Showing posts with label services. Show all posts
Showing posts with label services. Show all posts

Monday, 12 January 2015

Modified defence procurement policy in three months, defence minister Manohar Parrikar says



AHMEDABAD: Defence minister ManoharParrikar said on Sunday that his ministry would come up with defenceprocurement policy (DPP), preferring purchase of equipment made in India, within three months.
Speaking at a seminar ‘Gujarat: Preferred Hub for Defence Production’ during the Vibrant Gujarat summit, the minister said India cannot afford spending $20 billion on defence procurement, and for this, promoting local manufacturing is must and the country will promote private players in this field. “The government hopes to come up with a document in two or three months on a suitable model for defence manufacturing and procurement…We have listed certain items that are not going to be imported from 2016. These will increase later on. But we are coming up with the document in February-March on modified DPP.”
Responding to Gujarat’s keenness on having defence equipment manufacturing facilities, the defence minister said that Gujarat has got an “industrial base and a private line also”, thus for those intending to invest in defence equipment in Gujarat, it would have double advantage. He said that this is the way to realize Prime Minister Narendra Modi’s ‘Make in India’ dream.
Two companies pledged investment for manufacturing defence equipment in Gujarat, and intend to base this industry in North Gujarat districts of Banaskantha, Sabarkantha and the border district of Kutch apart from the coastal region. Bharat Forge said it would upgrade facilities for armoured fighting vehicles, defence electronics manufacturing and radar manufacturing facilities.
Defence experts also lauded the gesture of inviting private players to manufacture defence equipments in India. Chairman of Saab India Lars Olaf Lindgren said, “Not only India will benefit with this, foreign companies with expertise in different fields will also gain by partnering with India and Indian companies to manufacture in this country.”
Sanjay Garg, the defence ministry’s joint secretary, said that in the next 7-8 years, the capital budget for modernization of armed forces is going to be $130 billion. This is the perfect condition for any company to come to India.
Source: Defence News

Friday, 17 October 2014

India test-fires nuclear-capable Nirbhay cruise missile

BALASORE (Odisha): India’s indigenously developed nuclear capable sub-sonic cruise missile ‘Nirbhay’, which can strike targets more than 700 kms away, was today test-fired from a test range at Chandipur near here.

“The missile was test-fired from a mobile launcher positioned at launch pad 3 of the Integrated Test Range at about 10.03 hours,” said an official soon after the flight took off from the launch ground.
“Flight details will be available after data retrieved from radars and telemetry points, monitoring the trajectories, are analysed,” the official said.
It is the second test of the sub-sonic long range cruise missile ‘Nirbhay’ from the ITR.
The maiden flight, conducted on March 12, 2013 could not achieve all the desired parameters as “the flight had to be terminated mid-way when deviations were observed from its intended course,” sources said.
India has in its arsenal the 290 km range supersonic “BrahMos” cruise missile which is jointly developed by India and Russia.
Source: Defence News

Wednesday, 24 September 2014

Modi’s US visit : Defense partnership and Economic relations to remain top agenda

Defence and security partnership, energy including renewable energy relations and economic and investment ties and technology transfer will dominate Narendra Modi’s maiden visit to the USA as Prime Minister that is widely expected to correct sentiments in the India-US relations that have been soured since 2011.

On his longest trip abroad since taking over as the PM, Modi leaves for USA on September 25-26 for nearly seven days during which he will give his maiden speech at UN General Assembly on September 27 in New York and then proceed to Washington for the summit meeting with President Barack Obama on September 30.
All eyes are set on that meeting when Modi is also expected to raise concerns over US Immigration Bill that will affect Indian IT industry if passed in the current form. The Border Security, Economic Opportunity, and Immigration Modernization Act (S 744) imposes new and onerous restrictions and higher fees on H-1B and L1 visa programmes on the international IT services sector and would create an uneven playing field.
Modi’s visit is also expected to iron out bilateral differences over Intellectual Property Rights particularly in the pharmaceutical industry, official sources told ET. Big ticket items for the visit include expansion in the defence partnership to not only launch joint production of equipment but also sharing perspectives on West Asia and East and Southeast Asia, sources indicated.
Joint production and co-development that entails technology transfer is Modi’s mantra to attain self-sufficiency in the defence sector in the long run. India has deep interests over energy security and its diaspora in West Asia where Arab Spring followed by radical ISIS movement has been destablising factors. Meanwhile, China’s growing ambitions in East and Southeast Asia have been a matter of concern for both India and USA.
Among regional issues, situation in the Af-Pak region will dominate discussions, sources pointed out. India’s energy demands are rising by the day and Modi will make efforts to source more energy from Washington including partnership in solar energy and importing LNG and shale gas. There willfolbe considerable focus on clean energy partnership, an official said. While Modi would seek transfer of high-technology from the USA, the Obama administration would be keen to hear from him an environment conducive for investments after the policy paralysis in India since 2011, sources indicated.
US is interested in the agriculture and food processing sectors including coldchains. Besides, interest is growing in USA about investments in industrial parks or zones, and water purification, water management and energy from waste as part of smart city projects in India. “The US administration and senators are looking forward to a visit that will energise the relationship and expect that Prime Minister Modi could give them a confidence to further expand and deepen ties,” averred Robinder Sachdev, head of the India chapter of US India Political Action Committee, one of the influential India-American lobby groups said.
There are also indications US firm can invest in the Modi government’s campaign to Clean India. Education, especially community colleges by USA in India could be one of the deliverables from the visit. Modi and Obama will also discuss India’s nuclear liability law and ways to address concerns of US nuclear major Westinghouse.
Source : Defence NEws

Monday, 8 September 2014

INDIA as a Great Power

UNLIKE many other Asian countries—and in stark contrast to neighbouring Pakistan—India has never been run by its generals. The upper ranks of the powerful civil service of the colonial Raj were largely Hindu, while Muslims were disproportionately represented in the army.
 
On gaining independence the Indian political elite, which had a strong pacifist bent, was determined to keep the generals in their place. In this it has happily succeeded.
But there have been costs. One is that India exhibits a striking lack of what might be called a strategic culture. It has fought a number of limited wars—one with China, which it lost, and several with Pakistan, which it mostly won, if not always convincingly—and it faces a range of threats, including jihadist terrorism and a persistent Maoist insurgency. Yet its political class shows little sign of knowing or caring how the country’s military clout should be deployed.
That clout is growing fast. For the past five years India has been the world’s largest importer of weapons (see chart). A deal for $12 billion or more to buy 126 Rafale fighters from France is slowly drawing towards completion. India has more active military personnel than any Asian country other than China, and its defence budget has risen to $46.8 billion. Today it is the world’s seventh-largest military spender; IHS Jane’s, a consultancy, reckons that by 2020 it will have overtaken Japan, France and Britain to come in fourth. It has a nuclear stockpile of 80 or more warheads to which it could easily add more, and ballistic missiles that can deliver some of them to any point in Pakistan. It has recently tested a missile with a range of 5,000km (3,100 miles), which would reach most of China.
Which way to face?
Apart from the always-vocal press and New Delhi’s lively think-tanks, India and its leaders show little interest in military or strategic issues. Strategic defence reviews like those that take place in America, Britain and France, informed by serving officers and civil servants but led by politicians, are unknown in India. The armed forces regard the Ministry of Defence as woefully ignorant on military matters, with few of the skills needed to provide support in areas such as logistics and procurement (they also resent its control over senior promotions). Civil servants pass through the ministry rather than making careers there. The Ministry of External Affairs, which should be crucial to informing the country’s strategic vision, is puny. Singapore, with a population of 5m, has a foreign service about the same size as India’s. China’s is eight times larger.
The main threats facing India are clear: an unstable, fading but dangerous Pakistan; a swaggering and intimidating China. One invokes feelings of superiority close to contempt, the other inferiority and envy. In terms of India’s regional status and future prospects as a “great power”, China matters most; but the vexatious relationship with Pakistan still dominates military thinking.
A recent attempt to thaw relations between the two countries is having some success. But tension along the “line of control” that separates the two sides in the absence of an agreed border in Kashmir can flare up at any time. To complicate things, China and Pakistan are close, and China is not above encouraging its grateful ally to be a thorn in India’s side. Pakistan also uses jihadist terrorists to conduct a proxy war against India “under its nuclear umbrella”, as exasperated Indians put it. The attack on India’s parliament in 2001 by Jaish-e-Mohammed, a terrorist group with close links to Pakistan’s intelligence service, brought the two countries to the brink of war. The memory of the 2008 commando raid on Mumbai by Lashkar-e-Taiba, another terrorist organisation, is still raw.
Pakistan’s nuclear capabilities are a constant concern. Its arsenal of warheads, developed with Chinese assistance, is at least as large as India’s and probably larger. It has missiles of mainly Chinese design that can reach most Indian cities and, unlike India, it does not have a “no first use” policy. Indeed, to offset the growing superiority of India’s conventional forces, it is developing nuclear weapons for the battlefield that may be placed under the control of commanders in the field.
Much bigger and richer, India has tended to win its wars with Pakistan. Its plans for doing so again, if it feels provoked, are worrying. For much of the past decade the army has been working on a doctrine known as “Cold Start” that would see rapid armoured thrusts into Pakistan with close air support. The idea is to inflict damage on Pakistan’s forces at a mere 72 hours’ notice, seizing territory quickly enough not to incur a nuclear response. At a tactical level, this assumes a capacity for high-tech combined-arms warfare that India may not possess. At the strategic level it supposes that Pakistan will hesitate before unleashing nukes, and it sits ill with the Indian tradition of strategic restraint. Civilian officials and politicians unconvincingly deny that Cold Start even exists.
Bharat Karnad of the Centre for Policy Research, a think-tank, believes Pakistan’s main danger to India is as a failed state, not a military adversary. He sees Cold Start as a “blind alley” which wastes military and financial resources that should be used to deter the “proto-hegemon”, China. Others agree. In 2009 A.K. Antony, the defence minister, told the armed forces that they should consider China rather than Pakistan the main threat to India’s security and deploy themselves accordingly. But not much happened. Mr Karnad sees feeble civilian strategic direction combining with the army’s innate conservatism to stop India doing what it needs to.
The “line of actual control” between China and India in Arunachal Pradesh, which the Chinese refer to as South Tibet, is not as tense as the one in Kashmir. Talks between the two countries aimed at resolving the border issue have been going on for ten years and 15 rounds. In official statements both sides stress that the dispute does not preclude partnership in pursuit of other goals.
But it is hard to ignore the pace of military investment on the Chinese side of the line. Brigadier Gurmeet Kanwal of the Centre for Land Warfare Studies points to the construction of new railways, 58,000km of all-weather roads, five air bases, supply hubs and communication posts. China would be able to strike with power and speed if it decided to seize the Indian-controlled territory which it claims as its own, says Mr Karnad. He thinks the Indian army, habituated to “passive-reactive” planning when it comes to the Chinese, has deprived itself of the means to mount a counter-offensive.
Unable to match Chinese might on land, an alternative could be to respond at sea. Such a riposte was floated in a semi-official strategy document called “Nonalignment 2.0”, promoted last year by some former national security advisers and blessed by the current one, Shivshankar Menon. India’s naval advantage might allow it, for example, to impede oil traffic heading for China through the Malacca Strait.
China and India are both rapidly developing their navies from coastal defence forces into instruments that can project power further afield; within this decade, they expect to have three operational carrier groups each. Some Indian strategists believe that, as China extends its reach into the Indian Ocean to safeguard its access to natural resources, the countries’ navies are as likely to clash as their armies.
An OCEAN needs a navy ::
China’s navy is expanding at a clip that India cannot match—by 2020 it is expected to have 73 major warships and 78 submarines, 12 of them nuclear—but India’s sailors are highly competent. They have been operating an aircraft-carrier since the 1960s, whereas China is only now getting into the game. India fears China’s development of facilities at ports in Pakistan, Sri Lanka, Bangladesh and Myanmar—a so-called “string of pearls” around the ocean that bears India’s name; Mr Antony called the announcement in February that a Chinese company would run the Pakistani port of Gwadar a “matter of concern”. China sees a threat in India’s developing naval relationships with Vietnam, South Korea, Japan and, most of all, America. India now conducts more naval exercises with America than with any other country.
India’s navy has experience, geography and some powerful friends on its side. However, it is still the poor relation to India’s other armed services, with only 19% of the defence budget compared with 25% for the air force and 50% for the army.
The air force also receives the lion’s share of the capital-equipment budget—double the amount given to the navy. It is buying the Rafales from France and upgrading its older, mainly Russian, fighters with new weapons and radars. A joint venture between Hindustan Aeronautics Limited (HAL) and Russia’s Sukhoi is developing a “fifth generation” strike fighter to rival America’s F-35. As well as indulging its pilots’ need for speed, though, the air force is placing a new emphasis on “enablers”. It is negotiating the purchase of six Airbus A330 military tankers and five new airborne early-warning and control aircraft. It has also addressed weaknesses in heavy lift by buying ten giant Boeing C-17 transports, with the prospect of more to come. Less clear is the priority the air force gives to the army’s requirements for close air support over its more traditional role of air defence, particularly after losing a squabble over who operates combat helicopters.
With the army training for a blitzkrieg against Pakistan and the navy preparing to confront Chinese blue-water adventurism, it is easy to get the impression that each service is planning for its own war without much thought to the requirements of the other two. Lip-service is paid to co-operation in planning, doctrine and operations, but this “jointness” is mostly aspirational. India lacks a chief of the defence staff of the kind most countries have. The government, ever-suspicious of the armed forces, appears not to want a single point of military advice. Nor do the service chiefs, jealous of their own autonomy.
The absence of a strategic culture and the distrust between civilian-run ministries and the armed forces has undermined military effectiveness in another way—by contributing to a procurement system even more dysfunctional than those of other countries. The defence industrial sector, dominated by the sprawling Defence Research and Development Organisation (DRDO), remains stuck in state control and the country’s protectionist past. According to a recent defence-ministry audit, only 29% of the products developed by the DRDO in the past 17 years have entered service with the armed forces. The organisation is a byword for late-arriving and expensive flops.
The cost of developing a heavy tank, the Arjun, exceeded the original estimates by 20 times. But according to Ajai Shukla, a former officer who now writes on defence for the Business Standard, the army wants to stick with its elderly Russian T-72s and newer T-90s, fearing that the Arjun, as well as being overweight, may be unreliable. A programme to build a light combat aircraft to replace the Mirages and MiG-21s of an earlier generation started more than quarter of a century ago. But the Tejas aircraft that resulted has still not entered service.
There are signs of slow change. These include interest in allowing partnerships between India’s small but growing private-sector defence firms and foreign companies, which should stimulate technology transfer. But the deal to buy the Rafale has hit difficulties because, though Dassault would prefer to team up with private-sector firms such as Tata and Reliance, the government wants it to work with stodgy HAL. Even if Dassault had a free choice of partners, though, it is not clear that Indian industry could handle the amount of work the contract seeks to set aside for it.
Richard Bitzinger, a former RAND Corporation analyst now at the S. Rajaratnam School of International Studies in Singapore, sums up the problem in a recent study for the Zurich-based International Relations and Security Network. If India does not stop coddling its existing state-run military-industrial complex, he says, it will never be capable of supplying its armed forces with the modern equipment they require. Without a concerted reform effort, a good part of the $200 billion India is due to spend on weaponry over the next 15 years looks likely to be wasted.
The Tiger and the Eagle ::
The money it will spend abroad also carries risks. Big foreign deals lend themselves to corruption. Investigations into accusations of bribery can delay delivery of urgently needed kit for years. The latest “scandal” of this sort surrounds a $750m order for helicopters from Italy’s Finmeccanica. The firm denies any wrongdoing, but the deal has been put on hold.
Britain, France, Israel and, above all, Russia (which still accounts for more than half of India’s military imports), look poised to be beneficiaries of the coming binge. America will get big contracts, too. But despite a ground-breaking civil nuclear deal in 2005 and the subsequent warming of relations, America is still regarded as a less politically reliable partner in Delhi. The distrust stems partly from previous arms embargoes, partly from America’s former closeness to Pakistan, partly from India’s concerns about being the junior partner in a relationship with the world’s pre-eminent superpower.
The dilemma over how close to get to America is particularly acute when it comes to China. America and India appear to share similar objectives. Neither wants the Indian Ocean to become a Chinese “lake”. But India does not want to provoke China into thinking that it is ganging up with America. And it worries that the complex relationship between America and China, while often scratchy, is of such vital importance that, in a crisis, America would dump India rather than face down China. An Indian navy ordered to close down China’s oil supplies would not be able to do so if its American friends were set against it.
India’s search for the status appropriate to its ever-increasing economic muscle remains faltering and uncertain. Its problems with Pakistan are not of the sort that can be solved militarily. Mr Karnad argues that India, from a position of strength, should build better relations with Pakistan through some unilateral gestures, for example cutting back the size of the armoured forces massed in the deserts of Rajasthan and withdrawing its short-range missiles. General Ashfaq Parvez Kayani, head of Pakistan’s army, has declared internal terrorism to be a greater danger to his country than India. That may also offer an opportunity.
China’s confidence in its new military power is unnerving to India. But if a condescending China in its pomp is galling, one in economic trouble or political turmoil and pandering to xenophobic popular opinion would be worse. Japan and South Korea have the reassurance of formal alliances with America. India does not. It is building new relationships with its neighbours to the east through military co-operation and trade deals. But it is reluctant to form or join more robust institutional security frameworks.
Instead of clear strategic thinking, India shuffles along, impeded by its caution and bureaucratic inertia. The symbol of these failings is India’s reluctance to reform a defence-industrial base that wastes huge amounts of money, supplies the armed forces with substandard kit and leaves the country dependent on foreigners for military modernisation.
Since independence India has got away with having a weak strategic culture. Its undersized military ambitions have kept it out of most scrapes and allowed it to concentrate on other things instead. But as China bulks up, India’s strategic shortcomings are becoming a liability. And they are an obstacle to India’s dreams of becoming a true 21st-century power.
Source : Defence News

Friday, 5 September 2014

India is an emerging Democratic Superpower : Australian PM

MUMBAI: Describing India as an “emerging democratic superpower”, Australian Prime Minister Tony Abbott today said he looks forward to making the most of the abundant opportunities for business in the country.
Kicking off his two-day India visit from the commercial capital, Abbott said Prime Minister Narendra Modi’s call “come, make in India” was “close in spirit and in intent” to the phrase he had used in respect of Australia that “we are open for business”.
“This is a country which has amazed the world over the last few decades with its growth and its development – the world’s second most populous country; on purchasing power terms, the world’s third largest economy, clearly, the emerging democratic superpower of the world and a country with which Australia has long and warm ties.
“The purpose of this trip, as far as I am concerned, is to acknowledge the importance of India in the wider world, acknowledge the importance of India to Australia’s future, to let the government and the people of India know what Australia has to offer India and the wider world for our part, and to build on those stronger foundations,” he said addressing a 30-member business delegation accompanying him on the trip at Hotel Taj Palace.
Noting how India has changed “enormously” since his last visit 33 years ago as a backpacker, Abbott, who has expressed keenness to sign a nuclear deal with the country, said, “I can remember on my first day in Mumbai watching a bullock cart take material to a nuclear power station.
“Well, 33 years on, there aren’t that many bullock carts left in urban India, and the power stations – the nuclear power stations – are more sophisticated than ever,” he said.
Abbott, who had visited Taj Hotel, India’s icon of hospitality, during his 3-month trip in 1981, and had lunch there, described it as one of the truly magnificent hotels in the world.
“Back in 1981 I spent three months as a backpacker roaming around India – this mysterious, fascinating, enthralling sub-continent, this world in one country – and I spent a lot of time in third-class compartments of railway carriages, I’d spent a lot of time in two rupee a night hotels and I thought, I’m going to have to treat myself.
“So, I came here to the Taj Hotel and I had the best lunch this hotel could provide and I’m sure that the breakfast we’re about to enjoy will be no less splendid than the lunch I had here 33 years ago,” he told the delegates, fondly reminiscing about his visit.
Abbott said though there is no dearth of opportunities elsewhere in the vicinity of Australia, there is “an abundance of opportunities” in India.
“I am determined to make the most of them, I know all of you are determined to make the most of them and I look forward to working very closely with you and with our Indian interlocutors over the next two days,” he told the delegation.

Source : Defence News

Thursday, 4 September 2014

US endorses India-Japan strategic partnership

WASHINGTON: The US has welcomed the just announced India-Japan Strategic Partnership and said it is looking forward to strengthen its trilateral co-operation with them.

“The US strongly supports India’s collaboration and cooperation with its neighbours in the Asia Pacific. We actively support such collaboration through our trilateral dialogue and other activities with India and Japan, and look forward to strengthening further our trilateral cooperation,” State Department spokesperson Jen Psaki said. 
The US strongly supports a prosperous India playing an important role on the global stage, she said.
It is during the Obama Administration that India, Japan and the US have started trilateral meetings. 
“As we have long said, a strong, prosperous India contributes to regional and global peace and prosperity,” Psaki said responding to questions about Prime Minister Narendra Modi’s visit to Japan this week.
During a meeting between Modi and his Japanese counterpart Shinzo Abe, the two sides announced India-Japan strategic partnership and deepening of defence relationship. 
The Pentagon welcomed the decision of India and Japan and said that the latter’s participation in the Malabar exercise would be routine.
“We are very excited that Japan’s participation in Exercise Malabar is becoming routine and believe that credible, ready, and inter-operable maritime forces help to preserve peace, prevent conflict, and foster a spirit of cooperation to meet regional and global challenges for mutual benefit,” Jeffrey S Pool, a Defence Department spokesperson said. 
American think-tank community has described Modi’s Japan visit a great success.
“Modi’s visit to Japan has been lauded by all corners as a great success,” said Alyssa Ayres, Senior Fellow for India, Pakistan, and South Asia at the Council on Foreign Relations, a top American think-tank. 
“The United States has strongly supported strengthened ties between India and Japan (the US-India-Japan trilateral just one example), and the deliverables announced in the Tokyo Declaration complement components of US-India relations,” Ayres said.
The joint emphasis on democracy, upgraded defence relations, science and technology, and a robust catalogue of economic undertakings all illustrate similarity with priorities in the US-India relationship, she said. 
One major difference lies in the Japanese government’s ability to mobilise large amounts of Overseas Development Assistance, particularly through soft loans, she added.
“The Tokyo Declaration puts Prime Minister Abe’s commitment at 3.5 trillion yen over five years (around USD USD 33 billion). That’s a much larger sum than the United States government typically mobilises, and at a time when the US Congress has not renewed the US ExIm Bank’s charter, shows where Washington has a diminished ability to support similar projects,” Ayres said.
“Countries like Japan are working with economic policy tools to meet the strategic interests of partners like India, especially on infrastructure. Some good lessons for us here,” she said.
Writing for “Asia Unbound” a CFR foreign policy blog, Sheila A Smith wrote that in his five-day visit this week, Narendra Modi has made Japan’s pivot to India even more enticing – and far more likely to succeed. 
Modi’s election in May has brought more energy to the relationship, she noted.
“As the television footage suggested, the two leaders seem to have a good chemistry, and enjoyed their time together. Modi even sent out messages of thanks to Abe via social media as he visited Kyoto and other spots in Japan,” Smith said. 
Abe, according to her, must be satisfied to see one of his main diplomatic efforts take root.
He has put considerable energy into developing new partners and opportunities for balancing China’s rise, and India has long been an option that Tokyo’s strategic thinkers have looked to develop, she observed.
Source: Defense News

Tuesday, 2 September 2014

India, Japan agree to strengthen defense ties

In his first state visit, Indian Prime Minister Narendra Modi has met with a kindred spirit, Japanese Premier Shinzo Abe. The two leaders, wary of China's glowing clout in Asia, have agreed to strengthen defense ties.
India, Narendra Modi, Japan Shinzo Abe, visit 1.9.
semco tech services
During his visit to Japan on Monday, Indian Prime Minister Modi warned Asian powers against territorial expansionism, in a veiled reference to China's ambitions in the region.
"The 18th century situation of expansionism is now visible," Modi said, after holding talks with Japanese Prime Minister Shinzo Abe in the historic city of Kyoto. "Such expansionism would never benefit humanity in the 21st century."
Modi didn't specifically mention Beijing, but China and India contest several regions along their common border. Abe shares Modi's suspicion of China's intentions in the region. Beijing and Tokyo dispute the Senkaku Islands, called the Diaoyu in Chinese.
Over the summer, Prime Minister Abe's Cabinet approved a reinterpretation of Japan's pacifist constitution, permitting Tokyo to defend allies and deploy troops abroad for combat missions.
'Strategic, global partnership'
Although Abe and Modi failed to set up a permanent forum for their foreign and defense ministers to hold regular consultations, they did agree to "upgrade and strengthen" their defense ties. Tokyo is keen to sell New Delhi US-2 amphibian aircraft. The two countries also agreed to participate in joint maritime drills, and for Japan to continue participating in US-India drills.
"Together, working hand-in-hand with Prime Minister Modi, I intend to fundamentally strengthen our relationship in every field to elevate our relationship to a special strategic and global partnership," Prime Minister Abe said.
The two leaders also agreed to double Japan's investment in India over the course of five years to a total of 3.5 trillion yen ($33.6 billion, 25.5 billion euros).
slk/kms (AFP, dpa, Reuters)
Source : http://www.dw.de/ 

Monday, 1 September 2014

For First Time Since World War 2, Japan Will Sell Military Equipment. To India

TOKYO:  During his visit to Japan, Prime Minister Narendra Modi may not have closed a deal on nuclear energy cooperation, but he is returning with a pledge from counterpart Shinzo Abe for nearly 34 billion dollars in investment over the next five years, and the  sale of an amphibious aircraft to India's navy. The deal marks the intent of Asia's second and third largest economies to counter an increasingly aggressive China. 

For First Time Since World War 2, Japan Will Sell Military Equipment. To India


The specialised sea-plane, the US-2, will be Japan's first overseas military sale in nearly 50 years. Because it provides landings on sea and land, the plane will significantly enhance the Indian Navy's ability to carry out, casualty evacuations, deliver humanitarian assistance and conduct long-range surveillance and reconnaissance.



In keeping with Mr Modi's emphasis on developing military technology indigenously to check India's dependence on foreign defence manufacturers, the US-2 planes will be made in India. The Indian Navy has been lobbying to get 15 of these.



A statement issued in Tokyo after Monday's summit between Prime Ministers Modi and Abe said "both sides directed the Joint Working Group to accelerate progress in the discussions and preparations for a road map for the development of the Indian aircraft industry through US-2 amphibian aircraft cooperation including the transfer of the aircraft and its technology to India." 



This is the first time since World War-II ended seven decades ago that Japan will be selling military hardware abroad. Following its defeat, Japan had imposed an embargo on sale of weapons and military equipment.



The four-engine US-2 aircraft will act as a force multiplier for the Indian Navy, allowing it to quickly insert troops at places where there is no landing strip on shore, including the numerous far-flung islands in Andaman and Nicobar and Lakshwadeep. 



Currently, ground troops are delivered to areas like this using a 'Landing Ship Tank' which isn't always effective. The Sea Planes will allow faster troop insertion of small clusters of soldiers for specialised operations.



India's coastline runs nearly 7,500 kilometres and the Navy had earlier projected a requirement of 15 such sea planes, but their acquisition was stalled by a shortage of funds and other competing requirements, seen as more urgent - like acquiring multi-role helicopters, torpedoes, submarines and ships. 



The US-2 is one sturdiest aircrafts and can operate in sea state 5 conditions (wind speed of 30 to 38 km per hour) on the high seas as well as on rivers and lakes. Each plane can carry about 30 personnel and lift 18 tonnes and fly 4,500 km at stretch without needing to stop for refuelling. 
Story First Published: September 01, 2014 21:30 IST
Source: NDTV

Mahindra & Mahindra prefers consortium for defence; in talks with BAE, others


NEW DELHI: Learning from past experience in bidding for defence orders in India, Mahindra & Mahindra has decided to go the consortium way and is talking to global players, including erstwhile joint venture partner BAE.
"What we have discovered was that it's better to work as consortium because we have so many areas of interests right now," Mahindra Group Chairman and Managing Director Anand Mahindra told PTI in an interview.



Last year in February, the group had ended its joint venture with BAE Systems by buying out the partner's 26 per cent stake. The JV was formed in 2009 with plans of supplying artillery howitzers and anti-mine vehicles to the Indian armed forces.
"We dismantled the JV because we ran out of patience. Nothing was happening," he said.
Mahindra said that with the new government led by Narendra Modi in place, things have started to move now.
"They are moving. In certain areas like defence, RFPs (request for proposals) are being floated now," he said.
Elaborating on the group's decision to form consortium rather than enter into JVs, he said: "It's just a practical decision, which we have taken that given the number of areas we are in, we are probably better off bidding for large projects... JV is not the right way to do it. The right way to do is through consortium."
When asked about global players that the group was talking for such projects, Mahindra said: "We are in fact talking to the BAE again and to all the others... We are talking to BAE for the same bid, but we are saying that we do not know, so let's not go through the JV thing once again. Let's form a consortium."
He said while the easing of FDI norms to allow up to 49 per cent in defence was welcome, what was more important was to take "quick and transparent" steps.
"Suddenly we find out RFPs are being made. Will it be followed up? Will spending be carried out? Will the process be quick and transparent?" he wondered.

Mahindra further said: "Even at 26 per cent we had the partner BAE and they were ready to do business. That's not the problem. The problem was is the process of procurement happening. Is it happening transparently and predictively? And that's what will change defence and get production in."
Source :Economics TImes

Wednesday, 27 August 2014

Indian Defense Ministry to decide fate of Rs 6,000 cr light helicopter deal

New Delhi: The Defence Ministry will decide the fate of the controversial Rs 6,000 crore deal to procure 197 light choppers which has been on hold due to an ongoing CBI probe into charges that a Brigadier had sought bribe from AgustaWestland to help it bag the contract.
 
During a meeting of the Defence Acquisition Council (DAC) scheduled this week, the Defence Ministry will also discuss deals worth around Rs 15,000 crore for procuring Apache attack helicopters and Chinook heavylift choppers for the IAF from the US, Defence Ministry officials said.
The DAC, headed by Defence Minister Arun Jaitley, is scheduled to take up the deal for discussion in its meeting where it is expected to decide its fate, they said.
The 197 light utility choppers are to be procured for the Army and the IAF who use them for ferrying troops and supplies in high altitude areas such as Siachen Glacier and would be used to replace the vintage Cheetah/Chetak choppers which were inducted 40 years ago.
CBI has been probing allegations against the Brigadier which surfaced during investigations into the VVIP chopper deal about the alleged involvement of AgustaWestland in paying kickbacks to secure the Indian contract for 12 VVIP choppers.
CBI probe was ordered by the Defence Ministry after the Army requested it to investigate the charges against the Brigadier before taking any decision on the future developments in the deal.
Allegations have been levelled against the Brigadier in a letter allegedly sent by an AgustaWestland official in India to his superiors in Italy saying the officer was seeking USD 5 million for facilitating the deal in their favour.
Only two firms European Eurocopter and Russian Kamov are left in the race for the deal to supply 197 light choppers to the Army and the IAF as AgustaWestland was knocked out of the deal in the preliminary stages itself.
The deal for procuring 197 light choppers has already been cancelled once in 2007 in the last stages. The Brigadier has denied the charges made against him.


Source : Zee News

Thursday, 21 August 2014

Indian firms tool up for defence orders on Modi’s ‘buy India’ pledge

(Reuters) – Some of India’s biggest companies are pouring billions of dollars into manufacturing guns, ships and tanks for the country’s military, buoyed by the new government’s commitment to upgrade its armed forces using domestic factories.
 
India, the world’s largest arms importer, will spend $250 billion in the next decade on kit, analysts estimate, to upgrade its Soviet-era military and narrow the gap with China, which spends $120 billion a year on defence.
Under the last government, procurement delays and a spate of operational accidents – especially dogging the navy – raised uncomfortable questions over whether India’s armed forces are capable of defending its sea lanes and borders.
Even before his landslide election victory in May, Prime Minister Narendra Modi promised to assert India’s military prowess and meet the security challenge posed by a rising China and long-running tensions with Pakistan.
Within weeks of becoming prime minister, he boosted defence spending by 12 percent to around $37 billion for the current fiscal year and approved plans to allow more foreign investment into local industry to jump-start production.
Launching a new, Indian-built naval destroyer last week, Modi said: “My government has taken important steps in improving indigenous defence technology … We can guarantee peace if our military is modernised.”
This build-up comes as Southeast Asian nations expand their own defence industries, spurred by tensions with China. India, reliant on a state defence industry that often delivers late and over budget, risks being caught flat-footed.
“The opportunity is huge,” said M.V. Kotwal, president (Heavy Engineering) at Larsen and Toubro Ltd, one of India’s biggest industrial houses.
“We really expect quicker implementation. There are signs that this government is very keen to grow indigenisation,” added Kotwal, referring to increasing domestic production.
Tata Sons, a $100 billion conglomerate, said last month it will invest $35 billion in the next three years to expand into new areas with a focus on a handful of sectors including defence.
Larsen is putting $400 million into a yard to build ships for the navy, while Mumbai-based Mahindra Group is expanding a facility that makes parts for planes, including for the air force, and investing in armoured vehicle and radar production.
The companies are being lured by the prospect of lucrative returns on their investments as the Modi government has pledged to make “buy Indian” the default option for future orders.
Larsen is targeting a fourfold increase in annual defence revenue to $1 billion within the next five years.
Critics of indigenisation argue that producing gear – especially in the lumbering state sector – is more costly than buying from abroad. Such deals can add layers of bureaucracy, increasing risks of corrupt dealings.
Indian industry is renowned for its ability to adapt, yet questions remain whether the private sector can come up with the solutions needed to bring armed forces into the 21st century without sufficient access to world-class foreign technology.
DELAYS
Some companies are also sceptical of the government’s commitment to grow the private market given New Delhi’s history of delays and order cancellations, and the traditionally strong ties between the military and state-run manufacturers.
They cite the case of a $10 billion Future Infantry Combat Vehicle (FICV) programme. Conceived in 2009, the defence ministry invited three private players and the Ordnance Factory Board, a state entity, to bid for the 2,600-vehicle contract but suddenly withdrew the letter of intent in 2012.
Bidders included Mahindra and Tata, which is developing a vehicle along with Lockheed Martin Corp and General Dynamics Corp that could compete for a future contract, said Rahul Gajare, an analyst at Edelweiss Securities.
A quick decision to relaunch the programme would demonstrate Modi’s resolve, said S.P. Shukla, who heads Mahindra’s defence business. Past tenders have stalled amid wrangling over whether or not to allow state manufacturers to bid and under what terms.
Larsen’s Kotwal said its Kattupalli shipyard in south India has yet to receive any orders for warships or submarines despite being designed to do just that and despite past government pledges to build at least two submarines in private yards.
In the meantime, the yard has switched to constructing and repairing commercial vessels.
“The policy in India has been right since 2006. The problem has been implementation,” said Rahul Chaudhry, CEO at Tata Power SED, which makes rocket launchers, sensors and radars.
Local firms have captured a fraction of the Indian defence market since it first opened to private participation in 2001. Consecutive governments have handed orders to state factories or to foreign giants like Boeing, Lockheed and BAE Systems.
Gajare at Edelweiss estimates total India private sector revenues from defence, including overseas orders, at below $2 billion last year, less than 6 percent of the country’s defence spending.
 
Source :Defence News

Monday, 18 August 2014

Rafale fighter jet deal contract with France almost ready: Defence ministry

The much-awaited multi-billion Rafale combat aircraft deal with France has moved a step further with the defence ministry finalizing a ‘draft contract’, according to top defence ministry officials.
 
Rafale was declared the lowest bidder in Janaury 2012 but the deal has not been inked so far on account of escalation in the cost. The Cost Negotiation Committee, which was set up in February 2012 to work out the modalities for the deal has not reached a conclusion after 30 months of negotiations.
The government raised its concerns over this last month, during the visit of French foreign minister Laurent Fabius to New Delhi.
“Yes, we are in the process of finalizing the draft contract for the deal. And we also expect the Cost Negotiation Committee to submit its report soon,” said a senior defence ministry official, who was privy to the developments.
But the official refused to give a time frame for inking the deal. “It is very difficult to predict any date for signing the contract. But, it should happen in the next few months,” the officer said, requesting anonymity.
The Indian Air Force (IAF), which is coping with a depleted combat strength, claims that even if the deal is signed by the end of the year the first lot of Rafale aircraft would arrive only by 2017, by which time the IAF would have to phase out its MiG-21 squadrons.
The likelihood of an early signing is encouraging. Besides, the ruling NDA government has promised to address all the needs of the armed forces to ensure defence preparedness.
According to officials privy to the development, the defence ministry has asked representatives of M/s Dassault Aviation – the French manufacturer of Rafale aircraft – to revise the price structure which has gone beyond expected estimates.
Officials claim that when the tender was floated in 2007 the cost of the programme was $12 billion (Rs42,000 crore).When the lowest bidder was declared in January 2012, the cost of the deal shot up to $18 billion (Rs90,000 crore). Now with the inclusion of transfer of technology, the life cycle cost and creation of an assembly line, the deal has climbed to a whopping $20 billion.
The air force is seeking to replace its aging MiG-21s with a modern fighter and the medium multi-role combat aircraft (MMRCA) fits between India’s high-end Sukhoi-30MKIs and the low-end Tejas LCA lightweight fighter. The IAF has a sanctioned strength of 45 fighter jet squadrons. However, only 30 squadrons are operational as old aircraft have been retired.
Eighteen of the 126 new aircraft are to be purchased directly from Dassault and Hindustan Aeronautics Limited will manufacture 108 under a licence, at a new facility in Bangalore.
Defence minister Arun Jaitley informed parliament last week that “given the complexity of the procurement case, the process of negotiations with Dassault Aviation on various aspects of the commercial proposal and provisions of draft contract is on.”
Dassault Aviation emerged as L-1 bidder for procurement of the MMRCA based on its quotation.
 
Source : Defence NEws

Saturday, 9 August 2014

FDI in defence may go up to 100% if CEO is Indian

Global defence equipment majors such as BAE Systems and Lockheed Martin could set up manufacturing units in India and bring in foreign direct investment (FDI) exceeding 49 per cent, provided the company’s chief executive officer (CEO) is Indian.
As the objective was to let only serious players enter the market, the defence FDI policy approved by the Cabinet on Wednesday categorically stated investee companies should be self-sufficient in product designing and have maintenance and life cycle support facilities for the products they manufactured here, said a senior department of industrial policy and promotion (DIPP) official.
The Union Cabinet had approved an increase in the composite foreign investment cap in the defence sector from 26 per cent to 49 per cent. For investment exceeding 49 per cent, the Cabinet Committee on Security (CCS) will clear applications on a case-by-case basis.
“It could go up from 49 to 100 per cent, depending on modern and state-of-the-art technology, with the approval of the CCS,” said the DIPP official.
The CCS might consider such proposals only in rare cases in which original equipment manufacturers such as BAE Systems, Lockheed Martin, Airbus Group and Sikorsky intend to set up manufacturing units here.
This is aimed at ensuring only top defence original equipment manufacturers, with robust and proven track records, enter the market, with large-scale investment proposals. The government is hopeful this will not only lead to more manufacturing facilities in the country, but also ensure the life cycle of products is catered to by foreign companies.
The CCS will see to it that the management and control remains with Indian companies in case the FDI exceeds 49 per cent, more so in case it is more than 51 per cent, on a case-by-case basis. The official said in these cases, the CEO had to be Indian.
However, experts say subjective norms such as modern and state-of-the-art technology, self-sufficiency in product designing and maintenance and life cycle facilities will be hurdles to attracting FDI.
Amber Dubey, partner and head of aerospace and defence, KPMG in India, said, “Subjective conditions such as local design, maintenance repair and overhaul, lifecycle support facility and state-of-the-art technology run the risk of interpretation, delays, misuse and litigation. Once an original equipment manufacturer wins a competitive tender, market forces will force these to be transferred to India in stages.” 
Putting onerous preconditions ended up discouraging serious investors, Dubey said, adding the government could, instead, bring in practical checks and balances that would help build a strong defence industrial base in India through 10-15 years. 
“The CEO has to be an Indian national by default, from the perspective of national security and individual accountability. It would be practically difficult to get a CEO of foreign nationality extradited to India and prosecuted in case of an adverse event,” he said. 
Officials said all foreign institutional investment up to 24 per cent would be allowed under the automatic route. The DIPP official said proposals related to FDI exceeding 26 per cent would be approved on a case-to-case basis, apparently due to “national security concerns, as it (defence) is a highly sensitive sector”. 
Since the Indian defence sector was opened to private companies in 2001, barely $5 million of FDI has flowed into it, according to official statistics.
Nayanima Basu in New Delhi

Source:

Thursday, 7 August 2014

US eyes big-ticket arms deals during Hagel’s visit

With US Defense Secretary Chuck Hagel set to visit India tomorrow, noted American experts said his maiden trip to the country, in the early days of the new government, will give a much-needed thrust to the Indo-US defense ties.
Hagel, the second US cabinet minister to meet Prime Minister Narendra Modi, this week, will be accompanied by a high-power delegation of military leadership.
The Defense Secretary, during his three-day visit will hold talks with Defence Minister Arun Jaitley, and is also expected to meet National Security Advisor Ajit K Doval and External Affairs Minister Sushma Swaraj.“The purpose of this trip is to nurture the relationship and not to ink any deal,” Pentagon Press Secretary, Rear Admiral John Kirby told PTI ahead of the trip.
Hagel’s meetings will focus on the converging interests of India and the US in the Asia Pacific, their common interests in Afghanistan and initiatives to strengthen bilateral defense cooperation, including military exercises, defense, trade, co-production and co-development, and research and new technologies, Kirby said.
Assistant Secretary of State for Political Military Affairs, Puneet Talwar will also accompany Hagel.
“Bilateral defence ties are stronger than they have ever been, and poised to deepen further,” said Alyssa Ayres, senior fellow for India, Pakistan, and South Asia at the Council on Foreign Relation.
“On matters of strategy, a high-fidelity conversation between Hagel and Jaitley about regional security will build confidence between the two new counterparts,” Ayres said.
According to Richard M Rossow, Wadhwani Chair in US India Policy Studies, at the Center for Strategic and International Studies, India US defense ties have been the ballast for the relationship in the last year.
“Losing the MMRCA bid was painful, but the Department of Defense rebounded quickly, launching the Defense Trade Technology Initiative (DTTI). Defense sales by American firms are increasing, and joint exercises – highlighted by the recent Exercise Malabar,” he said.
“Anything really big that is close to ready for announcement would typically be held for when the two heads of state meet in September,” Rossow said. 
Source: Defencenews

Indian Union cabinet approves FDI in defence, railways

The Union Cabinet on Wednesday approved a proposal to raise the cap on Foreign Direct Investment (FDI) in the defence sector from 26% to 49%, a move aimed at accelerating indigenisation and bringing in modern technologies to meet the requirements of the armed forces.
Finance minister Arun Jaitley had announced in his budget speech that the FDI cap in defence manufacturing would be increased to 49%, with full Indian management and control through the Foreign Investment Promotion Board (FIPB) route.
Foreign firms haven’t made significant investments or set up defence manufacturing facilities, with the 26% cap on FDI dampening their enthusiasm to pump money into the country.
Barely $5 million of FDI has flowed into India since the defence sector was thrown open to private companies in 2001 by then NDA government.
However, it remains to be seen if lifting the FDI cap to 49% would lead to a significant inflow of foreign investment into the country and lead to greater indigenisation as there are some who have been advocating raising the limit to 74%.
Former defence minister AK Antony had opposed lifting the 26% cap on FDI. He had attacked the NDA government last month for increasing the FDI cap to 49% in the Budget, saying that it would hurt national security.
He had said, “I know a very strong lobby is working. Their demand is 100% FDI in defence. Successive governments since 1991 have overcome such pressure tactics. Their decision not to grant FDI beyond 26% was well thought out.”
However, the commerce ministry under the UPA regime had batted for raising the FDI cap to 74% to encourage foreign firms to invest in India.
100% FDI in railways
The government also approved a proposal to allow 100% foreign direct investment (FDI) for building railways infrastructure. Foreign capital in railways was not allowed till now.
However, the new government led by Prime Minister Narendra Modi has been pushing for it to build infrastructure projects such as high-speed railways and railway lines to and from coal mines and ports.
Currently, the cash-strapped railways cannot fund these projects without private participation. Foreign players from Japan and China are said to be keen to participate in building up of the infrastructure.
(With IANS inputs)
Source : Hindustantimes

Friday, 1 August 2014

General Dalbir Singh Suhag Takes Over As New Indian Army Chief

General Dalbir Singh Suhag today took charge as India’s new army chief, succeeding General Bikram Singh, who has retired. Lt. Gen. Suhag was appointed chief in May by the outgoing UPA government despite protests from former army chief, General VK Singh, and the BJP.
General Dalbir Singh Suhag today took charge as India’s new army chief, succeeding General Bikram Singh, who has retired.
Lt. Gen. Suhag was appointed chief in May by the outgoing UPA government despite protests from former army chief, General VK Singh, and the BJP.
59-year-old Lt. General Suhag, a Gurkha officer who had participated in the 1987 Indian Peace Keeping Force operation in Sri Lanka, will have 30-month tenure.
He comes from a family of soldiers.
A village in Jhajjar, Haryana, is celebrating the rise of the boy they knew as fearless.
“He had a sharp brain and worked hard. He has achieved all this because of his hard work. He was fearless,” his mother said. Asked if she was happy, she said, “When my son has reached such great heights…of course I am.”
His father Rajpal Singh Suhag is a retired flying officer.
“Generations of our family have been in the army. So he also had the desire to serve the nation. I was in the army, my grandfather and great grandfather were also in the army,” the former soldier said with pride, sitting in a room filled with medals and trophies.
Lt. General Suhag was made the Vice Chief of Army Staff in December last year. Before this he was the Eastern Army Commander.
He was at the centre of a controversy after a vigilance ban on him by then army chief General VK Singh in connection with an intelligence operation in Assam.
The ban was removed after General Bikram Singh took over in May, 2012.
General VK Singh is currently a minister in the BJP-led government. The BJP had questioned what it called the UPA’s alacrity to appoint Lt General Suhag and had insisted that the matter be left to the next government.
Soon after the BJP took power, however, Defence Minister Arun Jaitley said the appointment would not be scrapped.
Lt. General Suhag also commanded 53 Infantry Brigade engaged in counter insurgency operations in the Kashmir Valley in 2003-2005.
An alumnus of Sainik School, Chittorgarh, he joined National Defence Academy in 1970 and was commissioned in June 1974.

Source : Defence News

Wednesday, 30 July 2014

Indian Defense is in the air again

Defense is in the air again. There is a palpable sign of excitement amongst the Industry players who are suddenly awake to new sense of anticipation as far as defence sector is concerned. After a lull of almost a decade where inaction at large and negative action to some extent was the norm, the industry is looking forward to slew of measures from the new government to kick start the sector out of its deep slumber. And so far government has made right kind of noises. In fact, the new BJP led government’s manifesto explicitly envisages India as an exporter of defense equipments over the next decade. Government has already stuck a right note by increasing FDI in defence to 49% and also enhanced capital expenditure budget by 20%. Well, what it means for domestic defence players? Let’s take a deep breath and soak in the following facts:
a) According to a recent report by a reputed financial house, given Mr. Narendra Modi’s push to reduce import dependence in defence equipments and also to make India self-reliant, India’s likely defence outlay is estimated at USD 248 billion over next decade.
b) According to another report by KPMG, the defence budget is likely to grow at CAGR of 8% to reach $64 billion by 2020. The growth is to be primarily driven by capital expenditure.
The above figures suggest a huge opportunity for not only foreign players but more significantly even for domestic players, given the present government intent to promote the domestic defense industry as also to reduce dependence on imports.
Now, are these mere numbers or are we staring at a tremendous business opportunity?
The anecdotal data as well as common sense approach suggest, the later.
a) NDA has always been known to promote private business enterprise and the current PM is known for his “Gujarat Model” that has a strong place for private enterprise.
b) BJP intends to have a clear focus on Indian Defence with a vision to make it self- reliant & import independent.
c) Govt also clearly intends to promote domestic defence manufacturing that serve three purposes:
  1. It revs up the Indian Manufacturing sector and help aid our economy
  2. Create much needed employment for youth and
  3. Takes a significant step towards its ultimate goal of being self-reliant in defence.
stsplNo doubt that Indian top business houses like TATA, RIL, Mahindra, L&T are aggressively eyeing defense as a sunrise sector for coming decade. It is noteworthy that currently Indian Domestic defence manufacturing is distinctly dominated by Public Sector (DPSU) & Govt (OFB) which together account for 90% of defence manufacturing. Here, it is also noteworthy that opening up of largely govt dominated sectors in the past has meant huge business opportunities for private sector, teleocm, media and Aviation being the cases in point.

The above argument clearly suggests a huge door (not window) of opportunities for private enterprises in this now rightly called “Sunrise Sector”.

Sunday, 27 July 2014

'India should be more aware of cyber security threats'

NEW DELHI: India should be more aware of cyber security threats and the time to act in this regard is now, an Israeli security solutions firm has said even as it averred that the two countries have many common "opponents".
"I believe India should be more aware of cyber threats. I am sure that once India will be aware of cyber threats, the necessary steps would be taken," Zori Kor, vice president of Israeli firm ASERO Worldwide, said here.
Stressing on the importance of having cyber security, Kor said it was "unfortunate" that the Indian public is not fully aware of threats in this field, which can even have a ripple effect on the economy.
"As the public still doesn't understand how complex the challenge is, may be some decision makers are hesitating whether to take the necessary steps in order to meet the future challenges," said Kor, who is on a visit to India in connection with an upcoming homeland security conference in Israel.
"My recommendation is to start dealing with it (cyber security needs) now because it takes time," said Kor, who recently retired from Israeli Security Agency after 25 years of service in a number of counter-terrorism and protective security posts.
Adding that cyber security is not an area where one size fits all as the environment and threats keep changing from time to time, he said, "If we answer only the current situation, it might not be good enough. We have to think what the bad guy's next step would be in order to answer that."
Talking about the salient features of Israeli security capabilities, he said the country believes in partnership and in sharing knowledge and experience regarding implementation of technological platforms for internal security.
"We are in the same boat. Many of our opponents are unfortunately yours as well because we have good ideas and creativity and so do you. So, whoever is trying to steal good ideas from us might want to steal it from you as well," he said while opining that India was one of the "few friends" that Israel had.
India is now the main export target of the Israeli defence industry; however, both countries avoid revealing details about the scale and nature of their security trade.
In 2012, the Israeli defence ministry announced that the country's defence exports stood at an annual USD 7 billion of which homeland security accounted for about USD 1.5 billion.
Source  : The Economics Times

Tuesday, 22 July 2014

Defence could be sunrise industry for Indian firms in the next decade

With Prime Minister Narendra Modi’s push to reduce import dependence in defence equipment, India’s likely defence outlay is estimated at $248 billion over the next 10 years, according to the report.

  • Mumbai: Defence could be the sunrise industry of the next decade for Indian companies, according to a report released by Edelweiss Securities Ltd on 18 July. And Indian conglomerates such as the Tata group, Reliance Industries Ltd (RIL), Larsen and Toubro Ltd (L&T), and Mahindra Group are increasingly forging partnerships with global defence companies, and are “heavily enhancing production bases in the defence and aerospace businesses as India is on the cusp of a major spending drive to modernise its armed forces”, the report said. 
With Prime Minister Narendra Modi’s push to reduce import dependence in defence equipment, India’s likely defence outlay is estimated at $248 billion over the next 10 years, according to the report. In the budget unveiled on 10 July, the government proposed to raise the foreign direct investment limit in defence production to 49% from 26%.
On Saturday, Press Trust of India (PTI) reported that the government cleared procurement proposals worth over Rs.21,000 crore and also approved a project for the production of transport aircraft, which is open only to Indian private sector companies. Among the major proposals to receive approval is a Rs.9,000 crore tender to provide five fleet support ships for the Indian Navy, for which the request for proposal (RFP) would be issued to all public and private sector shipyards, defence ministry officials said.
The majority of the proposals cleared would involve only Indian public and private sector firms and are aimed at increasing the indigenization of military hardware, PTI reported. The Indian defence sector will be a significant opportunity for both foreign and domestic players, given the government’s intent to promote the domestic defence industry via a fresh dose of defence reforms.
The minimum opportunity for domestic entities is worth $75 billion, given the 30% offset requirement, the Edelweiss report said. India’s defence offset policy mandates that foreign contractors source components and systems from local vendors for at least 30% of the value of orders worth more than Rs.300 crore that they get from India. Other industry experts have a similar view.
According to KPMG, the defence ministry expects the defence budget to grow at a compounded annual growth rate of 8% to touch $64 billion in the financial year 2020. The growth will primarily be driven by capital expenditure, the component of the defence budget used for creation of assets and expenditure on procurement of new equipment. The offset opportunities are expected to be around $15 billion within the next 10-15 years, assuming that the proposed acquisitions which are under different stages are completed on time, according to KPMG.
“The new BJP-led government’s manifesto explicitly envisages India as an exporter of defence equipment over the next decade. The government has done away with the requirement of licences for defence manufacturing for all but 16 items. Further, in Budget 2014-15, it has increased FDI (foreign direct investment) in defence to 49% and also enhanced capital expenditure budget by 20%,” the Edelweiss report said. Domestic defence manufacturing is dominated by defence public sector undertakings (DPSU) and Ordnance Factories Board (OFB), which together have an 80-90% share of domestic defence manufacturing.
However, various private sector companies have been involved in a small way with several defence projects over the past years. Larsen & Toubro, the Tata group, Pipavav Defence and Offshore Engineering Ltd, among others, have tied up with global defence companies and have created infrastructure required to take on bigger roles in the defence space.
“These companies are yet to make a significant impact given the tardy processes involved in bagging defence orders…(However,) we believe defence could be the sunrise industry of the next decade for Indian companies,” the Edelweiss Securities report said. For instance, Mukesh Ambani-controlled RIL has been nurturing its ambitions in the defence space over the past few years and is likely to be a formidable entity in the aerospace business with several tie-ups in place, according to the research report.
The report said RIL is currently incubating the defence business, which looks promising. RIL did not offer any comments for the story. RIL had set up two defence subsidiaries—Reliance Aerospace Technologies and Reliance Security Solutions—in 2011. The group is set to enter the defence space by investing and signing new deals with global original equipment manufacturers (OEMs) primarily towards offset arrangement of defence equipment, the report said. RIL had recently signed an agreement with Dassault Aviation (France) for medium-multi-role combat aircraft (MMRCA) towards the offsets clause. RIL has also signed agreements with Raytheon Co. and Boeing Co. of the US and Siemens AG of Germany for homeland security systems.
Rival Tata group has also further fortified its presence in the defence space. “Chairman Cyrus Mistry’s strategy is to increase the Tata group’s footprint in the sectors opened up by the government, namely, defence and aerospace,” the Edelweiss report said. In June, Mint had reported that the $100 billion Tata group’s strategic aerospace and defence arm, Tata Advanced Systems Ltd (TASL), has scaled up operations across its seven lines of manufacturing and was preparing to bid for building full aircraft in the next three to five years.
To start with, TASL is eyeing a defence ministry contract to manufacture 56 military transport planes to replace an ageing fleet of Avro jets with the Indian Air Force at an estimated cost of Rs.11,900 crore. The Mahindra Group began its Mahindra Defense Systems division in 2000; this was later carved out as a separate company in July 2012. The group expects most of the projects to come from artillery systems and armoured vehicles. It hopes to ramp up revenues to $430 million by FY16E from the current $51 million.
Source : Defense News