pvt. Ltd.
Mob: + 91 9711132596
Email: ankit2.tyagi@in.ey.com
Ahmedabad
2nd floor, Shivalik Ishaan
Near. C.N Vidhyalaya Ambawadi
Ahmedabad-380015
Tel: +91 79 6608 3800
Fax: +91 79 6608 3900
Bengaluru
12th & 13th floor
“U B City” Canberra Block
No.24, Vittal Mallya Road
Bengaluru-560 001
Tel: +91 80 4027 5000
+91 80 6727 5000
Fax: +91 80 2210 6000 (12th floor)
Fax: +91 80 2224 0695 (13th floor)
1st Floor, Prestige Emerald
No.4, Madras Bank Road
Lavelle Road Junction
Bengaluru-560 001 India
Tel: +91 80 6727 5000
Fax: +91 80 2222 4112
Chandigarh
1st Floor
SCO: 166-167
Sector 9-C, Madhya Marg
Chandigarh-160 009
Tel: +91 172 671 7800
Fax: +91 172 671 7888
Chennai
Tidel Park
6th & 7th Floor
A Block (Module 601,701-702)
No.4, Rajiv Gandhi Salai
Taramani
Chennai-600113
Tel: +91 44 6654 8100
Fax: +91 44 2254 0120
Delhi NCR
Golf View Corporate
Tower – B
Sector 42, Sector Road
Gurgaon–122 002
Tel: +91 124 464 4000
Fax: +91 124 464 4050
3rd & 6th Floor, Worldmark-1
IGI Airport Hospitality District
Aerocity New Delhi-110037, India
Tel: +91 11 6671 8000
Fax +91 11 6671 9999
4th & 5th Floor, Plot No 2B
Tower 2, Sector 126
NOIDA-201 304
Gautam Budh Nagar, U.P. India
Tel: +91 120 671 7000
Fax: +91 120 671 7171
Hyderabad
Oval Office,18, iLabs Centre
Hitech City, Madhapur
Hyderabad - 500081
Tel: +91 40 6736 2000
Fax: +91 40 6736 2200
Kochi
9th Floor “ABAD Nucleus”
NH-49, Maradu PO
Kochi - 682 304
Tel: +91 484 304 4000
Fax: +91 484 270 5393
Kolkata
22, Camac Street
3rd Floor, Block C”
Kolkata-700 016
Tel: +91 33 6615 3400
Fax: +91 33 6615 3750
Mumbai
14th Floor, The Ruby
29 Senapati Bapat Marg, Dadar (west)
Mumbai-400 028, India
Tel: +91 22 6192 0000
Fax: +91 22 6192 1000
5th Floor Block B-2
Nirlon Knowledge Park
Off. Western Express Highway Goregaon (E)
Mumbai-400 063, India
Tel: +91 22 6192 0000
Fax: +91 22 6192 3000
Pune
C—401, 4th floor, Panchshil Tech Park
Yerwada (Near Don Bosco School)
Pune-411 006
Tel: +91 20 6603 6000
Fax: +91 20 6601 5900
EY — your trusted advisor for aerospace and defence projects
EY ranked as the #1 professional services brand in India for the third time in a row* in the Global Brand
Survey conducted by Kantar.
In India, EY with its dedicated team of aerospace and defence (A&D) professionals, functional capabilities
and globally experienced talent, enables its international clients to successfully enter, operate and succeed
in the Indian market.
For further details, please contact: Sailesh Rao, Leader Defence Advisory | eyaerospace.defenceindia@in.ey.com
What makes us different?
Select experience Services
• Dedicated A&D teams with
specialization in packaging business
advisory with regulatory advisory
• Team members involved in
prestigious projects such as:
• Drafting the Defence
Procurement Procedures and
founding the Defence Offset
Facilitation Agency
• Setting up an A&D
manufacturing facility at
Mahindra aero-structures
• Total experience of 66 man
years in the armed forces; MoD
administrative experience of 14
man years
• Offset structuring worth US$ 3.7
executed successfully
• Experience with foreign clients
include large US, European and
South Asian multinationals; strong
capabilities in offset program and
supply chain structuring and vendor
• Capabilities in market entry
strategies for renowned Indian
clients and a host of MSMEs
• Strong connects with Indian
companies across manufacturing
and services sector
• Project methodology driven by
primary information and deep
sectoral competencies
• Eye on Defence — India’s largest
circulated and read A&D quarterly
• Joint research with CII on
opportunities with DPSUs and
in offsets and on enhancing the
participation of MSMEs in India
with CII
• Invited speaker at prestigious A&D
conventions; US-India HTCG, Aero
India, Singapore Airshow and GOCA
• Contribution to policy
recommendations at industry
bodies such as AMCHAM, USIBC,
CII, FICCI etc.
• One of our team members was a
part of the 10—member committee
to suggest changes to the DPP
2013.
• One of our team members had
provided input to the Indian Defense
Offset policy in 2006.
• EY prepared a research paper
for the DRDO on enhancing the
participation of the private sector in
Defence R&D.
• EY prepared a white paper for
DOMW (DDP) to analyze the effects
of the abeyance order on services
as valid offset discharge.
Team of sector experts Multiple engagements in the
sector
Thought leaders in the sector MoD policy advisory
experience
Offset related services
•
• Regulatory compliance
• Finalization of offer
Mergers and acquisitions
• Asset & capital allocation advisory
• Buy-side M&A advisory
• Sell-side M&A advisory
• Capital markets lead advisory services
Business advisory
•
•
• New market investment strategy
• Strategic portfolio services
Regulatory advisory
• Export licensing
• Industrial licensing
• FIPB application
Taxation
• Specialized defence project taxes optimization
• Business tax
• Indirect tax
• International tax
• Transaction tax
This announcement appears as a matter of record only.
This announcement appears as a matter of record only.
This announcement appears as a matter of record only.
This announcement appears as a matter of record only.
This announcement appears as a matter of record only.
This announcement appears as a matter of record only.
Large Indian
Infrastructure Group
Business advisory
Entry strategy in A&D
US Strategic Electronics
OEM
Litigation services
Advisory services
Tax compliance
US Jet Engine
Manufacturer
Offset advisory
Business advisory
Tax advisory
Transfer pricing
US Aerospace Systems
OEM
Tax advisory
Tax compliance
Transfer pricing
Transaction tax services
Risk advisory services
Indian DPSU Shipyard
Business advisory
Formulation of business plan
and implementation procedure
Swiss Aircraft
Manufacturer
Offset advisory
Business advisory
Tax advisory
*Ranked as #1 brand in India for three consecutive editions of the biennial Global Brand Survey 2015 (Kantar), 2013 (TNS), 2011 (TNS)
©Copyright2016Ernst&YoungLLP.Allrightsreserved.
Disclaimer: The information contained herein does not constitute an offer to sell or a solicitation of an offer or a recommendation to purchase securities under the securities laws of
any jurisdiction, including the United States Securities Act of 1933, as amended, or any US state securities laws, or a solicitation to enter into any other transaction. Any securities
transactions with a US-based buyer will be effected through Ernst & Young Corporate Finance (Canada) Inc., a US registered broker-dealer that is part of a global network with Ernst &
Young LLP in accordance with Rule 15a-6 under the United States Securities Exchange Act of 1934, as amended.