Beruflich Dokumente
Kultur Dokumente
March 2013
Dear readers,
The Indian defense sector is currently in the middle of a
storm. I sincerely hope that this does not derail our planned
and ongoing procurement programs, which may then
seriously affect the operational capability and morale of our
armed forces.
The Union Budget was presented in the Parliament on 28
February. Whether the Defense Budget grew by 5% or 14%
is an argument that has not been settled yet. There is also uncertainty over the
increase in the Defense Budget, especially when the exchange rate of the US
dollar last year is compared to the one at present. We provide a high-level analysis
of this years Defense Budget, and hope to help answer this query.
Contents
Introduction
01
New projects/investments/
contracts
29
32
35
Industry buzz
36
Sources
42
13
Indias artillery modernization program has not made any ground level progress
in the past two decades. In our article, we try to provide a holistic picture of the
same. Thus, we have not limited ourselves to only large-caliber weapon systems.
The range, accuracy and availability of missile systems are a potent force
multiplier for any defense force. In our article we have attempted to present the
entire gamut of currently ongoing missile programs (purchase, indigenous, codevelop) in India. We may, of course, have overlooked a few, and look forward to
hearing from our readers for updates.
Among the regular sections, we have industrial license applicants, new projects
and investments, joint ventures and alliances, country-level deals and the latest
buzz in the industry.
I hope you find the first issue of this year useful. It has been our constant
endeavor to make this publication increasingly relevant to you and we will greatly
appreciate your comments and suggestions in this regard.
K. Ganesh Raj
Partner and Leader
Aerospace and Defence Practice
2012-13 (Budget)
2012-13 (Revised)
2013-14 (Budget)
Eye on defence | 2
14.74
12.88
2012-13 (Budget)
2012-13 (Revised)
This year, the Army has also allocated only INR10 million
toward the Make programs. This has made it almost
impossible to expect any major progress in the tactical
communication system (TCS), future infantry combat
vehicle (FICV) and battlefield management system (BMS)
programs in the current financial year.
2013-14 (Budget)
7.14
7.00
5.00
4.00
5.54
5.53
6.00
4.42
4.33
3.49
2.89
3.00
2.00
0.86
1.00
0.07
0.00
Army
Navy
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Airforce
0.86
0.37
2012-13 (Budget)
Defence Ordnance Factories
3.30
3.22
0.07
2012-13 (Revised)
R&D
Other
0.30
0.94
0.08
2013-14 (Revised)
0.27
2012-13 (Budget)
2012-13 (Revised)
2013-14 (Budget)
14.47
15.15
14.11
14.00
12.00
10.00
8.00
6.00
4.00
2.32
3.28
1.11
2.00
0.00
3.17
-0.10
-2.00
Army
2.11
2012-13 (Budget)
Navy
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Air Force
0.96
-0.18
2012-13 (Revised)
R&D
2.26
3.39
1.03
-0.17
2013-14 (Budget)
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INR 28 billion
INR 32 billion
INR 47 billion
INR 85 billion
INR 34 billion
2011
2010
2009
0
2008
10
2007
2006
20
2005
30
2004
40
2003
50
2002
60
2001
70
2000
Amiunt in $ million
Type
Total quantity
Category
Cost
Likely contenders
Status
155 mm
towed gun
Total: 1580
400 (direct
purchase) +
1180 (to be built
indigenously)
Buy
US$1.78
billion
Nexter (France)
Elbit (Israel)
Both are confirmed
contenders.
155 mm
tracked
Gun
100
Buy
US$778
million
Nexter, BAE
155 mm
Ultra Light
Howitzer
145
Buy
(through
FMS)
US$647
million
BAE Systems
155 mm
wheeled
selfpropelled
gun
Total: 400
Buy-Make
(Global)
US$889
million
155 mm
mounted
gun
Total: 814
200 (direct
purchase) +
614 (to be built
indigenously)
Buy-Make
(Global)
US$1.9
billion
Not known
180 (direct
purchase) +
220 (to be built
indigenously)
30% offset
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extended range (base bleed) ammunition and rocketassisted ammunition at the desired range. The platform
has ammunition-carrying capacity of 26 projectiles and
26 charges on board. The main weapon, along with its
sub assemblies, is expected to be manufactured in India
on transfer of technology (ToT).
With the procurements not making much headway,
owing to repeated cancellations of RFP or blacklisting
of firms, the MOD has been considering changing the
categorization of its artillery program from Buy and
Make (Global) to simply Buy and Make. This is likely
to help include domestic defense companies in the
international bidding process.
Force multipliers
Beside the guns, a number of force multipliers are crucial
for the modernization of artillery in the army. These
include the following:
Electronic fuses
Date of Issue
Product
Category
Quantity
Worth
Remarks
31 March 10
Buy
Not
specified
US$25million
14 May 10
155 mm trajectorycorrectable
munitions
Buy
Not
specified
US$25 million
US$30 million
29 August 11
120 mm mortar
terminally guided
munitions(TGM)
Buy
Not
specified
2008
Sensor-fused
munitions (SFM)
Buy-Make 4800
Not known
ATK
US$120 million
Not known
Eye on defence | 8
Electronic fuses
India continues to use mechanical fuses over electronic
fuses, as the former offer greater precision. Currently,
there is a deficiency of more than 1 million electronic
fuses for artillery guns alone. Owing to limited source
of supply, the timeline for meeting the immediate
requirement of 1 million fuses is anticipated to be
five to six years. However, at this stage, it will be
difficult to predict the timeline for the complete
transformation of fuse inventory to its electronic mode.
The rate of acquisition is expected to be incremented
by approximately 15%20% each year. The absence of
indigenous capability in the electronic fuses technology
and its variants offers market opportunity to establish
a JV to fill the void. Taking the average price of an
electronic fuse to be US$ 300 (INR15,000) , the existing
market can be pegged at approximately US$30 million
(INR1500 million). The requirement is bound to increase
when conversion for mortars takes place. Since electronic
time fuses will have applications for air defense, naval
and air platforms, the annual market size for electronic
fuses may be closer to US$ 2 billion ( INR100 billion).
RFPs issued for electronic fuse for 155 mm, 130 mm and105 mm
Caliber
Total
quantity
Variants
Quantity
Respondent
155 mm
392300
Percussion
Proximity
Carrier Shell
290700
50700
50900
BEL, ECIL,HBL,
Micron
130 mm
286900
Percussion
Proximity
Carrier Shell
256900
25000
5000
105 mm
320800
Percussion
Proximity
Carrier Shell
150000
50800
120000
BEL, ECIL
730
450
320
490
300
210
2015
Quantity (in '000)
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2017
2019
FCS is used not only for artillery guns but also in naval
ships, tanks, aircraft and helicopters. DRDO has designed
and developed electro-optical fire control system for
the Navy. The FCS for the T-90 tank was developed with
the help of Elbit, Israel. Apart from this, FCS has been
developed in-house by Tata Power SED for its 155 mm,
52 caliber artillery gun.
No RFI has been floated for automated FCS.
Eye on defence | 10
25%
Air
30%
Naval
15%
Land
15%
R&D
10%
C4ISR
4%
UAVs
1%
0%
10%
20%
30%
40%
Program
Manufacturer
Approx.
quantity
Cost
Remarks
US$175
million
(approx.)
US$4.47
million each
(approx.)
US$ 230
million
(approx.)
Undecided
Unspecified
ADE
12
DRDO
Rustom-II
HALE
US$ 342.25
million
(approx.)
SolarPowered
HALE UAV
DRDO
---
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Background:
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RFI details
Response date
Issued by
Service
6 Feb 2013
20 Feb 2013
Directorate of Staff
Requirements,
Integrated
Headquarters of MoD
(Navy)
Indian Navy
17 Jan 2013
20 Feb 2013
Directorate of Staff
Requirements,
Integrated
Headquarter of MoD
(Navy)
Indian Navy
9 Jan 2013
UAV simulator
25 Feb 2013
Directorate General of
Artillery
Artillery-11 (UAV)
Indian Army
2 Jan 2013
20 Feb 2013
Directorate Of Staff
Requirements,
Integrated
Headquarters of
MoD(Navy)
Indian Navy
28 Dec 2012
Medium-range, anti-ship
missile for naval surface
platforms
20 Feb 2013
Directorate of
Information
Technology
Indian Navy
Eye on defence | 23
RFI details
Response date
Issued by
Remarks
2 Mar 2013
4 Apr 2013
Army Commanders
special financial
powers
4 Feb 2013
8 Mar 2013
1 Feb 2013
Ballistic Helmet
26 Feb 2013
17 Jan 2013
Border Surveillance
Management Systems
26 Feb 2013
27 Dec 2012
18 Jan 2013
27 Dec 2012
18 Jan 2013
27 Dec 2012
18 Jan 2013
22 Dec 2012
4 Feb 2013
GOC-in-C, Northern
Command
6 Feb 2013
Aeroengines SU 30 MKI
21 Mar 2013
Air Headquarters,
Government of India,
MOD
Eye on defence | 24
Date of issue
RFI details
Response date
Issued by
Remarks
1 Feb 2013
NATO Ammunition
19 Mar 2013
Directorate of
Armament and
Safety Equipment, Air
Headquarters
18 Jan 2013
4 Feb 2013
15 Jan 2013
14 Feb 2013
Directorate of
Procurement,
Indigenous Purchase
Wing
24 Jan 2013
Frontier Head
Quarters, BSF
Jallandhar
Cantonment
18 Feb 2013
26 Mar 2013
Ordnance Factory,
Badmal, MoD
Issued by Ordnance
Factory Board (OFB)
Qty: 338180
15 Feb 2013
31 Mar 2013
Ordnance Factory,
Nalanda
Issued by OFB
30 Jan 2013
22 Mar 2013
Ordnance Factory,
Varangaon
Issued by OFB
23 Jan 2013
8 Mar 2013
OFAJ, Nagpur
Issued by OFB
22 Jan 2013
1 Mar 2013
Ammunition Factory,
Khadki Pune
Issued by OFB
Qty: 848
16 Jan 2013
21 Mar 2013
Indian Ordnance
Factories, Ordnance
Factory, Kanpur
Issued by OFB
Qty: 01
Eye on defence | 25
Date of issue
RFI details
Response date
Issued by
Remarks
14 Jan 2013
3G Cap Complete
19 Feb 2013
Ordnance Factory
Badmal
Issued by OFB
Qty: 370396
15 Feb 2013
5 Apr 2013
Defence Materials
Research &
Development
Establishment
(DMSRDE)
For DRDO
Qty: 01
6 Feb 2013
6 Mar 2013
Microwave Tube
Research and
Development Centre
(MTRDC)
18 Feb 2013
12 Mar 2013
Directorate General
For Indo-Tibetan
ITBP, Procurement Cell Border Police (ITBP)
ITBP
Qty: 04 each
4 Feb 2013
Communication Intelligence
(COMINT)
3 Apr 2013
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Issued by ADE
Aeronautical
Development
Establishment
Item of manufacture
9
22/02/2013
Om UAV Systems
10
22/02/2013
Non-explosive cartridge
11
22/02/2013
8
18/02/2013
7
05/02/2013
6
04/02/2013
5
01/02/2013
PCI Ltd.
3
31/01/2013
4
31/01/2013
2
24/01/2013
1
10/01/2013
86
17/12/2012
Global Energy Pvt. ltd. Passive night vision devices and TI/EO sight
85
Maini Precision Products Pvt. Ltd.
14/12/2012
84
22/11/2012
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Item of manufacture
83
Hemkund Precision Engineering Pvt.
21/11/2012 Ltd.
81
Mtare Engineering India Pvt. Ltd. Missile components, such as nozzle assemblies, linkages
8/11/2012
system components, air frame assembly, fairings
79
Amertec Systems Pvt. Ltd. Command and control systems; radar, EW and
05/11/2012
communication systems; data acquisition and tracking
systems; operational and mission computer; power
distribution systems; power supplies; voltage convertors;
simulator and test system
Eye on defence | 28
New projects/investments/contracts
Name of
entity
Project details
MBDA
Following the clearance, SRSAM is expected to be co-developed and comanufactured in India in a partnership with Bharat Dynamics Limited.
Eventually, the production of missiles in the country is likely to reach 2,000
units.
Airbus Military
Airbus Military has won the IAFs midair refueling tanker bid and a
production contract for Airbus A330 MRTT is expected to be negotiated
between the MoDand Airbus now.
INR54.21 billion
BAE Land
Systems
INR37.95 billion
123 Hawks have been purchased by India till date. BAE has received an
RFP for 20 more aircraft that may potentially make up the third batch.
The earlier two batches comprised 66 aircrafts in 2004 and 57 aircrafts in
2010.
Under the terms of an agreement made in October 2010, the company was
expected to provide an initial batch of F414-INS6-standard engines, with
the remainder to be produced in India.
GE Aviation
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Value*
INR325.26 billion
INR30 billion
Name of
entity
Project details
Indian Air
Force
The first three PC-7 Mark II aircraft have already been delivered by Pilatus.
Another 14 trainers are expected to be delivered to the IAF by June 2013.
IAF is likely to need 71 more trainers to meet its overall requirement of 183
basic trainer aircraft.
The IAF pilots course that begins initial training in June is expected to learn
to fly on the PC-7 Mark II.
HAL has proposed to prepare a blue-print for UAV requirements for paramilitary forces to the Union Home Ministry.
Larsen & Toubros shipbuilding division has received the contract from the
MoD for the construction of 18 high-speed interceptor boats for the Indian
Coast Guard.
The contract follows an earlier contract worth INR9.77 billion for the
construction of 36 vessels.
Hindustan
Aeronautics
Ltd.
ABG Shipyard
Larsen &
Toubro
Indian Army
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Value*
INR12.5 billion
INR5 billion
INR4.85 billion
INR4.47 billion
INR4.18 billion
Name of
entity
Project details
Wipro
Infrastructure
Engineering
The facility is spread over 7.2 acres of land and is expected to have an
initial annual capacity to produce 2,000 actuators for various aerospace
applications. The existing infrastructure allows for expansion of the capacity
by up to 8,000 actuators per annum.
Tata Motors has bagged an order from BEL for 6x6 multi-axle mobility
vehicles to mount radar applications meant for the Indian Air Force.
Tata is also in the process of delivering 96 specialist tractors for the Indian
Defence Forces Akash missile program.
The engineers from the two firms are expected to collaborate with each
other. The Indians are expected to look after the design details, while their
Italian counterparts are expected to focus on the management, quality and
certification aspects.
Tata Motors
Mahindra
Aerospace
Helicopters of
Russia holding
Tata
Technologies
*The values of the deals have been converted to Indian Rupees using Oanda currency conversion tool
1US$ = INR54.21 (Average of the value from 15 December 2012 to 11 March 2013)
Eye on defence | 31
Value*
INR650 million
(Phase I)
NA
NA
NA
NA
Nature of transaction
DCNS had earlier signed a strategic alliance with Pipavav, but had later
decided to be a strategic investor instead.
SAAB has acquired 3.5% shareholding in Pipavav Defense and Offshore, with
an option to increase it further at a later stage.
Hindustan
Aeronautics Limited
(HAL) and Ruag
Aerospace Germany
NA
NA
According to the deal, the potential work is scheduled to start by the end of
2014.
BAE Systems has extended its agreement with Elbit Systems to develop
airborne simulation capabilities for the Hawk Mark 132 advanced jet trainer
aircraft.
This partnership is expected to help ADT leverage its partners longstanding presence in southeast and west Asia as well as a strong client base
comprising large corporations and government organizations.
Dynamatic
Technologies and
Boeing
Advance Defense
Technologies, Inc.
Eye on defence | 32
Value*
INR13.5
billion
INR2.02
billion
NA
NA
NA
Name of entities
Nature of transaction
Tata Advanced
Materials and
Strongfield
Technologies Ltd.
Tata Advanced Materials Ltd has signed an MoU with UK-based Strongfield
Technologies Ltd, a manufacturer of equipment for defense and space
applications.
BEL has signed an MoU with Elbit Systems Electro-optics-Elop Ltd, Israel, for
the joint production of Compact Multi Purpose Advance Stabilization System
(CoMPASS) for Naval helicopter applications.
HCL is likely to deliver a range of engineering and R&D services, and also
support multiple Cobham sites across the globe with a wide range of services.
Bharat Electronics
Ltd and Elbit Systems
Electro-optics-Elop
Ltd.
HCL Technologies
and Cobham Plc.
Eye on defence | 33
Value*
NA
NA
NA
NA
NA
Name of entities
Nature of transaction
Elcom Systems
Israel Aerospace Industries (IAI) and Indias BEL have signed an MoU
regarding the development of Barak-8 missiles.
According to this MoU, BEL will function as the lead integrator and produce
major subsystems for the Barak-8. IAI would act as the design authority and
produce other subsystems as a main subcontractor to the Indian firm.
The MoU is a part of an order worth US$1.1 billion received by Israel in April
2009 to deliver Barak-8 systems. Deliveries are expected to be concluded by
2017.
Israel Aerospace
Industries and Bharat
Electronics Limited
*The values of the deals have been converted to Indian Rupees using Oanda currency conversion tool
1US$ = INR54.21 (Average of the value from 15 December 2012 to 11 March 2013)
Eye on defence | 34
Value*
NA
Nature of transaction
The US
Myanmar
China
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Additional details
Industry buzz
MoD plans to tighten defense production
policies
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Offset
structuring
Offset Structuring
worth US$ 3.1 Bn
executed successfully.
Total experience of 66
man years in the Armed
Forces.
MoD experience of 14
man years.
Industrial
connects
Team has members
from the Auto practiceIndias only proven
manufacturing
competence
We have offices in
Bangalore; Pune
Hyderabad & Chennai
where these
manufacturing and IT
capabilities reside
End to end
solutions
Industrial License
Application
FIPB approval
Due-diligence services
Transaction Advisory
for M&A
Tax Mitigation in offset
contracts
Creation of a compliant
Offset Schedule
Quarterly Offset
progress report
Eye on defence | 41
Sources
1. Murky competitions for Indian Howitzer orders may
end soon or not, Defense Industry Daily website,
7 February 2013, http://www.defenseindustrydaily.
com/murky-competition-for-2b-india-howitzer-ordermay-end-soon-0805/, accessed 15 February 2013
Eye on defence | 42
18. ABG Shipyard bags Rs. 485 crore order from the
Ministry of Defence, Indian Defence Review website,
www.indiandefencereview.com/news/abg-shipyardbags-rs-485-crore-order-from-the-ministry-ofdefence/, accessed 11 March 2013.
Eye on defence | 43
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