'Make in India' Single engined fighter

Cybaru · Post by **Cybaru** » 23 Oct 2016 10:26

sudeepj wrote:
What tech this new fighter line is bringing that LCA doesn't have? Radar? Engine? composites? alloys?
It is integrating India into a global military industrial complex. At a very high level, Indian problems lie in manufacturing, as much as technology. This will go some way towards solving the manufacturing problem, just as maruti-suzuki kicked the Indian car sector into some shape. The new line will open up Indian defense manufacturing to a similar type of competition.

Now, flip the question. What will manufacturing 240 LCAs vs 120 get India? Not strategic independence, because the prime mover, the prime sensor and part of the prime weapon system are imported.Neither any new technological know-how in these domains. Its simply a system integration effort, which has its own benefits, but lets not make it more than it is. Capability wise, its a wash at best. F16 or Gripen is a far more mature platform than the LCA. From an economy point of view, its a wash again, because the other fighter will also be manufactured in India! From a manufacturing point of view, will a further manufacture of 100 odd fighters after the initial 120 be a production exercise or a learning exercise too? I feel, itll simply be a production exercise.

Maruti-suzuki is perhaps a terrible example here. It's not like making consumer goods you know. IAF has only so many aircraft it can buy. Any extra aircraft we make helps reduce our own costs and goes towards the learning curve and not to forget that any contract we give to assemble takes away flexibility in design/customization addition of sensitive new weapons, a loss of innovative capability, and leads to higher overhead price per piece cost of our own designed and manufactured units.

So we need to be aiming to be making the 700 out of 700 aircraft for IAF, not just 120. Sure, we know that we are not there yet, but we will never be unless we don't start somewhere and that is what the other posters are perhaps trying to point out.

Its not like the cpg/software industry, there is no outside ever growing captive market waiting to be filled up. A line that we get, will be to produce a product that we need, and the contract will only allow us to fulfill our needs. It will come with all sorts of agreements against sale and management of other countries planes. Unless we are willing to get dictated by the state department whose order we can and cannot fulfil, whose plane we can and cannot service, its pointless. This whole thing is a marketing scam that we will get to do deep upgrades for other countries etc. No one is coming here with their specialized planes and allowing us to poke around with it, how will the state department mandate the special code for each radar type jammers etc and how much to degrade it by to us for uae/saudis/turks/saf etc? They won't because all we will be doing is even less than what we do on the LCA. We will make the body and stuff in the parts from all other vendors making us just assemblers. We already do that with the russians. Why do we need a new contract for that.

And yes if we make 240 LCA, we might have bought ourselves enough time to have perfected an asea radar and put it on the 120 out of 240 orders. We can now dream and design another 10 new weapon types that we may not have to buy, because we own the radar and could integrate incremental versions of Astra 2/3/4 in another ten years along with different versions of short to long range A2G missiles. We can even power the kaveri with an M88 core and make most of the engine and continue to aim at perfection. Lets not let perfection be the enemy of good enough, which is what we have always held against ourselves in any indigenous effort.

IMO creating a defence aviation industry isn't going to be like creating a car industry, its not about mass production, its not very much about bringing cost down(not primary goal), it really is about creating innovative products that are better than what your enemy can dream about every single day. That can give us a strategic advantage to win a war. We will own and maintain without tipping our hand on what the weapon does to everyone and sundry much like the scorpene/u209 saga. And we are not going to do that by continuing to import other peoples hand me down lines they don't think poses any problems to anyone in our region. No one is going to hand us that strategic advantage however much we want, we argue that every day here.

So what do we really want? Just short term fixes or long term independence? I think the LCA balances this really well even today, but whats really intriguing, is the potential of what the roadmap could truly be like, if we allow ourselves to get another 200 more of these.

gaurav_w · Post by **gaurav_w** » 23 Oct 2016 11:08

Defence industry insiders believe the first two major contracts that the promulgation of the “strategic partner” policy would unleash are: "a light fighter production line", and Project 75I

Could it be that goi is looking for a start partner for LCA or should it be seen in light of another mrca line...

http://ajaishukla.blogspot.in/2016/10/n ... 2.html?m=1

Rahul M · Post by **Rahul M** » 23 Oct 2016 11:31

gauravwarrior wrote:...

username changed to gaurav_w.

shiv · Post by **shiv** » 23 Oct 2016 11:48

Cybaru wrote: IMO creating a defence aviation industry... is about creating innovative products that are better than what your enemy can dream about every single day. That can give us a strategic advantage to win a war. We will own and maintain without tipping our hand on what the weapon does to everyone and sundry much like the scorpene/u209 saga. And we are not going to do that by continuing to import other peoples hand me down lines they don't think poses any problems to anyone in our region. No one is going to hand us that strategic advantage however much we want, we argue that every day here.

It is also about creating workshops and human skills in India to manufacture on demand about 5 to10,000 different types of small components starting from rivets to rings to washers to valves to wires, bulbs, pipes paints, seals, panels, fixtures castings and mouldings of special materials with extreme tolerances that will serve as component suppliers to any aircraft military or civil that may be made in India tomorrow. Currently that does not exist in India.

Here are some Russian products that the IAF had to make in their BRD "in house" as "import substitution" for Mi-8 and MiG 27. We need private companies with tooling and skills
https://www.youtube.com/watch?v=RKM56xkLl8g

Cybaru · Post by **Cybaru** » 23 Oct 2016 12:26

Shiv I agree with you. Yes, we need private companies to help augment and enhance the defence sector, there is no question about it.

JayS · Post by **JayS** » 23 Oct 2016 12:27

sudeepj wrote: The US is at least buying some stuff (Hercules components, some Boeing components, some Honeywell stuff) from us.

Which ones apart from those arising out of compulsory offset requirements??

sudeepj wrote: Bottomline is, India is looking for a strategic partnership and to tie in to a global defense industry. Investing in the LCA cant do it. In fact, the LCA project is in need of technology infusion. Hence the need for this fighter line.

We integrated ourselves into world auto market. 25yrs down the line, our companies still can't make one good engine without help from someone like AVL (I am yet to get an answer on this which I posed a few pages back). After 25 yrs HH don't any engine whatsoever, Bajaj while doing commendable job for 15yrs, their engine still sounds like a sewing machine, TVS is absolute bottomline of vibrations (nothing can be worse). The less said about the Car manufacturers the better. By the time someone from these companies manage to figure out something of IC engine tech, th world would have moved over to Electric car tech. How many of our companies have invested for this next cycle of technology?? So the loop of screwdrivergiri will start all over again.

What else, despite being 5th largest auto manufacturer these same companies are still not up to the speed to contribute anything significant in Aerospace industry (to be fair a lot of blame goes to GOI for not letting them try their hand in other defense tech, while they spread red carpet for foreign OEMs. BTW did Tata or Bharat Forge got permission to test their Howitzers??)

So on what basis you think we will become technologically competent in Defense manufacturing, by integrating into "global defense industry" when the defense industry is much more complicated than auto industry?? Letting foreign OEMs open shop here, even if its RnD, will not create local IPR. I know how atleast one big Aerospace company thinks (and I am pretty sure others have similar thoughts). Not taking back IPR to their own native country is a big deal breaker for them. And this is when our govt will be funding this IP development because no pvt company invests their own money in tech development without govts putting up atleast the same amount from the public money (and I will not even talk about other forms of subsidies such as SEZ, tax breaks, soft loans blah blah. So the deal is, Indian govt bankroll IP development and let the IPR fly abroad, we keep paying license fees on that same IP for life. Even after doing all this we still do not get access to the technological crown jewels that we really want. And mind you we do not have deep pockets like Unkil has, this money will be diverted from our kitty for desi projects. The foreign OEMs will strive to maintain the technological gap we have between the West and our desi tech today to the same level. Make no mistake, we are not Chinese that we will aggressively do anything about tech absorption.

Time and again our history has told us that easy availability of tech from West has not only killed our will power to make that stuff on our own and excel in that field but also, in some cases, killed whatever desi efforts were going on in that sector. Machine tools is an excellent example of the later, where our companies were happy importing scrapped machinary from west, and use them with some jugaad, post 1991. The only technology fields we have really excelled are the ones where we were sanctioned - Atomic energy, Missiles and Space. Even in the Atomic energy sector, the coming of Nuclear deal with US jeopardized our desi Th based rector development. Hopefully Modi govt has put it on backburner now. I daresay, we are technologically backword in Aircraft technology, precisely because we always had easy access to imported maal. We could always get good (not best but goo enough) stuff if we threw enough money around. Same story for guns, tanks and what not.

And now we want to solve our problem by inviting more imported maal in?? Only difference being now it will be assembled in India?? Well guess what, we have been doing this for past 70yrs. Nothing has changed. So what is so different about this time around??

Investing in LCA was precisely what was required. We missed one opportunities after another. And now when its almost over the finish line, we want to miss one more??

JayS · Post by **JayS** » 23 Oct 2016 14:17

sudeepj wrote: Now, flip the question. What will manufacturing 240 LCAs vs 120 get India? Not strategic independence, because the prime mover, the prime sensor and part of the prime weapon system are imported. Neither any new technological know-how in these domains. Its simply a system integration effort, which has its own benefits, but lets not make it more than it is. Capability wise, its a wash at best. F16 or Gripen is a far more mature platform than the LCA. From an economy point of view, its a wash again, because the other fighter will also be manufactured in India! From a manufacturing point of view, will a further manufacture of 100 odd fighters after the initial 120 be a production exercise or a learning exercise too? I feel, itll simply be a production exercise.

First of all - No manufacturing, it will be only assembled here. LM can only transfer their assembly line, they cannot transfer hundreds of tier1/2/3 suppliers production facilities in India.

Sorry to say this, but your arguments seemed more thoughtful before you wrote this part. LCA gives as much strategic independence we could ever get in current situation, which is far more that what F16 can bring. Components can always be stocked for bad times, systems can't be. I mean on one side you argue LCA doesn't give much strategic independence and on the other hand you are supporting importing entire aircraft?? Thats like having absolutely ZERO strategic independence. Not only F-16 but also everything that spawns from it in future will be restricted by ITAR and other such US restrictions. I can't keep my office window open because of these ultra restrictive US laws, because someone might see my desktop through the windows using telescope or something..!! And this is for a kind of job which is technologically not very great. I mean we Indians have better design capabilities than this already in NAL/HAL. If you think the US tech will simply percolate through our MIC to help us across the board you are off the mark by light years.

If you think system integration is not that important, that makes me wonder how much you really understand about an aircraft project. Please tell this to Boing and Airbus, because all they do in Airliner biz is precisely this - *Simple* systems integration. By your logic they are worth not much as a company. A *simple* system integrator knows far more about a component than a tier1 company which actually designs and manufactures that component. The tier1 company has almost know knowledge of real life performance of their own component, because that data is always with the *simple* system integrator and they never share this data. Just getting one temperature value in a jet engine from real test could take years of begging if you are a tier1 company. This is when you own the design of the component and are partner in the program.

I won't get into LCA vs F16 "whose dick is bigger" (in Shiv's words) comparison. If GOI/IAF is convinced F16 is the solution for their problem, the least I expect from GOI is a quick FMS deal and build quick numbers (120nos within 10yrs from signing the deal) rather than getting into this tender tamasha. But I will never have false hopes of magical transformations of our MIC due to this deal. There is a good probability that even GOI is not in this kind of mentality and they just want to build numbers to strength the defences in double time for time to come in near future and have another long term plans for boosting desi MIC. At least I hope it it so.

Also for those who think F16 failed in MMRCA and why IAF still want to buy F16, and this somehow reeks of something foul thing - I guess IAF, true to its no plan B statement, would happily have 120 Rafale even today. This plan B is from GOI and not from IAF. IMO Modi simply asked IAF why the want Rafale. He picked the most important of those reasons - nuclear delivery (and maybe initial penetration of enemy airspace) and asked how much is sufficient for this. And then decided to buy that number and gave an alternative to IAF for remaining numbers, an alternative which can fulfil those remaining requirements apart from Nuclear delivery and which is affordable for GOI and might as well achieve some other strategic goals. I don't see IAF having much of a choice in choosing between even F16 and Gripen. They care about their priorities but GOI has to think from a much larger perspective. As they say a best decision is the one which keep all the parties little unsatisfied.

Only thing is I am yet to see is any large scale push on the front of desi RnD. Only bits and pieces so far, no grand strategy.

JayS · Post by **JayS** » 23 Oct 2016 14:24

Cybaru wrote: *This whole thing is a marketing scam*

+1. May be a slightly lesser one than that of SAAB but similar nonetheless.

Pratyush · Post by **Pratyush** » 23 Oct 2016 14:33

The answer to the domestic building of the ecosystem needed for defense manufacture cannot be arrived with imported assembly line with predefined supplies and suppliers.

Painful measures must be taken and the LCA Has to be produced for the IAF in huge numbers may be 500+. With multiple blocks and versions developed with IAF Inputs and used by the IAF.

Only through that process can a domestic ecosystem be built and sustained. A forign design will not solve any of the problems that amajor program needs to overcome. As the solutions will all be imported.

We see this with the su 30. The plane developed with IAF requirements but for any upgrade we have to turn to the OEM. This new imported design will not be any different.

hanumadu · Post by **hanumadu** » 23 Oct 2016 17:25

Pratyush wrote:The answer to the domestic building of the ecosystem needed for defense manufacture cannot be arrived with imported assembly line with predefined supplies and suppliers.

This is the fundamental question that needs to be answered. How is a plant with components manufactured else where but integrated in India help create a aircraft industry in India?

Marten · Post by **Marten** » 23 Oct 2016 18:00

+1
For all the jargon being peddled on this thread, no one wants to ask the same cos to set up lines for manufacturing components for the LCA. Even the smartest folks on this forum are being blind to the fundamental question of how Indian manufacturing strengths will improve from this screwdrivergiri. If Namo or MP haven't considered this, one would be very surprised. Therefore the answer is that we're trading our current hobbled abilities for 1500 jobs and some super strategic gains. Some far reaching strategic goal must be reached or will be found, no doubt. But it makes no sense at this point when an additional line at HAL and double the staff at ADA would make more sense.

amit · Post by **amit** » 23 Oct 2016 18:47

Perhaps one should look at this issue from a slightly different perspective. Whether it is the LCA, LCA MK1, LCA MK2, F16 (whatever batch) or Gripen, these planes shouldn't be looked at in isolation. It's good to remember that these platforms, at the end of the day, are a means to an end not necessarily the end itself. The idea of giving a great plane/platform to IAF is to ensure that it has the equipment to defeat what its adversaries put in the sky.

Taking this PoV, maybe the question to ask is this: if, say, the F16 is chosen and the first plane rolls out of the Make in India assembly line, will it be a more capable fighter than the version of LCA which the IAF will be flying at that point of time? If the answer is No or its "only slightly better", then I personally think the argument ends right away, no need for this Make in India push.

If, however, it's a case of the F16 (you can substitute F16 with the Gripen) being a substantially better fighter than the then version of LCA, then I think the question then to be asked is would it be better than the J10s and other Chinese planes that would most likely be its competitors? Do note in this case it's not a question of growth potential of the platform, I think there's no argument to the fact that LCA has a far bigger growth potential. It's a question IMO of immediate fighting potential, because at the end of the day that's what IAF wants.

There's a stark fighter shortage and 200 planes are going to be retired, IAF wants (and I suspect GoI agrees) to replace these planes with ones that can stand up to the IAF threat perception from its two rivals PAF and PLAAF.

The point IMO is that India needs to both build a local aerospace industry via the LCA and future planes, as well as a capable replacement for the planes that are going to be retired, in the shortest possible time, so that the IAF is not weakened and retains the ability to fight a two-front war if needed. All this talk of sending in the MKI for tasks which a single engined fighter is supposed to do is good in theory but I don't think is feasible in practice.

I think that's why the GoI got IAF to commit to 120 LCAs first before committing to a second line. If 120 can't build up Tier 1 and Tier 2 suppliers I don't think a 200 order would be able to either. IMO the second line is not about building capability, though we would have a state-of-the-art factory once the order is closed, which isn't going anywhere. It's about replacing numbers but doing it by leveraging the now impressive heft that the country has in forcing companies to build the planes here (thousands of jobs, both direct and downstream). Ten years perviously we would probably have had to import all the planes.

IMO we are confusing the issue by combining the need for a local aerospace industry with induction of a new aircraft. I think these two are running separately but in parallel tracks. One would not be at the expense of the other. This is not a either/or situation.

JMT and all that.

shiv · Post by **shiv** » 23 Oct 2016 19:38

Marten wrote:+1
For all the jargon being peddled on this thread, no one wants to ask the same cos to set up lines for manufacturing components for the LCA. Even the smartest folks on this forum are being blind to the fundamental question of how Indian manufacturing strengths will improve from this screwdrivergiri. If Namo or MP haven't considered this, one would be very surprised. Therefore the answer is that we're trading our current hobbled abilities for 1500 jobs and some super strategic gains. Some far reaching strategic goal must be reached or will be found, no doubt. But it makes no sense at this point when an additional line at HAL and double the staff at ADA would make more sense.

This is my guess:

The primary goal is to increase fleet strength by hook AND crook

I use the modified expression deliberately. Initial examples will be semi-knocked down kits assembled in an integrating plant. All the little bits and pieces will be imported. But while the initial integration plant is being set up, the "offsets clause" will locate Indian small companies who will (ideally) be hand held to start manufacturing small parts and then increasingly complex parts. In theory the first 5 built will be almost 100% import - but after 10 years when the last few are being built the import content will be down to maybe 30%., but the entities making those parts will be private companies who have been hand held and given orders. Beyond that it is up to the nation to decide where to go

Vivek K · Post by **Vivek K** » 23 Oct 2016 20:26

So India will remain a client state dependent on others to protect herself with limits on the independence of its foreign policy. Consequently, India will never be in the same league as China.

And the effect on the Indian economy as a result of the outflow of billions for the IAF and IA's penchant for foreign toys is predictable - the colonial conditions will continue.

Marten · Post by **Marten** » 23 Oct 2016 21:04

Shiv saar, the Pune belt has many ancillary manufacturers who supply to German and Swedish cos. And I mean real hi-tech manufacturing. There are Japanese firms scouting teams for their plants that will come up at Hoskote. We do have cos that are already up to scratch in other areas except aviation because there is no native market. Any US ancillary firm, especially a MIC supplier will have to rely on the Supplier agreement with LM or similar tie-up to represent their interests in f16 assembly. Ooh There are quite a few other ways to incentivize suppliers, with zero tax or 10 year tax holiday schemes if they commit to supplying for the LCA. In general the supply chain for LM will take 8-10 years to get to 30% local manufacturing, and I mean real manufacture from scratch vs assembly. Even that would be a bean counters game. I understand HAL is not the right firm to continue handling all in manufacture so they must split the Tejas Division and offer better terms to TAML and L&T or indeed Bharat Forge to help them take up more AOR. I don't see LM suppliers setting up shop for small quantities, even if we claim 30% or 50% offsets. Even if they do, it might as well be for Tejas components at a cost to us. I'm not sure the new MRCA or FMS deal gives us manufacturing capabilities. Not as much as building two or three versions of the LCA will.
PS: A controlling stake in Saab would cost ~$3bn if the Wallenbergs were willing. That includes all of it, including Kockums, Selex too.

JayS · Post by **JayS** » 23 Oct 2016 21:21

^^ I highly doubt they will let it go to non-EU company.

sudeepj · Post by **sudeepj** » 23 Oct 2016 21:29

JayS wrote:
sudeepj wrote: The US is at least buying some stuff (Hercules components, some Boeing components, some Honeywell stuff) from us.
Which ones apart from those arising out of compulsory offset requirements??

There arent any offset requirements for the Russians? The US buys any number of products from us in the private sector. This shows that somehow, we are able to 'make it work' with the US industrial system.

JayS wrote:
sudeepj wrote: Bottomline is, India is looking for a strategic partnership and to tie in to a global defense industry. Investing in the LCA cant do it. In fact, the LCA project is in need of technology infusion. Hence the need for this fighter line.
We integrated ourselves into world auto market. 25yrs down the line, our companies still can't make one good engine without help from someone like AVL (I am yet to get an answer on this which I posed a few pages back). After 25 yrs HH don't any engine whatsoever, Bajaj while doing commendable job for 15yrs, their engine still sounds like a sewing machine, TVS is absolute bottomline of vibrations (nothing can be worse). The less said about the Car manufacturers the better. By the time someone from these companies manage to figure out something of IC engine tech, th world would have moved over to Electric car tech. How many of our companies have invested for this next cycle of technology?? So the loop of screwdrivergiri will start all over again.

You are simply pointing out that refined industrial products take generations of engineers to master. Merely bumping up the number of LCA from 120 to 240 or 360 is not going to guarantee that we get a refined product at the end.

Consider a learning curve, what is the level of 'marginal learning' that you get on a per unit basis for something like the LCA? Also consider in parallel, the obsolescence curve, which somehow gives you the number of years you can expect your fighter to be viable. LCA is already in need of a tech infusion, aka MK1A.

If you were going on a production run of tens of thousands, there is something to be said about learning from the large production runs. But in making custom machines with very small production runs, most of the learning is in R&D, not the production. If R&D continues and we get a viable proposal for an MKII that is still good enough when it comes to the obsolescence curve, we should definitely go for it.

JayS wrote:What else, despite being 5th largest auto manufacturer these same companies are still not up to the speed to contribute anything significant in Aerospace industry (to be fair a lot of blame goes to GOI for not letting them try their hand in other defense tech, while they spread red carpet for foreign OEMs. BTW did Tata or Bharat Forge got permission to test their Howitzers??)

You wont find any disagreement from me here.

JayS wrote:So on what basis you think we will become technologically competent in Defense manufacturing, by integrating into "global defense industry" when the defense industry is much more complicated than auto industry?? Letting foreign OEMs open shop here, even if its RnD, will not create local IPR. I know how atleast one big Aerospace company thinks (and I am pretty sure others have similar thoughts). Not taking back IPR to their own native country is a big deal breaker for them. And this is when our govt will be funding this IP development because no pvt company invests their own money in tech development without govts putting up atleast the same amount from the public money (and I will not even talk about other forms of subsidies such as SEZ, tax breaks, soft loans blah blah. So the deal is, Indian govt bankroll IP development and let the IPR fly abroad, we keep paying license fees on that same IP for life. Even after doing all this we still do not get access to the technological crown jewels that we really want. And mind you we do not have deep pockets like Unkil has, this money will be diverted from our kitty for desi projects. The foreign OEMs will strive to maintain the technological gap we have between the West and our desi tech today to the same level. Make no mistake, we are not Chinese that we will aggressively do anything about tech absorption.

This is a fictitious problem. Bottomline is, we dont have much IP in India today. Without the IP, you are trying to solve the problem of licensing fees etc.! And IP is frankly, over-hyped.. Except telecom, you wont find any cross licensing deals among the defense manufactures. Even in telecom, patents are not filed for the really top notch super secret stuff, because filing a patent means disclosing that secret recipe which a competitor can then copy or develop a replacement for. Trade secrets are much more important than IP. You wont see Boeing cross license anything to LM or vice versa.

JayS wrote:The only technology fields we have really excelled are the ones where we were sanctioned - Atomic energy, Missiles and Space. Even in the Atomic energy sector, the coming of Nuclear deal with US jeopardized our desi Th based rector development. Hopefully Modi govt has put it on backburner now. I daresay, we are technologically backword in Aircraft technology, precisely because we always had easy access to imported maal. We could always get good (not best but goo enough) stuff if we threw enough money around. Same story for guns, tanks and what not.

I just dont know how you get this idea that being cut off from the rest of the world, which btw. is far far ahead when it comes to technology, makes you catch up with them faster. You develop substitutes, and get to cock a snoot at them.. But you dont really get to cutting edge/innovation etc. And factually speaking, you are simply wrong on multiple angles.

These sectors were not isolated. The Vikas engine is based on imported tech. So is the Cryogenic. Our CANDU systems are based on imported tech. too! Next, If these sectors are so 'world class', where are the exports? There should be people lining up at our door to buy them? right? Where are the publications? Where are the patents? Where are the hordes of foreign engineers who want to learn at the feet of our masters? Fact of the matter is, these sectors have produced acceptable replacements. But not some world beating technologies. Even some tom-tommed successes, such as the IRNSS, would be impossible without foreign help in crucial components. And there is no shame in this.. There is one company that makes that specific component.. Should you get into a relationship so that you can buy it from him, invite him to do some of his work in India, or should you go and try to develop your own? Surely, you will be able to make some version of that component.. First principles are accessible to everyone, but itll likely be a poor quality version. And simply being cutoff from that one company that does that work will not mean that you will automagically end up at a higher quality version. The Chinese btw. developed their own version of this component.. and as a result their nav system is in a poor shape.

Investing in LCA was precisely what was required. We missed one opportunities after another. And now when its almost over the finish line, we want to miss one more??

But the LCA is being invested in.. So is the AMCA. A 120 plane order and possibly more to follow is nothing to laugh at! What people who are dissing the new fighter line need to show is, that were 240 planes of the MK1A type to be manufactured, it would make our bird a lot better, or teach our R&D/factory floor guys something they did not already know after the first 120. Or, that a new MKII can be developed, that would be acceptable for manufacture after the first 120, and production of which should be sanctioned NOW.

I suspect the answers will not be easy.

sudeepj · Post by **sudeepj** » 23 Oct 2016 21:54

JayS wrote: Sorry to say this, but your arguments seemed more thoughtful before you wrote this part. LCA gives as much strategic independence we could ever get in current situation, which is far more that what F16 can bring. Components can always be stocked for bad times, systems can't be. I mean on one side you argue LCA doesn't give much strategic independence and on the other hand you are supporting importing entire aircraft?? Thats like having absolutely ZERO strategic independence.

LCA does give some level of strategic independence, but with an imported prime mover, sensor and an imported shooter. We need to be realistic about how much 'strategic independence' there is. Further, what are you going to do with this level of strategic independence?

If you think the US tech will simply percolate through our MIC to help us across the board you are off the mark by light years.

That is where we differ.

If you think system integration is not that important, that makes me wonder how much you really understand about an aircraft project. Please tell this to Boing and Airbus, because all they do in Airliner biz is precisely this - *Simple* systems integration. By your logic they are worth not much as a company. A *simple* system integrator knows far more about a component than a tier1 company which actually designs and manufactures that component. The tier1 company has almost know knowledge of real life performance of their own component, because that data is always with the *simple* system integrator and they never share this data. Just getting one temperature value in a jet engine from real test could take years of begging if you are a tier1 company. This is when you own the design of the component and are partner in the program.

If you think Boeing and Airbus are in the same league as the HAL/ADA, or that HAL/ADA would become that if only they produced 240 LCAs instead of 120... What can I say! ADA developed a design, picked up ready components that worked for their design, and integrated it. However, if the components themselves are so complex, that we have no hope in heaven or hell to make them, what does this work buy you? Not much. You are as prone to sanctions etc. I am simply calling the work for what it is. Top notch aero design work, but failures when it came to mover, sensor and shooter.

I just dont buy the magical thinking that if only HAL made 240 instead of 120 LCAs, it would solve our sensor/shooter/mover problem.

I also dont buy, that its healthy for our R&D labs and manufacturing to be cut away from the world because 'then we will be world beaters, like ISRO'.

Aditya G · Post by **Aditya G** » 23 Oct 2016 22:22

shiv wrote:....The Rafale won only on some promise of price and tech transfer. .....

IAF down selected rafale and eurofighter based solely on technical parameters.

MMRCA winners are the best fighters in the world with respect to IAFs medium fighter requirements

Cosmo_R · Post by **Cosmo_R** » 23 Oct 2016 22:37

'Strategic Independence' with the LCA might have been possible if we were not facing a 200 a/c shortfall in the next 3-4 years.

As to percentage of local components in the F-16, don't forget the big promise LM is making—that they will export parts and even whole a/c from India. This means any supplier immediately sees a large market of existing user buyers—not some projection which is the problem with the Gripen or even the F/A-18.

Plus of course, if we want US help to co-develop an engine, we have to take LM's or Boeing's offers. It's the deal just like the engine-less Russian frigates for the Akula.

ShauryaT · Post by **ShauryaT** » 23 Oct 2016 23:06

amit wrote: I think that's why the GoI got IAF to commit to 120 LCAs first before committing to a second line. If 120 can't build up Tier 1 and Tier 2 suppliers I don't think a 200 order would be able to either.

This is about the only argument that is understandable to me. This proposal partly exists to kick start a "private" Aerospace eco-system that is linked into the global supply chain that the government owned DPSU's have not been able to do so far. There seems to be no confidence that the DPSU's will be able to nurture and spawn this private aerospace MIC and with good reason. In order to be productive, most of these private component suppliers would not be Tier 1. They also would certainly not own any IP to start with. The process would involve not just Lockheed but 100's of tier 2 and 1 global supply chain companies and convince them to setup shop in India. Few Tier 1's will crop up over time, the Systems integration is something lockheed will own but the final assembly be done in a plant setup by Lockheed in partnership. The hope is this deal will help setup a 100 such companies that are indeed integrated into the global supply chain making components not only for the F16 but also for many other types of aircrafts.

Two questions come to mind. 1. Why have we not leveraged the civil aircraft industry to do the same? - The only answer I can think of is because the private airline industry is doing the buying decisions without much coordination with the government to come up with strategic answers.

2. Why can the same not be done by our DPSU's. IOW: They help setup this "competition" to themselves, in the process dissolving themselves over time either partially or completely to these private organizations. An example would be parts of ADA, NAL, HAL get taken over by a private enterprise. The new organization will have the IP, production facilities and know how to evolve with the discipline and accountability that stems from being part of a private enterprise. What this step does not do is achieve integration into the global supply chain. This could be done, if we align all of civil and military aircraft in a strategic manner to spawn the 100 or so tier 2 and 3 component suppliers. The government would have to make the goal clear that the DPSU's as they are known would be dissolved one way or the other, retaining only "high risk" products and technologies, who's commercial viability is not feasible. A clear directive to DPSU's that ANY revenue making venture will be privatized!

What we need if the above is done, is to integrate these with the global supply chain and this is the key test of our so called alliance with the US. Not a Lockheed to do SI work in Indian plants, not even a Tier 1 level integration but the linking of 100 global tier 2 firms to setup shop in India with another 100 Tier 2 Indian firms that supply not only for Tejas/HAL products and many other Russian products and a part of their revenue coming from global firms.

IMO we are confusing the issue by combining the need for a local aerospace industry with induction of a new aircraft. I think these two are running separately but in parallel tracks. One would not be at the expense of the other. This is not a either/or situation.

JMT and all that.

Only in so far as they are entirely separate category of systems, which is not the case with the F16 or the many other types of component systems. Due to the technology gap, safe to say the foreign owned MII products will ALWAYS be a step ahead of what the local industry will be able to produce, at least in the short term of a few decades. This gap will manifest itself in requirements and selection criteria. There is no directive to buy Indian and if these are MII the argument that the forces have to buy Made in India is diluted even further.

Much of the above is recognized by the current players. ADA is on record that a key mistake made by them is NOT to create 9 different Tier 1 suppliers as they were designing the LCA. They hope to correct this mistake with the AMCA. If the next chairman of HAL is selected on the incentive to create these 9 Tier 1 suppliers for the Tejas (which HAL does themselves now), the entire story will be different. As of now the HAL chairman is there to preserve his revenue base!!

The achilles heel here is an inability of the government to undertake the privatization steps necessary to nurture an Indian MIC. Ideally HAL should have never been the maker of the Tejas.

kit · Post by **kit** » 24 Oct 2016 00:55

Marten wrote:Shiv saar, the Pune belt has many ancillary manufacturers who supply to German and Swedish cos. And I mean real hi-tech manufacturing. There are Japanese firms scouting teams for their plants that will come up at Hoskote. We do have cos that are already up to scratch in other areas except aviation because there is no native market. Any US ancillary firm, especially a MIC supplier will have to rely on the Supplier agreement with LM or similar tie-up to represent their interests in f16 assembly. Ooh There are quite a few other ways to incentivize suppliers, with zero tax or 10 year tax holiday schemes if they commit to supplying for the LCA. In general the supply chain for LM will take 8-10 years to get to 30% local manufacturing, and I mean real manufacture from scratch vs assembly. Even that would be a bean counters game. I understand HAL is not the right firm to continue handling all in manufacture so they must split the Tejas Division and offer better terms to TAML and L&T or indeed Bharat Forge to help them take up more AOR. I don't see LM suppliers setting up shop for small quantities, even if we claim 30% or 50% offsets. Even if they do, it might as well be for Tejas components at a cost to us. I'm not sure the new MRCA or FMS deal gives us manufacturing capabilities. Not as much as building two or three versions of the LCA will.
PS: A controlling stake in Saab would cost ~$3bn if the Wallenbergs were willing. That includes all of it, including Kockums, Selex too.

the Swedes will not part with any of their high tech ..esp kockums/SAAB .period .

JayS · Post by **JayS** » 24 Oct 2016 01:39

sudeepj wrote:
JayS wrote:
Which ones apart from those arising out of compulsory offset requirements??
There arent any offset requirements for the Russians? The US buys any number of products from us in the private sector. This shows that somehow, we are able to 'make it work' with the US industrial system.

Sorry Sir, but I am not here to discuss how Russians are better or worse than US. Wake me up when they buy something solely based on a company's ability and not because they *have* to do it. And this "we can make it work" doesn't apply. By that logic China should have been the biggest supplier for global defence and Aerospace industry, since everyone buys from them and they seem to "make it work".

sudeepj wrote:You are simply pointing out that refined industrial products take generations of engineers to master. Merely bumping up the number of LCA from 120 to 240 or 360 is not going to guarantee that we get a refined product at the end.

Yes it will. It matters how many time you do a process, in manufacturing. And the company doing it for LCA will learn from first principle to do it, not like handed down instruction manual to do certain steps to churn certain product for F16. Developing a process from scratch gives you far better ability to a second thing better. Do you expect LM to come to India and teach Indian suppliers why they are doing what they are doing?? NO it doesn't happen that way. There are far better chances of a company being able to make parts for AMCA if they have gone through the process of developing certain component manufacturing process for LCA, than if they have simply followed some obscure instructions came down from LM or one of their Tier1 supplier. Yes, you get only algorithmic steps to manufacture things when you are tier2/3 supplier, sometimes not even drawings are given of the component you are making, let alone telling why a certain thing is done in a certain manner. Don't ask question, just do it.

sudeepj wrote: Consider a learning curve, what is the level of 'marginal learning' that you get on a per unit basis for something like the LCA? Also consider in parallel, the obsolescence curve, which somehow gives you the number of years you can expect your fighter to be viable. LCA is already in need of a tech infusion, aka MK1A.

But your assumption here is that the LCA will not improve at all over the years. And solution to that is F16 which has almost no future growth prospectives whatsoever?? Replace *LCA* in above statement by *F16* and it still valid, the way you wrote it, right or wrong.

sudeepj wrote: If you were going on a production run of tens of thousands, there is something to be said about learning from the large production runs. But in making custom machines with very small production runs, most of the learning is in R&D, not the production. If R&D continues and we get a viable proposal for an MKII that is still good enough when it comes to the obsolescence curve, we should definitely go for it.

Bhai, I cannot give you a crash course on Aerospace related production here. The bold part is laughable, to be honest. Most of the Aerospace components are never manufactured in 10000's.

sudeepj wrote:This is a fictitious problem. Bottomline is, we dont have much IP in India today. Without the IP, you are trying to solve the problem of licensing fees etc.! And IP is frankly, over-hyped.. Except telecom, you wont find any cross licensing deals among the defense manufactures. Even in telecom, patents are not filed for the really top notch super secret stuff, because filing a patent means disclosing that secret recipe which a competitor can then copy or develop a replacement for. Trade secrets are much more important than IP. You wont see Boeing cross license anything to LM or vice versa.

Who is talking about patents here?? There are many ways to impose IPRs other than patents. Say a hypothetical process is taught by LM to some Indian company for F16 component, that process will not be used for any other component unless LM allows for it. Do you see patents anywhere?? And if its a dual-use technology, any misuse will be punishable offence under US ITAR, apart from other normal legal issues. Well there are already companies in India who are supplying to US OEMs but cannot sell another component using the same technology to DRDO for example. Just few days ago I read somewhere about one such company from Nagpur maybe, can't remember.

sudeepj wrote: I just dont know how you get this idea that being cut off from the rest of the world, which btw. is far far ahead when it comes to technology, makes you catch up with them faster. You develop substitutes, and get to cock a snoot at them.. But you dont really get to cutting edge/innovation etc. And factually speaking, you are simply wrong on multiple angles.

These sectors were not isolated. The Vikas engine is based on imported tech. So is the Cryogenic. Our CANDU systems are based on imported tech. too! Next, If these sectors are so 'world class', where are the exports? There should be people lining up at our door to buy them? right? Where are the publications? Where are the patents? Where are the hordes of foreign engineers who want to learn at the feet of our masters? Fact of the matter is, these sectors have produced acceptable replacements. But not some world beating technologies. Even some tom-tommed successes, such as the IRNSS, would be impossible without foreign help in crucial components. And there is no shame in this.. There is one company that makes that specific component.. Should you get into a relationship so that you can buy it from him, invite him to do some of his work in India, or should you go and try to develop your own? Surely, you will be able to make some version of that component.. First principles are accessible to everyone, but itll likely be a poor quality version. And simply being cutoff from that one company that does that work will not mean that you will automagically end up at a higher quality version. The Chinese btw. developed their own version of this component.. and as a result their nav system is in a poor shape.

I am not saying to cut off ourselves from the world. I am just pointing out something from history. This is not a mere coincidence. And you have assumed that the replacement for something that we import will be poor quality. Yes in first attempt may be. But it will improve after enough iterations. Think like an Engineer..!!

sudeepj wrote: But the LCA is being invested in.. So is the AMCA. A 120 plane order and possibly more to follow is nothing to laugh at! What people who are dissing the new fighter line need to show is, that were 240 planes of the MK1A type to be manufactured, it would make our bird a lot better, or teach our R&D/factory floor guys something they did not already know after the first 120. Or, that a new MKII can be developed, that would be acceptable for manufacture after the first 120, and production of which should be sanctioned NOW.

In the world where Tranche methodology is norm why it is so difficult to accept that LCA could easily keep up with the technology given enough money is poured in it?? I am not dissing F16. It might be better than each and every plane we own/will own. I just don't accept the argument that manufacturing it in India will somehow magically transform our MIC. Unless we pour some serious money in manufacturing of LCA, we will be still having the same kind of discussions in 2035 with LCA being replaced by AMCA and F16, by F35. Because as an Aerospace Engineer I don't think F16 can even remotely match LCA in teaching us how to make better planes.

Remember our problem is not small manufactures or system integrator. We have both, for LCA. Our problem is lack of real Tier1 companies who can for now take responsibility of a big module and develop/maintain supply chain for that part, and later also take up design of the modules for AMCA, for example. If L&T is taking up wing assembly now, L&T should participate in AMCA wing design with ADA for module level design.

JayS · Post by **JayS** » 24 Oct 2016 02:01

sudeepj wrote: LCA does give some level of strategic independence, but with an imported prime mover, sensor and an imported shooter. We need to be realistic about how much 'strategic independence' there is. Further, what are you going to do with this level of strategic independence?

Whatever it is, its more than F16. And that's what I care. And what do you mean by "what to do with this level of Strategic independence"?? In simple terms more is better. Why do you think IAF is apprehensive about US maal?? Why do you think our Nuclear delivery Aircraft was M2K and now it will be Rafale??

sudeepj wrote: If you think Boeing and Airbus are in the same league as the HAL/ADA, or that HAL/ADA would become that if only they produced 240 LCAs instead of 120... What can I say! ADA developed a design, picked up ready components that worked for their design, and integrated it. However, if the components themselves are so complex, that we have no hope in heaven or hell to make them, what does this work buy you? Not much. You are as prone to sanctions etc. I am simply calling the work for what it is. Top notch aero design work, but failures when it came to mover, sensor and shooter.

I just dont buy the magical thinking that if only HAL made 240 instead of 120 LCAs, it would solve our sensor/shooter/mover problem.

I also dont buy, that its healthy for our R&D labs and manufacturing to be cut away from the world because 'then we will be world beaters, like ISRO'.

I just tried to put some senses in you regarding importance of being a System Integrator. You didn't seem to get the drift.

I didn't say we should isolate ourselves (though I would love to see some Nuclear tests in Pokharan as soon as possible). I merely pointed out facts.

And its a fools hope to think HAL or any of the suppliers will be master the craft with only 120 LCA's. You don't become LM by manufacturing 120 items either. More is always better.

JayS · Post by **JayS** » 24 Oct 2016 02:06

kit wrote:
Marten wrote: PS: A controlling stake in Saab would cost ~$3bn if the Wallenbergs were willing. That includes all of it, including Kockums, Selex too.
the Swedes will not part with any of their high tech ..esp kockums/SAAB .period .

Correct. Even if we manage to buy SAAB somehow, the technology will not come to India automatically. It will stay in Sweden. Only thing is we will have control over it to some degree (but not fully). We can guess the picture based on what happened in JLR acquisition by TATA, even though it was a mere auto company.

GShankar · Post by **GShankar** » 24 Oct 2016 04:36

JayS wrote:
kit wrote:
the Swedes will not part with any of their high tech ..esp kockums/SAAB .period .
Correct. Even if we manage to buy SAAB somehow, the technology will not come to India automatically. It will stay in Sweden. Only thing is we will have control over it to some degree (but not fully). We can guess the picture based on what happened in JLR acquisition by TATA, even though it was a mere auto company.

Question - did something similar happen with Volvo too? Or was it sold lock, stock and barrel to Chinese?

sudeepj · Post by **sudeepj** » 24 Oct 2016 04:48

JayS bhai, lets agree to disagree. My own background is in electronics, not aerospace, I know at least a little bit about manufacturing. To me, it doesnt appear that making 240 Ambassadors instead of 120 will magically transform your product into a honda. Instead of berating me, do write to the GoI and explain you reasoning. May be they will listen, unlike me.

Cybaru · Post by **Cybaru** » 24 Oct 2016 05:09

sudeepj wrote:JayS bhai, lets agree to disagree. My own background is in electronics, not aerospace, I know at least a little bit about manufacturing. To me, it doesnt appear that making 240 Ambassadors instead of 120 will magically transform your product into a honda. Instead of berating me, do write to the GoI and explain you reasoning. May be they will listen, unlike me.

its the innovation curve where we will gain the most. New materials, new processes, scaling, automated tools, 3d printing, continuous enhancements to software/hardware, new weapon types, new tools for support, 3d visual crack inspections. If we make a lot of finished goods at home, we will also learn how to ensure they live upto the specs, figure out why if they don't and in next revision make enhancements. This whole cycle is lost when you import the toolings and drawings. And yes adding an extra 120 makes a huge difference to this innovation curve. When you import you only get the learning curve ( cost improvement ) not the innovation curve with it. If we are to make a dent in that, we need both.

NRao · Post by **NRao** » 24 Oct 2016 06:24

Cybaru wrote:
sudeepj wrote:JayS bhai, lets agree to disagree. My own background is in electronics, not aerospace, I know at least a little bit about manufacturing. To me, it doesnt appear that making 240 Ambassadors instead of 120 will magically transform your product into a honda. Instead of berating me, do write to the GoI and explain you reasoning. May be they will listen, unlike me.
its the innovation curve where we will gain the most. New materials, new processes, scaling, automated tools, 3d printing, continuous enhancements to software/hardware, new weapon types, new tools for support, 3d visual crack inspections. If we make a lot of finished goods at home, we will also learn how to ensure they live upto the specs, figure out why if they don't and in next revision make enhancements. This whole cycle is lost when you import the toolings and drawings. And yes adding an extra 120 makes a huge difference to this innovation curve. When you import you only get the learning curve ( cost improvement ) not the innovation curve with it. If we are to make a dent in that, we need both.

The import is expected to move multiple needles at the same time: jobs, quick(er) squads for the AF, techs (engine?), export (eco), etc. It is not just about absorbing techs that come with the craft. The curve you are proposing, while it makes a lot of sense, it will put India even further behind.

What India needs is a cultural change.

@sudeep, By and large I agree with you.

ShauryaT · Post by **ShauryaT** » 24 Oct 2016 06:43

NRao wrote: What India needs is a cultural change.

Who better to shape up Indians than the Americans right? I wanted to say this earlier. One's perspective changes depending on where one sits.

Cybaru · Post by **Cybaru** » 24 Oct 2016 06:48

NRao wrote: The import is expected to move multiple needles at the same time: jobs, quick(er) squads for the AF, techs (engine?), export (eco), etc. It is not just about absorbing techs that come with the craft. The curve you are proposing, while it makes a lot of sense, it will put India even further behind.

What India needs is a cultural change.

Cultural change? Or perhaps a realization that the innovation curve doesn't come for free. Like even now, you understand, yet you say its perhaps not worth investing in, as it will cost us time? Its also not something I came up with this innovation curve, its common industry term that is used to highlight the issues we are arguing about.

Do we need this innovation curve at all?
Is this something we are aiming for?
Or do we plan to assemble for another 100 years?
How will we get independent ?

hanumadu · Post by **hanumadu** » 24 Oct 2016 07:06

shiv wrote:
Marten wrote:+1
For all the jargon being peddled on this thread, no one wants to ask the same cos to set up lines for manufacturing components for the LCA. Even the smartest folks on this forum are being blind to the fundamental question of how Indian manufacturing strengths will improve from this screwdrivergiri. If Namo or MP haven't considered this, one would be very surprised. Therefore the answer is that we're trading our current hobbled abilities for 1500 jobs and some super strategic gains. Some far reaching strategic goal must be reached or will be found, no doubt. But it makes no sense at this point when an additional line at HAL and double the staff at ADA would make more sense.
This is my guess:

The primary goal is to increase fleet strength by hook AND crook

I use the modified expression deliberately. Initial examples will be semi-knocked down kits assembled in an integrating plant. All the little bits and pieces will be imported. But while the initial integration plant is being set up, the "offsets clause" will locate Indian small companies who will (ideally) be hand held to start manufacturing small parts and then increasingly complex parts. In theory the first 5 built will be almost 100% import - but after 10 years when the last few are being built the import content will be down to maybe 30%., but the entities making those parts will be private companies who have been hand held and given orders. Beyond that it is up to the nation to decide where to go

But our DPSU's can do it too. In fact they are in a better position to do so since they already know the Indian players, there is already an order for 120 planes and up to another 200 more if they can scale up, the manufacturing has already commenced. They are light years ahead of any foreign manufacturer who hasn't even been selected. If we have to import, lets import qualified personnel. If f-16 plant is shut down in the US and there are no gripen orders they will be jobless anyway.

I am still unwilling to believe that we can design the components which is a 1000 times more difficult task, but cannot manufacture them. Who would have thought that while we were eagerly and anxiously waiting for IOC and FOC of LCA, the real obstacle to make them in India will be our inadequate manufacturing abilities. Talk about KLPD.

shiv · Post by **shiv** » 24 Oct 2016 07:59

Cybaru wrote:
sudeepj wrote:JayS bhai, lets agree to disagree. My own background is in electronics, not aerospace, I know at least a little bit about manufacturing. To me, it doesnt appear that making 240 Ambassadors instead of 120 will magically transform your product into a honda. Instead of berating me, do write to the GoI and explain you reasoning. May be they will listen, unlike me.
its the innovation curve where we will gain the most. New materials, new processes, scaling, automated tools, 3d printing, continuous enhancements to software/hardware, new weapon types, new tools for support, 3d visual crack inspections. If we make a lot of finished goods at home, we will also learn how to ensure they live upto the specs, figure out why if they don't and in next revision make enhancements. This whole cycle is lost when you import the toolings and drawings. And yes adding an extra 120 makes a huge difference to this innovation curve. When you import you only get the learning curve ( cost improvement ) not the innovation curve with it. If we are to make a dent in that, we need both.

One problem is that India is an enormous country but the manufacturing "pipes" for defence equipment are narrow and limited in number. Like having one water tap for 100 people.

That means that "everything military" has to come out through the available government run factories. There is no "ecosystem" outside of government to build military grade stuff other than some innocuous things like tyres, automotive bodies etc. Anything that the military want have to come out via a few dozen government owned factories, or they have to be imported outright.

I have been hearing a lot of ideas about how to actually build, from ground up, industrial infrastructure as an alternative to government which has the skill and technology to meet military demands. A complete parallel system has to be built in India that augments what the PSUs produce and compete with similar parallel lines abroad.

As I see it the government has a vested interest in the success of the defence PSUs. First of all - the land is free and fully depreciated. Government money is poured into a government factory and government employees are paid with that money and finished products are sold to the military at prices that do not have to make a profit (because it is government paying government) and the prices do not have to account for land taxes or loans on acquired land. The biggest outflow would be salaries, perks and pensions but because the workers are government employees the factory they work in does not have to make a profit - the money comes from a central fund that pays all government employees. This allows for extreme inefficiency.

For example, imagine a private concern manufacturing say motors needs every worker to assemble 10 motors a day to be profitable and then you remove the burden of tax and salaries from the factory owner. You then get a factory in which a worker needs to assemble just 4 motors a day and he is still able to sell motors cheaper than the competition. The government is in a real fix because of this. If they divert funds by "privatization" the workers go on strike and CPI/CPM and all the JNU types go wild and bring defence production to a standstill. PSUs are a millstone around the country's neck but the government cannot shut them down or even downsize them in a hurry.

But the PSUs have become so vital that the government cannot shut them down. The only thing that the government that is interested in the country can do is to stop expansion of PSUs and hive off new work to private players. But what is "new work"? The government cannot fund the new private factories - they can give sops, concessions and tax breaks. Those new factories cannot be built without investment. Where will that investment come from? That investment can come from abroad, but those who invest will want profits. They can make profits if their product has a market. The Indian military is a ready made market because it is still starved of quality stuff - being dependent on PSUs who are inefficient and cannot deliver in quality of quantity, but cannot be shut down.

By getting foreign investment to set up defence manufacturing units the government does not have to expand the PSU base and pay more government employees with perks and sops for their entire lifespan. The govt does not even have to expand the defence budget as allocations for industrial growth are there in other budgets. There are states willing to allocate land and power for industries. Once the industries come, the investor pays the workers. He does not have to build colonies for them. He does not have to promise them lifelong pension like government employees. But the factory will attract shops, schools, hospitals and a whole lot of other private investment which generates employment and consumption beneficial to the state. The government pays only for the finished product and the price and terms for that product is what the defence ministry negotiates and pays for. Salaries, sales and efficiency is what the investor pays for. If he can train 2 men to operate robots that assemble 50 motors a day he only has to pay 2 men to do the same job that 12 PSU people are doing. When those 12 retire - they need not be replaced. In the long term the country saves by reducing the burden of supporting inefficient PSU workers for their entire lives.

Any Indian who works for a private firm will know that working more than 8 hours a day is often the norm and the number of public holidays is restricted. In government organizations - union ensure that hours worked are the minimum needed with tea breaks, and annual leave, casual leave, festival breaks etc as well as pension and regular hikes in salary independent of productivity - but linked to inflation (DA/ADA - dearness allowance + additional dearness allowance). Government run medical care is largely free for workers. Once a private player does such work this inefficiency will be allowed to die a natural death. But the real money and skills to invest for the defence industry in the private sector is not in India. It must come from abroad.

vina · Post by **vina** » 24 Oct 2016 08:08

shiv wrote:t the IAF had to make in their BRD "in house" as "import substitution" for Mi-8 and MiG 27. We need private companies with tooling and skills

This is EXACTLY why industry never took off in India in the defense sector. Import subsitution of spares is a terrible business to be in. Uneconomical, unviable and a dead end from the busienss point of view.

Now IAF instead of holding the feet of MIL and MIG to the fire for spares, want Indian industry to rengineer spares for them, and they will pay a pittance for that ? Thanks. NO thanks. They are welcome to build their own empires in the BRDs, try to "takeover" HAL , Harrumph at the "Civilians" at HAL and BRD and strut around , sure they will do well.

But to expect private venture to put resource, time, effort and capital on a fool's errand, I think not.

NRao · Post by **NRao** » 24 Oct 2016 08:16

Cultural change? Or perhaps a realization that the innovation curve doesn't come for free.

OK. Mind set change.

I just do not think techs or funds are a *real* problem within India. A Kargil never brought either one of these and yet something changed and Indian got it done (understatement of the century). So, what is it that makes India gets things done under duress and when that pressure is eased, India is back to chai biscut? I just termed it "culture". Call it what you want. It is internal. And only Indians can change it. Some individuals do and some teams do (Cricket?). But for whatever reason it is not present in other matters - forget aerospace, rules of the road. That has to change, else it really does not matter. Any amount of infusion will not change the situation. conversely, if that element is present no matter of external interference can prevent success.

JayS · Post by **JayS** » 24 Oct 2016 08:25

GShankar wrote:
JayS wrote:
Correct. Even if we manage to buy SAAB somehow, the technology will not come to India automatically. It will stay in Sweden. Only thing is we will have control over it to some degree (but not fully). We can guess the picture based on what happened in JLR acquisition by TATA, even though it was a mere auto company.
Question - did something similar happen with Volvo too? Or was it sold lock, stock and barrel to Chinese?

Volvo Aero was sold to a UK based company.

ShauryaT · Post by **ShauryaT** » 24 Oct 2016 08:34

Disinvestment in India is not an easy thing to do, but there were some governments who have acted in earnest, in defiance of the most vociferous oppositions. It has been done not fully but in sizable measure. The telecomm industry was one such example amongst others like hotels and the Maruti stake. If politics would not have intervened Shipping Corporation of India, NALCO, BALCO and the Petroleum monopolies would have been privatized along with Banks also some day. Make no mistake the bidders on each one of them were Indian entities. It would take the effort of a statesman to show real leadership and rise above politics and do what is needed in the nations best interests.

NRao · Post by **NRao** » 24 Oct 2016 08:36

vina wrote:
shiv wrote:t the IAF had to make in their BRD "in house" as "import substitution" for Mi-8 and MiG 27. We need private companies with tooling and skills
This is EXACTLY why industry never took off in India in the defense sector. Import subsitution of spares is a terrible business to be in. Uneconomical, unviable and a dead end from the busienss point of view.

Now IAF instead of holding the feet of MIL and MIG to the fire for spares, want Indian industry to rengineer spares for them, and they will pay a pittance for that ? Thanks. NO thanks. They are welcome to build their own empires in the BRDs, try to "takeover" HAL , Harrumph at the "Civilians" at HAL and BRD and strut around , sure they will do well.

But to expect private venture to put resource, time, effort and capital on a fool's errand, I think not.

In that case, the *only* was out - for India - is to export whole sale. Indian MIC need a financier and that is not the GoI. The model should be something like export the LCA MK-I and funnel the funds from those sales into the MK-IA/II.

IF the Indian MIC does not get air to breath, the gap between the user and producer will only increase, both in terms of funds and techs. Forcing more imports.

JayS · Post by **JayS** » 24 Oct 2016 08:52

sudeepj wrote:JayS bhai, lets agree to disagree. My own background is in electronics, not aerospace, I know at least a little bit about manufacturing. To me, it doesnt appear that making 240 Ambassadors instead of 120 will magically transform your product into a honda. Instead of berating me, do write to the GoI and explain you reasoning. May be they will listen, unlike me.

I dont know who you are, neither do I care, so berating you as a person is out of question. I am only berating your written thoughts which seems to be coming out of ignorance to reality. If you dont think making more parts doesn't help n 120 parts are sufficient to learn all that there is to learn n perfect the craft, if you think system integration is not that important, if you think screwdrivergiri enables someone to make something for next generation you are being ignorant. You dont want to look beyond what you already know, Your problem. You delude yourself, you will get disappointed later.

JayS · Post by **JayS** » 24 Oct 2016 08:59

If we want Indian industry to throw around billions of dollars worth investments to develop MIC based on only 120 LCA orders, it will actually end up making price of LCA so high we will start whining how we could have bought F35 for cheaper price.