India's R&D in Defence DRDO, PSUs and Private Sector

chackojoseph · Post by **chackojoseph** » 30 May 2014 09:53

srai,

Ok.

Nikhil T · Post by **Nikhil T** » 30 May 2014 11:05

manjgu wrote:looks good @Partha...what are the cons? I mean any co that does FDI in defence needs to be sure of continous orders from Mod?? Do we get access to new technology? apart from cessation of kickbacks is there any reason for opposition to 100% in FDI...

I am a little skeptical of the move. In my view, FDI in a project relates to the percentage *ownership* that a foreign entity can hold. Essentially it allows a foreign company to take 100% of the profits of their subsidiary in India.

1) It doesn't really save any forex because all the retained profits of the subsidiary will eventually be repatriated to the parent firm abroad.
2) Secondly, it doesn't necessarily mean additional training for indian workers because even with 26% FDI, a subsidiary in India will be employing Indian workers. The method of manufacturing would not really change - e.g a firm assembling fighter planes with 26% will still be using the same low-tech knocked down kits when the firm is completely owned by foreign entities.
3) Foreign governments could still shut down any FDI backed project in India through sanctions that would prevent any tech or material flow to India.

The right way to gain technology and skilled manpower remains the Defence Procurement Policy - which, if used correctly, can be used to pick and choose technologies that we want to gain as offsets.

partha wrote: Example - if a gun company manufactures a gun in which India is interested entirely in India -

1. Saves forex since we don't have to pay $$ for importing the gun.
2. Employment and knowledge building for Indian workers.
3. Boost to local manufacturing and improvement in quality of products.
4. Guns manufactured in Indian factories can be exported to other countries which should earn forex for India.
5. Indian companies could get into global supply chain in defence sector.
6. Tax money for GoI.

partha · Post by **partha** » 30 May 2014 11:47

^
1) Nothing to do with profits. India can buy defence goods locally with INR and save forex $.

Nikhil T · Post by **Nikhil T** » 30 May 2014 14:29

partha wrote:^
1) Nothing to do with profits. India can buy defence goods locally with INR and save forex $.

Not sure if you got my point. With FDI, GoI can pay in INR but the firm will eventually send all it's retained earnings to its parent company (similar to how Microsoft India sends over its profits to Microsoft US). This means that forex will still flow out of the country.

Austin · Post by **Austin** » 30 May 2014 15:07

3) Foreign governments could still shut down any FDI backed project in India through sanctions that would prevent any tech or material flow to India.

The idea being even if they sanction considering they build manufacturing facility in India we would still be able to use them and at later stage carry on with the work which is better than importing it outright

JayS · Post by **JayS** » 30 May 2014 19:56

Austin wrote:
3) Foreign governments could still shut down any FDI backed project in India through sanctions that would prevent any tech or material flow to India.
The idea being even if they sanction considering they build manufacturing facility in India we would still be able to use them and at later stage carry on with the work which is better than importing it outright

But certainly few critical components would be bought from outside. I believe no company will set up manufacturing facility for key technology components (for ex SCB) and would be inclined to bring them in through supply chain from motherland. Without those key components wouldn't we be paralised in the even of sanctions??

Also would a fully owned subsidairy in India be affected by laws of country of parent company such as USA?? Say Boeing sets up a shop in india and in some event of war, US puts importing Boeing maal under sanctions, would the subsidiary in india be also shut down?? I think this would be a critical point as well. Or we will be blackmailed all the same in the event of war.

Nikhil T · Post by **Nikhil T** » 30 May 2014 23:48

nileshjr wrote:
But certainly few critical components would be bought from outside. I believe no company will set up manufacturing facility for key technology components (for ex SCB) and would be inclined to bring them in through supply chain from motherland. Without those key components wouldn't we be paralised in the even of sanctions??

Also would a fully owned subsidairy in India be affected by laws of country of parent company such as USA?? Say Boeing sets up a shop in india and in some event of war, US puts importing Boeing maal under sanctions, would the subsidiary in india be also shut down?? I think this would be a critical point as well. Or we will be blackmailed all the same in the event of war.

+1. Exactly my point.

100% FDI doesn't mean 100% of the manufacturing will be done in India. USA can still sanction India and prevent any US firm like Boeing to stop doing business with India. Further, since India does piecemeal ordering of expensive, high-tech weapons (air refuellers, c-130, c-17, naval helicopters, M777, LGBs etc) firms are unlikely to choose to manufacture in India regardless of the FDI limit.

As I've been stressing earlier, FDI just means who can own a firm in India, it doesn't necessarily bring technology or provide protection from foreign dependence.

Rahul M · Post by **Rahul M** » 31 May 2014 00:09

folk, please go through this before discussing 100% FDI in defence

http://economictimes.indiatimes.com/art ... aign=cppst

The draft note has been circulated for inter-ministerial comments and can be seen as the first and the most significant move by the government to revive manufacturing, where output fell 0.2 per cent in the fiscal year ended on March 31, 2014. The new government is giving top priority to reviving manufacturing and DIPP is working overtime to get new ideas going. The department has proposed three different caps for FDI in defence — 49 per cent, 75 per cent and 100 per cent — which propose to incentivise technology transfer.

It has proposed allowing 49 per cent FDI in case of no technology transfer and 74 per cent where there is a technology transfer. The no-cap policy should be reserved strictly for cases which bring in state-of-the-art technology, it has suggested. However, entry though the automatic route may still be barred on account of security-related concerns, it has said.

srin · Post by **srin** » 31 May 2014 14:19

The biggest concern I have about FDI in technology is that the foreign firms can hire our DRDO scientists or engineers at HAL etc and can deal a really bad blow to indigenous R&D and also learn about our capabilities

ashish raval · Post by **ashish raval** » 31 May 2014 15:04

^^ why is this a bad thing ? It is better to loose them to a foreign company based in India rather than loose them to foreign universities and research institutions forever from where they will never be able to work for India ever again and we will be still buying things from them. With FDI we will be at least let our scientist get feel of what applied research is vs being champions of theoretical concepts. It will also expose them to project management in western style and their work ethics along with discipline and result oriented research. In future we will have set of entrepreneurial scientists which will eventually set up competing companies and in the end will lead to corporations like Boeing, LM, l3, Sikorsky, Northrop, Saic or General dynamics. Competition ultimately leads to best product and not clustering best bunch of people without goals and fear of being out of job if they dont perform.

It will also help LCA scientist to work at least in Boeing India instead of doing structural analysis of ford focus car just because there is no job for him other than DRDO !!

All companies would want to use Indian brains and also cultivate best brains and mind well these corporations do not want to loose best brains because if they loose one they have a competition hiring one and catching up with their technology or even surpassing them.

chackojoseph · Post by **chackojoseph** » 31 May 2014 19:30

HAL reports interest among defence vendors after the government announced possibility of upping the FDI cap.

Defence Vendors show interest as India mulls FDI stake increase : HAL

NRao · Post by **NRao** » 31 May 2014 21:05

srin wrote:The biggest concern I have about FDI in technology is that the foreign firms can hire our DRDO scientists or engineers at HAL etc and can deal a really bad blow to indigenous R&D and also learn about our capabilities

Unless someone steps up such fears will always remain.

Time to produce a Jobs or the like.

chackojoseph · Post by **chackojoseph** » 01 Jun 2014 08:52

^^^^^ Indian companies are already taking bright minds from DRRDO etc. Hope government up's the domestic research capabilities.

kshirin · Post by **kshirin** » 02 Jun 2014 05:14

[quote="Nikhil T"][quote="manjgu"]looks good @Partha...what are the cons? I mean any co that does FDI in defence needs to be sure of continous orders from Mod?? Do we get access to new technology? apart from cessation of kickbacks is there any reason for opposition to 100% in FDI...[/quote]

I am a little skeptical of the move. In my view, FDI in a project relates to the percentage *ownership* that a foreign entity can hold. Essentially it allows a foreign company to take 100% of the profits of their subsidiary in India.

1) It doesn't really save any forex because all the retained profits of the subsidiary will eventually be repatriated to the parent firm abroad.
2) Secondly, it doesn't necessarily mean additional training for indian workers because even with 26% FDI, a subsidiary in India will be employing Indian workers. The method of manufacturing would not really change - e.g a firm assembling fighter planes with 26% will still be using the same low-tech knocked down kits when the firm is completely owned by foreign entities.
3) Foreign governments could still shut down any FDI backed project in India through sanctions that would prevent any tech or material flow to India.

The right way to gain technology and skilled manpower remains the Defence Procurement Policy - which, if used correctly, can be used to pick and choose technologies that we want to gain as offsets.

[quote="partha"]
Example - if a gun company manufactures a gun in which India is interested entirely in India -

1. Saves forex since we don't have to pay $$ for importing the gun.
2. Employment and knowledge building for Indian workers.
3. Boost to local manufacturing and improvement in quality of products.
4. Guns manufactured in Indian factories can be exported to other countries which should earn forex for India.
5. Indian companies could get into global supply chain in defence sector.
6. Tax money for GoI.[/quote][/quote]

I agree with you with an additional suggestion. Instead of 100% FDI in Defence, let us have 100% Defence Offsets, which should be increased to 100%. All countries serious about indigenous defence capabilities have 100% Defence Offsets. Through Offsets, they have grown a dual use and defence production sector. Then Rafale complains about 30% Offsets in India, a ridiculously low amount, but agrees to 100% in Canada, because it could get away with it with our politicians for a consideration. Countries with 100% defence offsets obligations: Argentina, Austria, Brazil, Bulgaria, Canada, Chile, Colombia, Croatia, Denmark, Estonia, Greece, Italy, Malaysia, Netherlands, Norway, Peru, Portugal, Slovenia, Switzerland.

The great thing about defence offsets is that it will allow local manufacturing, transfer of technology, huge employment, multiplier effects AND you retain control in your hands!

IMO people are turning to FDI Defence because the PSU led licenced production model has failed to deliver indigenous products. But
no country has 100% FDI. It is a lazy solution which will perpetuate our dependence and wipe out our young private industry which is slowly gathering pace, I am in touch with some industry leaders - SME and large, who have developed fantastic capabilities. In fact, many business people in developing countries praise the quality of Indian industrial products over Chinese, but China backs its exports with massive loans and investments.

chackojoseph · Post by **chackojoseph** » 02 Jun 2014 06:34

100% of their profits being taken back is not a problem, but it ideally never happens in real world. It allows manufacturing in India and Indians get employment and experience. These companies begin developing vendors in India. They create jobs. They pay taxes. They create business processes like advertisements, CSR etc. You gain some and you loose some (FE) in this case.

Victor · Post by **Victor** » 02 Jun 2014 09:44

Nikhil T wrote:
partha wrote:^
1) Nothing to do with profits. India can buy defence goods locally with INR and save forex $.
Not sure if you got my point. With FDI, GoI can pay in INR but the firm will eventually send all it's retained earnings to its parent company (similar to how Microsoft India sends over its profits to Microsoft US). This means that forex will still flow out of the country.

I guess the question then is: are we OK with MSFT doing business in India even if it takes its profits to US? My guess is yes we are.

SanjayC · Post by **SanjayC** » 02 Jun 2014 09:48

I believe FDI in defence should not exceed 49%. The majority stake should always be with Indians. 49% is enough to ensure substantial technology transfer and turn India into an export hub of defence equipment. 100% FDI should be there only in those cases where substantial employment will be generated or firms which would be making the equipment in India but exporting the entire output.

RoyG · Post by **RoyG** » 02 Jun 2014 11:03

I am sure there will be some safeguards. You worry too much.

Rahul M · Post by **Rahul M** » 02 Jun 2014 12:57

http://indiatoday.intoday.in/story/anti ... 64820.html

Coming soon: Bomb-proof Anti-Terrorist Vehicles that also climb stairs

Yogi_G · Post by **Yogi_G** » 02 Jun 2014 13:08

To my untrained keyboard analyst eyes the last two types are tall boys, an explosion near the base might be sufficient to topple them over.

Aditya_V · Post by **Aditya_V** » 02 Jun 2014 13:25

SanjayC wrote:I believe FDI in defence should not exceed 49%. The majority stake should always be with Indians. 49% is enough to ensure substantial technology transfer and turn India into an export hub of defence equipment. 100% FDI should be there only in those cases where substantial employment will be generated or firms which would be making the equipment in India but exporting the entire output.

100% FDI is far better than largscale imports of Baretta's, M-4's, C-17's and whole lot where we have
0% control and 0 % output increase, 0% jobs in our country.

Why are we so sensitive for FDI butt allow large scale imports.

Manufacturing in your country gives India better leverage.

alexis · Post by **alexis** » 02 Jun 2014 15:49

100% fdi is better than 100% import!!!

100% offset though better than 30% offset, will not help in growth of critical technical know how. Only indigenous development can help.

100% FDI, 100% offset all have limited utility. We need to give 100% support to indigenous R&D.

merlin · Post by **merlin** » 02 Jun 2014 18:04

100% FDI won't be a problem if we treat such companies as eligible to be slotted into the "Make Indian" category?

SanjayC · Post by **SanjayC** » 02 Jun 2014 18:13

^^^ But it is strange to see defence sector being opened to foreign firms before it is opened to Indian firms. Ideally, it should have been the other way round, with a gap of 10 years between the two.

NRao · Post by **NRao** » 02 Jun 2014 18:34

SanjayC wrote:^^^ But it is strange to see defence sector being opened to foreign firms before it is opened to Indian firms. Ideally, it should have been the other way round, with a gap of 10 years between the two.

100% FDI is only for those that are willing to bring in the very, very best, top notch stuff. Which India firm has such stuff to fill those kinds of shoes?

The issue will hinge on what the Indian services *really* want. They will have to clearly define in which areas they want what quality. I think that will define in which areas, what FDI is needed.

ashish raval · Post by **ashish raval** » 02 Jun 2014 21:37

There is a fineprint in terms of 100% FDI.

Victor · Post by **Victor** » 02 Jun 2014 22:07

SanjayC wrote:^^^ But it is strange to see defence sector being opened to foreign firms before it is opened to Indian firms. Ideally, it should have been the other way round, with a gap of 10 years between the two.

This actually might mean that the defense sector is being opened up to Indian private firms big time by giving them a jump start into weapons manufacture with full foreign collaboration. It is very unlikely that a firm like Boeing or IAI will set up its own shop in India instead of entering into a joint venture with a local powerhouse like Tata or Mahindra. Only a very tiny and select group will qualify for 100% FDI and most will fall under 49% -75%.

But this extreme step may also show how desperate our situation really is, something that UPA2 either brushed under the carpet or--more likely--deliberately ignored.

ramana · Post by **ramana** » 03 Jun 2014 23:16

A Sharma wrote:Air Chief given demo of DRDO's new projects

Fuzes have been a big issue for IAF. They discontinued the OFB mfg. They are mainly made by Birla group of comapnies. However latest technology is needed to be incorporated for efficacy.
The flux compression generator is the e-bum.

Would like to know more of the high calibre bomb.

Wonder if its like the next gen HSLD.
Also the deep earth penetrator is important goal for IAF.
if it has incediary capability then its even better.
Straight to jahannum.

Nikhil T · Post by **Nikhil T** » 04 Jun 2014 10:25

Ajai Shukla on FDI debate.

FDI battle: MoD vs defence industry

The question at the heart of the FDI dilemma is: Should the government regard the defence industry as just another avenue for creating manufacturing jobs? Or should the government nurture a defence industry as a national strategic objective?

After the UPA tried unsuccessfully since 2010 to raise the 26 per cent cap on foreign direct investment in defence production, a move that indigenous defence companies and former Defence Minister AK Antony resisted staunchly, the new government has initiated a fresh attempt along the same lines.

In 2010, the department of industrial policy and promotion --- at the behest of Commerce Minister Anand Sharma --- had pushed to raise the FDI cap to 74 per cent. This time, under Nirmala Sitharaman, the DIPP has mooted three separate options in a cabinet note --- proposing 49%, 74% or 100% FDI.

Commerce ministry sources say that, given the new government’s focus on promoting manufacture to generate employment, and with a new defence minister who is less protective of indigenous defence industry, the international defence industry’s longstanding demand to lower entry barriers into India might well be granted.

Want to read more defence stories? Click HERE

Even so, there will be stout resistance from the department of defence production, and from an indigenous defence industry that worries that the unfettered entry of international vendors would wipe out fledgling Indian defence companies.

“Please name one country that allows foreign defence companies unfettered access to the market. America theoretically allows 100 per cent FDI, but its laws mandate that every single employee must be a US national and the company must operate exclusively on US soil. India hasn’t the means to enforce such rules, and foreign companies will take full advantage,” says the CEO of a major Indian private sector defence company.

So watertight are the US laws that the Tel Aviv based president & CEO of, say Israeli company Elbit is required to take Washington’s permission before he can visit his own company facilities that operate in the US.

Furthermore, say defence industry CEOs, there is no evidence that increasing FDI provides any benefit to an industry. They cite the example of telecom, where permitting 100 per cent FDI has failed to galvanize the emergence of telecom manufacture. To this day, there is no significant Indian manufacturer of telecom equipment.

In 2001, the DIPP permitted private sector participation in the defence industry, vide Press Note No 4 of 2001, which notified several measures for liberalising the FDI regime of that period. Paragraph (iii) of that notification said, “The defence industry sector is opened up to 100% for Indian private sector participation with FDI permissible up to 26%, both subject to licensing.”

A 26 per cent holding allows the foreign partner only a veto over major policy decisions. Were the FDI cap raised to 49 per cent, the foreign company would still not control the company or the board, but would be able to repatriate a higher share of the profit. A significant FDI limit rise would be if foreign companies were permitted 51 per cent or above. And were 100 per cent FDI permitted, foreign entities would be able to buy out Indian companies in full.

Defence ministry officials and major Indian defence industries want to retain the 26 per cent cap, since it allows the Indian partner to demand technology infusion from the foreign original equipment manufacturer.

Indian industry sources point out that, while India proposes to raise FDI caps, Germany has recently reduced its defence FDI cap from 26 per cent to 25 per cent in order to further curtail the rights and powers of the foreign partner.

Citing an agreement signed this week between Samsung, and Larsen & Toubro, officials say the Korean defence major would have probably chosen to go it alone, had 100 per cent FDI been allowed.

“Since L&T is the controlling partner, it will ensure that Samsung brings in the technology, which will be translated by low-cost Indian workers into cheaply priced defence equipment. That is the model to follow,” says the official who requested not to be named.

Foreign OEMs deny this, arguing that they would be ready to bring in high-end technology, and to source Indian-built defence equipment for their global supply chains, if only they had more control over the joint venture company.

Indian CEOs counter this with the question: Can you name one foreign OEM that has willingly transferred technology to India? They point out that 72 multinational corporations employ two lakh Indian engineers in research and development centres in places like Bangalore, Hyderabad and Pune. Yet none of the technology that they have developed is available to India.

The question at the heart of the FDI dilemma is: Should the government regard the defence industry as just another avenue for creating manufacturing jobs? Or should the government nurture a defence industry as a national strategic objective? A government focused on job creation might not be inclined to treat defence as a special sphere

vic · Post by **vic** » 06 Jun 2014 08:50

As per Indian law, you can completely control a company with 25.1% shares. Anybody wants to incorporate such a company contact me

muraliravi · Post by **muraliravi** » 08 Jun 2014 00:01

This whole rona-dhona from some called domestic indian defence manufacturers is a big joke. Where were these jokers all these years, what have they manufactured worth even mentioning. Same with telecom industry, is fdi stopping them from making cell phones. If they cannot even make something as basic as a phone, they why cry. Indian companies just dont have the stomach to invest in r&d. They love to take the profits home and pay themselves and their shareholders, but they think 10000 times even before reinvesting 1% of the profits back in r&d. Such morons deserve to get wiped out.

Karan M · Post by **Karan M** » 08 Jun 2014 01:19

Muraliravi, your comments reflect a time that is gone by. Two significant groups - PSUs and SMEs - both invest significantly in R&D and even larger private groups would spend on defence if they saw a level playing field.

When it comes to SMEs. They invest upto 25% as a function of their sales which dwarfs that of DPSUs like BEL which are now rising to 8%. The former (% of sales) is an industry std metric and shows an aggressive approach on behalf of the SMEs, BEL etal's spend is more standard, and reflective of the changing times and contributes heft given overall turnover. For instance, BEL is now putting up a large chunk of the funds for a very expensive EW program intended for the IAF. SMEs will design and make parts of the overall platform.

Larger private firms are also committing heavily to defence but are simply waiting for a level playing field. Their caution is not unwarranted. Bharat Forge has invested in getting a gun design to India and even startup capex - no orders yet, despite a gap in IA capabilities - a prudent Govt might have ordered at least a few hundred from Bharat Forge.

Similarly, L&T invested significantly in submarine capabilities via the Arihant program - no benefit yet on the conventional side or orders for even its other shipyard.

SMEs have invested heavily because they are supported by DRDO (tacitly via design support and orders for prototyping) and now acceptance from DPSUs which take their production and incorporate it into the series production items integrated at the DPSUs.
For instance all Brahmos fitments on Naval ships have FCS from a Chennai based SME.

You are right that in Indian industry (overall) still spends far too little on R&D, but they are waking up. Some of the better firms with core heavy engineering capabilities (Tata, L&T) also have divisions/businesses that work on complex projects for the DRDO and others. The Revathi radar on the IN minesweepers has a stabilization (essential for Naval radars and a first for us) built by L&T, whereas the Samyukta program for the Army saw significant software work from Tata's Strategic Electronics Division. They are now a significant player for many IA/IAF/IN programs and many successful programs could not have worked out without them(http://www.tatapowersed.com/)

In short, many products and services from Indian firms - most go under the radar and if the GOI were to provide these guys a level playing field with DPSUs - we'd rapidly ramp up in capabilities. DRDO for instance has long wanted the ability to choose its partner from the best private and public firms but MOD policy forces it to focus on DPSUs alone.

The depth of our requirements is such that the extra capabilities will be quickly absorbed.

shiv · Post by **shiv** » 08 Jun 2014 08:17

Let me post an opinion using a rhetorical question:

India started manufacturing the MiG 21 in the 1960s. But after 1990, when the Soviet Union collapsed, India faced issues wrt spares for the MiG 21. Why?

The reason was that even the MiG bureau does not make every single component. Some small, cheap and vital components like pins, rings, washers, pipes, reflectors, holders, housings, covers, special wiring etc needed in small numbers are often bought from local small scale manufacturers who supply those parts in bulk. So a single system like an aircraft, ship, sub or tank that is "licence manufactured" will still have to outsource thousands of parts to local industry in the country of origin because it does not make financial sense to set up an assembly line for every one of tens of thousands of items at HAL, Avadi or Mazgaon simply for some small parts that are imported cheap and in bulk from pre-existing factories abroad who supply a wide range of industries in their own country.

Selected manufacturers of such items in foreign countries can be allowed 100% FDI if it makes financial sense for them to rake in better profits while setting up a plant in India.

Karan M · Post by **Karan M** » 08 Jun 2014 10:51

Shivji we have been trying that but with no luck. It was a mix of vendor disinterest (our requirements limited in some cases) plus political reasons (Russia didnt want to cede cobtrol). Which is why we continue with this.

http://www.bharat-rakshak.com/IAF/Today ... 11BRD.html

Other approach has been to use SMEs for low volume items since they have lower overheads and take up these jobs.

Another alternative (sort of) has been this

http://m.in.rbth.com/economics/2014/04/ ... 34717.html

Indranil · Post by **Indranil** » 08 Jun 2014 11:08

muraliravi wrote:This whole rona-dhona from some called domestic indian defence manufacturers is a big joke. Where were these jokers all these years, what have they manufactured worth even mentioning. Same with telecom industry, is fdi stopping them from making cell phones. If they cannot even make something as basic as a phone, they why cry. Indian companies just dont have the stomach to invest in r&d. They love to take the profits home and pay themselves and their shareholders, but they think 10000 times even before reinvesting 1% of the profits back in r&d. Such morons deserve to get wiped out.

If only you understood what it takes to make a world class cell phone, you wouldn't have made this ridiculous comment.

And last I checked the foreign private companies did exactly the same: They love to take the profits home and pay themselves and their shareholders, but they think 10000 times even before reinvesting 1% of the profits back in r&d.

vic · Post by **vic** » 08 Jun 2014 11:18

Bharat Forge has invested heavily on 155mm howitzer manufacture, what did they achieve?

L&T invested heavily on manufacture of Submarines, ships, turbines but are also suffering.

Foreign Companies have rarely if ever even bothered to fulfill 30% offsets, there is no way they will ever transfer any technology.

Auto Ancillary industry was built up by Maruti when it was "Govt Company" but now they are handing back manufacturing to Suzuki again.

member_23694 · Post by **member_23694** » 08 Jun 2014 11:23

indranilroy wrote:If only you understood what it takes to make a world class cell phone, you wouldn't have made this ridiculous comment.

Sir , you remove the chipset and OS, then the rest of the things should not be something very time consuming or technologically challenging.
Most of the manufacturers of cell phone are using off the shelf chipset and android OS to make there OS and flooding the world market.

Indranil · Post by **Indranil** » 08 Jun 2014 12:27

I know a little about this field as I have worked in it. It is not that easy. If your board design is complete today, by the time your board arrives, drivers perfected, OS integrated, applications tested, bugs fixed, performance enhanced for smooth user experience, it will be at least 2 years from now. Then you go to market. Unfortunately you have to compete with the Nokias and Samsungs of the world, who have already amortized their development cost on basic developments already. They are behemoths who can brow-beat their suppliers to keep prices low or loose enormous volumes (speak to the Microns/ARMs/TIs/Qualcomms of the world). And in 2 years' time your models are out of date.

You have to start with a gold mine's worth of money. And how the hell do you attract talent? It just makes much more financial sense to create companies which develop software or hardware design for the behemoths. And this is what you see happening in India. I have bought popular phones and portable devices which have software I developed when I was in India.

Phones and portable media players is an extremely well established market with extremely large players with long supply chains. Unless you have a killer idea (Apple with Ipod, and then NAND-flash utilizing Iphone/Ipod/Iphones), you won't be able to get a footing.

shiv · Post by **shiv** » 08 Jun 2014 12:37

vic wrote: Foreign Companies have rarely if ever even bothered to fulfill 30% offsets, there is no way they will ever transfer any technology.

This is how I see it

If an aircraft has tens of thousands of parts, many of which are not high tech but simply costly to set up a whole manufacturing unit for domestic consumption, it would be useful to find a manufacturer from some part of the world to set up shop in India, use Indian labour to reduce his costs and export 90% of his stuff and take 90% of the profits. Even tech transfer may not be needed. Just a small percentage of the manufactured parts and a factory to employ 50 Indians for less money than he needs to employ 5 people by the rules of his country. This might not be easy to do but the investment opportunity needs to be made attractive to an investor. A small firm making - say specialized synthetic rubber rings that is losing business in the west might be willing to ship the factory here and become competitive on the world market.

I am just highlighting a fairy tale like situation but it might be possible

JE Menon · Post by **JE Menon** » 08 Jun 2014 12:45

Generally speaking...

Is anybody actually expecting cutting edge technology transfer?

Or to put it more precisely, is anyone expecting the transfer of technology that is not already significantly surpassed by the country/company doing the transferring?

If the answer is yes, why is there that expectation?