Category — Defense/ Security

New Defense Minister Acts Quickly

Six times since the infamous Bofors scandal of the 1980s, India has cancelled the purchase and upgrade of its artillery. This is set to change. At his very first opportunity to chair the Defense Acquisition Council meeting, Manohar Parrikar issued orders for a Request for Proposal to be launched for 814 mounted-gun systems. The guns will be bought under ‘buy and make’ category – the first 100 guns will be bought off the shelf from an original equipment manufacturer and the remaining 714 will be manufactured in India by an Indian company.

Indian companies are already working in tandem with their partners. Larsen & Toubro  has a tie-up with Nexter of France, Tata with Denel of South Africa while  Kalyani group has a tie-up with Elbit of Israel. The Russians are already working with the Ordnance Factory Board which is a unit of India’s Ministry of Defense.

The India Expert hopes that the seventh time is a charm for this acquisition program.

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November 22, 2014   No Comments

Rising Optimism for Doing Business in India

The environment for foreign investments in India started improving a short time before Narendra Modi was elected prime minister on a business-friendly reform agenda in May 2014. United Arab Emirates’ Etihad Airwas acquired a stake in India’s  largest corporate carrier, Jet Airways. As a result of this deal, the U.A.E. ranks in the top five of India’s leading foreign investment sources.

A survey conducted by Ernst & Young found that 53% of more than 500 business leaders around the world planned to enter or expand their operations in India within the following 12 months. The list of multinationals that are making long-term investments in India includes U.K. liquor company Diageo, which acquired majority ownership of United Breweries, once run by Indian billionaire Vijay Mallya; French energy company GDF SUEZ; pharmaceutical giant GlaxoSmithKline; Sweden’s IKEASingapore Airlines; Starbucks, which partnered with the Tata BeveragesUnilever, Vodafone and Volkswagen all upped the ante upon Modi’s eelection.

Over the last year, 67% of foreign direct investment in India has gone go the services sector, with 18% going to the manufacturing sector. The remaining 15% has gone to agribusiness investments, according to the Reserve Bank of India.

FDI in India is capped in a number of key sectors.  Foreign ownership cannot exceed 49% in Indian defense contractors, or 74% in private banking. Nandan Nelivigi, head of India’s practice at White & Case said, “Competition for the best opportunities [in India] is already fierce and will only intensify as the business climate improves. Fortunately, investing in India today is no longer a step into the dark.”

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November 17, 2014   No Comments

India Wants to Export Weapons

India’s Defense Research and Development Organization has identified 15 weapon systems that may have an export market,  the country’s top military scientist Avinash Chander said.

The military hardware shortlisted for export includes

  • Astra beyond-visual-range air-to-air missiles,
  • Prahar surface-to-surface missiles,
  • Akash missiles,
  • Light combat aircraft, Tejas,
  • supersonic cruise missile Brahmos,
  • Sonars,
  • Arjun MK-2 tanks,
  • Airborne early warning and control systems,
  • plus many  unmanned systems and battlefield radars.

“There is a significant potential for export. The DRDO is more challenged by lack of trust in its capabilities rather than lack of capability,” continued Chander, the man credited with shaping India’s strategic missile program. Home-built missiles would form the centerpiece of India’s arms exports, within the framework of the missile technology control regime that bans exporting missiles with ranges above 200 miles. However, some of these platforms such as the LCA and Arjun Mk-2 aren’t operational yet.

In August, the DRDO had come in for some sharp criticism from the new Prime Minister over delays and cost overruns in key programs. The DRDO chief said, “On an average, we are delivering products in a cycle of eight to ten years from project sanction, which is only two to three years behind global players. In many cases, we had to develop technology from scratch.” He said several projects had missed many deadlines due to technology denial regimes, extremely demanding qualitative requirements, and a shrinking talent pool.

 

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November 13, 2014   No Comments

India to Buy Warships from Korea

In keeping with a growing “strategic partnership” with  South Korea, India is set to acquire 8 advanced mine sweeping and hunting warships for $1 billion.

Under the program, India will get two of the mine counter-measures vessels (MCMVs) directly from the South Korean firm Kangnam Corporation, while the other six will be manufactured by a shipyard in Goa after the transfer of technology. “The contract is now being finalized after the conclusion of the commercial negotiations,” said a source.

India’s need for advanced MCMVs that combine the role of traditional minesweepers and active mine-hunters to detect and destroy underwater mines is critical for the security of Indian harbors and offshore installations. Made of composite material and high-grade steel to ensure minimal magnet fields, the new MCMVs will have high-definition sonars and acoustic and magnetic sweeps to first detect all kinds of marooned and drifting mines and then use remote-controlled systems like small underwater vehicles to detonate them at safe distances.

 

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November 13, 2014   No Comments

India’s $525 Million Spike Missile Deal

India will buy anti-tank guided missiles from Israel, rejecting a rival bid from the U.S.  for its Javelin missiles. Defense Ministry sources stated that Modi’s government has placed orders for 8,356 Spike missiles and 321 launchers from Israel in a deal worth 32 billion rupees ($525 million). The Javelin is currently manufactured by Raytheon and Lockheed Martin.

“The Defense Acquisition Council took the decision based on purely technical reasons and based on hard facts,” said an unnamed defense ministry official. “The process of bringing them (equipment) here will be done over a period of time, in stages,” he added without giving details. India, the world’s biggest arms importer, is in the midst of a $100-billion defense upgrade program, whose pace has accelerated since the new  government was elected in May this year

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November 13, 2014   No Comments