Special Focus: India Page 1 Part I
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Epicos 2017 Special Focus: India Volume 9 Number 03 – Wednesday, 18 January 2017 Part I: India 1. Indian Defence Procurements and Future Defence Budget 2. Indian Defence Industry: Capabilities, Turnover and International Cooperative schemes 3. Epicos “Industrial Cooperation and Offset Projects” 4. Development of a new generation ballistic protection vest, integrated with a lightweight Microclimate cooling and heating system, in order to meet Future Soldier requirements and applications 5. Machining services of ferrous and non-ferrous materials for the aerospace sector 6. News from our A&D Business Network Part II: Epicos Newsroom 1. LEONARDO: Agreement with the Italian Ministry of Defence for the New M-345 Trainer Aircraft and for the Development of the New Exploration and Escort Helicopter 2. Flynas orders 60 Airbus A320neo Family aircraft 3. Elbit Systems Awarded Approximately $17 Million Contract to Supply Ground Breaking BrightNite Systems to an Air Force in a NATO Country 4. Russian Helicopters to supply its first civilian rotorcraft to Pakistan 5. AAR Signs Extended PBH Contract with Bluebird Cargo © Epicos Informational Services Page 1 Epicos 2017 Special Focus: India Indian Defence Procurements and Future Defence Budget Due to the strained relations that India has with its neighboring countries and the growth of the uncertainty created by international terrorism, the Indian government has been investing heavily, upgrading its defence capabilities. Currently, India is one of the top military spenders in the world. According to the Stockholm International Peace Research Institute (SIPRI) Fact Sheet released in March 2014 India was the world’s largest importer of major conventional weapons for the period 2008-13. India’s imports of major arms were increased by 111% between 2004-2008 and 2009-13. This trend continued in the Financial Year (FY) 2016-17 defence budget, which is projected to reach Rs 249099 crore (36.6 billion US dollars). Historically the army receives the highest amount of funds, when compared to other branches. It is indicative that in the FY 2016-17 the army is expected to receive approximately 56% of the total budget, the air force 21.46% and the navy 15.82%. The remaining funds are allocated to other authorities responsible for defence administration, to Research and Development (R&D) and to the Directorate General of Ordnance Factories (DGOF). This trend was also followed through the period 2013-2016 with marginal fluctuations. Department-wise break up of Defence Budget 60.00 50.00 40.00 30.00 20.00 10.00 0.00 2013-14 2014-15 2015-2016 2016-17 Army 48.88 52.38 55.35 56.08 Navy 16.41 16.44 15.30 15.83 Air Force 28.36 24.02 22.62 21.46 DGOF 0.64 0.72 0.78 0.78 DGQA 0.38 0.37 0.38 0.39 R&D 5.34 6.06 5.56 5.46 Army Navy Air Force DGOF DGQA R&D Source: Ministry of Defence, Annual Report 2015-16 Modernisation of the Indian land forces remains one of the key focus activities of Indian authorities. Among others, Indian army received indigenously manufactured T-90 tanks. The local manufacturer of the tanks is the Heavy Vehicles Factory (HVF), located at Avadi in © Epicos Informational Services Page 2 Epicos 2017 Special Focus: India Chennai in the Indian state of Tamil Nadu. More on that, a new futuristic Main Battle Tank is being conceptualised, while the BMP-II is been upgraded. The upgrade includes, among others, the installation of enhanced communication, night fighting capabilities, transmission systems and weapon platforms. The modernisation process of the Indian Navy includes among others the construction of 6 submarines based on the Scorpène design (Kalvari class). Under a technology transfer agreement, the state-owned company Mazagon Dock Shipbuilders Limited (MDL) in Mumbai will manufacture the submarines. On 12 January 2017, Khanderi, the second of Kalvari class submarines with Scorpene design, was launched. Four other submarines will follow at intervals of nine months. Additionally, MDL is also handling two more projects for the Indian Navy (construction of seven destroyers, and four frigates). A destroyer was delivered in 2016 and another destroyer is at an advanced stage of sea trials and is expected to be delivered in the near future. Moreover, a destroyer class ship "Vishakhapatnam" was commissioned in 2015 and the launch of another ship "Mormugao" is planned in the middle of F.Y. 2016-17. Finally, the contract for construction and delivery of frigates was signed during the previous year between MDL and the Indian government. Moreover, currently, there are 14 warships under construction in the Garden Reach Shipbuilders and Engineers Ltd. (GRSE) facilities, which include two Anti-Submarine Warfare Corvettes (ASWC), eight Landing Craft Utility (LCU) ships and four Water Jet Fast Attack Crafts (WJFAC). Additionally, India is currently manufacturing an aircraft carrier. Approval for the construction of the aircraft carrier was given in May 1999, but the first of the floating airfields, the INS Vikrant, is expected to be ready in 2023. India has upgraded the majority of its aircraft assets. More specifically, in March 2015, Dassault Aviation and Thales delivered the first upgraded Mirage 2000 to the Indian Air Force. The upgrade included improved radar, avionics, a new electronic suite, weapons and a modern generation glass cockpit. Under the “Make in India” policy the rest of the Mirage 2000 fleet was agreed to be upgraded in Bangalore from Hindustan Aeronautics Limited (HAL) with the complete support and involvement of Dassault Aviation and Thales teams. Additionally, in 2015, Indian MiG-29 fighter jet modernized by Indian specialists took off into the sky. The modernisation process was carried out in India, while specialists from MiG Corporation, provided the necessary advice and technical assistance and know-how to Indian partners. Another purchase of aircraft was finalised in November 2015, when the last Pilatus PC-7 Aircraft was delivered to the Indian Air Force (IAF), closing a delivering process which began in February 2013. In May 2012, Indian Ministry of Defence signed a contract with Pilatus for the delivery of 75 PC-7s. Undoubtedly, the biggest procurement of the Indian air force was that of 36 Rafale aircraft. After a lengthy process in September 2016, France and India signed the contract for the acquisition of the aircraft. The Rafale is a twin-jet fighter aircraft able to operate from both © Epicos Informational Services Page 3 Epicos 2017 Special Focus: India an aircraft carrier and a shore base and as of June 2016, 152 such aircraft had been delivered. Moreover, it is worth mentioning that the rotary wing capabilities of the Indian Air Force have already seen a major boost with the induction of upgraded Mi-17 V5, which has better avionics, weapon systems and improved performance. Furthermore, India also procured in 2015, 15 CH-47F Chinook heavy-lift helicopters and 22 AH-64E Apache multirole combat helicopters from Boeing. The total value of the deal could be as high as $3 billion. When operational the helicopters will enhance India’s capabilities across a range of military and humanitarian missions. India is the 14th nation to select the Apache and the 19th nation to select the Chinook aircraft. Kyriazis Vasileios, Epicos Newsletter Head Editor © Epicos Informational Services Page 4 Epicos 2017 Special Focus: India Indian Defence Industry: Capabilities, Turnover and International Cooperative schemes One of the main objectives of India, regarding defence equipment is the achievement of self-sufficiency in defence production. Currently the country is far from achieving this goal as according to estimations nearly 70% of the defence requirements are met through imports, with only 30% being met through domestic production. In order to achieve this, the Indian government has enhanced the services and products provided by the Ordnance Factories and Defence Public Sector Undertakings (DPSUs). The products manufactured include arms and ammunition, tanks, armoured vehicles, heavy vehicles, fighter aircraft and helicopters, warships, submarines, missiles, ammunition, electronic equipment, earth moving equipment, special alloys and special purpose steels. Ordnance Factories is an industrial setup functioning under the Ministry of Defence. They include among others the following: 41 factories, 9 training institutes and 3 regional marketing centres. The 41 factories are geographically distributed as following: Name of State/ Union Territory Number of factories Maharashtra 10 Uttar Pradesh 9 Madhya Pradesh 6 Tamil Nadu 6 West Bengal 4 Uttaranchal 2 Andhra Pradesh 1 Chandigarh 1 Orissa 1 Bihar 1 Source: http://ofbindia.gov.in/ Hindustan Aeronautics Limited (HAL) is the largest DPSU. HAL has established itself as a comprehensive solution provider to the Indian Armed Forces in the field of aviation, providing products such as fighter aircraft, trainer aircraft and helicopters. The Indian Army is the biggest customer of HAL, as the vast majority (97%) of the company’s sales are destined to cover the needs of the local army. HAL has 20 Production Divisions, 11 R&D Centres and one Facility Management Division. Other important DPSUs are the following: Bharat Electronics Limited (BEL) Bharat Dynamics Limited (BDL) BEML Limited (BEML) Mishra Dhatu Nigam Limited (MIDHANI) Mazagon Dock Limited (MDL) Garden Reach Shipbuilders & Engineers Limited (GRSE) Goa Shipyard Limited (GSL) Hindustan Shipyard Limited (HSL) © Epicos Informational Services Page 5 Epicos 2017 Special Focus: India The value of production of Defence PSUs & Ordnance Factories for the fiscal year 2013-14 was 43745 ₹ Crore (6.4 billion US dollars), while in 2014-15 it reached 46428.66 ₹ Crore (6.8 billion US dollars). Value of Production of Defence PSUs and OFB in ₹ Crore 18000 46428.66 50000 44096 42352 16000 45000 14000 40000 35000 12000 30995.31 30000 10000 25000 8000 20000 6000 15000 4000 10000 2000 5000 0 0 2012-13 2013-14 2014-15 2015-16 Up to Dec.