NEW DELHI: The country has already attracted over $4.27 billion through defence “offsets” through arms contracts inked since October, 2007. The defence procurement policy specifies that a foreign armament company, which bags an arms deal over Rs 300 crore, must plough back at least 30% of the contract value back intoIndiaas offsets.
The offsets figure will zoom further north with India poised to ink several more mega defence deals in the coming years. The around $20 billion MMRCA (medium multi-role combat aircraft) project to acquire 126 fighters for IAF, for instance, specifies a 50% offset obligation on the foreign vendor.
Defence minister A K Antony, in a written reply in Lok Sabha on Monday, said, “Seventeen offset contracts have been signed so far with a value of about $ 4.279 billion. The offset contracts are at various stages of execution.”
While the offset contracts worth around $3.435 billion were signed while procuring aircraft, radars, drones and other systems for IAF, the naval contracts notched up $843 million, thanks to the acquisition of fleet tankers, maritime reconnaissance aircraft, radars and UAVs.
The Army does not figure in this list probably because of its slow modernization projects, which the defence ministry is only now trying to fast track after Gen V K Singh complained of “critical hollowness” in his force’s operational capabilities.
Antonysaid, “The offset policy was introduced in 2005. It is a relatively new policy and is in the process of evolution. The first offset contract was signed in 2007…The positive impact of the offsets on development of the indigenous defence industrial base (DIB) will be visible in the coming years.”
Replying to a question on the amount spent on capital acquisitions from foreign sources,Antonysaid Rs 15,443 crore was spent in 2010-11, while the figure for 2009-10 stood at Rs 13,411 crore.
After several complaints last year thatIndia’s DIB was incapable of absorbing the huge offsets in pipeline, the defence ministry was forced to liberalize its offsets policy to include investments in the country’s civil aerospace, homeland security and training sectors as well. Till then, the offsets had been restricted to only the defence industrial sector.
Indiastill imports almost 70% of its defence requirements because neither have the DRDO and defence PSUs got their act together, nor has the private sector stepped into the defence arena in a major way.
The offsets, it is hoped, will help boost the country’s DIB, with the defence ministry also encouraging joint ventures or `co-production arrangements’ between Indian firms and foreign armament majors.
INDIA ORDERS ARMY BACK FROM FORWARD BASES
Indiais likely to drastically reduce the number of troops from wartime positions on the border withPakistanwhere they were deployed immediately after the Mumbai Attacks.
IndiaandPakistanhave reached an understanding to withdraw troops from forward bases during President Asif Ali Zardari’s visit toNew Delhion April 8. The withdrawal of the army to peacetime positions is one of the many initiatives taken by both sides to reduce tensions and talk forward the bilateral process and give peace a chance.
A formal announcement about the withdrawal is likely when the Indian Prime Minister visitsIslamabad, possibly during the latter half of this year.
The Indian govt. had mobilised thousands of troops to forward positions immediately after the Mumbai Attacks where relations between the two nuclear armed neighbours had gone for a dive.
In a wartime scenario, the regular army starts manning the border instead of special forces meant for protecting boundaries.Indiahas the Border Security Force andPakistanhas Rangers for this purpose.
The move will helpPakistandeploy more troops in the northern region where the Pakistani Army is fighting Islamic terrorist organisations and the Taliban. There is immense international pressure onPakistanto fight and exterminate the menace of terrorist from it’s soil.
Pakistanis also in favour of de-militarising the world’s highest battle field, the Siachen glacier & Sir Creek where recently 139 Pakistani soldiers died due to an avalanche.Indiahowever maintains thatPakistanshould agree to current standing positions and move back with a solid demarcation.
IndiaandPakistanspend thousand of crores every year to maintain troops on the world’s highest battle field.Indiawith a booming economy has no problem in maintaining troops at Siachen butPakistan’s bleeding economy is in no shape to sustain the constant expenditure.
DELAYS AND CHALLENGES FOR INDO-RUSSIAN FIGHTER
NEW DELHI: Seven years before its scheduled completion, the Ministry of Defence (MoD) has already announced a two-year delay in the Fifth Generation Fighter Aircraft (FGFA)IndiaandRussiaare to jointly develop.
Defence Minister A K Antony has been saying the FGFA would join the Indian Air Force by 2017. On Monday, his deputy, M M Pallam Raju, told Parliament, “The fifth generation aircraft is scheduled to be certified by 2019, following which the series production will start.”
The FGFA is the flagship of the Indo-Russian partnership. Both countries say it would be the world’s most advanced fighter. But interviews with Indian designers who have overseen the project suggest significant disquiet. There is apprehension the FGFA would significantly exceed its current $6 million budget, because this figure reflects the expenditure on just the basic aircraft. Crucial avionics systems would cost extra.
On the positive side, Indian designers say the FGFA project would provide invaluable experience in testing and certifying a heavy fighter aircraft that is bigger and more complex than the Tejas light combat aircraft (LCA),India’s foundational aerospace achievement.
The Russian and Indian air forces each plan to build about 250 FGFAs, at an estimated cost of $100 million per fighter. That adds up to $25 billion each, in addition to the development cost.
The FGFA’s precursor has already flown. In January 2010, Russian company Sukhoi test-flew a prototype called the PAK-FA, the acronym for Perspektivnyi Aviatsionnyi Kompleks Frontovoi Aviatsy (literally prospective aircraft complex of frontline aviation). Now, Hindustan Aeronautics Limited (HAL) will partner Sukhoi to transform the bare-bones PAK-FA into an FGFA that meets the Indian Air Force (IAF)’s requirements of stealth (near-invisibility to radar), super-cruise (supersonic cruising speed), networking (real-time digital links with other battlefield systems) and world-beating airborne radar that outranges enemy fighters.
But Sukhoi insists the PAK-FA already meetsRussia’s requirements, says N C Agarwal, HAL’s design chief, who spearheaded the FGFA negotiations until his recent retirement. HAL worriesRussiamight askIndiato pay extra for further development, particularly the avionics that transform a mere flying machine into a lethal weapons platform. That would leave the $6-billion budget in tatters.
The IAF clearly wants a top-of-the-line FGFA. According to Ashok Nayak, who spoke to Business Standard as HAL’s chairman before retiring last October, the IAF has specified 40-45 improvements that must be made to the PAK-FA. These have been formalised into an agreed list betweenRussiaandIndia, the Tactical Technical Assignment.
A key IAF requirement is a ‘360-degree’ AESA (airborne electronically scanned active) radar, rather than the AESA radar thatRussiadeveloped. Either way,Indiawould payRussiaextra: either in licence fee for the Russian radar; or hundreds of millions, perhaps billions, for developing a world-beating, 360-degree AESA radar.
Nor is the IAF clear on whether the FGFA should be a single-seat fighter like the PAK-FA, or a twin-seat aircraft like the Sukhoi-30MKI. A section of the IAF backs a single-seat fighter, while another prefers two pilots for flying and fighting a complex, networked fighter. During the ongoing preliminary design phase (PDP), for which India paid $295 million, the two sides would determine whether developing the PAK-FA into a twin-seat aircraft (inevitably more bulky) would reduce the FGFA’s stealth and performance unacceptably.
“The single-seat FGFA is essential for the IAF, and we will transform the Russian single-seat fighter into our single-seat version with a large component of Indian avionics. The twin-seat version will depend on the PDP conclusions,” says Nayak.
The PDP also requires Sukhoi to hand over design documentation to HAL, providing it a detailed insight into the design processes of the PAK-FA. SinceIndiatook years to decide to join the FGFA project, HAL missed out the design phase entirely.
The 18-month PDP, which terminates this year, will be followed by the ‘R&D phase’, which could take another seven years, says the HAL chairman. The FGFA would be designed in both countries. About 100 HAL engineers already operate from a facility inBangalore. Another contingent would move toRussiato work in the Sukhoi design bureau.
“Our boys will learn the Russian language, their way of working, their design rules and their design norms. We are left-hand drive, while they are right-hand drive. The Russians say they would part with all these things,” says Nayak.
But the most valuable learning, say HAL executives, would take place during the FGFA’s flight-testing. “Unlike the basic design phase which we missed out on, we will actually gain experience during flight testing. This phase throws up dozens of problems, and we will participate in resolving these, including through design changes,” says Agarwal.
HAL designers also relish the FGFA’s specific challenges. For achieving stealth, its missiles, rockets and reconnaissance payloads are concealed in an internal bay under the wings. Before using these, a door slides open, exposing the weapon for use.
The Russians clearly believe HAL possesses useful capabilities, including the ability to design the AESA radar. Also attractive isIndia’s experience in composites.
“The LCA programme has generated a high level of expertise in composite materials within the National Aerospace Laboratory and some joint teams. The FGFA requires ‘higher modulus’ composites, which can withstand the 120-130 degree Centigrade temperatures that arise whilst flying at Mach 1.7 speeds,” says Agarwal.
Despite the continuing imponderables, HAL believes the FGFA project provides genuine technological skills, far more useful than licensed manufacture. Agarwal says, “We will pay some $6-7 billion toFrancefor the licence to build the Rafale in HAL. In the FGFA project, a similar sum would bring in genuine design knowledge that will help us in the future.”
‘ECIL IS KEEN TO POSITION ITSELF AS A SUPPLIER OF STRATEGIC TECHNOLOGY’
HYDERABAD: Electronics Corporation of India Ltd , the public sector electronics giant, has achieved a turnover of Rs 1,400 crore for the fiscal 2011-12. It has set its eyes on crossing Rs 2,000 crore in the next few years. It derives confidence from the current order book of Rs 2,300 crore and a range of strategic areas, where its expertise is in demand.
The Hyderabad-based PSU has set in place a modernisation plan, which will strengthen its capabilities and beef up production facilities. It should give us the necessary edge in the niche areas we intend to grow, says its Chairman and Managing Director, Mr Y.S. Mayya.
The over 50-year-old company enjoys a good brand recall for its EC TV and contributions to electronic hardware. However, it went through troubled times, before turning around at the turn of the century. Since 2001 it has been on a steady growth path. In an interview to Business Line, Mr Mayya explained some of the initiatives that he felt would make ECIL a strong and robust company, serving the needs of the country’s electronics and strategic requirements. Excerpts:
Over the years ECIL has transformed itself into a solutions provider, mostly hardware for the strategic sectors. While it provides both challenge and assured projects, doesn’t it limit the company’s rapid growth potential?
Yes, the decision to shape ECIL into a company that can fill the demands of defence, space and atomic energy was consciously taken in the interests of the country. Also, traditionally the company has nurtured the technological capabilities in electronics and strategic sector. We did make a mark in consumer electronics in the form of EC TV as well as in IT education.
Especially, after Pokhran in 1998, due to sanctions,Indiawas under pressure to develop critical technology and hardware on its own. This fit well with the company’s core competencies. In a way, the continuous flow of contracts from the strategic sectors, has ensured healthy growth.
What is the business mix of ECIL as of now?
At present, defence sector accounts for 50 per cent of our business. We have four business units. The Electronic Warfare and Communication Intelligence, artillery fuses; ground support systems for missiles and military radios. Next is security systems, especially information and cyber security, which contributes to 25 per cent. Nuclear business is around 15 per cent.
We want to consolidate in these sectors. One area, ECIL was strong; earlier it was telecom. We want to re-enter this space. Similarly, there is big scope in the National ID card project. We are setting up a facility in Tirupati in Andhra Pradesh to be prepared to take advantage of the opportunities in this huge national project.
How well prepared is ECIL to take on multinational competition and accelerate its growth in the near future?
ECIL was to position itself as a supplier of strategic technology toIndia. We want to create Indian products, made inIndia. We are in fact, working on two such products, which are close to hitting the market. The first is a router, which we have developed with the IIT,Bombay. The second is the PLC, which has application in satellite launches, nuclear plants and energy sector.
Our long-term aim is to become a global entity with strong technology strengths. In financial terms, by 2020, we intend to cross the Rs 5,000crore-turnover mark . We have set the ball rolling and are quite confident.
What is the modernisation plan that the company has put in place?
Our plan is to upgrade technological, IT, HR and production facilities. It will involve big recruitment as 200-300 people are retiring annually. We intend to take in at least 150 engineers every year. The Atomic Energy for example is setting up several facilities. Similarly, a carbon fibre manufacturing unit, expansion of radiation detection and instrumentation are on the anvil.
By 2015, the modernisation and expansion should be completed. The emphasis is on building core competencies and strengths in niche areas. During the 12 {+t} {+h} plan we have identified 10 projects, with an investment of around Rs 300 crore that will provide a strong technological base.
How has ECIL fared on the exports front? What are the plans?
Our focus in not on exports at present. The domestic demands are quite high. However, our electronic voting machine is being exported to countries likeBhutanandNepal.Kenya,NigeriaandIvory Coasthave evinced interest. Similarly, the company has tendered for the electronic voter registration kits contract inKenyarecently.
However, the company is involved in at least two major global projects — the ITER project and the FAPR. In the €10 billion ITER projects, which is trying to create nuclear fusion, the ECIL will be supplying power converters. In the case of the Facility for anti-proton ion Research (FAPR), an accelerator coming up inGermany, the company will be supplying converters for the super conducting magnets. Both mega projects are expected to become operational around 2018.
USER TRIALS OF INDIGENOUS ARTILLERY GUN TODAY AT POKHRAN
In another big boost to the Indian Army’s artillery modernisation programme, the first home-built artillery gun will undergo its first user trials today at Pokhran, Rajasthan.
This gun is being manufactured by the Ordnance Factory Board (OFB) on the basis of the design transferred by the Bofors in 1986. The designs have since then been gathering dust owing to the taint on these Swedish gun.
However, as the repeated efforts of the Indian Army hit a naught, the force along with the OFB decided to manufacture the gun at home.
The indigenous gun will be upgraded version of the Bofors. So far the OFB is refusing to call it a Bofors gun. In any case the Indian Army has already placed an order of 114 guns.
DEALING WITH ARMED FORCES – PUBLIC CONTROVERSIES MUST BE AVOIDED
by Air Marshal R.S. Bedi (retd)
Despite the fact that the armed forces inIndiahave remained almost in a state of war continuously sinceIndependenceto keep their cohesiveness, integrity and sovereignty intact and have stood by the government without ever alluding to any doubt as regards their loyalty, they are still viewed with a certain amount of scepticism. The obvious tendency for the political leadership as well as the bureaucracy is to exercise tight control over them. This widening chasm and lack of harmony between them is harming the national interest. Partly, the armed forces’ leadership is itself to blame for this state of affairs.
In advanced democracies like theUSandEurope, the armed forces are generally held in high esteem. The military uniform is a symbol of national pride and reverence. The armed forces and their civilian counterparts in the government work in unison at all levels as a seamless entity.
But here inIndiathe powers that be have not realised the importance of the men in uniform nor have they, for that matter, grasped the worth of the exalted position of the Service Chiefs. It first started with Gen Thimayya who could no more bear with Krishna Menon’s idiosyncrasies and chose to quit honourably. The country was shocked. Nehru persuaded him to withdraw his resignation. He also appealed to his patriotism saying that it would not projectIndiaas well. ThenPakistanPresident Gen Ayub Khan was transiting throughNew Delhi. Gen Thimayya promptly obliged the Prime Minister. Nehru instead castigated him in Parliament the very next day for being immature. The General did not take up the cudgels for being slighted unfairly. He continued to head the Army but as a lame duck Chief.
This, however, created ripples in the Army because General Thimayya was a soldier’s General, a charismatic leader and an outstanding professional who stood out as the first Indian brigade commander during World War II and later as General Officer Commanding of a division in J&K. Besides, he had also earned laurels for the country as the Chairman of the Neutral Nations Commission inKorea. This is how our illustrious Prime Minister treated an equally illustrious soldier. This was, in fact, the beginning of the rot setting in.
Later, it was Gen Rodrigues who was run down unsparingly not only by his Defence Minister, George Fernandes, but also by a host of parliamentarians for his remark that the armed forces were equally responsible for good governance. The manner of dismissal of the Navy Chief, Admiral Bhagwat, was shocking, to say the least. Considering the sensitive nature of the matter, it could well have been handled more carefully by allowing the Chief to exit gracefully instead of humiliating him by showing the door.
It is interesting to look back when Nehru was to appoint the Army’s first Indian Chief. He harboured serious doubts about Gen Cariappa on account of his wide popularity in the armed forces and continued proximity to Pakistani Generals even after Partition. He was thinking of appointing the next senior-most man, General Rajendrasinhji, as the Army Chief. Gen Rajendrasinhji allegedly told Nehru that he would resign if so appointed as the Chief over and above his senior, Gen Cariappa. Nehru backed off and appointed Gen Cariappa as the Army Chief.
In a partly similar case in the Navy in recent past, the Admiral next in the line of succession promptly accepted the bait instead of standing up to it as a matter of principle when Admiral Bhagwat was sacked.
These examples reflect the cavalier attitude of the political hierarchy in this country. These also highlight the military leadership’s acquiescent and deferential demeanour. This has done tremendous harm allowing the bureaucratic hold on them to tighten. The armed forces have been marginalised to the extent that they are not even in the decision-making loop. The Chiefs are no more in direct link with the government and have to deal through the Defence Secretary only. But while the armed forces in any democratic country must necessarily function under civilian control, it must not be misconstrued as a bureaucratic control.
It is instructive to bring out here the advice given by Lord Mountbatten to Prime Minister Nehru in regard to the importance of Service Chiefs. When the committee of secretaries recommended that, as in other ministries, the Defence Secretary too should have a status higher than the three Chiefs, Lord Mountbatten objected to it immediately on the ground that one could not equate the Service Chiefs with the secretaries of the departments of the government. Being responsible for the sovereignty and integrity of the nation and key players in ensuring national security, the Chiefs must have a status commensurate with their span of responsibility and the right of direct access to the Prime Minister as in all democracies.
Nehru accepted the logic and decided to place the three Chiefs above the Defence Secretary in status which continues to be so even today. Notwithstanding this, the Chiefs have been somehow denuded, gradually, of their standing and eminence with the passage of time.
A stage has now reached when the Chiefs can hardly air their views even on matters of national security, of which they are largely responsible without inviting flak and brickbats. Any time they attempt to clarify or make a statement with regard to the nation’s capabilities vis-a-visChinaorPakistan, they are ticked off, sometimes even publicly.
Air Chief Marshal Naik, now retired, was snubbed for his response toPakistan’s boast that it had developed tactical nuclear missiles againstIndia’s overwhelming conventional superiority. The Chief had merely pointed out that the nuclear weapons were nuclear weapons whether tactical or strategic.Pakistanshould not miscalculate, forIndia’s response of “punitive retaliation” would remain the same regardless. Earlier, too, a former Army Chief, Gen Padmanabhan, was publicly censured by the then Defence Minister for having elucidatedIndia’s nuclear capability and likely response toPakistan’s blackmail. For that matter, was it really necessary to rebuke the Army Chief when he answered in the affirmative to a query as regardsIndia’s capabilities to mount similar operations as the American “Jeronimo” to exterminate Osama bin Laden? The Service Chiefs must periodically air views on matters of national security in order to instil confidence among the people.
The Indian armed forces are one of the most apolitical forces in the world. They have always stood by the government without any doubts about their loyalty and rumour-mongering as it happened recently notwithstanding. The incident was played up as it also happened earlier when an artillery brigade moved toDelhifor range firing at the time of Nehru’s death. The vested interests created the fracas which only led to the widening of the trust deficit further.
The cavalier manner in which the armed forces are being treated is not in the long-term interest of the country. The institution of Chiefship, which at one time had certain aura about it, has been severely mauled. Public pronouncements slighting the armed forces and their Chiefs must stop in the long-term interest of the country.
The writer is a former Director-General, Defence Planning Staff,New Delhi.
NO PLANS FOR TROOP WITHDRAWAL FROM PAK BORDER: INDIA
NEW DELHI:Indiahas denied a news report in aPakistannewspaper which saidNew Delhiwas moving away its troops to peace-time locations following an understanding betweenPakistanPresident Asif Ali Zardari and Indian Prime Minister Manmohan Singh last month.
Sitanshu Kar, spokesman of the Indian Defence Ministry, said, “The report that ‘Indiamay move troops to peace time locations’ is completely incorrect and without any basis.”
The short three-line clarification came late this evening after Express Tribune, a Pakistan-based newspaper, in its Islamabad edition today, said India is likely to thin out troops from wartime positions on the border with Pakistan, where they were deployed after the 2008 Mumbai terror attacks in November 2008.
Sources here said the Indian High Commission atIslamabadthis morning faxed the news report to the Foreign Secretary Ranjan Mathai, the National Security Adviser Shiv Shankar Menon and the Prime Minister’s Office.
The Ministry of Defence then got down to rebutting the report. The report has come just 10 days ahead of a meeting of the Home Secretaries of the two countries on May 24 and 25, and less than a month ahead of the meeting on June 11 and 12 when the Defence Secretaries of the two nations meet.
“The two countries reached an understanding on withdrawing troops during Pakistan President Asif Ali Zardari’s visit to New Delhi on April 8,” The Express Tribune quoted unnamed military and diplomatic officials as saying.
Officials said the Indian government had mobilised troops to take wartime positions at the disputed border withPakistan, particularly in Kashmir, immediately after terrorists launched the attacks inIndia’s commercial hub of Mumbai.
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