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

vina · Post by **vina** » 06 Apr 2010 09:53

There are a lot of constraints with which they operate. One eg., is the work force they handle...Mazgaon docks cannot be expected to have the same efficiency as L&T. Everything from top down has a political angle to it, despite the organisation being in the Defence sector.

This is a very important point that you have realized /made. What you are saying is that structurally because of Govt ownership and hence the impact of politics and the politicization of business, a Govt/PSU entity cannot match a well run pvt organization in a level playing field environment.

So the answer out is to close or privatize the PSUs and get the Govt out of business!. Simple isn't it ? Doing it any other way is to condemn the system to perennial "inefficiency" and sub par performance and results.

And no, dont give out commie platitudes such as "govt should give a free hand to management", politics should be kept out business.. yadda yadda. That wont happen because as you pointed out the raison d etre of govt ownership is to precisely ensure these agendas.

The day we realise it, the argument stops. Till then it is time pass onlee for all of us.

Nope. The day we realize it the argument stops alright. Till then, it aint "time pass onlee" , but a call to activism and action to do something about it. Why BR and BRF is actually a part of it, atleast to get the debate started and to reach a wider audience, and to put out wider opinions beyond the canned propaganda / ideology of the JNU and associated ding dongs and the official govt hand outs of the DAVP and the govt / PSU/ DPSU propaganda machinery.

somnath · Post by **somnath** » 06 Apr 2010 11:03

Rahul M wrote: all I'm saying is HAL has had limited success but in a far wider field, overall the tally between the two companies might not be that different. would embrarer have succeeded in even half of their ventures if they were subjected to similar levels of sanctions related restrictions that HAL still faces ? we need to keep in mind the overall scenario too.

Now thats being selective..Barring the US, which other country ever had sanctions on us? And the infamous "entities list" of the US got substantially whittled down way back during the JAswant-Powel "Glide path" programme..There hasnt been too many "HAL pertinent" sanctions for the last one decade now...If the US was "blocking" key tech, what prevented HAL from building upon its continuous Russian experience? Or French? Or British?

If one were to really look at "constraints", Embraer is a Brazilian company...In the last 50 the years, Brazil has some of the most turbulent political histories that is so symptomatic of Latin America, with ideological pendulum swinging back and forth..Worse, multiple financial crises, to the extent of sovereign defaults (the last one as recent as late '90s)...Compared to that, Indian companies (all of them, pvt and public) have had the luxury of a stable polity with no material financial crisis to contend with...

another one of HAL's strengths and experience is in avionics and upgradation of legacy aircraft.

Which major avionics system does HAL make (DARE has had some good success in avionics, especially under Vetrivale, but what was HAL's contribution to that?)? Out of the multiple legacy upgrades we have carried out, which one has been "led" by HAL? Mig21, Mig29, Mirage 2k, An32? Limited Jag upgrades (and the govt is again looking at BAE for a deeper and more extensive upgrade programme)..And a limited Mig 27 upgrade programme...
In fact its ironic that Israel has bulk of the global market for upgrading legacy Russian systems, not us (the largest operator of such equipment)! So much for HAL's knowledge absorption through "license production"...

amit wrote:The final point I think is that it's pure bumpkin to say "strategic" defence production can't be trusted in the hands of Private sector players because they will compromise India by getting foreign collaborators and spilling all the secrets to them

amit, there is nothing "strategic" about a majority of systems that armed forces use worldwide...But it is true that for the truly "strategic" stuff (ballistic missiles, nukes, ultra high-end sat imagery), no one's really in the market to sell...But for everything else, there should be no difference between public, private and foreign - as long as India is getting a "knowledge externaility" in return..

It's about Toyota and Hindustan Motors starting out at the same year both with foreign technology infusion. And the comparison between them today.

HM did not change, so they faded away...Our PSUs/DPSUs dont change, and stubbornly hang on (to govt doles and monopoly contracts!)..

Sanku · Post by **Sanku** » 06 Apr 2010 12:13

negi wrote:While I have no data to take sides in this DPSU vs private sector debate , I would say 100% FDI is indeed a welcome step (MMS gobmint has got this one right ) .

It hasnt happened yet, it is still being opposed by MoD as bizarre, let us see if MMS roughshods MoD again after EUMA or can MoD hold the ground.

100% FDI is essentially a backdoor entry to avoid offset clauses and technology sharing being currently demanded by MoD.

Nothing more nothing less.

-----------

PS> Nothing to with Private industry at all, we may even have 100% subsidiary of a company 51% owned by a external govt, basically a firangi govt manufacturing using Indian resources on Indian soil and selling to Indians.

Sanku · Post by **Sanku** » 06 Apr 2010 12:17

vina wrote:And no, dont give out commie platitudes such as "govt should give a free hand to management", politics should be kept out business.. yadda yadda. That wont happen because as you pointed out the raison d etre of govt ownership is to precisely ensure these agendas..

Absolutely, except that the side effect will be that the private companies may indeed pursue their own agenda, leaving no company working on the GoI agenda.

Had it not been so, there would be no need for GoI to force Pvt sector to move in that direction through offset clauses. They would jump up and try and get their on there own.

Fact remains, private industry need the help of local govts. Generous help. The other so called private entities of the west have gotten here because they were raised by their govts to their feet.

No where in the world has private enterprise really worked in Defence sector (and no LM is not really private), it is always easy for 24 year old to claim that he/she is independent and or self made, quite forgetting the handholding as a toddler.

Our private sector in toddler if not infant as far as def production (forget R&D) is concerned.

Sanku · Post by **Sanku** » 06 Apr 2010 12:40

Rahul M wrote:did my post sound like I'm blind to their deficiencies ?
all I'm saying is HAL has had limited success but in a far wider field, overall the tally between the two companies might not be that different. would embrarer have succeeded in even half of their ventures if they were subjected to similar levels of sanctions related restrictions that HAL still faces ? we need to keep in mind the overall scenario too.

Quite so Rahul M, in fact judging HAL in comparison to ANY other organization is well slightly deficient in understanding of reality.

HAL is responsible to GoI, and should be judged by what GoI tasked HAL to do, whether or not what some opinionated and loud person short on understanding (to be charitable) thinks it should do.

For example compare HAL to Avadi, GoI handles both the organizations and gives marks to both. Now that audit is useful and not a judgment about what HAL should have or should not have done in 1950s.

Folks wax eloquent about Israel doing this and that, who owns the IAI? Is this a public company or private?

How does a public company in Israel become kick ass if the public ownership model itself is flawed?

And perhaps the entire IAI should hang its head in shame and commit harakiri by jumping in the dead sea (a pun for those who cant understand the fact that you float in the dead sea) because of this?

In 2003, Israel Aircraft Industries attempted to enter the VLJ (Very Light Jet) Market, by launching the Avocet ProJet, a 6-8 seat, high utilization air taxi, with a list price almost half the cost of the least expensive business jet available at that time.

In early 2006, the ProJet stalled after a major undisclosed US OEM pulled out of the program due to unspecified reasons.

somnath · Post by **somnath** » 06 Apr 2010 14:06

One unfortunate derivative of a lot of politico-economic discussions in India has traditionally been focused around "ownership" issues...Predominantly because historically the state has tried to "command" all areas of the economy...Things have changed in quite the "180 degree" manner in the last 20 years, but has left the defence industry stuck in the same paradigm...MMS, in some of his earlier avatars (including Chief Economic Advisor, or RBI guv, or even as FM) has been publicly critical of the performance of the "strategic sector", though the nuclear establishment (George PErkovich documents that in some detail in his book) more than the military industrial setup...Its therefore a mystery why he hasnt put in a bit more political capital in reforming the sector..

There are tons of examples of govt-owned companies around the world doing well - Alcatel is oned by the govt, and it is at the cuttign edge of telecoms..Soc Gen is a quasi-state owned bank, and they operate at the cutting edge of financial derivatives..So there are successful examples, though not all that many in the commercial sphere (incl defence)...

The issue is really with Indian PSUs in general, and DPSUs in particular...

Here is one lament on Indian DPSUs by Grp Cap Bewoor..

http://www.indiandefencereview.com/2009 ... trayl.html

He is mixing up the DRDO and DPSUs, and the article is a bit short on facts, but some of the key impressions are still valid - for example, the one of flak kackets..

And this is what OFB/DPSU employees say about the situation:

http://livefist.blogspot.com/2007/06/ps ... 1292780000

Sanku · Post by **Sanku** » 06 Apr 2010 14:27

somnath wrote: The issue is really with Indian PSUs in general, and DPSUs in particular...

Or with blatant personal biases of some folks which fuel such fundamentally mind bending experiences as comparing a private car maker with a govt owned, govt paid, govt controlled, govt sourced, govt DPSU and then comes to conclusions.

Actually given the horrific butchery of common sense that has been displayed, along with repeated side stepping into different tracks when blocked with real examples, the fact free hyperventilating tirade against a section of Indian establishment in my view goes far more than debate.

This is pure character assassination, willful and deliberate, not stopping to consider facts but repeatedly pull out opinions supported with out of context articles which when read actually make different points.

amit · Post by **amit** » 06 Apr 2010 14:59

somnath wrote:amit, there is nothing "strategic" about a majority of systems that armed forces use worldwide...But it is true that for the truly "strategic" stuff (ballistic missiles, nukes, ultra high-end sat imagery), no one's really in the market to sell...But for everything else, there should be no difference between public, private and foreign - as long as India is getting a "knowledge externaility" in return..

Somnath the strategic bit was in quotes if you notice.

That's because some folks feel anything to do with Defence production is "Strategic" and the private sector manned by Indians cannot be trusted. (However, the same Indians working in relatively low paying PSUs become uber patriotic). I fully agree with your contention about the truly strategic stuff.

Sanku · Post by **Sanku** » 06 Apr 2010 16:02

amit wrote: That's because some folks feel anything to do with Defence production is "Strategic" and the private sector manned by Indians cannot be trusted..

Strawman, strawman, strawman.

Empty rhetorical straw men galore.

Bheem · Post by **Bheem** » 06 Apr 2010 17:06

somnath wrote:
A low Capital expenditure on R&D and high revenue expenditure normally indicates account fudging where normal salaries for hundred of babus lazying around is put under R&D head. If actually few hundred crores are spent it would show up in lot of labs, prototypes and some news exposure.
Bheem ji, Thats precisely what is seen for BHEL quite clearly - out of 690 crores of R&D spend, 12 crores is capex!! Is it any surprise that its still scrounging around for tech?

And on BEL? Not much better..Quoting from the latest annual report..

During 2008-09, BEL has spent a sum of Rs. 2,433.3
million on R&D. The expenditure on Revenue
account was Rs. 2,250.0 million and on Capital
account was Rs. 183.3 million
from : http://www.bsepsu.com/Annual_Reports/100049_200903.pdf

So about 8% of R&D spend is capex....

Mrinal ji, you can quote selective "items, projects" etc..But these are the numbers - and they show..

To add to my post, the production line is hardly ever used for R&D as it disrupts production. Also the equipment required for R&D is normally very different from the equipment required for mass production. Also the labs and testing equipment requrred for R&D and normal production is different. Very low capex of 'alleged' R&D is a strong indicator of account fudging.

somnath · Post by **somnath** » 06 Apr 2010 17:46

Another key mistake that people make in the whole "public v/s private" debate is to forget the distinctions between funding, ownership, regulation and execution...Going back to the American model, the really bleeding edge research there, across sectors, are performed at universities and at their awesome national laboratories (likes of Los Alamos and Lawrence Livermore)..Both unis and national labs can be either publicly owned or private, or for that matter set up through a large endowment...But all of them do tons of projects/studies/research that are fully funded by the government...In fact "basic" resarch in the US is predominantly funded by the government....The same concept flows down to corporations...Why just the usual suspects (LM, Raytheon etc), even the likes of GE, Dupont, Intel do lots of product development on critical tech purely on public funding...Not just that, even "foreign firms" (likes of BAe US) get their share of US govt work...Ditto in the UK, or France, or for that matter Israel....No one starts questioning the patriotism and motives of people working in UK's Atomic Weapons Establishment (they make UK's nuke warheads) - the factory is owned two-thirds by LM and JAcobs Engg (both US firms)!!!Or no one in France questions their govt why all their publicly-funded next gen aeronautics projects are the prerogative of a family-owed outfit called Dassault!!

By its very nature, military spending is 100% (or close to) publicly funded..And also 100% publicly regulated...But that does not mean that execution on R&D and production has to be carried out by publicly owned companies..

I think the problem is that governmental India has not really changed in its "mindset" about private/foreign...It cuts across lines (look at Jairam Ramesh scuttling Bt Brinjal giving the primary reason of a foreign company - Monsanto - being the research company bringing it out - and openly admiting that his stance would have been different had the company been an Indian, preferably public sector company)....Now this mindset is best defined by what AMit saidd:

private sector manned by Indians cannot be trusted. (However, the same Indians working in relatively low paying PSUs become uber patriotic).

So somehow, Indians working in Monsanto have less conscientious motives than those working for the Pusa Institute...

BAck to the context, so Indians working for Tata SED (or Boeing India) would be more tempted to "leak secrets" that those working in BEL!!?? Antediluvian is the only way to describe it....

amit · Post by **amit** » 06 Apr 2010 18:38

Let me clarify a bit on my HAL comment. It's just not about HAL being a PSU. God knows being in the private sector is no silver bullet as HM and Ambassador cars illustrate.

What is important is the system as it is at least in the case of HAL is not going to work any more if India hopes to be a major aerospace power, I think that should be obvious.

So what's the answer, totally privatise HAL? I don't think that's going to work. Better management, accountability and autonomy is needed. And the guys running the show need to be told they are running a company not a govt department. They got a PR after so many years who was doing a good job and they just fire him in the assumption HAL doesn't need a PR.

This change in mindset needs to come from the govt. Once that comes then their will be more trust in the private sector and it's great potential could be utilised.

However given the sample of opinion here which seems to be govt knows best that seems a tall order.

JMT

negi · Post by **negi** » 06 Apr 2010 20:01

Sanku wrote: 100% FDI is essentially a backdoor entry to avoid offset clauses and technology sharing being currently demanded by MoD.

Yes and that is why I support it , offsets and ToT is a big farce to make a fool out of the layman and others outside of the circus , the way I see it offsets clause is there to just keep the desi companies look busy while they do screwdriver giri for a huge lump sum charged by the OEM in the name of ToT . Name any one deal involving this ToT or such sham and we can easily dig up the time and cost overruns it ran into when it came to local manufacturing and then there are other classic examples of unparalleled goof ups like HDW and Bofors where GOI paid for the ToT but later shot itself in foot and now we are facing the same with Scorpene and even the T-90 deal.

Nothing to with Private industry at all, we may even have 100% subsidiary of a company 51% owned by a external govt, basically a firangi govt manufacturing using Indian resources on Indian soil and selling to Indians.

Well it is not true if the sector is indeed opened up like any other industry we might see TATAs, L&Ts, Ashok Leylands and even Mahindras jumping in via tie-ups or even acquisitions . And if likes of LM or Raytheon wish to set up shops here then why not ?

I don't see any legitimate reasons for concerns this infact reminds me of commies in WB or even George kaka who booted out IBM due to misplaced priorities .

Let the playing field me made even and the fittest survive if HAL, BHEL and co indeed do cutting edge stuff and produce quality deliverables in time they have nothing to fear .

Sanku · Post by **Sanku** » 06 Apr 2010 20:07

negi wrote:
Sanku wrote: 100% FDI is essentially a backdoor entry to avoid offset clauses and technology sharing being currently demanded by MoD.
Yes and that is why I support it , offsets and ToT .....

The issues listed are valid, yet the ToT method is being constantly refined. Note all this is a fairly new imitative. Why sing a dirge before the child is even born?

Well it is not true if the sector is indeed opened up like any other industry we might see TATAs, L&Ts, Ashok Leylands and even Mahindras jumping in via tie-ups or even acquisitions .

Which is exactly what the 2008 policy trying to do and IS supported big time by all the folks you list.

Who DO NOT support 100% FDI.

The def Navaratna policy is made for them.

And if likes of LM or Raytheon wish to set up shops here then why not ?

Under certain conditions, why not indeed. It is the no holds barred entry that is being opposed. Only that.

I don't see any legitimate reasons for concerns this infact reminds me of commies in WB or even George kaka who booted out IBM due to misplaced priorities .

Sorry completely different issues.

Let the playing field me made even and the fittest survive if HAL, BHEL and co indeed do cutting edge stuff and produce quality deliverables in time they have nothing to fear .

Negi think through this for a moment, if LM is indeed fittest and kills HAL et al, do you really think that is a good thing?

Sanku · Post by **Sanku** » 06 Apr 2010 20:09

amit wrote:This change in mindset needs to come from the govt. Once that comes then their will be more trust in the private sector and it's great potential could be utilised.

You know something amit, I totally concur with this post of yours, and the one before the last one.

I just dont agree with somehow painting all the folks asking for domestic industry growth in def sector as being labeled as anti-free-market.

Sanku · Post by **Sanku** » 06 Apr 2010 20:15

somnath wrote:Why just the usual suspects (LM, Raytheon etc), even the likes of GE, Dupont, Intel do lots of product development on critical tech purely on public funding...Not just that, even "foreign firms" (likes of BAe US) get their share of US govt work..

I think the problem is that governmental India has not really changed in its "mindset" about private/foreign...

Ah exhibit 102 of Shanghai statistics, after 101 correct examples of public/private partnership in US and others where ALL the players are of the same country we have this, slight of hand where private/foreign are taken together.

So private == foreign?

Or opposing 100% FDI == opposition of private enterprise?

An perfect example in dialectics, take a bunch of absolutely correct examples, and slip in a word, just a word, only ONE word, which is hopelessly UNTRUE, and if any one objects pass of the objection to the incorrect part as being objection by yahoos to obviously correct picture.

Bravo, well done.

negi · Post by **negi** » 06 Apr 2010 20:18

^ There is ample space in market for those who have quality products/services to deliver , let us not get senti and rhetorical stuff like LM killing HAL into this debate , after all these years of hand holding and government support if DPSUs cannot hold there own in the market then they should be left to market's mercy . One cannot argue both ways i.e. either DPSUs do quality stuff in which case they very much have a role to play and will adapt to market or they simply are being a bottle neck when it comes to growth of India's MIC and all in the name of nation's interest .

Kanson · Post by **Kanson** » 06 Apr 2010 20:23

I dont know guys how correct i'm but i feel this 100% FDI is geared towards the procurement of MMRCA.

Remember, when allowing the Amreekhan jets, people questioned abt the viability and saction proof. For that the then NSA, MKN, while on his trip to Amreekhan talked or hinted about shifting of *entire* assembly lines [F-16]or Amreekhan procuring important parts of jets for the current lot[f-18] in our soil. At that time, even there was a talk of shiting F-16 assembly lines to India and people in this very forum questioned if situation arises, do we sell F-16 from India to Pak.

Recently someone talked abt 'Iron clad' guarantee in a kind of paanwalla news on the eve of the selection of Mig-35 as MMRCA. Deals will be worked to make a complete transfer - I can only guess.

Even Eurofighter CEO hinted something to this effect and Gripen talked abt complete tech transfer.

If not HAL being involved - dont know, just guessing - so for the offset of 50% that comes more than 5 billion USD as joint venture of 26% seems ridiculous - JMT

Or probably MMRCA JV can be set like Boeing MRO ?

Sanku · Post by **Sanku** » 06 Apr 2010 20:30

negi wrote:^ There is ample space in market for those who have quality products/services to deliver , let us not get senti and rhetorical stuff like LM killing HAL into this debate , .

Hey you brought it in, survival of the fittest, I am only asking you think it through, do think it through.

-----------------------------

Meanwhile an anecdote, recently a large Chinese telecom firm bid for a contract that I know about for 1 rupee, yes, that is right 1 rupee (did they watch too much Trishul?) Or is the concept of some one with a fat bank balance trying to snuff out competition still valid?

Is there a reason why the GREAT and MUCH BELOVED US of A has a anti-monopoly act and breaks up Bells (but does not break up monopolistic def suppliers)

BTW the Chinese company was booted out of the contract, everyone saw through their game. They should realize, that Bollywood movies are not India.

Rahul M · Post by **Rahul M** » 06 Apr 2010 20:40

somnath wrote:
Rahul M wrote: all I'm saying is HAL has had limited success but in a far wider field, overall the tally between the two companies might not be that different. would embrarer have succeeded in even half of their ventures if they were subjected to similar levels of sanctions related restrictions that HAL still faces ? we need to keep in mind the overall scenario too.
Now thats being selective..Barring the US, which other country ever had sanctions on us? And the infamous "entities list" of the US got substantially whittled down way back during the JAswant-Powel "Glide path" programme..There hasnt been too many "HAL pertinent" sanctions for the last one decade now...If the US was "blocking" key tech, what prevented HAL from building upon its continuous Russian experience? Or French? Or British?

{and that is a perfect example of someone opening his/her mouth without having the slightest idea what he or she is talking about. but never mind, that didn't stop any self-proclaimed expert to spout any which nonsense theory that took their fancy and forcing facts into grotesque contortions trying to fit them. we have already seen enough evidence of that on the forum, the latest being the 'analysis' in the armoured vehicles thread. forget last decade, the sanctions still stand, if you are unaware of it then you should simply acknowledge that fact, there's no shame in it. just because HAL and co does not come out with frontpage ads saying "we are under sanctions" does not make it not so.
all these vehement arguments without being aware of the simplest facts betrays a mentality that is out to win arguments at any cost.
while the US has officially whittled down the sanctions regime by a fair degree, HAL and other R&D organisations continue to face a very significant barrier in procuring even the simplest of components, the story is no different in case of other western sources. similarly, it's sheer naivete to imagine that russia opens its complete treasure box to us, it most certainly doesn't and even in cases they do, the standards are frequently different enough to render their items unusable in our context.

to emphasise, virtually every industrialised country had a technology barrier against us, of varying degrees (for obvious reasons) and still do, although at a lower level.

____________________
coming to embraer, let's not forget that embraerr operates in a sector with little or no military significance, out of a country with little to no military significance as well (AFA the west is concerned)

even then, embraer does not make, let alone design engines, something which HAL does as routine.
embraer does not make, nor design any of the sundry avionics that goes into their aircraft, which are sourced from a variety of western sources.
in fact, embraer does not make anything much other than the airframe and handling overall assembly.

now this is not a knock on embraer, most aircraft manufacturers operate in that way, the F-22 for example features engines from P&W, radar systems from NG, display helmet from raytheon/elbit, cockpit from GEC,UK avionics from BAE and so on.
but of course, only in case of HAL all kind of questions will be asked, HAL has/had to make these things itself in-house, (which precious few aircraft manufacturers want to, preferring to stay as an overall designer and fabricate the aircraft from ready sub-assemblies) because Indian industry was not capable of doing the job. that is a testament to the condition they had to work in.
pray tell me WHY HAL would undertake R&D work on items like MC's etc when there is a dedicated and competent lab devoted to this field ? }

another one of HAL's strengths and experience is in avionics and upgradation of legacy aircraft.
Which major avionics system does HAL make (DARE has had some good success in avionics, especially under Vetrivale, but what was HAL's contribution to that?)?
{this question again throws up the double standards at work here. embraer builds the airframes and virtually everything else that goes into it is foreign built, is touted as the perfect entity, while HAL that actually makes the systems (even if designed by other organisations) supposedly has no strengths whatsoever.

FYI :
The core avionics designed by the Bangalore-based Defence Avionics Research Establishment (DARE) consists of Mission Computers, Display Processors and Radar computers which are now manufactured by HAL'S Hyderabad Division. (also exported for the malayasian su-30MKM's)

The integrated communication equipment and radar altimeters are of HAL's own design, already well proven in other aircraft applications.
http://www.bharat-rakshak.com/IAF/Aircr ... ivale.html }

Out of the multiple legacy upgrades we have carried out, which one has been "led" by HAL? Mig21, Mig29, Mirage 2k, An32?
{I guess it is too difficult to wrap one's head around the simple fact that upgrading aircrafts without involving the OEM is a risky proposition as the OEM can play hardball and cut-off critical spares ?? and when the vast majority of your fighter fleet originates from that manufacturer (mig) or a very important component of the fleet (mirage 2k) or more than half of your transport fleet (An-32), such a step could have disastrous consequences ?
that said, other than the An-32 upg (AFAIK), all of these upgrades have significant HAL involvement and contribution from the start and other than a few token initial samples, all actual upgradation work was/will be carried out by HAL.}
Limited Jag upgrades {how does DARIN II become "limited" ? perhaps because it is "led" by HAL and it causes discomfiture to acknowledge that ? }
(and the govt is again looking at BAE for a deeper and more extensive upgrade programme) {the govt is doing NO such thing, other than in the overactive imagination of some people. DARIN III is a completely HAL/IAF led effort and while some foreign components will be used, it is HAL that is calling the shots, as was the case with DARIN II which has been a grand success.
not to forget, it was HAL that saved BAE's sorry a** when the jags developed an as yet undetected problem which was identified and rectified by HAL. BAE of course claimed all rights to HAL's work afterwards.
http://www.bharat-rakshak.com/IAF/Histo ... aguar.html }..And a limited Mig 27 upgrade programme... {aha, so the mig-27 upg is also a "limited" programme ? pray tell me why ? because it is done by HAL I guess ? is this some new syntax ? any upgradation by HAL is automatically dubbed "limited" ?

any "limited" upgradation that brings about this much change in cockpit ergonomics and layout has my vote. more power to "limited" upgrades ! }
In fact its ironic that Israel has bulk of the global market for upgrading legacy Russian systems, not us (the largest operator of such equipment)!
{is that so ? which other AF has israeli upgraded migs other than the romanian AF (a romanian co was a part of the JV with elbit for the mig-21lancer program in the first place)
this of course is yet another case of missing the woods for the trees, israel can afford to do so and antagonise the OEM because it is not a major or even a minor operator of russian origin aircraft. we do not have that luxury.}
So much for HAL's knowledge absorption through "license production"...
{so much for the "understanding" of self-proclaimed experts. }

negi · Post by **negi** » 06 Apr 2010 21:47

Sanku wrote: Hey you brought it in, survival of the fittest, I am only asking you think it through, do think it through.

You are quoting me out of context , there are many niche areas under the defense sector itself so a lot of place for HAL and likes to play around if they can deliver .

Meanwhile an anecdote, recently a large Chinese telecom firm bid for a contract that I know about for 1 rupee, yes, that is right 1 rupee (did they watch too much Trishul?) Or is the concept of some one with a fat bank balance trying to snuff out competition still valid?

Name a leading arms manufacturer out there who can outbid HAL or likes who operate from India for a similar product , if HAL can consistently produce stuff like ALH, LCH or even LCA within stipulated time frame no LM or Boeing can beat them on unit cost not unless they set up complete R&D and manufacturing base in India with substantial yindoo manpower , funny thing is once that happens does it matter if it is LM or HAL ?

Is there a reason why the GREAT and MUCH BELOVED US of A has a anti-monopoly act and breaks up Bells (but does not break up monopolistic def suppliers)

Monopoly where ? They have at least 3/4 top notch OEMs in every niche field almost every nook and corner has a small start up which can design and make modern fire arms which can give the guns in Unkil's service a run for their money same is true for the UAVs and other ventures.

BTW the Chinese company was booted out of the contract, everyone saw through their game. They should realize, that Bollywood movies are not India.

The Chinese companies have cornered a huge share in India's power sector when it comes to supplying boilers and other heavy power equipment so such anecdotes don't mean nothing .

somnath · Post by **somnath** » 07 Apr 2010 08:45

Rahul M,

Will ignore your gratuitous comments on the armoured discussion - suffice to say that IA has made the decision fairly close to what I said...But lets come back to the context here..

forget last decade, the sanctions still stand, if you are unaware of it then you should simply acknowledge that fact, there's no shame in it. just because HAL and co does not come out with frontpage ads saying "we are under sanctions" does not make it not so.
all these vehement arguments without being aware of the simplest facts betrays a mentality that is out to win arguments at any cost.
while the US has officially whittled down the sanctions regime by a fair degree, HAL and other R&D organisations continue to face a very significant barrier in procuring even the simplest of components, the story is no different in case of other western sources

This is precisely what happens when people "open their mouths" based on dated facts converted to cliches and preogressively into axioms...

Here is the US Entity List:

http://www.access.gpo.gov/bis/ear/pdf/744spir.pdf

Cant see HAL there - only missile-making entities of DRDO, some entities of DAE and ISRO....The only sticking point IMO is ISRO now...As for the rest, no country wants to transfer its "strategic tech", so no wonder entities in working in that space are treated cautiously...BTW, even Korean, and Taiwanese, and Turkish entities (all US allies) figure in the list)...

But even this does not answer the point that there were no sanctions ever by UK, France, Russia et al...

But there are more "qualifications"

similarly, it's sheer naivete to imagine that russia opens its complete treasure box to us, it most certainly doesn't and even in cases they do, the standards are frequently different enough to render their items unusable in our context.

to emphasise, virtually every industrialised country had a technology barrier against us, of varying degrees (for obvious reasons) and still do, although at a lower level.

Ahh, somehow the "treasure box" was available to Embraer, Bombardier, Mitsubishi, Korea Aerospace etc etc!!And somehow the Americans, French, Brtish cmpanies helped "set their expertise up" through their munificence!!!

Doesnt stop there, some more:

coming to embraer, let's not forget that embraerr operates in a sector with little or no military significance, out of a country with little to no military significance as well (AFA the west is concerned)

Latam is not militarily significant for the US?? (Allende, Pinochet, sandinistas, Castro.....!!!)...Brazil swung between communist-leaning (Vargas-Quadros) to military to nationalist (Lula) wildly for the last 60 years...the coup was largely ascribed to the CIA....And somehow, for such a volatile country (one with large communist sympathies, no less) Embraer was "supported" to become a top notch aviation company!!

even then, embraer does not make, let alone design engines, something which HAL does as routine

Which engine has HAL designed?

embraer does not make, nor design any of the sundry avionics that goes into their aircraft, which are sourced from a variety of western sources.

Which avionics has HAL desinged? Airplane desing/manufacturing companies dont usually in any case...So why make claims on that basis?

The knock HAL has to take is not on its avionics (in)abilities..But on its failure to design and manufacture even a basic combat aircraft after 5 decades of license producing Russian, British, French stuff..The knock it has to take is due to its inability to even do the license manufacturing with half-decent efficiency (as depicted in its financials)...

this of course is yet another case of missing the woods for the trees, israel can afford to do so and antagonise the OEM because it is not a major or even a minor operator of russian origin aircraft. we do not have that luxury

Really? Israel and Russia are now marketing these upgrade packages together....Wonder why it isnt India and Russia?

And thats really the crux...Boeing/Airbus cant think beyond doors and windows (!) to be sourced from HAL, despite heavy offset commitments, while they source so much more from China (which BTW has many more entities in the Entity list!)...And Russia cant decide what can possibly be our "workshare" in the PAKFA programme...

After 5 decades of protected mollycoddling (post nationalisation), all that HAL can do is more screw drivering (some more Su30s, some more Hawks, some more MRCAs)...We want to develop an indigeneous combat aircraft? CReate a society, ADA to design the LCA...Want a local "light" aircraft? Get NAL...Want a local small transport aircraft...Lets ask the Russians to do a JV(and refuse them stake commensurate to their design contriution!)!!!

And evaluate HAL on effieciency (financial) parameters - blasphemy, how can you do that?!

aditp · Post by **aditp** » 07 Apr 2010 09:49

Okay deleted

Santosh · Post by **Santosh** » 07 Apr 2010 10:06

Why take it down to the personal level aditp? Somnath raises valid points. The likes of HAL, BHEL, SAIL, IOC, SBI should have been rubbing shoulders with the likes of Lockmart/Boeing, Alstom/Siemens, Mittal, ExxonMobil and JPM/HSBC. Tens of other PSU's can be added to the above list. It's a shame that they are not. An average tax payer has every right to feel being let down. And the PSU's have as much blame to take as the lame govt policies.

Sanku · Post by **Sanku** » 07 Apr 2010 10:34

Santosh wrote:Why take it down to the personal level aditp? Somnath raises valid points. The likes of HAL, BHEL, SAIL, IOC, SBI should have been rubbing shoulders with the likes of Lockmart/Boeing, Alstom/Siemens, Mittal, ExxonMobil and JPM/HSBC.

Which they do. To say that there are no issues is misleading, so to say that because of the issues a whole host of success be ignored is meaningless.

Somnath does not raise ANY meaningful points, he has been, to put it mildly, falsifying data to suit an agenda, repeatedly.

Rahul M · Post by **Rahul M** » 07 Apr 2010 10:43

somnath wrote:..........
Really? Israel and Russia are now marketing these upgrade packages together....Wonder why it isnt India and Russia?........

I'll come to the rest of the post later, but I'll like to know more about this. do you have a reliable source for this ?

Rahul M · Post by **Rahul M** » 07 Apr 2010 10:47

santosh, no one's saying the DPSU's have been perfect or even close. but to dismiss their achievements (of which there are many) out of hand as irrelevant while hanging on to whatever real and perceived shortcomings they have, smacks of an agenda or a bias, there is nothing objective in somnath's analysis.

arnab · Post by **arnab** » 07 Apr 2010 12:16

Rahul M wrote:santosh, no one's saying the DPSU's have been perfect or even close. but to dismiss their achievements (of which there are many) out of hand as irrelevant while hanging on to whatever real and perceived shortcomings they have, smacks of an agenda or a bias, there is nothing objective in somnath's analysis.

I think it is a tad unfair to ascribe an 'agenda' to someone on a forum, considering NOBODY here does a full disclosure about their institutional affiliations

Yes one can ascribe a 'bias', but then we all have those. Having said that, I do not believe somnath has provided any false data either. One may of course interpret data in different ways.

The fact is that in an 'absolute' sense DPSUs have not delivered in terms of cutting edge technology. There are many reasons for this - the infant industry argument, technology denial or government priorities. The question really is - where do we go from here?

If the defence industry is truly completely strategic, why did GOI allow 26 % equity to private sector in 2000-01. Why not keep it shut completely (like the nuke power sector)? If the intention was to encourage foreign participation for technology infusion - then clearly that has not happenned.

amit · Post by **amit** » 07 Apr 2010 12:29

Rahul, not to crib on the points that you've raised, but one question that begs asking is, what's the way forward for HAL?

Will it/should it continue to do what is has been doing for the next 60 odd years or should it change and move into the big league? If it's the big league how do propose a company like HAL would do that?

I'd like to know your thoughts on this.

Another point.

Your assertion that Embraer doesn't do any military stuff is not exactly accurate. Just a cursory glance at the WiKi link I had posted tells otherwise. If I've time over the next few days I'll dig up some more stuff.

On October 22, 1975, the company's first pressurized aircraft, the Xingu, made its inaugural flight. The aircraft was smaller than the Bandeirante, thus it didn't become a successor; a few dozen Xingus were built, with most being delivered to the French Air Force in 1981. By request of the Ministry of Aeronautics, Embraer developed its first original combat aircraft, the Tucano, which made its inaugural flight on December 16, 1980. The Tucano became the most successful turboprop military trainer ever built, with more than 650 units sold around the world and a license for Short Brothers to build it for the Royal Air Force.

Do note that by the early 1970s, Embraer was doing this. It should also be noted that Embraer was Govt owned at this point of time, so being a PSU is not necessarily bad in Brazil. Can we say the same in India?

And here's what they are planning to do now:

On April 19, 2007, Embraer announced it was considering the production of twin-engine, jet-powered military transport, the Embraer C-390. Using many of the technologies developed for the Embraer 190, {building commercial planes can be a good learning exercise, even though it may not be as se*y as military jets} it would carry up to 19 tons (41,888 pounds) of cargo and is aimed at replacing older, Cold War-era cargo aircraft. By comparison, the Lockheed C-130 Hercules carries between 19.7 tons (43,550 pounds) and 21.2 tons (46,812 pounds).[11] The project is still under consideration, and is dependent on customer interest. The Brazilian postal service, the Correios, has demonstrated interest in buying at least 5 and eventually 20 to 25 of the aircraft, in lieu of using commercial freight service for mail transport.

Here's an update on the C-390 or KC-390 as it's now know: Embraer Launches KC-390 Military Transport Jet Program

SÃO JOSÉ DOS CAMPOS, Brazil: In a ceremony held, today, during the seventh edition of the Latin America Aero and Defence (LAAD) trade fair, which takes place from April 14 to 17 (2009), at Riocentro, in the city of Rio de Janeiro, Embraer signed a contract with the Brazilian Air Force (FAB) for the KC-390 military transport aircraft program.

I don't want anyone to rupture a blood vessel but I'd like to remind folks that India also has ambitions of making a medium transport military aircraft. Comparisons are odious (for some folks) I know but are they unjustified in this case? Can we do it without the Russians? What good is all the innovative upgrades and avionics packages if they all do not add up to the ability to build a transport aircraft from the drawing board stages in a reasonable amount of time? Tejas shouldn't be brought into this debate as HAL didn't design the aircraft. That itself is a pity. Despite having a 70 year old aerospace company, India had to set up a special group to design Tejas.

Link to an image: http://www.aereo.jor.br/wp-content/uplo ... azonia.jpg

Sure Embarer isn't making a fifth generation aircraft or even a 4+ one. But can we dismiss its achievements with one sentence, that it only makes commercial jets?

Finally a request: Is it really necessary to make personal attacks and questions motive of a poster who's comments goes against what is the BRF group think on this subject? As far as I can see he has made no personal attacks on anybody. If his arguments are hollow then, it should be easy to demolish them nah? I write this after I've brought this point to the notice of the Mods.

amit · Post by **amit** » 07 Apr 2010 12:30

Oh, I see Arnab has asked the same question that I did. I think its a legitimate question.

Rahul M · Post by **Rahul M** » 07 Apr 2010 13:00

arnab wrote: I think it is a tad unfair to ascribe an 'agenda' to someone on a forum, considering NOBODY here does a full disclosure about their institutional affiliations Yes one can ascribe a 'bias', but then we all have those. Having said that, I do not believe somnath has provided any false data either. One may of course interpret data in different ways....

arnab, selective quoting and ignoring real-life issues to suit one's theory does not make for a constructive discussion, whatever else you may term it.
such "freedoms of expression" may be granted elsewhere on the net but on BR you are expected to stick to facts and circuitous reasoning and repeating same points after those have been summarily discredited is not tolerated. mind you, I'm not just speaking of this thread or even of the recent past. similarly, as someone said, ignorance is not a POV. that might make us less "free" or "liberal" than is fashionable but heck, I don't care, my job is to sustain a good environment for discussion.

as to the rest of your post, I haven't taken any stand on those issues and I'll give them a pass for the moment, since replying takes too much of my time.

it appears that you are asking those questions based on some assumptions about my stand which are not quite accurate.

to sum up my stand on this issue :
> FDI upto 49% should be allowed in defence manuf sector
> a host of OFB factories should be sold off/privatised on a case by case basis
> those that would be retained should operate as govt undertakings rather than as ministry controlled factories as is the case now.
> the OFB as a body should be abolished
> MOD should provide level playing field between DPSU's and pvt co's and discriminate for and against any of them.

> the management issue of orgs like HAL or BEl etc is a very complex one and I don't think I'm in any position whatsoever to comment on it.

Rahul M · Post by **Rahul M** » 07 Apr 2010 14:24

amit wrote:Rahul, not to crib on the points that you've raised, but one question that begs asking is, what's the way forward for HAL?

Will it/should it continue to do what is has been doing for the next 60 odd years or should it change and move into the big league? If it's the big league how do propose a company like HAL would do that?

I'd like to know your thoughts on this.

{all I can say is the management has to improve, how that can be done I do not know. see my last para in reply to arnab}
Another point.

Your assertion that Embraer doesn't do any military stuff is not exactly accurate.
{no sir ji, I wasn't quite inaccurate. I said it was excellent in one sector, it's presence in other sectors is nothing exemplary nor very cutting-edge. }

Just a cursory glance at the WiKi link I had posted tells otherwise. If I've time over the next few days I'll dig up some more stuff. {by all means }
On October 22, 1975, the company's first pressurized aircraft, the Xingu, made its inaugural flight. The aircraft was smaller than the Bandeirante, thus it didn't become a successor; a few dozen Xingus were built, with most being delivered to the French Air Force in 1981. {oh come on ! xingu is a short-haul civilian prop. just because it's used by the AdlA doesn't make it a military plane. have a look at it :
The IAF uses many HM ambassadors, does that make the ambassador a military vehicle ?
a better example for your point would be the AMX, which was a very basic jet fighter, somewhat similar in tech level to the kiran and based on an italian design}By request of the Ministry of Aeronautics, Embraer developed its first original combat aircraft, the Tucano, which made its inaugural flight on December 16, 1980. The Tucano became the most successful turboprop military trainer ever built, with more than 650 units sold around the world and a license for Short Brothers to build it for the Royal Air Force. {toucano too is a good aircraft for training rookie pilots or for fighting bush wars if that is your thing. but as I said, none of this is cutting edge stuff. a turboprop military trainer is still very basic technology. the performance level of such aircraft are similar to WW2 fighters.

just FYI, HAL produced two similar turboprop proposals, once in mid 80's, then again in early 90's. both times IAF dismissed the offer and the project was eventually scrapped.

should HAL be blamed for that ?}
Sure Embarer isn't making a fifth generation aircraft or even a 4+ one. But can we dismiss its achievements with one sentence, that it only makes commercial jets?
{did I even once 'dismiss' embraer's achievements ? why are you of all people resorting to putting words in my mouth ?
I said it was excellent in one sector, which is true, incidentally almost identical statement would be valid in case of airbus, (namely it's excellent in one sector viz. civilian airliners) would that imply that I'm dismissing its achievements ? what logic is this ?}
Finally a request: Is it really necessary to make personal attacks and questions motive of a poster who's comments goes against what is the BRF group think on this subject? As far as I can see he has made no personal attacks on anybody. If his arguments are hollow then, it should be easy to demolish them nah? I write this after I've brought this point to the notice of the Mods.
{btw, pointing out that someone is using selective quotation and ignorance as a shield as argument tactics is "personal attack" ? wow !
what is this strawman of groupthink ? in this very thread there are almost equal no of supporters and detractors for any one point, sometimes two people who are on opposite sides about one point are on the same side about another, how do you determine groupthink among all this ?
the points have already been demolished by mrinal ji and some others, if someone refuses to acknowledge the simple fact that's not my problem.}

I don't want anyone to rupture a blood vessel but I'd like to remind folks that India also has ambitions of making a medium transport military aircraft. Comparisons are odious (for some folks) I know but are they unjustified in this case? Can we do it without the Russians? What good is all the innovative upgrades and avionics packages if they all do not add up to the ability to build a transport aircraft from the drawing board stages in a reasonable amount of time?
Link to an image: http://www.aereo.jor.br/wp-content/uplo ... azonia.jpg

first things first, can HAL make a military transport similar to the C-390 in a reasonable amount of time (say 10 years) if given the mandate by GOI (engines will have to be sourced from outside) ?
the answer is a definite yes, the question is will it make economic sense to pour that much of effort, funds and manpower, especially when easier options are available ?

let's do not forget that HAL is/will be extremely stretched at the moment, with
> production of MKI
> upgradation of jaguar to DARIN III
> production of hawk AJT
> development and production of IJT
> development and production of LCA
> development and production of PAK-FA
> development and production of AMCA/FGFA
> upgradation of mig-29 fleet
> upgradation of mirage-2000 fleet
> production and development of various ALH versions + WSI versions
> re-engining of cheetah helo's
> development and production of LCH
> development of LOH
> development of medium helo

......... need I go on ?

point is that HAL has its hands full, is it any surprise they want to cut time and effort by going the JV route with russia ? it's strange that the very people who are all praise for embraer management for 'good management practices' like going for JV, using foreign sub-systems in lieu of in-house ones, are castigating HAL for not going it alone !!

my point is simple, HAL definitely has many problems, it's one thing to objectively identify those, quite another to brush *anything* they do or don't as an example of incompetence !
sadly, much of what has been presented in this thread as problems with HAL belongs to the later category.

genuine problems with HAL
> lack of effort on engine development, HAL has been making a variety of engines for a veeery long time now, by this time they should have had at least one turbofan and one turboprop/turboshaft in their portfolio. ardiden does not count since HAL's contribution to it has been in non-critical areas as per most sources.
> lack of foresight with the HTT-35, even if IAF didn't show interest, HAL should have continued the project any which way since it was clear that a need for such aircraft would soon arise.
> failing to rectify HPT-32's fuel system problem after so many years.
etc (too tired to type any more ATM)

Tejas shouldn't be brought into this debate as HAL didn't design the aircraft. That itself is a pity. Despite having a 70 year old aerospace company, India had to set up a special group to design Tejas.

though HAL didn't do the overall design, they were a very important part of the group and their contribution certainly can't be ignored. I suggest you get a copy of AM Rajkumar's book, engrossing read.

amit · Post by **amit** » 07 Apr 2010 15:02

Rahul,

Thanks for the detailed reply. Let me mull over it, right now a bit busy with some work.

However, a quick point.

my point is simple, HAL definitely has many problems, it's one thing to objectively identify those, quite another to brush *anything* they do or don't as an example of incompetence !
sadly, much of what has been presented in this thread as problems with HAL belongs to the later category.

Let me put it on record I do not think everything HAL has done has the hallmark of incompetence, I don't think I've said that anywhere and if what I've written has given that impression then my apologies.

Also I don't subscribe to this idea that Pvt Sector means good and PSU means bad, I think I've made that clear also.

I brought up the example with Embraer because I think these two companies, which started out in the 1940s have followed two different developmental paths. Now when we stand in 2010 with both countries poised for greater things being part of the Bric and all that, where does the aerospace ambitions of the two countries stand today?

I think that's a valid question.

And regarding your point about HAL being able to build a medium haul in 10 years, sure it can, afterall we have the expertise to build such a fine aircraft like Tejas. However, if we make a point like that, one also needs to ask if Embraer, if needed, can do or could do all the things HAL has achieved, also within a 10 year period? I would tend to think yes. Also note that Embraer made it known in 2007 that they would build the plane and in 2009 actually signed the deal with the Brazilian air force.

At the end of the day I guess it's a personal judgment as to which company is today a more capable aerospace company with a better future in the world aerospace market.

I'm sorry to see that you thought my statement about group think is a strawman. Please note I have no particular axe to grind, and my statement, while it was in response to your post was not directed towards you. It was directed at some other comments and I think you know what I'm talking about. Just because one disagrees with a particular POV doesn't mean the person making it has a hidden agenda or personal bias and folks can just come in and make assertions to this effect.

My point is once folks start responding in kind then there's a long downhill. IMHO if we are to discuss old issues with new ideas then we have to give some leeway to those who put out new POVs, however odious they may seem. And there's always the option of demolishing these arguments with solid counter-arguments. IMHO there's no need to look for (hidden) agendas.

But then that's the opinion of a Mango Abdul BRFite so take it FWIW and ignore.

Viv S · Post by **Viv S** » 07 Apr 2010 15:11

Rahul M wrote: to sum up my stand on this issue :
> FDI upto 49% should be allowed in defence manuf sector

Why do you expect that would yield a radically different result than the prevailing 26% cap?

somnath · Post by **somnath** » 07 Apr 2010 18:09

This is a performance analysis of DPSUs from IDSA (by Laxman Behera)..

http://www.idsa.in/system/files/jds_3_4_lkbehera.pdf

I am not entirely sure yet on some of the variables used here - for example, the use of the "Value Add" number..Laxman said that he has picked it up from individual company annual reports (which I strangely couldnt find), so I asked him to clarify what they really mean by "value add", especially given what the financial numbers show - he said he'll check and come back...

Anyhow, the trends established are clear...

By their own admission, DPSU value-add as a % of their "Value of Production" has been showing a near secular decline for the 8-9 years used in the analysis..

Labour productivity, another indicator of operational efficiency, is in the 25 lac rupee range, which is about 55k USD...Very very low by any indicator, even if one uses Laxman's "global top 5" benchmark...

Finally the analysis talks of exports, the pathetic record there doesnt need any analysis at all..

Also key are little nuggets like these (this one's on HAL:

For production of these items along with its other
activities, the company's dependence on raw materials, components and spare
parts, and capital goods is to the extent of 74 per cent, of which import content
is about 80-90 per cent. In last two years (2005-06 and 2006-07) its value of
imports totalled Rs. 4,753 crore and Rs. 6,715 crore, which are nearly 73 and 80
per cent of its total cost of VoP, respectively

In a manner of looking, the study doesnt say too much that we didnt know, but at least its another compendium..

The discussion is not about "pvt-good, public-bad"..I had quoted a number of examples earlier of performing public sector companies around the world..

The issue is with Indian DPSUs...And the ideological proclivity/comprehension of those who mask the macro big picture under qualifications, cliches and the occasional bright spark is the challenge...

the number of cliches (read excuses) used is so routine that one can rattle them off without even looking at a specific project:

1. Sanctions - never mind that they pertained to, when they did, they did only to Americans..
2. Tech denial - this is the biggest oxymoron - as if for some reason other countries had tech donation schemes from others

When faced with facts of course (the efficiency ratios of HAL for example), the standard response is to pull out some occasional bright spark - "hey but HAL has done a superb upgrade of of the Mig27 avionics!"..

Rahul M · Post by **Rahul M** » 07 Apr 2010 18:51

Viv S wrote:
Rahul M wrote: to sum up my stand on this issue :
> FDI upto 49% should be allowed in defence manuf sector
Why do you expect that would yield a radically different result than the prevailing 26% cap?

why do you NOT expect that would yield a radically different result than the prevailing 26% cap?

per my unitary method calculation, there should be around twofold increase in 'radicality' by increasing FDI cap to 49 % from 26 % !

(given the level of some arguments forwarded in this thread, I don't see why my analysis is not equally valid !

)

I guess you would argue for 100% FDI, am I correct ?
in that case,
my reason = (your reason)/2 (approx)

_______________________
jokes aside, the 49% number comes from two competing factors,
>> the need to raise the cap as much as possible to attract foreign firms
>> without giving them a controlling stake.

It's my opinion that a 100% foreign owned mil sector would be a disaster for our nascent MIC, just when it is starting to find its feet.
consider,
> if 100% FDI is allowed foreign co's will find no reason to cooperate with Indian co's, whether public or pvt. admitted, a few handful of Indian citizens will gain access to cutting edge technology, however, all of that will be owned by the foreign co and there will be no development of 'institutional knowledge' in Indian co's, which is essential to growth. in fact even now there are many Indians with access to cutting edge tech (albeit most are not Indian citizens but nevertheless, many still have strong links with India), how has that helped our MIC in any meaningful way ?
> foreign co's will have no reason to cooperate with domestic research bodies, for example if there is component X which is made by a domestic PSU/pvt co' for its own items, but it is also used some development project of DRDO/ISRO, GOI has to only ask for the component.
in a situation when it's a foreign co making it, they will be subjected to the laws of their own land and they might well refuse to cooperate. in fact they will most certainly refuse to cooperate with DRDO labs. whatever R&D capability we have developed will become unsustainable in the long run because of the disconnect between development and production.
> nothing will stop foreign companies to outbid and outbribe Indian co's to extinction
> once that happens it will become a monopoly situation and we will have absolutely no leeway in striking deals, whatever the suppliers come up with we will have to agree.
> last but not the least, call me old-fashioned but I would much prefer an Indian co' to grow on Indian taxpayers money rather than a foreign one.

Rahul M · Post by **Rahul M** » 07 Apr 2010 18:53

Rahul M wrote:
somnath wrote:..........
Really? Israel and Russia are now marketing these upgrade packages together....Wonder why it isnt India and Russia?........
I'll come to the rest of the post later, but I'll like to know more about this. do you have a reliable source for this ?

I'm still waiting for a reply.

somnath · Post by **somnath** » 07 Apr 2010 19:14

Rahul M wrote:I'm still waiting for a reply.

http://www.encyclopedia.com/doc/1G1-45987649.html

http://defense-update.com/features/2009 ... 30409.html

and maybe you can explain this:

forget last decade, the sanctions still stand, if you are unaware of it then you should simply acknowledge that fact, there's no shame in it. just because HAL and co does not come out with frontpage ads saying "we are under sanctions" does not make it not so.

Rahul M · Post by **Rahul M** » 07 Apr 2010 19:21

http://www.encyclopedia.com/doc/1G1-45987649.html

is restricted access, if you have the article please post it.

http://defense-update.com/features/2009 ... 30409.html

says no such thing.

IOW, I'm still waiting.

and maybe you can explain this:

all in good time.

somnath · Post by **somnath** » 07 Apr 2010 19:22

Rahul M wrote:It's my opinion that a 100% foreign owned mil sector would be a disaster for our nascent MIC, just when it is starting to find its feet.
consider,
> if 100% FDI is allowed foreign co's will find no reason to cooperate with Indian co's, whether public or pvt. admitted, a few handful of Indian citizens will gain access to cutting edge technology, however, all of that will be owned by the foreign co and there will be no development of 'institutional knowledge' in Indian co's, which is essential to growth. in fact even now there are many Indians with access to cutting edge tech (albeit most are not Indian citizens but nevertheless, many still have strong links with India), how has that helped our MIC in any meaningful way ?
> foreign co's will have no reason to cooperate with domestic research bodies, for example if there is component X which is made by a domestic PSU/pvt co' for its own items, but it is also used some development project of DRDO/ISRO, GOI has to only ask for the component.
in a situation when it's a foreign co making it, they will be subjected to the laws of their own land and they might well refuse to cooperate. in fact they will most certainly refuse to cooperate with DRDO labs. whatever R&D capability we have developed will become unsustainable in the long run because of the disconnect between development and production.
> nothing will stop foreign companies to outbid and outbribe Indian co's to extinction
> once that happens it will become a monopoly situation and we will have absolutely no leeway in striking deals, whatever the suppliers come up with we will have to agree.
> last but not the least, call me old-fashioned but I would much prefer an Indian co' to grow on Indian taxpayers money rather than a foreign one.

Of course, the same set of arguments were forwarded in 1991, all through to 2000 - in pretty much every sector of the economy..The only industry that I can think of that has turned completely "foreign" is the cola industry...This despite the famed Indian predilection for "foreign" brands...

And to think this will happen in a monopsony (where Govt of India is the sole buyer)!