Defense NewsThe deals included the purchase of four helicopters for survey vessels and upgrading the nation’s electronic warfare system, a defence ministry spokesman told reporters.
“The defense acquisition council has also cleared a proposal relating to purchase of a platform system for transporting military equipment,” he said.
The proposals cleared were worth 44.4 billion rupees ($696 million), the ministry official added.
Russian Defence Minister to visit India next year
December 25, 2014 RIA Novosti
Russia and India are the largest partners in the field of military-technical cooperation – with over 70% of weapons and military equipment used by the Indian Army, Air Force, and Navy made in Russia or the former Soviet Union.
Russian Defence Minister Sergey Shoigu will pay an official visit to India in 2015, Deputy Defence Minister Anatoly Antonov announced this past Wednesday.
“The plans of the Russian Defence Minister, General Sergey Shoigu for next year – include an official visit to New Delhi,” he told Russia Today during a press briefing.
Speaking about the work already completed, Mr. Antonov said that “a mechanism was recently created for top-level Russia-India meetings, and this year, they had already carried out exercises in all three branches of the Indian Armed Forces.”
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India remains Russia’s largest partner in the military-technical cooperation sphere. “Along with the delivery of finished weapons, we continue to assist the country in the development of its own military-industrial complex,” said Mr. Antonov.
Russia and India are the largest partners in the field of military-technical cooperation (MTC) – with over 70% of weapons and military equipment used by the Indian Army, Air Force, and Navy made in Russia or the former Soviet Union.
The Federal Service for Military-Technical Cooperation (FSMTC) estimates the volume of weapons and military equipment supplied to India in 2013 at $4.78 billion.
Along with exporting military equipment, Russia also works jointly with India on the development of new weapons. The Russian-Indian joint venture BrahMos Aerospace has created the supersonic BrahMos Cruise Missile, which the Armed forces of India started buying in 2005. In addition, Russia and India have agreed to jointly develop a fifth generation fighter aircraft (a promising multifunctional jet fighter) and a military transport airplane.
First published in Russian by RIA Novosti.
For the first time since the private sector was allowed into defence production in 2001, a defence minister has met private sector defence CEOs face-to-face to discuss the role they could play in boosting defence production in India.
On Saturday, at the Taj Vivanta Hotel in Goa, Defence Minister Manohar Parrikar - alone, except for a personal secretary - met for three hours captains of private defence industry. Not one of his ministry's five secretary-level officers was in attendance. Nor was anyone from the public sector invited.
Major issues discussed included the 'Make' category of procurement; ways of harnessing micro, small and medium enterprises (SMEs); and boosting defence exports.
Industrialists who flew down to Goa for the meeting included Baba Kalyani from the Kalyani Group, and the defence vertical chiefs of Bharat Forge, Larsen & Toubro, Tata Advanced Systems, Godrej & Boyce, Ashok Leyland, Punj Lloyd, Alpha Design Technologies, Zen Technologies, Data Patterns and Pipavav Shipyard. Local Goa group, Dempo, also sent a representative.
Business Standard was briefed on the meeting by three CEOs who attended it. All of them agree that after 13 years of operating from the sidelines under three successive defence ministers - George Fernandes of the National Democratic Alliance; and Pranab Mukherjee and A K Antony of the United Progressive Alliance -Parrikar's readiness to interact face-to-face is an encouraging indicator of change.
"We spoke frankly and Parrikar listened carefully, interjected frequently and took notes during the meeting. For the first time in a decade, we (private sector defence companies) believe we will be allowed to use our capabilities in the defence of India," says H S Shankar, who attended the meeting as chief of defence electronics company Alpha Design Technologies.
A central issue discussed was the "Make" procedure, which was devised to allow private companies a larger role in designing and building defence equipment, with the ministry of defence (MoD) reimbursing 80 per cent of the development cost. However, since the "Make" procedure was instituted in 2008, not a single project in this category has been successfully floated by the MoD.
A new "Make" procedure has been in the pipeline for years, but there is little consensus on its form, even among the private industry. Parrikar indicated the new procedure would be finalised by end-January.
Industry representatives suggested that no programmes be tendered under the "Make" procedure until there was clarity on its final form. They cautioned it was very different from the prime minister's (PM's) "Make in India" initiative, which is about boosting manufacture. The "Make" procedure, in contrast, is about developing design capability and intellectual property (IP) in the country.
Parrikar requested CII for a note that explained IP issues, including the critical issue of who should own the IP generated through the "Make" procedure - the company that generated it, or the MoD which paid for it.
Zen Technologies proposed that the MoD should not accept low indigenous content of 30-50 per cent, which the current Defence Procurement Procedure mandates in certain categories of procurement. Instead, 90 per cent indigenisation should be aimed at. Parrikar requested for a paper on a new procurement category, called "Pure Indian", which would demand near-total indigenisation.
Parrikar proposed an assured R&D work share for MSMEs under the new "Make" procedure. He mooted a national registry of defence MSMEs, based on capability criteria. Once registered, an MSME should be supported with exemptions from burdens like earnest money for defence tendering.
Also discussed was the relative success of Indian Space Research Organisation (ISRO) compared to the Defence R&D Organisation (DRDO). Many ascribed ISRO's success to the autonomy that came with being directly under the PM. The defence minister revealed that he had ordered greater financial powers to the DRDO's departmental heads. Each of these director-generals, who oversee specific technology areas like aerospace, missiles and underwater systems, will now be empowered to spend up to Rs 150 crore. The onus of delivering usable defence equipment would be squarely on their shoulders.
This BS about ISRO >> DRDO which gets repeated ad nauseum needs to be challenged.Kakkaji wrote:Parrikar engages pvt firms to boost indigenous arms
Also discussed was the relative success of Indian Space Research Organisation (ISRO) compared to the Defence R&D Organisation (DRDO). Many ascribed ISRO's success to the autonomy that came with being directly under the PM.
AHMEDABAD: Defence minister ManoharParrikar said on Sunday that his ministry would come up with defence procurement policy (DPP), preferring purchase of equipment made in India, within three months.
Speaking at a seminar 'Gujarat: Preferred Hub for Defence Production' during the Vibrant Gujarat summit, the minister said India cannot afford spending $20 billion on defence procurement, and for this, promoting local manufacturing is must and the country will promote private players in this field. "The government hopes to come up with a document in two or three months on a suitable model for defence manufacturing and procurement...We have listed certain items that are not going to be imported from 2016. These will increase later on. But we are coming up with the document in February-March on modified DPP."
Responding to Gujarat's keenness on having defence equipment manufacturing facilities, the defence minister said that Gujarat has got an "industrial base and a private line also", thus for those intending to invest in defence equipment in Gujarat, it would have double advantage. He said that this is the way to realize Prime Minister Narendra Modi's 'Make in India' dream.
Two companies pledged investment for manufacturing defence equipment in Gujarat, and intend to base this industry in North Gujarat districts of Banaskantha, Sabarkantha and the border district of Kutch apart from the coastal region. Bharat Forge said it would upgrade facilities for armoured fighting vehicles, defence electronics manufacturing and radar manufacturing facilities.
Defence experts also lauded the gesture of inviting private players to manufacture defence equipments in India. Chairman of Saab India Lars Olaf Lindgren said, "Not only India will benefit with this, foreign companies with expertise in different fields will also gain by partnering with India and Indian companies to manufacture in this country."
Sanjay Garg, the defence ministry's joint secretary, said that in the next 7-8 years, the capital budget for modernization of armed forces is going to be $130 billion. This is the perfect condition for any company to come to India.
http://www.telegraphindia.com/1150113/j ... LSxHMlfJdgRs 13000cr shaved off military weapons outlays
SUJAN DUTTA
New Delhi, Jan. 12: The government has ordered a cut of Rs 13,000 crore in the budgets of the army, navy and the air force meant for buying major weapons and systems in a military modernisation drive that the Narendra Modi regime has promised.
A source in the defence ministry said today that "we are re-appropriating Rs 13,000 crore from the armed forces' capital outlays towards revenue expenditure".
This effectively means running the military at its current strength itself is proving to be so expensive that the government is left with little for the purchase of new guns, warships and fighter planes to replace outdated weapons.
Each of the three services will have between Rs 4,000 and Rs 4,500 crore shaved off their capital outlays.
The capital outlay in the maiden budget of the Modi government - which finance minister Arun Jaitley presented in July last year when he was also defence minister - was Rs 94,587 crore in the total defence allocation of Rs 2,29,000 crore. About 80 per cent of the capital outlays go into committed liabilities - contracts already executed for purchases.
The cut effectively shelves a navy effort to order three additional frigates of the Shivalik class (to be made at Mazagon Docks, Mumbai), an army-air force joint effort to acquire attack helicopters (the Apache-64D, made by the US-based Boeing) and an army plan to buy new small arms.
The slash also puts the brakes on a tottering IAF programme to buy medium multi-role combat aircraft (Rafale, by France's Dassault Aviation) within this financial year.
A parliamentary standing committee on defence, chaired by BJP MP and retired Major General B.C. Khanduri, estimated in a report earlier this month that the IAF's plan to buy the Rafale alone will require Rs 15,000 crore in the first year.
The programme to buy the attack helicopters may yet go through, with the US President Barack Obama set to be the chief guest at the Republic Day parade on January 26.
Part of the reason to re-allocate funds meant for capital purchases under the revenue head is a government decision to implement the demand of military veterans for "one rank one pension" (OROP).
Defence minister Manohar Parrikar, who took over from Jaitley, said in an interview to a news channel this evening that he had estimated the outgo for OROP at Rs 6,000 crore to Rs 8,000 crore. But the controller-general of defence accounts puts it at Rs 14,200 crore.
In the interview, Parrikar blamed A.K. Antony, the defence minister in the UPA II government, for the backlog in acquisitions that he was now trying to overcome.
Last week, Parrikar had said a revamped defence procurement policy for faster acquisition of weapons would be implemented by March this year.
Frigates, Rafale orders were unlikely within remaining 2.5 months of this FY but Apache order delay is a surprise given Obama's visit.The cut effectively shelves a navy effort to order three additional frigates of the Shivalik class (to be made at Mazagon Docks, Mumbai), an army-air force joint effort to acquire attack helicopters (the Apache-64D, made by the US-based Boeing) and an army plan to buy new small arms.
The slash also puts the brakes on a tottering IAF programme to buy medium multi-role combat aircraft (Rafale, by France's Dassault Aviation) within this financial year.
May be it's going to be Rudra+LCH combo.JTull wrote:Frigates, Rafale orders were unlikely within remaining 2.5 months of this FY but Apache order delay is a surprise given Obama's visit.
Hyderabad: Indiscriminate blacklisting of companies supplying defence products over "small issues" may create supply-chain problems for the armed forces, Defence Minister Manohar Parrikar on Saturday said but insisted that "serious crimes" should not go unpunished.
"You cut down your options by indiscriminate blacklisting. I am not saying blacklisting should not be there. If one has committed a serious crime, it has to be punished severely. But just understand a scenario where because of some small issue we blacklist a series of companies," he said.
Parrikar was addressing a conclave organised by Forum for Integrated National Security.
The Defence Minister defended government's decision to partially lift the ban on Tatra trucks, saying it had affected supply of some important equipment.
"I found more than 10 per cent of the trucks getting stopped because of spares. A lot of systems which we need to induct got stuck up because the trucks were not available.
I think the need of the defence forces is the first priority. Of course, we have not fully withdrawn the ban. We have only said that it can be used only where it is absolutely essential," the minister said.
Last December, Parrikar had said the government was open to reviewing all cases of blacklisted defence firms on merit and partially lifted a ban on Tatra trucks.
Parrikar said India has the capability to export defence and aerospace products but stressed on the need to remove bottlenecks in defence procurement.
"There are bottlenecks. I found that bottlenecks are not because of any logic or lack of understanding or lack of policy. But over the last may be around 8 years we have tied ourselves in a knot.
"We have created a web of procedural bottlenecks so much so that files initiated in 2006 or 2007 are coming to me now," he said, in a veiled attack on the previous UPA government.
Parrikar assured the industry that his ministry would come out with new defence procurement procedures to address their concerns.
Defence Min @manoharparrikar on procurement for armed forces: 'Files initiated in 2006-07 are coming to me now'.
The purchase of 75 trainer aircraft from Swiss company Pilatus was fundamentally flawed, a key defence ministry official has discovered.
In a detailed note that the official has requested be "brought to the notice of RM (Raksha Mantri, or Defence Minister Manohar Parrikar)", he shows that additional money being demanded by Pilatus, over and above the contracted price of Swiss Franc (CHF) 557 million (Re 3,870 crore), makes the PC-7 Mark II trainer far more expensive than was assessed while awarding Pilatus the contract. Business Standard has reviewed the six-page note. This suggests that Pilatus was not the lowest bidder (L1) and was awarded the contract incorrectly
Contacted for comments, Pilatus cited "confidentiality agreements with both the GOI [government of India] and HAL." The MoD has not responded to an emailed request for comments.
The group, which has interests from telecom to infrastructure and financial services to power, has set up Reliance Defence and Aerospace (RDA) as a wholly owned unit of Reliance Infrastructure Ltd, and named Rajesh Dhingra, a former managing director of Lockheed Martin India, as its head.
To start with, RDA will bid for contracts to make helicopters for the Armed Forces, the Reliance Group said
That's very cheap compared to what they provide. The fog of war is expensive. Putting your people and planes without getting first look is expensive. This is cheaper than that. 500 million is also the reason they will always have an escort with long legs when they fly. 4-6 at the minimum in war time. IAF better get their strategic forces vision thingy going and get abbout 40-50 planes as escorts to your Refuelers/Awacs etc when passing through war zone.Karan M wrote:Cybaru, each of those birds is $400-500 Mn onlee..
About 4-5 Rafales each.
I dont disagree, just saying their high cost and on IL airframe is making the IAF conserve-ative.Cybaru wrote:That's very cheap compared to what they provide. The fog of war is expensive. Putting your people and planes without getting first look is expensive. This is cheaper than that. 500 million is also the reason they will always have an escort with long legs when they fly. 4-6 at the minimum in war time. IAF better get their strategic forces vision thingy going and get abbout 40-50 planes as escorts to your Refuelers/Awacs etc when passing through war zone.Karan M wrote:Cybaru, each of those birds is $400-500 Mn onlee..
About 4-5 Rafales each.
NEW DELHI: A crucial meeting of the Defence Acquisition Council will be held this Saturday during which issues of Avro replacement and procurement of additional Pilatus basic trainer aircraft from Switzerland among others are likely to be taken up.
Out of the total 29 proposals which was considered by the committee, 22 were from defence manufacturing sector.
"All the clearances were given to them including security, explosives and from the Department of Defence production. Out of 29, 26 have been cleared by the licensing committee meeting," a senior official in the DIPP told PTI.
While Tata MotorsBSE 0.41 % proposed overhaul of armoured fighting vehicles and infantry main combat vehicles, Mahindra & MahindrMahindra had sought permission for manufacturing of torpedo launchers and decoy launchers.
Similarly, Pipavav DefenceBSE 3.92 % and Offshore Engineering has sought approval for manufacturing, assembling and testing of calibres of ammunitions ranging from 20 mm to 203 mm for the armed forces.
The other major players who have approached the committee with their proposals include Punj LloydBSE 1.77 %, Samtel Thales Avionics and Max Aerospace & Aviation.
Competitive trials!NEW DELHI: The Defence Ministry has shortlisted a consortium of Tata Power-Strategic Electronics Division (SED) and Larsen & Toubro for the battlefield management project, the order value of which in the production phase may be as much as Rs 50,000 crore.
As per the requirement of the procurement procedure, both the selected parties will -- after finalisation of the system specification -- be tasked with development of "prototype systems" for which purpose 80 per cent cost will be funded by the government, L&T said.
[...]
"L&T formed a consortium lead by Tata Power-strategic electronics division... After an extensive evaluation of the different 'expressions of interest'...two parties have been shortlisted as development agencies-one being the Tata Power-SED + L&T Consortium," L&T said in a filing to the BSE.
At the end of this development phase, which may spread over more than two to three years, the two independently developed prototype systems will be subjected to necessary evaluation and tests by the Defence Ministry, it said.
On Thursday, after another round of the DTTI co-chaired by defence production secretary G Mohan Kumar and US undersecretary of defence Frank Kendall, US officials said if India did not sign the pacts, it would become "an issue" at some point in the future as the two countries worked on high-end defence technology.
Though Kendall stressed the pacts were not directly linked to DTTI, his colleague deputy assistant secretary (defence trade controls) Kenneth Handelman said they would become necessary in the long run. "DTTI has progressed in the absence of the foundational agreements...but at some point the foundational agreements are going to be an issue whether it's the LSA or CISMOA," he said.
HTT-40 will get firm support but HAL will be on notice. Good on both count but Grad??Government today cleared the purchase of 38 additional Pilatus basic trainer aircraft for the IAF from Switzerland and nominated state-run Goa Shipyard to manufacture 12 mine counter-measure vessels (MCMVs) for Rs 32,000 crore.
It also decided that future requirements of the trainer aircraft would be met by state-run HAL which would be given adequate orders for its HTT-40 plane to be commercially viable.
The Defence Acquisition Council, which met today, also okayed the purchase of a C-130J Super Hercules aircraft for the Indian Air Force to replace the one which had crashed in March last year killing five service personnel, including four officers, near Gwalior.
Chaired by Defence Minister Manohar Parrikar, DAC decided to seek more information on the proposal to purchase at least 15 US-2i amphibious aircraft from Japan.
No decision was taken on the bid by Airbus-TATA consortium to replace the ageing Avro transport aircraft fleet of the Indian Air Force.
......
"The remaining requirement will be met by the HAL which will supply its indigenously developed HTT-40. Adequate orders will be given to the HAL to make the development commercially viable," Defence sources said.
They said that the progress of this project will be monitored by a committee and it will periodically submit its report to the DAC.
.........
The Council also approved the purchase of 21 Low Level Light Weight Radars (LLLWR) for the IAF besides sanctioning additional multi-barrel Russian Grad rockets for the Army.
It also approved setting up of armament repair facilities for the Indian Navy. These will be set up in Mumbai and Vishakapatnam at a cost of about Rs 450 crore each, sources said.
Why additional Grads for the Army? Why not Pinaka? What is the issue ??Under the Rs 94,588 crore capital expenditures that are likely to follow, the Army will be spending approximately Rs 26,300 crore on buying equipment. The Air Force will spend about Rs 33,000 crore while the Navy will spend about Rs 24,000 crore. While the ministry underspent the money it had received the provision for 2014-15 by about 12,622 crore, the capital allocation for the next year will decide how the modernisation of the defence forces, which are in dire need of modern equipment, shapes up.
Among the three services, the air force has been allocated the lion's share of the capital Budget - Rs 31,481 crore, compared to the navy's Rs 23,910 crore and the army's Rs 21,574 crore. Even so, the air force allocation remains stagnant, indicating the government has not budgeted for buying the Rafale medium fighter, which would have required about Rs 15,000 crore as the signing amount.
Interestingly, the allocation for defence pensions has risen by Rs 4,500 crore to Rs 54,500 crore for the coming year. It remains unclear how the government will implement the One rank, One pension (OROP) scheme that the defence ministry sanctioned last week. OROP has been variously estimated to require Rs 8-12,000 crore to implement.
Besides the Rs 6,630 crore that will be returned unspent from the capital head, the defence ministry transferred another Rs 6,000 crore from the capital to the revenue head.
This record underspend on equipment modernisation comes after Defence Minister Manohar Parrikar twice claimed before the media that sticking to procurement targets was “his specialty”.
India announced a core defence budget of INR2.5 trillion (USD41.1 billion) for fiscal year 2015-16 on 28 February.
The figure is a 7.7%, or INR1.8 billion, increase over the initial 2014-15 budget announced by the previous Congress Party-led government in February 2014, or a 10.9% increase over the revised budget announced by the new government of Prime Minister Narendra Modi in July 2014.
Total defence spending, including military pensions expenses, will rise to INR3 trillion.
The first full budget presented by Modi's government since it took power in May 2014 saw core defence spending decline to 1.75% as a percentage of GDP for the second consecutive year.
Although total defence spending will rise by around 5.5% in real terms compared with the revised budget for 2014-15, senior service officers have argued that the increase will be rendered "ineffectual" by rising inflation and the decline in the value of the rupee against the US dollar, leaving insufficient cash for long-delayed military modernisation plans.
The officials told IHS Jane's that this year's defence budget was among the lowest against GDP since 1962, when India lost a four-week war against China over a border dispute that remains unresolved.
The budget's revenue expenditure of INR1.5 trillion earmarked for salaries, pension payments, and operational expenses outstrips the INR945.9 billion capital or modernisation allocation.
Of this amount, the Indian Army gets INR215.7 billion, the Indian Air Force (IAF) INR314.8 billion, and the Indian Navy INR239.1 billion.
The IAF's allotment is INR3.4 billion less than the initial budget for FY 2014/15, even though it is expected to acquire 22 Boeing AH-64E Apache attack helicopters, 15 Boeing CH-47F Chinook heavy-lift helicopters, and six Airbus Military A330 tankers.
It is also in advanced negotiations to procure 126 Dassault Rafale fighters and will need to pay a hefty 15% advance if the deal is signed in FY 2015/16, as the IAF anticipates.