Eye on Defense January 2012

32
Need for offset monitoring and a suitable solution 2 Electronic fuze: opportunities and market potential 8 Tier-1 vendors now permitted to execute offset obligations 14 Request for Information (RFIs) 16 Request for Proposal (RFPs) 17 List of Industrial Licenses (ILs) filed from 01/09/2011 TO 31/10/2011 19 List of Industrial Licenses (ILs) filed from 01/11/2011 TO 31/12/2011 20 New projects/investments/contracts 21 Country-level deals and initiatives 23 Industry buzz 24 Sources 29 January 2012 Eye on defence Dear Readers, The Indian defence industry is entering an exciting phase with the Government of India embarking on rapid indigenization. The growing importance can be gauged by the proposed inclusion of defence in the Twelfth Five Year Plan (2012–17). Amidst this rapidly changing landscape, we are pleased to present the Eye on Defence, Ernst & Young’s quarterly newsletter on defence for the period October-December 2011. This issue of Eye on Defence covers key topics, which include the urgent need to monitor offsets and the market opportunities for relatively new technology prod-ucts such as electronic fuze. With the recent amendment in DPP-2011 allowing the tier-1 suppliers to discharge off- set obligations, we look forward to help the Indian industry identify such suppliers on a particular program. Among the regular sections there are industrial license applicants, new projects and investments, joint ventures and al-liances, country-level deals and the latest buzz in the industry. We hope you enjoy reading this issue. It has been our constant endeavor to make this publication more relevant to you and would appreciate your comments and suggestions in this regard. K. Ganesh Raj Partner and Leader Aerospace and Defence Practice

description

EY India's quarterly defense news letter. This is the January 2012 edition.

Transcript of Eye on Defense January 2012

Page 1: Eye on Defense January 2012

• Needforoffsetmonitoringandasuitablesolution 2

• Electronicfuze:opportunitiesandmarketpotential 8

• Tier-1vendorsnowpermittedtoexecuteoffsetobligations 14

• RequestforInformation(RFIs) 16

• RequestforProposal(RFPs) 17

• ListofIndustrialLicenses(ILs)filedfrom01/09/2011TO31/10/2011 19

• ListofIndustrialLicenses(ILs)filedfrom01/11/2011TO31/12/2011 20

• Newprojects/investments/contracts 21

• Country-leveldealsandinitiatives 23

• Industrybuzz 24

• Sources 29

January2012 Eye on defence

DearReaders,

TheIndiandefenceindustryisenteringanexcitingphasewiththeGovernmentofIndiaembarkingonrapidindigenization.ThegrowingimportancecanbegaugedbytheproposedinclusionofdefenceintheTwelfthFiveYearPlan(2012–17).

Amidstthisrapidlychanginglandscape,wearepleasedtopresenttheEyeonDefence,Ernst&Young’squarterlynewsletterondefencefortheperiodOctober-December2011.ThisissueofEye

onDefencecoverskeytopics,whichincludetheurgentneedtomonitoroffsetsandthemarketopportunitiesforrelativelynewtechnologyprod-uctssuchaselectronicfuze.WiththerecentamendmentinDPP-2011allowingthetier-1supplierstodischargeoff-setobligations,welookforwardtohelptheIndianindustryidentifysuchsuppliersonaparticularprogram.Amongtheregularsectionsthereareindustriallicenseapplicants,newprojectsandinvestments,jointventuresandal-liances,country-leveldealsandthelatestbuzzintheindustry.

Wehopeyouenjoyreadingthisissue.Ithasbeenourconstantendeavortomakethispublicationmorerelevanttoyouandwouldappreciateyourcommentsandsuggestionsinthisregard.

K. Ganesh RajPartnerandLeaderAerospaceandDefencePractice

Page 2: Eye on Defense January 2012

Need for offset monitoring and a suitable solutionBackgroundWithMMRCAbecomingarealityinthenearfuture,aUS$6–7billionofbusinessfortheIndianindustryisexpectedfromthisonesingleprogram.SincetheinclusionofoffsetsinDPP2006,contractsworthINR140billionhavealreadybeensignedbytheIndianindustrywithforeignOEMsunderoffsetsaloneandareundervariousstagesofimplementation.However,therearemanymoreexcitingopportunitiesintermsofbusinesspotentialinoffsets,intheverynearfuture.IndustryinIndia,hastakenthisopportunityseriouslytilldatebothrelatingtocurrentopportunitiesandtheonesalreadyaccorded.Industrybuzzis,“Isittruethatsomanyhundredsofcroresofoffsetsarebeingdischarged,ifsowherearetheyandwhoarethebeneficiaries?”

TheoffsetsopportunitycreatedbytheGovernmentofIndia(GoI)wasintendedtoactasanenablertoallowaconsiderablesegmentoftheIndianindustrytobeapartofthedefenceindustry,therebycreatinganenvironmentforseriousdefencemanufacturing.Therestrictiveregimesprevalentinthepastcreatedthemonopolyofthedefencepublicsectorenterprises,sincethedefencesectorenjoyedspecialtreatment.Openingofthedefencesectortoprivateparticipationin2001,witharestrictionof26%FDI,bothsubjecttolicensingwasindeedavisionarystep(consideringthehighlyrestrictiveregimesprevalentaswellasthereluctancetohaveanopenmindtowardthissector)tounleashthepotentialintheprivateindustries,whichhithertohavedoneexceedinglywellinothersectors.Thisimpliesthattoday,theMinistryofDefence(MoD)willhavetodealwithafigureofapproximately30,000companieswhenanyreferenceismadetothedefencesector.

InclusionofadedicatedAppendixonoffsetsintheDefenceProcurementProcedure(DPP)2005wasreallythefirststeptowardsettingouttorepatriateaportionoftheforeignexchangeoutgo,towardgeneratingdefencebusiness.DetailedoffsetguidelinesincorporatedinDPP2006,speltoutthescopeandmethodsofoffsetdischarge,besidesamodusoperandiforevaluationandacceptance,signingofcontractandabriefmentiononoffsetmonitoring.Thisiswellintendedandmadeonpurpose,sincethatwasindeedthebeginningandthefocuswasrightlyonthescopeandmethodsofdischargeofoffsets.

Eye on defence | 2

Page 3: Eye on Defense January 2012

AimWeareintothesixthyearsincetheprocedurewasformulatedfordischargeofoffsetsandtimeisripetoseriouslyconsideramonitoringmechanismforoffsetscontractsthattheGoIhasentered.

Theaimofthisarticleistoanalyzethepresentorganizationforoffsetmonitoringandtosuggestasuitablestructure.

NeedTheneedforoffsetmonitoringisparamountforcomplianceandadherencetothestatedcontractthatincludesanoffsetschedule.Anumberofdeductionscanbedrawnfromacarefulanalysisofthemonitoringmechanism,whichcouldpotentiallybehelpfultotheadministeringauthoritiestobeabletorefineorevenredefinethepoliciesforfutureaswellasformulatedetailedguidelinesforevaluationandacceptance.Thus,theoffsetschedule,whichformsanintegralpartofthecontract,canbemorepragmaticandpractical,ensuringeffectiveimplementation.AnalysisofsomeofthemethodsadoptedbyOEMsinactualdischargeofoffsetswillsuggestwhethertheimplementationofoffsetswasinconformationwiththespiritofthepolicyoronlynamesakeadherence.

Thus,thereisaneedforaneffectiveorganizationtomonitoroffsets,bothtoensurecomplianceandforananalysistotriggerforrefinementintheprocedures.Thesheervolumeoftheoffsetsbusinesstriggerstheneedforaneffectivemonitoringorganization.ItisbelievedthatmorethanINR140billionoffsets,havebeensignedandmorethanINR500billionareintheoffinginthenextfiveyears.

Divided responsibilityTheorganizationwehavenowcanbetermedaseitherdividedresponsibilityortobemoreprecisedistributedresponsibility.Currently,theMoDhasconstitutedanOffsetMonitoringCellundertheDDPforthisratherenormoustask.ItwillbeinterestingtoseehowtheMoDorganizeditselftocarryoutthisgigantictaskthatsetsaspirationsintheindustry,bothdomesticandinternational.

Amongthe130oddcountriesthathavebeenpracticingoffsetsevenbeforeIndiaimplementedthem,nonehave,eveninconcept,anorganizationsuchasDOFA(DefenseOffsetFacilitationAgency).TheIndianMoDisthefirstintheworld,tohaveconstitutedaDOFApurelyforfacilitationandalsoputtheentireDPPopenlyonagovernmentwebsite.ItisnoteasytohaveaccesstotheOffsetPoliciesofothercountriesandonehastogettheinformationfromthirdpartysourcesinconferencesandseminars.Thisisbyfar,awonderfulconcept,excellentideabutunfortunatelynotimplementedinthebestpossiblemanner.

WehavetheDG(Acquisition)andtheentireacquisitionwingunderhim,whichisfocusedontheacquisitionofweaponsystemsfortheArmedForcesandtheDOFAundertheDDP(DepartmentofDefenceProduction)forfacilitationofoffsetproposalsandexecution.Itisaverygoodconcept,sincetheDDPisasupportorganization,whichsupportsthepoliciesoftheMoDbyenergizingtheIndianindustry(readDPSUs).AlthoughthecharteroftheDDPwasDPSUs,itisbelievedthatithasbeenexpandedtoincludetheIndianindustryinitsentirety(notyetvisibleinmanyechelonsoftheIndianindustry).

Eye on defence | 3

Page 4: Eye on Defense January 2012

Suchasoundconceptwhenimplemented,tookshapeongroundtotranslateintothefollowing:

a. DG(Acquisition)processestheRFP,getstheresponses,constitutestheTOEC(TechnicalOffsetEvaluationCommittee),makesevaluations,accordsacceptanceofprojectsandfinallysignsthecontract.

b. DOFA(DefenceOffsetFacilitationAgency)undertheSecretaryDP(DefenseProduction)expectedtofacilitateimplementation,assistpotentialvendors,assistinvetting,assistinmonitoring,etc.ThelistoffunctionsoftheDOFAisalongone,whichishithertotooambitiousandseldomaddressedbytheorganizationduetoitsratherlimitedbandwidth.

c. AnOffsetMonitoringCellwasthereaftercreatedinadditiontotheabovethroughadepartmentalorder,in2008,underSecretaryDP.WhiletheDOFAwasunderJointSecretary(ElectronicSystems),theOffsetMonitoringCellwasfunctioningfromunderDirectorS1/S2,inthesupplieswingoftheDDP,underadifferentJointSecretary.EvenwithintheDDP,theresponsibilitywasfurtherdistributed.

d. ThencametheprovisionofBankingofOffsetCreditsinDPP2008,whichwascreatedundertheAdditionalSecretaryDP,withmembersfromallstakeholders,ofwhichtheChairmanDOFA,providedsecretarialsupport,withhelpfromtheOffsetMonitoringcell.

Ascanbeseenfromabove,theresponsibilityforoffsetswasdividedandtheOffsetMonitoringCell,whichprobablycomprisessomeofficialsofthesupplieswingofDDP,wereonmulti-taskingmode(asisthecasewithotherstoo,includingChairmanDOFA),andforalsomonitoringoffsetsinadditiontotheiroriginaltasks.EvenwithintheDDP,theinherentstrengthinthecreationofDOFAwasnotsustainedandaneworganizationwascreatedformonitoring,althoughitwasalsotoreporttoChairpersonDOFA.Lackofinformationandcoordination,arealsoinherentinsuchorganizationswithdistributedresponsibility,besidesvariousotherdrawbacks.While,duringtheplanningprocess,DDPisinvolvedinvariousServicesCapitalAcquisitionPlans(SCAP)committeesandtheCapitalAcquisitionPlan(CAP)sectionofDirectorateofPlanningandCoordinationhasthebaseknowledge,theDOFAandoffsetmonitoringcellaremostlywithdrawnfromthisentireprocessanddonotpossesstheknowledge,hithertoavailableattheplanningstages.TheDOFAandoffsetmonitoringcellcomeinatalaterstagewithoutthekeyknowledgeofacquisitionsprograms.ThisshouldnothavebeenaproblemiftheyDOFAwereonlyafacilitationagency.However,suchaprocessdoesnotfacilitatetheirintegrationintothewholegameofoffsets.

Ineffect,weseethat,DOFA,whichwasincorporatedundertheDDPasafacilitationagencyalone,alsoincorporatedintoitsresponsibilityandcharterofdutiescompletemonitoringofoffsetsinitsfunctionsduetoitsindustrybias.ThisisalsoincontrasttothecharterofDOFAspeltoutclearly,“toassistinmonitoringofoffsetprovisions(3.1(d)ofAppendixDtoDPP2011);asagainstcompletelyhandlingit.”

Thechallengestherefore,aretofindaneffectiveorganizationforoffsetmonitoring,adequatelystaffedandtechnologicallyequippedtomonitoroffsetcases,whicharesettoincreaseexponentially.

Eye on defence | 4

Page 5: Eye on Defense January 2012

Basic components of monitoringThebasiccomponentsofamonitoringprocessarebroadlysimilartothoseof“programmanagement”.Eachoffsetcontract,inanacquisitionprogram,isa“project”andtomanageallsuchindividualprojectsweneedprogrammanagement.Thevolumestobeencounteredinthisprogrammanagementaresubstantialandneedaveryeffectiveset-uptomanagethesame.Programmanagementisaboutdoingprojectsright.Andthisisdistinctlydifferentfromprojectmanagement,since,successfulprojectsaredeliveredontimeandareexecutedwithinbudgetandspecification.Successfulprograms,ontheotherhand,deliverlong-termimprovementstoanorganization,andtheMoDshoulddefinitelybefocusingonthat.Inthiscase,theterm“project”iscomplexwithdifferentIndianoffsetpartnersexecutingdifferenteligibleproductsandservices.

Therefore,offsetmonitoringmustessentiallybringtoforethebenefitsthata“programmanagement”functionwilldeliver;elsethisentirefunctionwillfailtodeliverontheconsiderablebenefitsthatcouldpotentiallyaccruetotheIndianindustry.Inlessthanfiveyearsofoffsetsbeingimplemented,contractsworthINR120billionhavebeensignedandimplementationisinvariousstagesofprogress,withlittleinformationonhowandwheretheintendedbenefitshaveactuallyaccrued.Itisnotevenknown,iftheindividualoffsetprojectswereindeedcompletedtothetotalsatisfactionoftheMoD.ThisismainlybecausetheMoDisyettoputinplaceaneffectivemonitoringmechanism,barringtheQuarterlyOffsetMonitoringreportthatissubmittedbytherespectiveOEMs.SomeorganizationinthesupplieswingoftheDDP,hithertounrelatedtoeithertheDOFAortheacquisitionprocess,withadualtaskingcannotbenominatedforsuchacriticalfunctionoftheacquisitionprocess.Inanycase,suchanorganizationcannotdomorethanamerebookkeepingfunction,atthehighestlevelofefficiency.

Therefore,theessentialingredientsinmonitoringofoffsetsprogramsarefollowing:

a. Monitoringeachindividualprojectforwhichoffsetscontractshavebeenconcludedforadherencetotheoffsetschedule.

b. Timeandcostover-runs,ifany,needstobemonitored.

c. Book-keepingofoffsetsdischarged,toensurethatthequarterlyreturnsandhalf-yearlyreturnsarefiledonschedulebytheOEMsandtheyareinconformationtothecontract.

d. AlistofforeignOEMsistobemaintainedforcomplianceandtosimultaneouslygeneratealistofIndianoffsetpartners(IOPs)whohavepartneredwithOEMs.

e. Concurrentlythelististobeupdatedforfreshcontractsawardedandalsotogenerateaproductprofile.

Eye on defence | 5

Page 6: Eye on Defense January 2012

f. AnalysisonsuchIOPsfordisplayofconcurrentproductprofilingandimprovementsaretobeshown.

g. Analysisontheperformanceofservicesvs.themanufacturingsectorindischargeofoffsetob-ligations,andcomparisonsofefficienciesthereofaretobecarriedout.Thiscouldpresentaverygoodpictureoftheinter-seperformanceamongvarioussectors.

h. Theacquisitionwingwillbeintimatedregardingnon-performanceofOEMswithregardtothecommitmentindischargeofoffsetsdespitereminders,forsuitablefollow-upaction.

i. Analysis,evaluationandapprovalofoffsetsdischargeforaccordofoffsetcredits,tobecarriedoutinnear-realtime.Thisisnotaschallengingasitmayseemandtheremustbeminimaldelaysinthisrespect.Unfortunately,theMoDfacesalotofflakinnon-performanceofthiscriticalfunctionandtheOEMsreportunduedelaysincreditingtheiroffsets,despitetheclaimsofcompletingthesame.Invariably,MoDdoesnotevenconsideritfittorespondtothequeriesoreventhereportssubmittedbytheindustry.SincethereisnoresponsefromtheGoI,theOEM’sversionprevails,forpublicconsumption.

Structure for monitoringMonitoringofoffsetsforimplementationisnotmerelyasimplisticjobofbookkeepingorprovidingreceiptsforthemailreceivedintheofficebythedispatchclerk.Thereneedstobelotmorethoughtinvolvedandthestructuremustflowfromthedesiretotargetachievablegoals.Themonitoringprocessmustprovidefoodforthoughttoshapefuturepolicies,provideremedialmeasuresforongoingprojectsandmanagetheprograminaneffectivemanner.

Monitoringmustincludesystemsengineeringandindustrialengineeringasmajordisciplinesbesidesaccountingandanalysis.ItmaybeagoodideafortheMoDtooutsourcethisfunctiontotheindustryassociations,whomayconstituteanindependentbody,chargedtofunctionundertheMoD’ssupervisionandreportingtotheMoD,whilemaintainingcorporatestandardsinrecruitmentandfunctioning.Thiscouldfollowthemodelofpublicprivatepartnership,onthelinesofAadhar.AdedicatedorganizationmustbecreatedforthisandbeintegratedintothefunctioningofMoD’scapitalacquisitionprocess.Thisisessentialtomakesurethattheorganizationisloadedwithadequateknowledgeandequippedwiththewherewithaltohandleunforeseensituationsinamoreeffectivemanner.Besidesotherbenefits,itwillensurecontinuityatleastatoneend.

Thestaffingforthisorganizationcouldbebothfromprivate,publicandgovernmentbodies,withsuitableincentives.ThestructuremustadheretothebasictenetsoffunctioningoftheMoD,tomaintainconfidentialityofdocumentswhileensuring,amonitoringfunctionwithadequatetransparencytoincludeallfacetsofprogrammanagement.Thestaffmustincludesystemengineering,productionengineering,technologyunderstandingandassessment,databasemanagement,ITprofessionalsandbedrivenbyastrategicpolicy-orientedanalyst.

TheorganizationmustbeabletomaintaincloseliaisonwiththeMoDtoincludeDG(Acquisition),HQIDS,Services,MOD(Finance),DRDOandDDP.SuitableintegrationatplanningstageswithMoDisnecessaryforanunderstandingofthecompleteprocess.Whiletheaimistoderivebenefitsofprogrammanagement,itmustberememberedthatthisisonlyamonitoringorganizationandmustbemandatedtoonlypost-contractmonitoringandforapprovedprogramsinoffsetbanking.

OutsourcingofsuchfunctionscanhelptheMoDtoderivebenefitsofcorporatebestpractices,enablethebestintheindustrytobehiredforthiscrucialjobandallowtheMoDtoconcentrateonformulationandrefinementofpolicies,evaluationofproposals,their

Eye on defence | 6

Page 7: Eye on Defense January 2012

interpretation,approvals,whilederivingthebenefitsofobtainingadetailedindustrialanalysis,outcomeevaluationsandanindependentoutoftheboxinput.Thisbodycouldalsobechargedwiththeresponsibilityoffacilitation,intermsofcreatingandsustainingacredibleindustrydatabasethroughwhichahighlevelprofessionaladvicecanbeofferedtotheOEMs.ThecredibilityofthisorganizationwillbehighsinceitwillenjoythebackingoftheGoIinhowsoeverasmallmanner.

Asastartingpoint,itissuggestedthattheMoDseriouslyconsideranoutsourcingmodelforthenon-serious,non-policyinvolved,non-sensitiveareasofimplementationtocredibleindustrybodies,throughsuitablepartnerships.Thisway,theindustrywillbeabletoputinplacethebestresourceforthejobandatthesametimebeabletoincorporatethebestpracticesgloballyforaneffectiveandefficientmonitoringsolution.Thiscanbedonethroughane-solutionincorporatingbestITpracticesaswellashandledthroughseriousbook-keeping.Anintegrationofbankingpractices,technologyassessmentwithactivesupportfromDRDO,industrypolicyinterpretationswithactiveliaisonwithMinistryofCommerce,internalsecurityrequirementsandtheirconsequentintegrationthroughliaisonwithMinistryofHomeAffairsandsimilarlyforcivilaviationthroughliaisonwithMinistryofCivilaviationandSTC,licensingnormsthroughinteractionwithSIA/DIPPetc.,willemerge.ThecorporatebodywillhavethebandwidthtobeabletoreachouttothevariousstakeholderswithinandoutsidetheGoI,tofindeffectiveandefficientsolutionstovarioussituations.ThebodycouldbestructuredtoactwithintheframeworkdefinedbytheMoDwithclearlylaiddowncharterforindependentactionandforactionwithconsultations.

Theneedofthehourisaneffectiveimplementationoftheoffsetprovisionsincorporatinganefficientmonitoringsolution.

Eye on defence | 7

Page 8: Eye on Defense January 2012

Electronic fuze: opportunities and market potentialAfuzeisadevicethatinitiatesanexplosivefunctioninammunition,causingittodetonateorreleaseitscontents,whenitsactivationconditionsaremet.Anartilleryfuzeisusedwithaprojectilefiredbyguns/howitzersandmortars.Thefuzedesignincorporatesthefollowingmechanisms:

a. Safetymechanism.Itprovidessafetywhileinstorageandtransportandinitialstageofflightbykeepingtheexplosivestrain(detonatorandmagazine)non-alignedfromthestriker.

b. Armingmechanism.Itarmsthefuzeatappropriatestageofflightbyremovingthesafeties.

c. Firingmechanism.Itfiresthefuzeonmeetingactivationconditions.

Thesafetyandarmingmechanismsusecombinationof“setback,centrifugalandrotational”forcestoarmthefuzeoncetheprojectileisfiredanditisatasafedistancefromthecrew.

Classification of fuzesFuzesarebroadlyclassifiedbasedonoperatingmechanismasmechanicalandelectronicfuzes,thoughsomechemicalandopticalfuzesarealsoinexistence.

a. Mechanicalfuzes

Mechanicalfuzes,asthenamesuggests,havetheirsafety,armingandfiringmechanismsconsistingmostlyofmechanicalcomponentsandlinkages.MechanicalfuzesarebroadlyclassifiedundercategoriessuchasPercussionFuzes,Directaction,GrazeDelayandTimefuzes,dependingontheirmodeoffunctioning.ForexampleinPercussionandDirectActionfuzes,thecontactsensing(impact)orpresetting(Timemode)isconverteddirectlyintomechanicalmovementofafiringpin,whichinturnisdriveneitherintooragainstthedetonator.Thedetonatorignitesatrainofexplosives,eventuallyfiringthemainchargeoftheprojectile.

IndianArmyhas105mm,130mmand155mmArtyGuns,totalingaround2,000.Thefuzes,whichareinservicearemostlyoldvintagesuchas:

• MechPointImpactFZ117,FZ119,PDM572

• TankFuzeB429andB-429E

• TimePyroDelay-FUZE213andTimeVT-8A

• MortarFuze162,DA-4A,TimeFuzeV-19P

Someofthehardwaremanufacturersofmechanicalfuzes(lessexplosivescontents)are:

• OFB,OrdanceFactoryAmbajhari

• VXLFaridabad

• MicronChandigarh

• SandeepMetalCraftNagpur

AsondatethemainsourceofsupplyofexplosivefilledfuzesareOrdnanceFactories.Thisvalueadditionofaround70%isdonebyordnancefactoriesonly.

Eye on defence | 8

Page 9: Eye on Defense January 2012

b. Electronicfuze

InandEuropeanandotherwesterncountries,electronicsaregraduallyreplacingmechanicalsub-systemsduetoitsenhancedreliability,besidesmakingitpossibletoincorporatevariousoperatingmodesintoasinglemulti-purposedesign.Electronicfuzeshavemanycharacteristicsofmechanicalfuzes,thoughtheydifferinthemethodoffuzeinitiation.Inparticular,safetyandarmingfunctionsareachievedbycombiningelectronicandmechanicalmechanismswhereasthetargetsensingandfiringfunctionsareachievedbyelectroniccircuits.Maincomponentsofanelectronicfuzeareasshowninthefigurebelow.

Mechanicalfuze ElectronicfuzeNotarget-sensingcapability;hence,cannotfunctionasproximityfuze

Proximityactionpossible

Canbedesignedastimefuzebutnumberoftimeintervalsarelimited

Precisetimesettingwithawidediscreterange

Hastobemanuallyset;morepronetosettingerrors

Canbeprogrammedandsetremotely;minimalsettingerrors

Heavyandbulkyduetomechanicalcomponents;limitedminiaturizationpossible

Lightweightandcompactdesignprovidesextraspaceforexplosive

Comparativelylesssafe Electronicsafetycircuitsarevalueadditionstooverallsafety

Increaseslogisticsandtrainingrequirements ReducedlogisticsandtrainingrequirementsLessExpensive Expensive

Dependinguponthetargetsensingmechanismandelectroniccircuitryinvolved,theelectronicfuzesareclassifiedas:

• RadioProximity(PRX)Fuze

• ElectronicTime(ET)Fuze

• ElectronicPointDetonation(EPD)Fuze

• UniversalFuze(MultiOptionFuze)

Advantagesofelectronicfuzesovermechanicalfuzesaregiveninthefollowingtable.However,whereelectro-magneticenvironmentexists,mechanicalfuzeshaveanedgeoverelectronicfuzes.

Eye on defence | 9

Page 10: Eye on Defense January 2012

c. MultiOptionFuzeforArtillery(MOFA)

Inearly1980selectronicfuzeswithseveralfunctionsandoptionsstartedappearing.Themostmodernmulti-optionartilleryfuzesintegratesandoffersacomprehensivechoiceoffunctionsservedbydelay,superquick,timeandproximityfuzes.Theycanbeoperatedwithallexistinganddevelopmentalartillerysystems(105mm–203mm)usingbulk-filledprojectiles,suchashigh-explosiveroundsorilluminatingroundsandofferincreasedaccuracy,reliabilityandperformance.Multioptionfuzescanbeinductivelyormanuallyset.Theuserhastheoptiontoselectany/combinationofmodesaccordingtorequirement.

SomeofthemajorOEMsproducingtheMOFAare

• ATK,theUS(M782)

• JunghansMicrotec,Germany(DM74)

• FucshElectronics,SouthAfrica(M9801)

• RESHEFTechnologies,Israel(M175)

• SignalUsfaandTNOPhysics&Electronicslaboratory,theNetherlands(MEDEA)

d. PrecisionGuidedMunitions(PGM)

Thefiremissionstobeaccomplishedbyartilleryrequireconsiderableamountofartillerypieces,ammunitionandtime,andareevenfittedwithelectronicfuzes.Reductionofammunitionexpenditureandtimeofmissionaccomplishmentcanbeobtainedonlyincaseofhigh-accuracyfiring.ThishasledtodevelopmentofPGMstocatertooperationalneedsandgivetheseweaponsaprecision-strikecapability.Theprojectilesareguidedonthetargetusinglaser/IR/GPSguidancetherebyleadingtoreducedCircularErrorProbability(CEP).OtherbattlefieldadvantagesaccruingtoaforcecommanderemployingPGMsarethefollowing:

• First-roundeffect

• Effectiveengagementofsmaller/fleetingtargets

• Reducedlogistics

• Minimizecollateraldamage(counter-insurgencyoperations)

MajorOEMsproducingPGKarethefollowing:

• ATKUSA

• SaabBoforsdynamics

• LockheedMartinwithDiehl

• KBPInstrumentDesignbureau

• BAESystemswithRaytheonMissileSystems

• IsraelMilitaryIndustries

Eye on defence | 10

Page 11: Eye on Defense January 2012

Electronic fuzes: market sizeCurrently,theIndianArmyhasartillerygunsofvariouscalibersandofdifferentvintageinitsinventory.TheIndian105mmfieldgunanditslightervariantforthemountainsarethebasicfieldguns.TheRussian130mmgunsarethebackboneofmediumartillery,withtheSwedishBofors155mmHowitzers,complimentingthem.Wealsohavethe120mmmortarsthatneedanupgrade.Thebroadgun/mortarequipmentinventoryisasfollows:

Equipment Holding

105mmIFG/LFG 1000+

130mm 500+

155mm 400+

81mmMortar 4000+

120mmMortar 480+

Currently,bulkofthefuzesusedbytheIndiandefenceservicesismechanicalfuzes.Toassessthemarketsizewewillonlyconsidertherequirementoffuzesfortheartillerygunsatthisstage(155mm,130mmand105mm).Accordingtoexistingscales,theannualrequirementofallvariantsofmechanicalfuzesfortrainingandwastagesisestimatedtobeapproximately0.5million.ConsideringanaveragepriceofINR5,000perfuzethistranslatesintoannualrequirementofINR250million.Inaddition,thereisalsoarequirementoffuzestocoverthevoid,whichexistsbetweencurrentholdingsandauthorizedscalesoffuzesforoperationalrequirements.Takingaconservativeestimateofdeficiencyat15%,anadditionalmarketformechanicalfuzesstandsat0.75millionamountingtoINR375million.

Thefocusisnowshiftingtowardelectronicfuzes,inviewofenhancedperformanceandlogisticsre-quirements.Overaperiodoftimetheelectronicfuzeswillreplacethemechanicalfuzebeingusednow.Asondatethesearebeingusedonlyfor155mmgunsandthattooislimitedtolessthan10%oftheauthorizedscale.Theusageisnowbeingextendedto130mmand105mmguns.Thereisanexistingdeficiencyofelectronicfuzesworthmorethan1million.ElectronictimeandproximityfuzescostmorethanPointDetonationfuzes.TakinganaveragepriceofINR15,000perelectronicfuze,theexistingmarketiscappedataroundINR1,500million.Therequirementisboundtoincreaseinthefuturewhentheconversionformortarsalsotakesplace.Duetolimitedsourceofsupplycurrently,thetimelinetomeettheimmediaterequirementof1millionfuzesisanticipatedtobefivetosixyears.Atthisstageitwillbedifficulttopredictthetimelineforswitchovertotheelectronicmode.Theswitchoverwillalsoentailreductionininventory.However,itisexpectedthattherateofacquisitionwillgraduallyincreasebyapproximately15%–20%eachyear.

Eye on defence | 11

Page 12: Eye on Defense January 2012

Theindicativemarketsizeforelectronicfuzemarket(artillerygunsonly)isasshowninchartbelow.

210

300

490

320

450

730

2015 2017 2019

Market growth projections: electronic fuze for artillery

Quantity (in '000) Cost (in INR million)

Multi-functionalfuzesforpointdetonation,proximityandelectronictimefuzeswillhaveapplicationsinAirDefence,NavalandAirplatformsaswell.IndianInfantryusershavealsostartedrealizingthecosteffectivenessofusingelectronicfuzeswithmortarammunition.Takingintoconsiderationexpansionofusageofelectronicfuzeintheseareas(10%initiallyandtobeincrementedonanyearlybasis)theannualmarketsizeforelectronicfuzes(mortar,AirDefence,NavalandAirplatforms)asofdatestandsatapproximatelyINR2billion.

Competition analysisElectronicsCorporationofIndiaLtd.(ECIL),apublicsectorundertaking(PSU)underatie-upwithFuchsElectronicsofSouthAfricaiscurrentlymeetingapproximately80%ofthetotalrequirementofelectronicfuzesoftheArmy.ThePSUenjoyedvirtualmonopolyoveralongperiod,butfailedtoindigenizethecontents.Itisunfortunatethatdespitemorethan15yearsoftieup,criticalsubsystemssuchassafetyandarmingdevice(S&A),thebatteryandanelectronictimerkitareimportedfromSouthAfricaandassembledinIndia.

Arequestforproposal(RFP)for1millionfuzes,issuedbyMoDinearly2009,iscurrentlyheldupduetoobjectionsfromtheenvironmentandfromgovernmentvigilanceorganizations.TheRFPhascombinedthreedifferentkindsoffuzefor105mm,130mmand155mmguns.Stipulationssuchasvendoreithersuppliesallthreetypes,orsuppliesnone,shutsdoorsonmostcompanies.ItwasallegedthattheRFPhasbeendraftedinawaythatiteliminatescompetition.Companies,whichrespondedtotheRFP,indifferentcategoriesaftercollaborationsfordevelopmentandmanufactureofelectronicfuzewerethefollowing:

Electronic fuze:105 mm

• BEL,withIsraelfirmReshefTechnologiesLtd.

• Micron-Jughans

• ECIL-Fucsh

• HBLNoida-SouthKorean

Eye on defence | 12

Page 13: Eye on Defense January 2012

Electronic fuze:-130 mm

• BEL-ReschefIsrael

• ECIL-Fucsh

Electronic fuze:-155 mm

• BEL-Reschef

• ECIL-Fucsh

• Micron-Jughans

Thesecompanieshaveofferedtheproductfortrials.However,thetrialshavebeenheldbackbytheMoD.Theabovecaseislikelytobeshelvedasafreshproposalforprocurementof1millionfuzeshasbeensubmittedtotheMoD.AccordinglyafreshRFIwasissuedinJune2011,asa“buyglobal”case.TheMODisbelievedtohavereceivedresponsefromthefollowingvendors:

• ECIL-Fucsh

• BharatForge

• IndianTelephoneIndustries

• Micron-Junghans

• HBL

• BEL-ReshefTechnologies

• ATKUS

• Rheinmetall

TheIndianArmedForcesareonamajormodernizationdrive.Ascomparedtodevelopedcountries,theIndianArmedForcespossessaconsiderablylowernumberofelectronicfuzes/MOFA,PGMdevices.ChangesinDefencepolicywillallowprivateorpubliclylistedIndiancompaniesinthissector.Thus,theMODdesirestoenhancetheindigenouscapabilityinthissegment.

Theabsenceofindigenouscapabilityintheelectronicfuzestechnologyanditsvariants,offersmarketopportunitiestoestablishaJVtofillthevoid.

Eye on defence | 13

Page 14: Eye on Defense January 2012

Tier-1 vendors now permitted to execute offset obligationsInDecember2011,theMoDreleasedanamendmenttoDPP2011.Itaddedaparagraph(1.7)toappendixD,Chapter1oftheDPP,permittingTier-1sub-vendorstodischargeoffsetobligationstotheextentoftheirworkshare(byvalue)onbehalfofthemain/primevendor.However,theoverallresponsibilityandliabilityfordischargeofoffsetobligationswillcontinuetoremainwiththemain/primevendor.Thisamendmentisapplicablewithimmediateeffect.

TheMMRCARFPwasreleasedunderDPP2006andthus,DassaultandEurofighter(NETMA)willnothavebeenabletoleveragethisamendment.However,aspecialdispensationisintheoffingthatwillenablethetwocontendersoftheMMRCAprogramtotakeadvantageofthisamendmentandofferanenhancedoffsetdischargeprogram.

ForthenascentIndianDefenseindustrytogrowthroughtherouteofoffsets,itisveryimportanttorealizethefactthataprimevendorgenerallydoesnothavemorethan20%workshareonboardacompleteplatformandconsequentlytheywilldischargeonly20%ofthetotaloffsetobligation.Thus,thereisanincreasedpotentialtoreceiveoffsetworkpackagesfromTier-1sub-vendorsoftheprogramsunderconsiderationvis-a-vistheprimevendor.TheIndianindustryprofessionalsshouldthereforeforgerelationshipswithbothmediumandlargeTier-1sub-vendorsinordertogainnotonlyoffset-relatedordersbutalsotogetaccesstocuttingedgetechnologyandbestpractices.

Asafirstattempt,Ernst&YoungwilltrytohighlighttheTier-1subvendorsofcertainlargeticketcapitalacquisitionprogramsthathavealreadybeensignedorareexpectedtobesignedinthenearfuture.

Inthefigureonthefollowingpage,thedesignoftheC-130JHerculestransportaircraft,manufacturedbyLockheedMartin(Primevendor)isdepicted.Indiahasalreadypurchasedsixsuchaircraftandtalksareinadvancedstagestoprocuresixmore.WewouldliketoextendoursinceregratitudetoLockheedMartinIndiaforsharingthisinformationwithus.

Eye on defence | 14

Page 15: Eye on Defense January 2012

Eye on defence | 15

Page 16: Eye on Defense January 2012

Request for Information (RFIs)

October 2011–January 2012

Date of issue RFI details Response date Issued by Service

14Oct2011 SubsonicAmmunition7.62x51mmFor7.62mmGALILSniperRifle

15Nov2011 WE-8/9) Army

19Oct2011 PowerPackWithMinimum380HorsePowerEngine

30Nov2011 DirectorateGeneralofMechanisedForces Army

27Oct2011 PassiveNightSightforAssaultRifle 15Nov2011 AdditionalDirectorateGeneralofWeaponsandEquipment(WE-8/9)

Army

5Dec2011 ElectronicBirdDeterrentSystemforArmyAviation

20Jan2011 AdditionalDirectorateGeneral Army

9Dec2011 ThermalImagingSightfor7.62mmLightMachineGun

31July2012 AdditionalDirectorateGeneralofWeaponsandEquipment(WE-8/9)

Army

20Dec2011 DrivingSimulatorsforT-90/T-72tanks 15Jan2012 DirectorateGeneralofMechanisedForces Army

21Dec2011 WeaponSystemforShootingAroundtheCorner

31Jan2012 DirectorGeneralofRashtriyaRifles(RR-2) Army

26Dec2011 PrimeMoverfor70TonTrailertobeusedforTransportationofTanks

25Jan2012 DirectorateGeneralOfSupplyAndTransport(ST-11) Army

6Jan2012 RFIandInteractionwithManufacturersofOperatingTheatreShelterInflatable

11Jan2012 MGO/EM/GS&CRoomNo206

Army

6Jan2012 GeneralPurposeMachineGunforPARA(SF)

20Jan2012 DirectorGeneralofInfantry Army

6Jan2012 Spares,RepairandOverhaulofMissileTestStation

23Jan2012 DirectorateGeneralOfEME(Electronics)MasterGeneralofOrdnanceBranch

Army

21Oct2011 LaserbasedSpeedGunswithAccessories 22Nov2011 DTEOFPM(AIR)/ AirForce

3Nov2011 3DCDBandAirSurveillanceRadar 1Dec2011 DirectorateOfStaffRequirements Navy

3Nov2011 IntegratedCombatSystem 15Nov2011 DirectorateOfSplOPS&Diving Navy

12Oct2011 AirCushionVessel(ACV) 25Oct2011 IHQMoD(Navy)/DSR Navy

4Nov2011 AirFieldSecuritySolution(CASS) 4Dec2011 AirHQ(VayuBhawan) AirForce

25Nov2011 AirborneHelmets 12Dec2011 DirectorGeneralofInfantry AirForce

5Dec2011 GeneralPurposeMachineGun(GPMG) 31Dec2011 DirectorateGeneralofWeaponsandEquipment(WE-8/9)

AirForce

23Dec2011 SearchandRescueEquipment 23Jan2012 AirHQ(VayuBhawan) AirForce

Eye on defence | 16

Page 17: Eye on Defense January 2012

Request for Proposal (RFPs)

October 2011–January 2012

Date of issue RFP details/equipment Response date Issued by Remarks

Oct2011 8/34MBPSRadioRelay — — Army

8Dec2011 TenInertWarheadsforP-SeriesMissiles

26Dec2011 TheCommandingOf-ficerINSTunir,NavalSta-tionKaranja

Navy

20Dec2011 COTSS-BandSurveillanceRadarSystemAlongWithAccessories

10Jan2012 TheNavalOfficer-in-Charge,Karnataka Navy

11Jan2012 Portableairsupply&communi-cationsystem

30Jan2012 CommanderOperationsOfficer

Navy

4Oct2011 IRISbasedAccessControlSystem 31Oct2011 WgCdrEPSyam,SeniorLogisticsOfficer AirForce

13Oct2011 SupplyInstallationTestingInte-grationandCommissioning(SITIC)ofAFLS(NewGeneration)withassociatedfittings-fixtures

1Dec2011 DirectorateofPro-curement AirForce

25Oct2011 GearwheelAssemblyforFDR-MIG29 14Nov2011 AFStationOjhar,Na-sik,Maharastra AirForce

28Oct2011 FlexiVideoScope 25Nov2011 LogisticsMgmtBranch AirForce

7Nov2011 DifferentialGPSSystemforASTE 29Nov2011 (BaranSen)WingCommanderOCTestEnggSqn

AirForce

5Dec2011 OverhaulofViper22-8AeroEn-gines 19Jan2012 JS(G/A),RoomNo.108(E) AirForce

7Dec2011 Repair/OverhaulofaggregatesofMi26Helicopters

16Jan2012 JointSecretary(G/AIR),MoD AirForce

9Dec2011 SpikeBarrierandBoomBarrier 30Dec2011 UnitsLogisticsSectionTrainingCommand(U),AF AirForce

10Dec2011 UnifiedThreatManagement(UTM) 6Jan2012 CentralAirCommandHQCACIAF

AirForce

29Dec2011 TwoBasicPoweredHangGliderswithAccessories

30Jan2012 StationCommander AirForce

30Dec2011 JaguarFlyingClothing 22Feb2012 ACAS(PROC) AirForce

23Nov2011 PassiveNightVisionMonocular 10Dec2011 DirectorGeneral,CRPF CentralRe-servePoliceForce

23Nov2011 PassiveNightVisionBinocular 10Dec2011 DirectorGeneral,CRPF CentralRe-servePoliceForce

26Nov2011 ClothHarnessB.P.Jackets 25Jan2012 DIGP,GC,CRPF CentralRe-servePoliceForce

25Dec2011 LifeJackets 27Jan2012 DIGP,GC,CRPF CentralRe-servePoliceForce

23Dec2011 MechanizedBoatandMediumCraft 21Feb2012 DirectorateGeneral,BorderSecurityForce BorderSe-curityForce

Eye on defence | 17

Page 18: Eye on Defense January 2012

Date of issue RFP details/equipment Response date Issued by Remarks

23Oct2011 Revamping/ReconditioningOfExistingOne(1)No.20TonLF-VDPlant

16Dec2011 AdditionalGeneralManagerMetal&SteelFactory,Ishapore

1Nov2011 FiringMountRequiredFor30MMCANNON 29Nov2011 TheGeneralManagerOrdnanceFactory,Tiruchirapalli

21Nov2011 XBandDopplerRadarSystem 22Dec2011 DirectorARDE —

22Nov2011 SupplyandIntegrationofCom-municationandNetworkTestBed

14Dec2011 DirectorCAIR —

30Nov2011 ArmourPlate4mm 29Dec2011 SrGeneralManager,VehicleFactory,Ja-balpur —

30Nov2011 ArmourPlate6mm 29Dec2011 SrGeneralManager,VehicleFactory,Ja-balpur —

9Dec2011 ExpressionofInterestofBCLplant 2Mar2012 TheGeneralManager,Corditefactory,Aruvankadu

16Dec2011 10TonHollowESRPlant 4Apr2012 TheGeneralManager,Metal&SteelFactory,Ishapore

Eye on defence | 18

Page 19: Eye on Defense January 2012

List of Industrial Licenses (ILs) filed from 01/09/2011 TO 31/10/2011Application no. and date Name of the applicant Item of manufacture

6701/09/2011

CromptonGreavesLtd. Design,development,manufacturingassemblyupgrade,systemintegrationofelectricalandelectronicsystemssubsystemsandassembliesfordefenceapplication

6806/09/2011

SFOTechnologiesPvt.Ltd. Electronicsitemsforthesupplytothedefencesectorundertheoffsetprogram

6907/09/2011

AviotechPvt.Ltd. Defenceandcivilaircraftinteriors,aeroairbornestructurescompositetestinggroundhandlingequipmentgroundsupportequipment

7013/09/2011

KLIMAviationTechnicsPvt.Ltd. Minorcomponentsavionic,radarsetc.andrepairoftheirparts

7123/09/2011

PipavavDefence&OffshoreEngineeringCompanyLtd.

ManufacturingofpartsandaccessoriesN.E.C.foraircraftorspacecraft

7211/10/2011

KaynesTechnologyIndiaPvt.Ltd. Electronicprintedcardboardassemblies/electron-ICsubassemblies/militarywireharnessesfordefenceandaerospaceapplication

7317/10/2011

DataPatterns(India)Pvt.Ltd. Design,developmentandmanufacturingofradar,sonarandelectronicwarfaresystems

Eye on defence | 19

Page 20: Eye on Defense January 2012

List of Industrial Licenses (ILs) filed from 01/11/2011 TO 31/12/2011Application no. and date Name of the applicant Item of manufacture

7401/11/2011

MahindraAerostructuresPvt.Ltd. Aerospacecomponents,aerostructuresandparts,accessories,assemblies/subassembliesthereof

7503/11/2011

Ray-HansTechnologies(P)Ltd. Design,engineering,softwaredevelopmentandmanufacturingofelectronicandcommunicationproducts,HLAS,FibreopticPROD.powersupplies,cableandwireharnessandsheetmetalfabricationspeciallydesignedforuseindefence,aerospace,healthcareetc.

7609/11/2011

OKPlayIndiaLtd. Manufacturingofpackingproductofplasticsfordefencepurpose

7716/11/2011

SattvaeTECHIndiaPvt.Ltd. Design,development,fabricate,manufacture,upgrades,recondition,assemble/systemintegrationofelectroniccomponentsincluding;software,firmware,multi-layerPCBs,highvoltagepowersupplies,digitalsignalprocessmodules,weapononboardetc.

7805/12/2011

MainiMaterialsMovementPvt.Ltd. Allterraincombatvehicles

7908/12/2011

AANEngineeringIndustryLtd. Defencevehicleparts

8019/12/2011

MAKControlsandSystemsPvt.Ltd. Design,development,manufacture,assemblyandrepair&maintenanceofgroundsupportequipment/vehicles,cargoloaders,groundairconditioningsystems,startingrectifiers,frequencyconverters,airstartersforaircraftetc.

8120/12/2011

VedaDefenseSystemPvt.Ltd. Parts,componentsandaccessoriesforaerospaceanddefensesector

8220/12/2011

Jeet&JeetGlassandChemicals(P)Ltd. Mineresistant/ambushresistant(armored)vehicles

8426/12/2011

SundramFastenersLtd. Kingpin/sleeve/bushes/adapter/thrustboring/components/bolts/nuts/screwsforaerospace

8730/12/2011

VinalTechPvt.Ltd. Cableharness/electronicsystemsintegration

Eye on defence | 20

Page 21: Eye on Defense January 2012

New projects/investments/contracts

Name of entity Project details Value

MinistryofDefence,GovernmentofIndia

• TheIndianDefenceMinistryacceleratedtheselectionprocesstoacquiretwotypesofmicro-andmini-unmannedairsystems(UAS)forusebyitsarmy’snortherncommandalongthenation’sborderwithPakistan.

• Twentysystemsofeachtypeareexpectedtobepurchasedunderanurgentoperationalrequirementdeal.

NA

GovernmentofIndia • TheDefenseSecurityCooperationAgencyhasnotifiedtheUSCongressofapossibleforeignmilitarysaletotheGov-ernmentofIndiaforsixLockheedMartinC-130Jsandas-sociatedequipment,parts,trainingandlogisticalsupport.

INR60.6billion

BrahMosAerospaceThi-ruvananthapuramLtd.(BATL)

• BrahMosAerospaceThiruvananthapuramLtd.(BATL),awhollyownedsubsidiaryofBrahMosAerospacecateringtoproductrequirementsofthecountry’sdefence,aerospaceandnuclearsectors,issettolandordersforproductionoftheBrahMossupersoniccruisemissile’sliquidramjetenginefromtheDefenceResearchDevelopmentOrganization(DRDO).

• BATLwillbeinvolvedinthemakingoftheentireBrahMosmissile,includingthenosecap,thewholeofF3(themissilesectioncomprisingairframeandfueltank)andtheramjetengine.Ineffect,itwillbethecompletemissileexceptthecompositepartandwarhead.

NA

BharatDynamicsLimited(BDL)

• BDLbaggedanorderforthesupplyofAkashWeaponsystemtotheIndianArmy.• TheUnionMinisterofStateforDefence,MMPallamRaju,laidthefoundationstoneforBDl’sAkash

projectbuildinginMedakdistrict(AndhraPradesh).

INR140billion

BharatDynamicsLimited(BDL)

• BDLissettingupanewunitatNandgaonPetinAmaravatidistrictofMaharashtratomanufactureshort-rangemissilesforthearmedforces.

• BDLplanstoproduceveryshort-rangeairdefencemissilesatthenewunit.

INR2.5billion

HindustanAeronauticsLtd.(HAL)

• TheStrategicElectronicsManufacturingFactoryofthepublicsectorHindustanAeronauticsLtd.,setupattheKINFRAIndustrialParkinKasargodisreadyforinauguration.

• ThemanufacturingfactorywillinitiallyworkastheextensionoftheAvionicsDivisionofHAL,Hyderabad.Itisengagedinmanufactureofawidevarietyofelectronicequipmentcoveringcommunication,radar,navigation,computersandelectronicwarfare.

• Thenewfacilitymaybeexpandedtoincludenewprojectsarisingoutofnewaircraftprogramsandconvertedintoafull-fledgeddivisioninfuture.

INR2billion

Boeing • Boeingbaggedadealforthesupplyof22heavy-dutyattackhelicoptersandgunshipstotheIAF.• Besidesthe22Apaches,thepackageincludes812AGM-114L-3HellfireLongbowmissiles,542AGM-

114R-3Hellfire-IImissiles,245StingerBlockI-92Hmissiles,12AN/APG-78fire-controlradarsetc.• BoeingwaspreferredoverRussianMilCorporation’sMi-28N“NightHunter”asApacheprovidedincreased

capabilitiesanddisplayedsuperiorall-weatherapplications.

INR70.67billion

MBDA,France • Indiaclearedtheacquisitionof490FrenchadvancedmissilesystemstoequiptheMirage-2000fighterjets.

INR62billion

TataPower,Stra-tegicElectronicsDivision

• TataPowerSED,thestrategicelectronicsdivisionofTataPowerLtd.,wasawardedthecontracttomodernizetheIndianAirForce’sairbaseinPunjab,whichincludesnewrunways,newlightingsystemandAirTrafficControl(ATC)systems.

• TataPower,afterbeingawardedthecontract,signedanagreementwithRaytheon,underwhichthelatterwillsupplyairtrafficcontrolsystems.

INR9.39billion

BAESystems • BAESystemssecuredacontractforsparesandgroundsupportequipmenttoaidtheIndianAirForce(IAF)Hawktrainingaircraftoperations.

INR4.64billion

TataSteel • TataSteelannouncedinvestmentinitsStocksbridgesteelworksinSouthYorkshire,UK,toboostaerospacesteelproductionby30%.

• Ithasalreadymadeinvestmentsintwovacuumarcremeltingfurnacesandspecialisttestingequipmenttoproducemoresteelfortheaerospaceindustry.

• Engineersarecurrentlycarryingoutfinalinstallationworkonthenewequipmenttoenabletrialstobeginbytheendof2011.Bothfurnacesareexpectedtobeinfullproductioninearly2012.

INR510.9million

*ThevaluesofthedealshavebeenconvertedtoIndianRupeesusingOandacurrencyconversiontool

1US$=INR50.48;1Euro=INR65.26;1£=INR78.6(Valuesason22January2012)

Eye on defence | 21

Page 22: Eye on Defense January 2012

Joint ventures and alliances

Name of entity Nature of transaction Value

Mahindra&MahindraandGriffonCorpora-tion(Telephonicsunit)

• ►TelephonicsCorporation,asubsidiaryofGriffonCorporation,andMahindra&MahindraLtd.announcedthesigningofamemorandumofunderstanding(MoU)toformajointventure(JV).Mahindra&MahindraGroupwillholda74%stakeintheventure,whiletheremaining26%willbeheldbyGriffonCorporation.

• ►ThejointventurewillprovidetheIndianMinistryofDefence(MOD)andtheIndiancivilsectorwithradarandsurveillancesystems,identificationfriendorfoe(IFF)devicesandcommunicationsystems.Inaddition,theJVintendstoprovidesystemsforairtrafficmanagementservices,homelandsecurityandotheremergingsurveillancerequirements.

• ►TheIndianfacilitywillmanufactureandserviceairborneradarsystemsthatarealreadybeingsuppliedtoHALbyTelephonicsandsupportairbornemaritimesurveillancesystemsfortheIndianNavyandCoastGuard.Asofnowitissearchingforlandtosetupamanufacturingplantandhasshortlistedthreelocations.

NA

AshokLeylandDe-fenceSystemsandKrauss-MaffeiWeg-mannGmbH&CoKG

• ►AshokLeylandDefenceServicesrecentlysignedaMemo-randumofUnderstanding(MoU)withMunich-based,Krauss-MaffeiWegmannGmbH&CoKG,inGermany,tomanufacturearmoredwheeledvehicles,recoveryvehicles,artilleryandcombatsystemsandbridgelayingsystems,amongotherthings.

• ►TheGermancompanywillprovidethetechnologyandthetechnicalassistancerequiredforthedevelopmentofthesedefencesystemsbyAshokLeyland.

NA

UnitedTechnologiesandAgniceFirePro-tection

• ►UnitedTechnologiesCorp(UTC),adiversifiedcompanyen-gagedintheproductionofHamiltonSundstrandaerospacesystems,aircraftengines,SikorskyhelicoptersandUTCFireandSecuritysystemsacquiredChennai-basedAgniceFireProtection.

INR3.5billion

UniversalDetectionTechnologyandHo-neywell

• ►UniversalDetectionTechnology,aUS-basedcompanythatdevelopsearly-warningmonitoringtechnologiesprotectingagainstbiological,chemical,andradiologicalthreats,hassignedacontractwithHoneywellIndia.

• ►Theagreementhasbeensignedtodeveloparadiationde-tector,whichwilldisplayradiationdatacollected,viaBlu-etooth,toasmartphone.

NA

PipavavDefenceandOffshoreEngineeringCo.LimitedandMazagonDockLimited(MDL)

• ►Pipavavsigneda50:50jointventureagreementwithMDLinSeptembertobuildsubmarinesandwarshipsfortheIndianNavy.Thejointventure(JV)companywasnamed“MazagonDockPipavavLtd.”However,theJVwasputonholdfollowingacomplaintfromLarsen&ToubroandABGShipyard.

• ►IndianshipbuilderPipavavDefenceandOffshoreEngineeringCo.Ltd.isintalkswiththeMinistryofDefencetoope-rationalizetheMoU,whichwillallowittoformajointventurewithMDL.

NA

BharatElectronicsLi-mitedandRaytheon

• ►Thestate-ownedelectronicequipmentmakerBharatElec-tronicsLtd.(BEL)planstoformaJVfirmwithUS-baseddefencecontractorRaytheonCompanyforthedevelopmentofdefenceproductssuchasPatriotmissiles.

NA

MahindraSatyamandSaabAB

• ►MahindraSatyamopenedadedicatedtechnologycenter,SaabIndiaTechnologyCentre(SITC)forresearchanddevelopmentinpartnershipwiththeSwedishfirm,SAAB.Thecenterwillcommenceoperationswith100engineers.

• ►TheprimaryareasofdevelopmentofSITCwillincludesoftwareengineering,electronicengineeringandmechanicalengineering.Itwilllaterfocusondevelopmentintheareasofsignalprocessingandsystemsengineering.

NA

Eye on defence | 22

Page 23: Eye on Defense January 2012

Country-level deals and initiatives

Country Nature of transaction Additional details

Russia IndiaandRussiareviewedtheirdefencetiesduringthevisitofIndia’sDefenceMinistertoMoscowfrom3to5October2011.Bothgov-ernmentsexpressedreadinesstotakenecessarymeasurestofurtherexpandthecooperationonamutuallybeneficialbasis.

Thetwosidesexpressedsatisfactionovertheirinteractioninthedevelopmentofdefencetechnologies,modernizationofmilitaryequipmentandjointmanufactureofmilitary-purposeproducts.However,theIndianDefenceMinisterex-pressedconcernattheprogressmadeinthedesignanddevelopmentoftheMulti-RoleTransportAircraft.

UK(JointNavalExer-cise)

IndiaandtheUKconductedtheirannualjointweeklongnavalexercise“Konkan”offthecoastofGoafrom8October2011keepingthefocusonsubmarineoperationsincludingnuclearunderwatervessels.IndiawillfielditsShishumarClassINSShankushHDWsubmarineandtheBritishwillhaveoneoftheirTrafalgarClassnuclearsubmarines.

TheexercisewillhelptheIndianNavytohoneitsskillsinoperatingnuclearsubma-rines.IndiaisexpectedtogettheNerpaK152nuclearsubmarineonleasefromRussiaandisalsoplanningtoinducttheindigenousINSArihantsubmarineinthenearfuture.

France(JointMili-taryTrain-ing)

AnIndo-FrenchJointMilitaryTrainingExerciseSHAKTI–2011washeldatChaubattia,Uttarakhandfrom9to21October2011undertheaegisofGarudDivision.

Theexercisewasaimedattrainingtroopsincounter-terroristoperationsandenhancingdefencecooperationandmilitaryrelationsbetweenthetwonations.

Japan(Defencetalks)

ThetalksbetweentheDefenceministersofIndiaandJapanwereheldinTokyoon2No-vember2011.

Maritimesecurity,anti-piracymeasures,freedomofnavigationandmaintainingthesecurityofsealanesofcommunicationtofacilitateunhinderedtradearesomeoftheissuesdiscussedinthebilateraltalks.

Oman(AirExercise) Afour-dayjointexercisebetweentheIndianAirForce(IAF)andtheRoyalAirForceofOman(RAFO)washeldattheAirForceStationJamnagarfrom17to21October2011.Theexercisenamed“EasternBridge-2011”wasthesecondintheserieswiththefirstoneheldinOctober2009atOman.

TheRAFOcontingentcomprisedsixJaguaraircraftand115personnel.TheIAF’sJaguarsandMiG29sbasedatJamnagar,participatedintheexercise.TheOmanicontingentwantedtounderstandthechallengesofflyingoverthevaryinglandscapeoftheIndianterrain,whichisunliketheOmaniflatbeddesert.

Eye on defence | 23

Page 24: Eye on Defense January 2012

Industry buzz

Defence to be included in the five-year planThedefenceindustryhasfoundplaceinthePlanningCommission’sfive-yearplanforthefirsttimeever.ThereportsoftheWorkingGrouponDefenceEquipmentandAerospacewillbeincorporatedintheframeworkoftheindustryoutlookduringtheTwelfthFiveYearPlanfortheperiod2012–17.Themoveisexpectedtofacilitatetheindigenizationofthedefenceequipment.

(Source:“DefencePartofFiveYearPlan’sIndustryOutlookforFirstTimeEver,”Press Information Bureau website,http://pib.nic.in/newsite/AdvSearch.aspx,accessed15January2012.)

GoI freezes all defense shipyard joint venturesTheIndianMinistryofDefencehasputonholdtheformationofalljointventuresindefenceshipyardsuntiltheGoIformulatessuitableguidelines.ThisdecisionwasputonholdafterajointventurebetweenMazagonDockLtd.andPipavavDefense&OffshoreEngineeringCompanywaschallengedbyothercommercialshipyards.TheIndianDefenceministryisnowforminganewpolicyforpublic-privatebusinesspartnershipsforincreasedtransparency.

(Source:JayMenon,“IndianFreezesAllDefenseShipyardJointVentures,”Aerospace Daily & Defense Report,21December2011,viaFactiva,©2011McGraw-Hill,Inc.)

GoI advises not to import encryption equipment from ChinaMinistryofDefence,citingnationalsecurity,advisedthestate-ownedelectronicsequipmentmanufacturerandsuppliertotheArmedForces,BharatElectronicsLimited(BEL)tonotsourcecriticalencryptioncomponentsfromChina.ThewarningwasbasedontheapprehensionthatChinamaymodifytheequipmentanduseittomonitorIndia’sdefenceactivities.

(Source:“GovtadvisesnottoimportencryptionequipmentfromChina,”ElectronicsBazaar,1November2011,viaFactiva,©2011EFYEnterprisesPvt.Ltd.)

Indian Army to procure armored recovery and repair vehiclesIndiawillsoonprocuremorethan600armoredrecoveryandrepairvehiclesforT-72battletanksatacostofINR10billion.AproposalinthisregardwasclearedbytheCabinetCommitteeonSecurity.TheorderisarepeatorderandthevehicleswillbebuiltunderatransferoftechnologyfromthePolishdefencefirm.Thesevehiclesareusedtorepairdamagedorbrokendowntanksandinfantrycombatvehiclesbothduringpeacetimeandcombatoperations.

(Source:“Indiaclears$275mnorderforT-72tankrecoveryvehicles,”13October2011,Indo-AsianNewsService,viaFactiva.)

Eye on defence | 24

Page 25: Eye on Defense January 2012

Field evaluation trials of anti-tank missile soonThefieldevaluationtrials(FET)ofMBDAMissileSystem’sPars3LRfire-and-forgetanti-tankguidedmissile(ATGM),shortlistedalongRafaelAdvancedDefenceSystem’sSpike-ERfortheIndianArmy’sweaponizedAdvancedLightHelicopter(ALH)”Rudra,“areslatedtogetunderwaysoon.

(Source:S.Anandan,“Fieldevaluationtrialsofanti-tankmissilesoon,”The Hindu,24October2011,viaFactiva,©2011Kasturi&SonsLtd.)

Main Battle Tank Arjun debuts in military exerciseTheindigenouslybuiltMainBattletank(MBT)ArjunmadeitsdebutinSudarshanShakti,oneofthelargestmilitaryexercise,heldinrecenttimes.Arjunhasafavorableguntoweightratioandhasgotmorehorsepowerandgunpower.Itcameoutwithsuperiorperformanceonallparameters.Arjuntook37yearsofresearchanddevelopmentandwasbuiltatacostofINR3.5billion.

(Source:RituSharma,“MainBattleTankArjunDebutsinWarGames,”New Indian Express,10December2011,viaFactiva,©2011TheNewIndianExpressGroup.)

Indian army may revive Bofors howitzer plansTheIndianArmyseekstoreinstatelong-dormantABBoforsFH-77B155mm/39-caltowedHowitzerprogramthatwassuspendedin1980soverallegationsofcorruption.

(Source:RahulBedi,“IndianArmymayreviveboforshowitzerplans,”Jane’s Defence Weekly,26October2011,viaFactiva,©2011TheNewYorkTimesCompany)

Indian Navy plans to acquire Russian submarine Nerpa RussiawillhandovertheAkula-IIclass,nuclear-poweredsubmarine”K-152Nerpa”toIndiaona10-yearleaseafterthesubmarinerecentlyfinishedseatrials.ThesubmarinewillberechristenedINSChakraandisexpectedtoreachIndiabytheendofJanuary2012.

(Source:“IndiatakesdeliveryofRussianN-submarine,”The Times of India,31December2011,viaFactiva,©2011TheTimesofIndiaGroup.)

Indian Navy intends to upgrade Sea King and Kamov ChopperTheIndianNavywantstoupgradeitspresentfleetofSeaKingandKamovhelicoptersandpurchasenewhelicopterstoreplacethem.SeaKingisanti-submarinewarfarehelicopterwhileKamovisusedforairborneearlywarnings.

(Source:“IndianNavyHuntsforSea-KingandKamovChopperUpgradesandSuccessors,”IndiaDefence,1October2011,viaFactiva.)

Yantar Shipyard tests INS Teg built for IndiaFrigateINSTeg(standsfor“saber”)builtbyYantarShipyardinKaliningradcontinuedseatrialsafteritsdamagedcruisingturbinewasreplaced.Thetrialprogramwassuspendedafteranaccidenttothefrigate’sportsidecruisingturbine.INSTegisthefirstProject11356frigateinthesecond3-shipseriesorderedbytheIndianNavy.MooringtrialsstartedinMarch2011,andinAugusttheshipwastransferredtoBaltiyskforthefirstphaseofshipyard’sseatrials.

(Source:“YantarShipyardTestsINSTegBuiltforIndia,”RIAOreanda-News,16November2011,viaFactiva,©2011RIAOREANDA.)

GE Shipping arm cancels Mazagon Dock offshore vessel order on delayGreatEasternShippingCompany(GEShipping)cancelledanorderforamulti-purposesupportvessel(MSV),placedwithstate-ownedMazagonDockLtd.,duetonearlyatwo-yeardelayindelivery.Earlier,anarmofGEShipping,GreatshipGlobalOffshoreServices(GGOS)hadsignedcontractstobuildtwonewmultipurposesupportvessels(Builder’sYardNo.26775and26784)withMazagonDock,MumbaiinSeptember2007.

(Source:“NW18:GEShippingarmcancelsMazagonDockoffshorevesselorderondelay,”NewsWire18–EquityWire,9November2011,viaFactiva,©2011NewsWire18Ltd.)

Naval exercise organized at Paradip to spread awarenessTheIndianNavyorganizedanavalexerciseintheseaoffParadiptospreadawarenessaboutthecapabilitiesofitswarships.Thisnavalexercisehelpedthepublictoknowmoreabouttheoperationofwarships.TheNavy’smostmodernmulti-purposestealthfrigate,INSShivalik,twoguidedmissiledestroyersINSRanvirandINSRanjit,twoguidedmissilecorvettes,INSKarmukandINSKuthar,andonelandingshiptank,INSAiravat,displayedtheiroperationalskills.Thewarshipsperformedoperationalmaneuversanddemonstratedtheirfiringpower.

(Source:“NavalexerciseleavesParadipawestruck,”The Times of India,9November2011,viaFactiva,©2011TheTimesofIndiaGroup.)

Eye on defence | 25

Page 26: Eye on Defense January 2012

India falters in getting its new submarine plan off the blockThelong-delayed“Project-75India”toacquiresixnew-generationstealthsubmarineshasbeendelayedandtheactualcontractisnowlikelytobeinkedonlyby2014–15.TheP-75Iboatsareexpectedtobereceivedonlyafter2020sinceittakessixtosevenyearstobuildanadvancedsubmarine.Thishappenedbecauseoftheinabilitytodecideontheshipyards,whichwillbeexecutingtheproject.OriginallythreeofthesubmarinesweretobeconstructedatMazagonDocks(MDL)inMumbai,andanothercameupattheHindustanShipyardinVisakhapatnam.Theothertwoweretobeeitherimportedfromtheforeigncollaboratororbuiltbyadomesticprivateshipyard.

(Source:RajatPanditTNN,“Indiafaltersingettingitsnewsubplanofftheblock,”The Times of India-PuneEdition,2November2011,viaFactiva,©2011Bennett,Coleman&Co.,Ltd.)

Indian Navy to double orders for P-8I maritime reconnaissance aircraftTheIndianNavywillinduct24BoeingP-8Ilong-rangemaritimereconnaissanceaircraft,whichwillboostitssurveillanceandattackcapabilitiesoverIndia’sterritorialwaters.TheIndianNavyplacedordersfor12additionalaircraftoverandabovethe12alreadyonorderbringingthetotalto24.TheP8-Iiscapableofbroad-areasurveillanceandanti-ship,submarineandlandattackoperationsandisequippedwithHarpoonmissiles,depthchargesandtorpedoes.TheaircraftwillbeequippedwithsomeIndiancomponentsbecauseoftheindustrialoffsetrequirements.BharatElectronicsLtd.isalreadysupplyingtheDataLinkIIsystemtofacilitateP-8I’scommunicationswiththeIndianspace,naval,andland-basedassets.

(Source:“IndianNavytodoubleordersforP-8Imaritimereconnaissanceaircraft,”Domain-B,6December2011,viaFactiva,©2011TheInformationCompanyPvt.Ltd.)

Tejas LSP-7 all set for launchTejas,ahomegrownlightcombataircraftdevelopedbyHindustanAeronauticsLimited(HAL),completeditscrucialgroundrun(EGR)andisnowbeingputonlow-speedtaxitrials(LSTT).TejasLSP-7isthetwelfthaircraftfromtheprojectflight-lineandtheseventhfromthelimitedseriesproduction(LSP-7).TheaircraftisexpectedtodotheLSTTat150kmphandtheHSTTat250kmph.

(Source:AnanthaKrishnanM,“TejasLSP-7allsetforitslaunch,”New Indian Express,21October2011,viaFactiva,©2011TheNewIndianExpressGroup)

21 more Hawks for IAF’s Surya Kiran aerobatics display teamTheIAFinitiatedtheprocurementof21additionalHawkaircraftbuiltbyHindustanAeronauticsLimited(HAL).HawkadvancedjettrainerswillallowtheSuryaKiranAerobaticsTeam(SKAT)toflyfaster,turntighterandmanoeuvremorespectacularly,thanwaspossiblewiththevintageKiranMarkIItraineraircraftthattheyhaveflownsince1996.

(Source:AjaiShukla,“21moreHawksforIAF’sSuryaKiranaerobaticsdisplayteam,”Business Standard,25October2011,viaFactiva,©2011BusinessStandardLtd.)

Third generation Nag test-firing in Pokhran ThethirdgenerationNagmissile’sfinaltestwasdoneinJaisalmer’sPokhranfieldfiring.The“fire-and-forget”missilehasbeendevelopedbytheDefenceResearchandDevelopmentOrganisation(DRDO).ThereweresometechnicalchangesandcorrectionsinthelaunchpadaccordingtoArmyrequirements.TheNag,oncefired,isguidedtohitevenafast-movingtank.

(Source:VimalBhatia,“ThirdgenerationNagtest-firinginPokhransoon,”The Times of India,7October2011,viaFactiva,©2011TheTimesofIndiaGroup)

India to order 59 Mi-17s Indiaissettoorder59Mi-17sunderthefollow-onclauseinthefirstcontract.TheywillbeweaponizedforcombatoperationsandwillallowIAFtodeployadditionalchoppersforlogisticalsupportinanti-Naxaloperations.80Mi-17VswereorderedundertheUS$1.34-billioncontractsignedbyRosobronexport,JSCinDecember2008.ThefirstbatchofthecontracthasbeendeliveredtoIndiainNovember2011.ThehelicoptersaremanufacturedbyKazanHelicopters,asubsidiaryoftheRussianHelicoptersholdingcompany.TheR.E.T.Kronshtadt,amemberofTranzasGroup,basedinSt.Petersburg,alsoplanstobuildtwohelicoptersimulatorswithintheframeworkofthiscontract.

(Source:“Indiasettoorder59moreRussiancopters,”FrontierStar,14November2011,viaFactiva,©2011Asianet-Pakistan.)

IAF sends Mirages to France for retrofittingTheIndianairforce(IAF)dispatchedtwoofitsMirage2000fighteraircrafttoFranceaspartofthedealbetweentheGoIandThalesandDassaultAviation.Thedealistoupgradearound50supersonicfighters.Accordingtotheagreement,theFrenchfirmswillmodernizethenavigationsystems,missioncomputers,electronicwarfaresystemsandradars,bringingtheaircraftuptothestandardsofmoreadvancedMirage-2000-5s.ThemodernizationwillcostanestimatedUS$2.4billionundertheagreementsignedbetweenIndia,ThalesandDassaultAviation.TheFrenchcompanieswillinvest30%ofthedeal’svaluebackintotheIndiandefencesectoraspartoftheoffsetpolicy.

(Source:JayMenon,“IndiaSendsMiragesToFranceForRetrofit,”AerospaceDaily&DefenseReport,7December2011,viaFactiva,©2011McGraw-Hill,Inc.)

Eye on defence | 26

Page 27: Eye on Defense January 2012

214 Russian-Indian fifth-generation fighter jets to be inducted into the Indian Air Force by 2017214fifth-generationfighterjets,beingdevelopedjointlywithRussia,areexpectedtoentertheIndianAirForceby2017.Outofthese166areexpectedtobesingle-seaterand48two-seateraircraft.

(Source:“214Russian-Indianfifth-generationfighterjetstoenterserviceinIndiaby2017,”Interfax:Russia&CISMilitaryNewswire,4October2011,viaFactiva,©2011InterfaxInformationServices,B.V)

MHA helps OCTOPUS commandos acquire gunsTheMinistryofHomeAffairs(MHA)sanctionedINR30milliontopurchase206sub-machinegunsMP5A3sandtheiraccessoriestoarmtheOrganisationforCounterTerroristOperations(OCTOPUS),theanti-terrorcommandoforceofAndhraPradesh.TheGermanweaponsmakerHeckler&Kochearlierrefusedtosellthestatepolicetheirsub-machinegunscitinghumanrightsviolations.MHAdecidedtoimporttheweaponsasthesameweaponsareusedbyTheUSNavySealsandtheBritishSpecialAirService.

(Source:“MHAhelpsstategetguns,”Deccan Chronicle,3November2011,viaFactiva,©2011DeccanChronicleHoldingsLtd.)

Security forces get 19,000 night vision gadgetsTheGoIsanctionedmorethan19,000night-visiondevicesforthesecurityforcessuchasNSG,CRPFandITBP.Thehigh-enddevices,procuredfrompublicsectormanufacturerBharatElectronicsLimited(BEL),includeweapon-mountednight-visiontelescopes,nightsightsforrocketlaunchers,monocularsandbinocularsandhelmet-

mountednightvisiondevices,whichcanbewornbytroops.Thenight-visiondevicesareessentialforthesecurityforcestooperateatnightandprovideaclearvisionoftheenemyandotherstatictargets.

(Source:“Forcesget19,000nightvisiongadgets,”The Statesman,7October2011,viaFactiva,2011TheStatesmanLtd.)

Agni-4 test-fired successfullyThelong-rangemissileAgni-4wassuccessfullytest-firedfromWheelers’Island,offthecoastofOrissanearBalasore.Agni-4,earlierknownasAgniIIprime,hasthecapabilitytodeliverstrategicwarheadsintherangeof2,500–3,500km.Itis20meterslongandweighsnearly17tons.Itislightinweightandhastwostagesofsolidpropulsionandapayloadwithare-entryheatshield.Ithasacompositerocketmotor,whichhasbeenusedforthefirsttime.Themissilesystemisequippedwithmodernandcompactavionicswithredundancytoprovidehighlevelreliability.

(Source:RajaramSatapathy,“Agni-4firedsuccessfully,”The Times of India,17November2011,viaFactiva,©2011TheTimesofIndiaGroup)

SAAB–HAL JV to commence airborne electronic warfare systems productionThejointventureofSaabABandHindustanAeronauticsLimited(HAL)willstartproductionofairborneelectronicwarfaresystemsbyMarch2012inBengaluru.ThejointventurewasannouncedinFebruary2011inwhichSaabwillholdaminoritystakeof26%.ElectronicwarfaresystemssuppliedbySAABarebeingusedinDhruv-HAL’sadvancedlighthelicopter.ItalsoplanstoexporttheairborneelectronicwarfaresystemsfromitsBengalurufacility.

(Source:“Saab-HALJVtocommenceairborneelectronicwarfaresystemsproductioninsixmonths,”IndiaPublicSectorNews,25October2011,viaFactiva,©2011Contify.com)

BDL procures DRDO technology for anti-tank missileBharatDynamicsLtd.(BDL)procuredanindigenouslydevelopedSeekertechnologybytheDRDOforthethird-generationNAGanti-tankguidedmissile.ImagingInfraRed(IIR)Seekersisasophisticatedsystemusedformissileguidanceandgivesthemissilethe“fireandforget”capability.BDListhefirstinthecountrytoownthetechnology.Thetechnologywillbeusedfortheforthcomingdevelopmentaltrialsofhelicopter-launchedNAG(HELlNA),whichistheothervariantoftheNAGmissilebeingdevelopedbyDRDO.

(Source:“BDLprocuresDRDOtechnologyforanti-tankmissile,”ThePressTrustofIndiaLimited,2No-vember2011,viaFactiva,©2011AsiaPulsePtyLimited.)

Rolls-Royce and HAL to set up aero engines unitInternationalAerospaceManufacturingPrivateLtd.(IAMPL),ajointventurebetweenHindustanAeronauticsLtd.(HAL)andRolls-Royce,commencedconstructionofanewmanufacturingunitatBengaluru.TheplantwillmanufacturecomponentsfortheTrentcivilaeroengines,aswellasmarineandenergygasturbines.IAMPLhasaround200employeesinIndia,andanother650engineersworkonasub-contractbasisintheengineeringcenteratBengaluru.Theplantisexpectedtocommenceproductionfrom2012.

(Source:“Rolls-Royce,HALtosetupaeroenginesunit,”ProjectMonitor,9December2011,viaFactiva,©2011EconomicResearchIndiaPvt.Ltd.)

HAL shortlists Goldman, 3 others for IPOHindustanAeronauticsLtd.(HAL)hasshortlistedfourbanksincludingGoldmanSachsandBarclaysforaninitialpublicoffering(IPO)thatislikelytoraiseUS$200million.Accordingtoreports,SBICapitaland

Eye on defence | 27

Page 28: Eye on Defense January 2012

EnamSecuritieshavealsobeenshortlistedbythecompany.Thesharesaleisexpectedtobelaunchedinthenextfiscalyearthatbeginson1April.

(Source:“HALshortlistsGoldman,3othersforIPO:report,”IndiainfolineNewsService,15November2011,viaFactiva,©2011IndiainfolineLtd.)

BEL bags Raksha Mantri’s Award in five categories for FY10India’sstate-ownedelectronicequipmentmanufacturerBharatElectronicsLtd.(BEL)wontheprestigiousRakshaMantri’sAwardsfortheyear2009–10infivecategories.BEL’sPanchkulaunitreceivedtheawardfortheBestPerformingDivisionofDefencePublicSectorUndertakings.TheawardwasreceivedbyBELChairmanandManagingDirectorAnilKumaralongwithGeneralManagerofBEL’sPanchkulaunitSureshNfromDefenceMinisterAKAntony.

(Source:“BELbagsRakshaMantri’sAwardin5categoriesforFY2010,”IndiaEnergyNews,19November2011,©2011.Contify.com)

Avantel to deliver first MSS system to BoeingHyderabad-basedAvantelLimiteddevelopedtheindigenousMobileSatelliteSystem(MSS)afterthreeyearsofintensiveR&Dindesign,engineeringandintegrationoftechnologiesrelatedtoradiofrequencydesign,satellitecommunication(satcom),signalprocessingandnetwork.IthassecuredordersworthUS$2.2billionforMSSfromBoeing,UStoinstallthesysteminP-81maritimeReconnaissanceAircraftfortheIndianNavy.AvantelLimitedisengagedinthemanufacture,sale,andexportofRF/microwave,telecom,andsatcomproductsinIndia.

(Source:“AvanteltodeliverfirstMSSsystemtoBoeing,”UNI(UnitedNewsofIndia),24December2011,viaFactiva.)

Embraer completes first flight of EMB 145 EmbraercompleteditsmaidenflightofEMB145AirborneEarlyWarningandControl(AEW&C)aircraftdevelopedfortheGoI.Theplatformisequippedwithanin-flightrefuelingsystem,satcomcapabilityandincreasedelectricalandcoolingcapabilities,alongwithaerodynamicandstructuralchanges.Theseimprovementswillallowtheinstallationofadvancedelectronicsystems

currentlybeingdevelopedbyIndia’sDRDOwithCABS(CentreforAirborneSystems)asthenodalagency.Thedeliveryofthefirstaircraftisexpectedinthefirsthalfof2012.

(Source:“EmbraercompletesFirstFlightofEMB145AEW&CforIndia,”The Weekly of Business Aviation,12December2011,viaFactiva,©2011McGraw-Hill,Inc.)

Research facilities boost prospect for the Futuristic Main Battle Tank (FMBT)ThreenewresearchfacilitieswereopenedatCombatVehiclesResearchandDevelopmentEstablishment(CVR&DE)inAvadionSunday(Chennai),whichhasboostedtheprospectofthefuturisticmainbattletank(FMBT).CVR&DEisalaboratoryundertheDRDO.TwodedicatedtestfacilitieshavebeenopenedtotesthydrogassuspensionunitsusedinFMBTandfuturisticsemi-activesuspensionunits.Anotherfacility,theCombatVetronicsTechnologyCenter,willfocusontechnologiesthatincludein-vehiclenetworkingandembeddedsystemcontrol.

(Source:“Newresearchcentrestofocusonfuturisticbattletank,”The Times of India-ChennaiEdition,12December2011,viaFactiva,©2011Bennett,Coleman&Co.,Ltd.)

Eye on defence | 28

Page 29: Eye on Defense January 2012

Sources

1. “Rosoboronexport:IndiagetsfirstRussiancoptersunder2008deal,”PrimeNews,8November2011,viaFactiva,©2011.PrimeZAO.

2. “R.E.T.KronshtadttodelivertwotraininghelicoptersimulatorstoIndia,”Interfax:Russia&CISMilitaryNewswire,31October2011,viaFactiva,©2011InterfaxInformationServices,B.V.

3. “TataSteelinvestingUS$9.2mntoboostaerospacesteelinU.K.,”AsiaPulse,31October2011,viaFactiva,©2011AsiaPulsePtyLimited.

4. “SixadditionalC-130JstoIndia?,”SP’sAviation,31October2011,viaFactiva,©2011SPGuidePublicationsPvt.Ltd.

5. “NW18:TataPowerSEDsettoclinch$186-mlnIndiandefencecontract,”NewsWire18–MoneyWire,28October2011,viaFactiva,©2011NewsWire18Ltd.

6. “Boeingbags$1.4bnIAFdealfor22helicoptergunships,”Domain-B,28October2011,viaFactiva,©2011TheInformationCompanyPvt.Ltd.

7. “BDLbagsorderforAkashmissilesystems,”New Indian Express,18November2011,viaFactiva,©2011TheNewIndianExpressGroup.

8. S.Anandan,“BATLsettomakeBrahMosengines,”The Hindu,25October2011,viaFactiva,©2011Kasturi&SonsLtd.

9. “India’sdefenceministryisacceleratingtheselectionprocesstoacquiretwo...,”FlightInternational,8November2011,viaFactiva,©2011ReedBusinessInformationLimited.

10. “HindujaAutomotivegetsdefence-bizfocused,”CommercialVehicle,15November2011,viaFactiva,©2011NextGenPublishing.

11. “PipavavDefenceintalkswithdefenseministrytooperationalizeMoUforJV,”IndiaInvestmentNews,14November2011,viaFactiva,©2011Contify.com.

12. “India’sBELmayformJVwithU.S.-basedRaytheonfordevelopingdefenseproducts,”IndiaEnergyNews,12November2011,viaFactiva,©2011Contify.com.

13. SamidhaSharma&BobyKurianTNN,“UnitedTechmayacquireChennaifiresolutionsco,”The Times of India - Pune Edition,24October2011,viaFactiva,©2011Bennett,Coleman&Co.,Ltd.

14. “MahindraSatyamsetsupresearchunitforSwedishfirmSAAB,”BusinessLine(The Hindu),22October2011,viaFactiva,©2011TheHinduBusinessLine.

15. “GovtclearsPipavavasMDL’sjointventurepartner,”IndiaPublicSectorNews,11October2011,viaFactiva,©2011.Contify.com.

16. “BAEgets59millionHawksparescontract,”SP’s Aviation,14December2011,viaFactiva,©SPGuidePublicationsPvt.Ltd.

17. “MahamissileunitforBDL,”Deccan Chronicle,14December2011,viaFactiva.

Eye on defence | 29

Page 30: Eye on Defense January 2012

18. “HAL’selectronicsfactoryreadytogoonstream,”Business Line (The Hindu),13October2011,viaFactiva,©2011TheHinduBusinessLine.

19. VivekRaghuvanshi,“FundingFlapStallsIndo-RussianMTA,”DefenseNews,viaFactiva,©2011,ArmyTimesPublishing.

20. “IndiaeyesRaytheon’sairbornesurveillanceradars,”Domain-B,12November2011,viaFactiva,©2011.TheInformationCompanyPvt.Ltd.

21. NarayanLakshman,“U.S.interestedinIndianhelicoptertender,”The Hindu,11November2011,viaFactiva,2011Kasturi&SonsLtd.

22. “USAhopefulofbaggingIndianattackhelicoptersorder,”The Statesman,11November2011,viaFactiva,©2011TheStatesmanLtd.

23. “India-UKjointnavalexercisefrom8Oct,”BBCMonitoringSouthAsia,8October2011,viaFactiva,©2011TheBritishBroadcastingCorporation.

24. “Indo-FrenchJointMilitaryTraining:ExShakti–11,”Press Information Bureau website,http://pib.nic.in/newsite/AdvSearch.aspx,accessed15January2012.

25. “IndoOmanAirExercise–EasternBridge–IIConcludesatJamnagar,”Press Information Bureau website,http://pib.nic.in/newsite/AdvSearch.aspx,accessed15January2012.

26. “MaritimeSecurityIssuesDominateIndia-JapanDefencetalks,”Press Information Bureau website,http://pib.nic.in/newsite/AdvSearch.aspx,accessed15January2012.

27. “IndiaandRussiatoStepupDefenceTIES,”Press Information Bureau website,http://pib.nic.in/newsite/AdvSearch.aspx,accessed15January2012.

28. InayatJehangir,“Indiaeyeingairbornesurveillanceandreconnaissanceradars,”ThePressTrustofIndiaLimited,11November2011,viaFactiva,©2011AsiaPulsePtyLimited.

29. N.Ramakrishnan,“RaytheonsayskeentosellHEATmissiletoIAF,”Business Line (The Hindu),12November2011,viaFactiva,©2011TheHinduBusinessLine.

Eye on defence | 30

Page 31: Eye on Defense January 2012
Page 32: Eye on Defense January 2012

Ahmedabad2ndfloor,ShivalikIshaanNear.C.NVidhyalayaAmbawadi,Ahmedabad–380015Tel: +917966083800Fax: +917966083900

Bengaluru12th&13thfloor“UBCity”CanberraBlockNo.24,VittalMallyaRoadBengaluru–560001Tel: +918040275000 +918067275000Fax: +918022106000(12thfloor)Fax:+918022240695(13thfloor)

Chandigarh1stFloorSCO:166-167Sector9-C,MadhyaMargChandigarh–160009Tel: +911726717800Fax: +911726717888

ChennaiTidelPark,6th&7thFloorABlock(Module601,701-702)No.4,RajivGandhiSalaiTaramaniChennai–600113Tel: +914466548100Fax: +914422540120

HyderabadOvalOffice18,iLabsCentre,HitechCity,Madhapur,Hyderabad–500081Tel: +914067362000Fax: +914067362200

Kochi9thFloor“ABADNucleus”NH-49,MaraduPO,Kochi–682304Tel: +914843044000Fax: +914842705393

Kolkata22,CamacStreet3rdFloor,BlockC”Kolkata–700016Tel: +913366153400Fax: +913322817750

Mumbai6thFloorExpressTowersNarimanPointMumbai–400021Tel: +912261920000Fax: +912261922000

14thFloor,TheRuby29SenapatiBapatMargDadar(west)Mumbai–400028Tel +912261920000Fax +912261921000

5thFloorBlockB-2,NirlonKnowledgeParkOff.WesternExpressHighwayGoregaon(E)Mumbai–400063Tel: +912261920000Fax: +912261923000

NCRGolfViewCorporateTower–BNearDLFGolfCourse,Sector42Gurgaon–122002Tel: +911244644000Fax: +911244644050

6thfloor,HTHouse18-20KasturbaGandhiMargNewDelhi–110001Tel: +911143633000Fax: +911143633200

4th&5thFloor,PlotNo2B,Tower2,Sector126,Noida–201304GautamBudhNagar,U.P.IndiaTel: +911206717000Fax: +911206717171

PuneC—401,4thfloorPanchshilTechParkYerwada(NearDonBoscoSchool)Pune–411006Tel: +912066036000Fax: +912066015900

Ernst&YoungPvt.Ltd.Assurance|Tax|Transactions|Advisory

About Ernst & YoungErnst&Youngisagloballeaderinassurance,tax,transactionandadvisoryservices.Worldwide,our152,000peopleareunitedbyoursharedvaluesandanunwaveringcommitmenttoquality.Wemakeadifferencebyhelpingourpeople,ourclientsandourwidercommunitiesachievetheirpotential.

Ernst&YoungreferstotheglobalorganizationofmemberfirmsofErnst&YoungGlobalLimited,eachofwhichisaseparatelegalentity.Ernst&YoungGlobalLimited,aUKcompanylimitedbyguarantee,doesnotprovideservicestoclients.Formoreinformationaboutourorganization,pleasevisitwww.ey.com.

Ernst&YoungPvt.Ltd.isoneoftheIndianclientservingmemberfirmsofEYGMLimited.Formoreinformationaboutourorganization,pleasevisitwww.ey.com/in

Ernst&YoungPvt.Ltd.isacompanyregisteredundertheCompaniesAct,1956havingitsregisteredofficeat22CamacStreet,3rdFloor,BlockC,Kolkata-700016©2012Ernst&YoungPvt.Ltd.PublishedinIndia.AllRightsReserved.

Thispublicationcontainsinformationinsummaryformandisthereforeintendedforgeneralguidanceonly.Itisnotintendedtobeasubstitutefordetailedresearchortheexerciseofprofessionaljudgment.NeitherEYGMLimitednoranyothermemberoftheglobalErnst&Youngorganizationcanacceptanyresponsibilityforlossoccasionedtoanypersonactingorrefrainingfromactionasaresultofanymaterialinthispublication.Onanyspecificmatter,referenceshouldbemadetotheappropriateadvisor.

EYIN1202-020

Offices

Formoreinformation,pleasecontact:

K. Ganesh RajPartnerandLeaderAerospaceandDefencePracticeErnst&YoungPvt.Ltd.Tel:+911206717110Email:[email protected]

Ankur GuptaSeniorConsultantAerospace&Defence,IIC-PIErnst&YoungPrivateLimitedMob:+919811910666Email:[email protected]