Showing posts with label Def Ind Base. Show all posts
Showing posts with label Def Ind Base. Show all posts

20 April 2017

Mapping the World's Biggest Weapons Exporters – and their Best Customers


War kills. And war sells. These maps show the world's four biggest arms exporters and their major clients.

While they reveal a lot about who mongers weapons to whom, the sequencing on this graph is a bit misleading.

11 April 2017

Defence acquisition reform in limbo

With former defence minister Manohar Parrikar’s return to the position of chief minister of Goa, the global defence industry is asking one big question: What will happen to the defence reforms announced by him?

India faces a significant shortage of critical defence equipment, including fighter aircraft, submarines and helicopters, which India’s defence public sector undertakings (DPSUs) have been unable to address. This reality was publicly stressed yet again in March by a parliamentary standing committee on defence.

If the Indian military is to manage this challenge, critical policy issues such as defence procurement reform need to be finalized.

To address this issue, Prime Minister Narendra Modi and Parrikar introduced the concept of nominating “strategic partners” in defence production. The idea appears to be that the government should designate vetted private Indian companies to specific areas of national security importance, such as manufacture of fighter aircraft, tanks or submarines, to develop technologies and systems.

20 March 2017

Defence Expenditure: A Challenge for Defence Economists

Amit Cowshish

The only sub-theme that vies for pride of place alongside the debate on the alleged shenanigans of an inept civilian bureaucracy is the gross inadequacy of defence outlays. Governments have come and gone since 1947, but the sluggish trajectory of annual defence budgets continues, interrupted only by pay commissions and wars. It does not require any great power of prophesy to rule out a steep hike in the defence budget in the coming years. The history of the defence budget over the past seven decades should be enough to drive home this truth.

More specifically, the growth in annual defence allocations since 2014 only indicates that it is naive to expect that the gap between the demand projected by the Ministry of Defence (MoD) and the actual allocations made for defence in the union budget will soon be a thing of the past.

Defence analysts never tire of mentioning the year 2004 when the then outgoing government made a provision for a defence modernisation fund in the interim budget, seen till date as a bold step to address the problems besetting the modernisation of the armed forces. But it is the same political dispensation which, despite being in power now for almost three years, not only has not revived the defence modernisation fund but has also failed to cut the mustard when it comes to raising the defence expenditure.

28 February 2017

Building Deterrence

by Manmohan Bahadur

In war, and more importantly, in preparing for war, uncertainties abound. The spectrum of conflict is becoming larger and time compression due to computing technology and the opening up of the aerospace frontier demands acquisition of knowledge. The arena too has expanded from land/sea/air to the cybersphere, space and the electromagnetic domain. Call it new generation or hybrid warfare, it is incumbent on decision-makers to plan India’s approach towards capability building to meet the threat of war.

While casualties have a deleterious impact on society, it is the country’s standing in the comity of nations that is at stake. The mantle falls on people charged with the brief of war prevention, war planning and war making; the political executive has a major part in all three since policy formulation directly effects the creation of deterrence.

There are two macro issues that demand attention. First, the restructuring of the Higher Defence Organisation (HDO), characterised presently by the incessant demand for a Chief of Defence Staff linked with theatre commands, a la the US, and now China. Clinical analysis is necessary to tackle this issue, which has become an emotive one. Second, for too long have we pussy-footed on the need to develop an indigenous defence manufacturing base — changes are happening, but just about.

17 February 2017

"Breaking the Norm": A New Acquisition Approach

Source Link
By George Landrith

It may have been easy to overlook, given the steady stream of news coming out of Washington of late, but one of the more significant developments for the defense industry in quite some time is currently unfolding in the acquisition policy sphere.

In the last month, two defense industry giants have pulled out of one of the few major new acquisition competitions the Pentagon currently has running – with an expected business opportunity north of $16 billion. The reason why may surprise you.

Defense Department procurement generally follows a well-worn path: one of the services identifies the need for a new or upgraded platform; contractors pour time and research and development dollars into their offerings without official guidance on the necessary capabilities and requirements expected; the service issues a formal Request For Proposal (RFP) late in the game; and the service eventually settles for whichever one of the offerings most closely resembles what they were actually looking for. Thus wasting a lot of time and money, without necessarily providing the best outcome.

The Air Force, to their credit, has taken a different path for their 2017 T-X trainer competition, which seeks to replace the existing and rapidly aging 1960s-era T-38 trainer fleet with an initial 350 new aircraft and accompanying ground-training systems. The new trainers, with an expected initial operating capability scheduled for 2024, will help future pilots learn to fly the fifth-generation aircraft that now populate fighter wings.

10 February 2017

India’s Submarine Choice

As Donald Trump begins his Presidency, leaders in India face the question of whether to sign two long-delayed agreements to facilitate closer security cooperation with Washington. In New Delhi last week U.S. Pacific Commander Admiral Harry Harris offered a useful illustration of why the deals matter. Without them, he noted, India and the U.S. won’t be able to share vital information about China’s intensifying submarine presence in the Indian Ocean.

Chinese submarines have become a regular sight in the ocean in the past...

7 February 2017

*** Rescuing India’s defence spending from oblivion

Source Link
Pavan Srinath

When you exclude defence pensions, the defence budget drops to a meagre 1.6% of GDP, a drop from last year’s low of 1.74%. Photo: Abhijit Bhatlekar/Mint

Last year, finance minister Arun Jaitley did something different in his budget speech. For the first time in decades, he entirely skipped mentioning defence spending in his speech.

This year, he did a slightly better job of discussing defence. Apart from mentioning a few minor things about a defence travel system and an online pension disbursement system, he had this one sentence to say: “For defence expenditure excluding pensions, I have provided a sum of Rs2,74,114 crore including Rs86,488 crore for defence capital.”

Between what was said and unsaid, there are many implications for defence expenditure in the country.

The first thing left unsaid was that the budget estimate of defence pensions this year is a whopping Rs86,000 crore. When you include defence pensions, the overall defence budget amounts to Rs3.59 trillion, or 2.1% of gross domestic product (GDP). When you exclude defence pensions, it drops to a meagre 1.6% of GDP— a drop from last year’s low of 1.74% of GDP.

Falling expenditure on defence is of concern in the world seen in 2017. This year has an increasingly belligerent China, a new president in the US who wishes to be more insular about American interests and a Russia that is playing footsie with Pakistan. The deterrent effect of defence spending is needed more now than in the last few years.

The song remains the same on the capital acquisitions budget. As the government has done repeatedly, there was a 9% slash in last year’s revised estimate, compared to the budget estimate. This year, there is a nominal increase of 10% in the capital acquisitions budget over last year —but this is a net reduction in capital spending once you account for inflation and slashed expenditures in the revised estimate.

While Rs86,000 crore on capital acquisitions might sound like a large number, close to 90% of it is allocated to paying off instalments of money for past purchases of Sukhoi fighter craft, aircraft carrier Vikramaditya, transport planes like the C130J Super Hercules and more. The available budget for future acquisitions will be about Rs10,000 crore and no more.

22 January 2017

BEML Disinvestment: What about the other DPSUs and OFs?

Laxman K Behera

The Cabinet Committee on Economic Affairs (CCEA) has taken a major decision to privatise some government-owned companies. One of the companies listed for privatisation is BEML (formerly named Bharat Earth Mover Ltd., which functions as one of the nine Defence Public Sector Undertakings (DPSUs) under the administrative control of the Department of Defence Production of the Ministry of Defence (MoD). As per the CCEA’s in-principle approval, 26 per cent of BEML’s equity shares would be sold to a strategic buyer, bringing down the government’s share in the company from 54.03 per cent currently to 28.03 per cent. The offloading of the government’s equity shares in BEML, which would simultaneously involve the transfer of management control from the government to the ultimate buyer, is likely to bring in an estimated Rs. 1,000 crore to the central exchequer. In the light of this unfolding development, two questions arise: What is the significance of BEML’s disinvestment? Is it a one-off affair or should the government disinvest in other production entities functioning under the MoD?

The significance of the BEML’s strategic disinvestment lies in the fact that it would be the first time that the MoD will lose management control over one of its own companies. This is pertinent given that some perceive DPSUs to be too strategically important to be owned by the private sector. It may appear that the singling out of BEML for disinvestment could be due to the company’s dwindling exposure to the defence market post the controversy over the purchase of Tatra trucks. In 2015-16, the defence business (consisting primarily of sale of high-mobility vehicles) contributed a mere 11 per cent (as opposed to nearly 30 per cent a decade before) of BEML’s total gross revenue of Rs. 3426.02 crore. With such a low exposure to defence, the company’s rightful claim to be a defence company had come under question. The decision to privatise the company through the route of strategic sale instead of shifting it to another ministry, (as was done in case of loss-making Hindustan Shipyard Ltd., which was acquired by the MoD from another ministry), conveys the strong message that the government believes that it has no business in business.

It is worthwhile to note that BEML’s privatisation is not related to its performance. Unlike some other DPSUs, BEML is a highly competitive company, with 88 per cent of its sales in 2015-16 coming through the open tendering process. Besides, the company has a good track record of generating profits; it has registered a profit in 15 of the last 16 years. Poor performance of commercial entities, which had been the main driver of disinvestment decisions in the past, is not the main criterion for the government’s decision to disinvest in BEML.

Should the government now follow the BEML decision and move towards disinvesting in other defence production entities? The unambiguous answer is yes. DPSUs and Ordnance Factories (OFs) are the part of the larger set of Central Public Sector Enterprises (CPSEs) and other departmentally run production entities. These have outlived the utility of the Nehruvian model of industrialisation, under which the Government of India assumed the role of the largest industrialist in the country. But the running of businesses by the government has been accompanied by bureaucratic, administrative and decision-making inefficiency, manifested in the poor performance of these companies, including DPSUs and OFs. In fact, as suggested by the 1991 Statement on Industrial Policy, the CPSEs, given their inefficiency, have become a drag on the Indian economy.

Measured in terms of innovation, productivity, exports and customer satisfaction, the performance of DPSUs and OFs has been anything but encouraging. Some statistics testify to this sorry state of affairs. The combined R&D expenditure of the DPSUs, an indicator of their innovation performance, is a mere five per cent of their turnover. In the case of OFs, it is less than one per cent. Compared to this, some global companies spend up to 20 per cent of their turnover on R&D. Given such a poor focus on R&D, it is not surprising that they have designed and developed very few products. The average labour productivity of DPSUs is less than one-fifth of that of major global defence companies. Exports, a measure of international competitiveness, accounts for a meagre five per cent of their sales, whereas many international companies generate over 70 per cent of their revenues from international customers. The 40-odd OFs, which employ more than 95,000 workers, do not meet even 50 per cent of the product target set for the Indian Army, leaving a big hole in the latter’s preparedness.

More importantly, DPSUs and OFs have not succeeded in their primary mission of making the country self-reliant in defence procurement. Instead, they have become a conduit for large arms imports, albeit indirectly. This indirect arms import is made in the form of purchase of parts, components and raw materials from the international market and for which a large amount of foreign exchange is incurred. In just five years ending 2014-15, the nine DPSUs spent a whopping Rs. 78,740 crore on indirect imports, which amounts to nearly three-fifths of their total sales.

The only way that these entities can be made to function better is by putting them under an efficient management. And that can be achieved only through privatisation. The BEML model of disinvestment needs to be applied to the rest of the DPSUs. For the privatisation of OFs, the first thing that needs to be taken is to convert them from their present avatar of being a departmentally run organisation to a corporate entity. Disinvestment in these entities will not only make them function efficiently and contribute to the country’s self-reliance efforts but also enable the government to generate resources for meeting the fiscal deficit target as well as fund the critical modernisation requirements of the armed forces.

19 January 2017

HARSH TRUTH Inside Ike’s Farewell Warning: The Military Industrial Complex


With just days until he would hand over the reins of power to the young JFK, Dwight Eisenhower was faced with one final mission—to send his country forth with the proper guidance.

The speech had already been sent to the mimeograph machine to be copied and distributed to reporters. But sitting at his desk in the Oval Office, the president was still rewriting. Reporters who were used to Ike’s tendency to edit his speeches up until the very last minute had learned not to take the “official” version as final. Those tempted to file their stories before the actual speech risked waking up red-faced when Ike’s delivery veered off in another direction. 

At 8:30 p.m., millions of Americans would miss their Tues- day night episodes of The Many Loves of Dobie Gillis, The Red Skelton Show, or Alfred Hitchcock Presents to watch the president bid goodbye. Earlier, some of his friends had urged him to give the address before Congress and make a big display of it. He’d replied, “No, this is the president-elect’s show. I’ll just do it quietly from the White House.” 

Ike had been at the final editing since before eight that morning, with a strong sense of purpose. In the background he could hear pounding and hammering as the inaugural parade viewing stand was erected outside. It was, he thought, like be- ing a condemned man in a cell listening to the scaffold going up. Now the hour was nearing when the final script would have to be handed to the technicians to set up the teleprompter. (As it turned out, he would bypass it that night, deciding at the last moment to keep a paper copy on his desk and to turn the pages as he read—while the teleprompter scrolled pointlessly along.) 

16 January 2017

Army Looks to Change the Conversation With Defense Industry

By Sandra I. Erwin

The storyline on the Army’s bid to modernize its aging equipment has been one of fits and starts.

A litany of fruitless weapon development efforts over the past decade has cost the Army billions of dollars but delivered little in the way of advanced equipment. Congressional leaders have hammered Army officials amid fears that U.S. forces are losing technological ground to adversaries.

Army leaders insist they are forging a new path forward, and promise to get more bang for their limited procurement bucks. Notably, they have concluded that past failures partly were brought on by poor communications with defense contractors.

“We have identified several problems,” said Maj. Gen. Robert Dyess, deputy director of the Army Capabilities Integration Center, who discussed the Army’s latest thinking on how it plans to recover from its modernization slump.

Dyess summed up the situation in blunt terms: “Industry doesn’t know what the Army wants. There is no forum to address these needs. And small businesses don’t have a chance to present their ideas to the government.”

28 December 2016

The SIPRI Top 100 Arms-Producing and Military Services Companies, 2015

By Aude Fleurant

This SIPRI Fact Sheet lists the top 100 arms-producing and military services companies in 2015 and describes the international arms sales trends that unfolded during the year. Although there was a slight decrease in arms sales revenues when compared to the previous year, profits in 2015 were still 37 per cent higher than in 2002, when SIPRI began recording such data.


The arms sales of the SIPRI Top 100 arms-producing and military services companies (excluding China) were $370.7 billion in 2015. This represents a decrease of 0.6 per cent compared with 2014 and is the fifth consecutive year of decline.
US-based companies’ arms sales for 2015 fell by 2.9 per cent to $209.7 billion, due to ongoing limitations on government spending, including military spending. However, with a 56.6 per cent share of the Top 100 arms sales in 2015, US companies’ arms revenues remain way ahead of those of other countries. 

16 November 2016

Transfer of Defence Technology to India: Prevalence, Significance and Insights

October 2016

Transfer of technology has been prevalent in numerous forms across the world, both in the civil as well as defence domains, and India is no exception. These transfers, primarily in the form of licenced manufacture, have provided a significant boost to the production capabilities and self-reliance of developing nations in the past and hold great promise, in the future, for nations that do not have a well-developed science and technology base. This article addresses transfers in the defence domain and delves into some of its fundamental aspects through a coverage of its prevalence in India; whether it contributes to the attaining of national goals; understanding its core fundamentals and connected nuances; and finally, benefits and costs, including restrictive issues.

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22 October 2016

The Challenges That Remain In The Burgeoning Indo-US Defence Ties

October 19, 2016

India and the US have been forging a strategic relationship with each other, and defence is a critical component of it.

Even as the defence ties reach unprecedented levels, some challenges remain that have to be tackled.

This will propel the strategic relationship between the two into the long term.

India and the United States (US), and the emerging strategic partnership between the two, is directed with shared strategic logic, which includes the rise of China, Islamic fundamentalism and extremism and mutual agreements on various international issues. The two countries have been forging closer defence cooperation, which is one of the crucial engines of the strategic partnership. The US has emerged as the largest defence supplier to India in terms of value. A number of initiatives, agreements and forums have been designed and created in order to further boost military-to-military cooperation, defence co-production and co-development as well as collaboration in R&D in defence technology. The June 2015 Defence Agreement signed between US Defence Secretary Ashton Carter and Indian Defence Minister Manohar Parrikar envisions further strengthening of the defence relationship.

There are, however, certain obstacles that have prevented full exploitation of the true potential of defence cooperation between the two strategic partners. Though the US has emerged as the largest defence supplier in terms of value, Russia continues to be India’s single-most important supplier of defence hardware as far as the number of units is concerned. Moreover, India remains wary of the reliability of the US as a defence partner because of historical suspicions. Americans, on the other hand, find it difficult to comply with India’s defence offset policy.

11 October 2016

Role of Small and Medium Enterprises in Defence

PIB Press Release
Aug 13, 2016 
The Government has taken several initiatives to enhance the role of MSMEs in the defence sector. Augmenting the role of MSMEs in defence sector is one of the defining features of Defence Procurement Procedure (DPP)-2016. In the DPP-2016, the ‘Make’ procedure has been recast wherein greater impetus has been provided to MSMEs, by reserving certain categories of ‘Make’ Projects exclusively for them. The eligibility criteria for Shortlisting Indian Vendors, for participation in ‘Make’ projects, has been made liberal for MSMEs. Besides this, a multiplier of 1.5 is permitted for discharging of offset obligations through MSMEs as Indian Offset Partner.

In addition, the Government has launched various schemes for supporting MSMEs so that they can supply their products to various organizations including defence sector. The Lean Manufacturing Competitiveness Scheme was launched to improve the quality of the products of MSMEs. The MSMEs can upgrade their machinery under Credit Linked Capital Subsidy Scheme (CLCSS) and Technology Up-gradation Scheme (TEQUP). The units can also avail credit guarantee trust fund for MSEs to raise loan without collateral security for enhancing their competitiveness. MSMEs can also participate in Domestic and International Trade Fairs under Marketing Assistance and Technology Up-gradation (MATU) scheme.

The Government of India has notified Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012, under which a minimum of 20% of the total annual procurement from Micro & Small Enterprises by Central Ministries / Departments / PSUs has become mandatory w.e.f. 1st April, 2015. The same is also applicable to the defence sector.

30 September 2016

Defence Offsets Are Not Working. Foreign Companies Give Indian Vendors Low Tech Work

28 Sep, 2016

As a part of its new defence procurement policy adopted in 2005, the government introduced a clause for ‘defence offset’ in order to boost manufacturing capacity and technological capability of the local military complex. The offset clause binds foreign defence manufacturers to invest a portion of the total revenue in Indian defence firms.

Vendors often look at the offset as a burden and try to find ways to bypass the clause. A report published by Bloomberg reveals that offset obligations on 25 contracts signed by the government since 2008 show a shortfall in implementation in 13 cases. In other cases, the investment is often offered for low-technology products. These deals don’t involve the transfer of technology and do not contribute to technological innovation and capacity building. With this being the state of offset investment, defence vendors in India have hardly reaped any benefits from the revised policy.

Being the largest importer of defence equipment in the world, the country needs sustained investment in the defence industry to reduce dependence on foreign vendors. Vendors have often complained about the complexity of India’s procurement procedures and the offset clause. Refined policies, that promote foreign investment in the Indian defence industry and also addresses the concerns of the investors, should replace the existing framework. This, in turn, will help in capacity building and technological innovation.

21 September 2016

Reliance And L&T Competing For $2 Billion Defence Deal- How The Navy Is Promoting Indian Shipbuilding Capabilities

19 Sep, 2016

The Defence Ministry has cleared Reliance Defence and Engineering and L&T Shipbuilding Company for undertaking shipbuilding projects following a capacity assessment of various private shipbuilders in the country. Being the only two private shipbuilders cleared by the process, the two are set to compete for a $2 billion defence deal to construct four Landing Platform Dock (LPDs) for the Indian Navy. 

LPDs are amphibious transport docks capable of transporting troops to the war zone and are designed to act as landing decks for helicopters. The 20,000-tonne LPD would be the largest warship to be built in an Indian yard after the aircraft carrier under construction in Kochi.

As per the deal, the winning bidder will be awarded a contract to construct two LPDs and will assist the state-owned Hindustan Shipyard Limited (HSL) to construct the remaining two LPD platforms. Being the biggest warship construction project set aside for private shipbuilders, the project has the capacity to transform the winning bidder into a leading player in the industry. 

While the defence ministry operates five front-line shipyards, they are not enough to satisfy India’s strategic needs. Private shipyards that have recently displayed promising capabilities but are often regarded as “inexperienced” and only given orders for smaller, less complex vessels. In this regard, the clearance could be seen as Navy’s attempt to develop indigenous shipbuilding architecture by utilising the capability of under-utilized private shipbuilders in the country.

22 August 2016

Rethinking Profit Policy In Defense Acquisition

August 12, 2016
“The first responsibility of the acquisition workforce is to think.”

Despite persistent myth, the average profit margin for defense companies is half the margin for S&P 500 companies. Whether that bargain is good for warfighters and citizens depends on DoD acquisition goals and what that policy actually achieves in security, cost effectiveness, and innovation. But defense acquisition has performed poorly for decades and has been under constant reform during all of that time. Lack of progress in acquisition reform suggests underlying assumptions in policy and reform to date are flawed, and that if any progress is expected in the future, then these assumptions and policies must be reexamined. Otherwise, future progress is equally unlikely however comprehensive and well intentioned. 

DoD profit policy continues to operate under the assumption that profit is merely wasted expense, or worse. 
According to a Defense Acquisition University training presentation, “Many in Government see profit as ‘evil’ and unfair to the government vs. a required component of the acquisition process”. DoD leadership consistently denies there is a “war on profit”, but in 2013 HASC testimony, Pierre Chao showed something is clearly wrong with DoD profit policy: “Culturally we have evolved to a point where the system would rather pay $1 billion and 5% profit for a defense good, than $500 million and 20% profit.” The Defense Business Board agrees: “Profit is misunderstood by the government, [It is] seen as something to be minimized” and more comprehensively that “DoD lacks sufficient understanding of business operating models and drivers of innovation.”

The Public View of Defense Industry Profit

Clearly, both the American public and media views of the defense industry and especially defense industry profit are aligned with DoD policy. Neither are generally friendly to the defense industry. A Brookings study noted, “We are accustomed in the American public debate to praising men and women in uniform, and yet we often ignore or even pillory those who equip and support them.” 
Stories of $800 hammers and $1000 toilet seats are not lessons of industry greed. Such prices are instead monuments to a broken acquisition system mired in regulation, process, oversight, and unique and changing requirements – all of which add to the cost of delivering what DoD acquires. They have nothing to say about industry overcharging or profit.
Media and various watch organizations are especially responsible for feeding the public myth of a greedy defense industry. This 2015 Washington Post headlineDefense contractors hunker down, then report blistering earnings is at best misleading. At the close of 2015, defense industry profits were again half of the S&P, and far less than profits for Dow 30 producers of hamburgers, diapers, and Coca-Cola, not to mention the truly prosperous producers of our iPhones and favorite apps. Such stories needlessly inflame the ire of the public and Congress and result in ever more expensive and time-consuming legislation, policy, bureaucracy, and process. Although responsible oversite is necessary for productive, accountable administration, in defense acquisition it has been driven to an extreme “accretion of laws, regulations, reporting requirements, and mandated procedures that are choking the system … Fully a third of our procurement dollars are going to ‘overhead’, much of it dictated by the choking layers of redundant and competitive overseers.” (John Hamre, “An Honest Look at the "Military-Industrial" Complex”)

Examining Defense Industry Profit

4 July 2016

The Naysayers Are Wrong. Here’s Why India Must Celebrate The Tejas
Mihir Shah - July 3, 2016,  

The Tejas aircraft is a bigger success than it is being credit for. A fourth generation fighter has been developed from scratch - there was very little technological or industrial backbone the developers could draw strength from.
We must learn to see the success of the Tejas program in the context of our industrial, economic and strategic environment.
Last week saw the formal induction of two Tejas aircraft into the No. 45 Flying Daggers Squadron of the Indian Air Force. The squadron will begin operating from Bangalore before eventually moving to Coimbatore where it will be permanently based. It will form the early adopters group which will evolve tactics and iron out early difficulties in maintenance. 
Twenty aircrafts will be produced in the current configuration. A hundred more may be inducted in an improved configured (Mk 1A) in the coming years if HAL and IAF stick to their commitments. But there are many who question the wisdom of continuing with the project. The argument is that the Tejas is quite late in the game, that it cannot hold its own against the sort of fighters that will be deployed against the IAF and that, technologically speaking, the Tejas is at least a generation behind aircrafts like Rafale that the IAF wants to acquire. Why continue with something that is do delayed and even out of date?

The arguments are not new: The jet is old, they say. 32 years in the making. There are 53 shortfalls in performance. 20 permanent waivers have been granted by Indian Air Force. The useful combat radius is only 300 kilometres. The Indian Air Force (IAF) is down to 35 fighter squadrons from a sanctioned strength of 42, and cannot afford the risk of inducting an unproven design.
While these figures are all technically correct, the absence of proper context makes them appear more damning than they should. More importantly, the narrow focus on cherry-picked performance parameters fails to take into account the larger picture: the one that puts the achievements till date (and there have been many) in the context of the industrial, economic, and strategic environment in which the project was undertaken. It also neglects longer-term economic and security benefits that have accrued as a result of this effort, the strategic implications of which go beyond any one individual program.

4 June 2016

Security Risks Through Delays in Acquisitions: A Solution

Jun 3, 2016

The Business Standard, in its Editorial of May 18, 2016, acknowledged that the Modi Government had ‘taken a variety of initiatives’ on modernisation of the armed forces but ‘security risks from delay’ must be addressed. In my personal capacity I truly believe that path breaking progress has indeed been achieved by MoD. However, whilst the procedural and policy issues have been addressed there is no escape to the delays in the overall acquisition chain. The reason for this is obvious.

Most acquisition programs take time - for design, development, customisation, test, production and final delivery. Therefore, delays are inherent and unavoidable, which in turn result in overexploitation of existing assets/war reserves, consequential higher maintenance costs and earlier decommissioning thereby causing further reduction of force levels. This also creates a public perception that the MoD is not doing enough and fast. To bridge the capability deficit during the period of accord of AoN and final induction into service it is proposed that the DPP 2016 include a ‘Lease’ categorisation for certain platforms/equipment as a stop gap arrangement to check force level declines, improve operational capability and reduce security risks. I was the first to mention this concept on Lok Sabha TV during the Indian Defence Analysis program and since then I remain ever more convinced that for fast tracking defence capability building lease is an ideal solution.

27 April 2016

DPP – 2016: A New Face of “Make in India” in Defence

Author: Prakash Panneerselvam
April 18, 2016 

The much awaited Defence Procurement Procedure – DPP 2016 was unveiled by Defence Minister Manohar Parrikar during the inauguration of DEFEXPO – 2016. The DPP – 2016 is an important step in restructuring the existing defence procurement and acquisition policy. Over the last two decades the government has failed to find a solution to the existing problem in Indian defence acquisition process, leading to several delays in acquiring much needed modern weapon platforms by the Indian armed forces. To resolve the issue, Defence Minister Manohar Parrikar has taken extra care in restructuring the DPP 2016, which he views as an important component in achieving self-reliance in the defence sector.

After assuming the office in 2014, Defence Minister Manohar Parrikar had constituted a team of experts under former Union Home Secretary, Dhirendra Singh to review Indian defence procurement policy and DPP -2013. The new DPP – 2016 incorporates the Dhirendra Singh Committee recommendations and brings in dynamic changes in the defence procurement process. The DPP lays emphasis on achieving enhanced self-reliance in weapon manufacturing. Many industry and strategic experts have opined the proposed change would speed-up the procurement process. At the same time, it is also important to analyse, how the DPP – 2016 would impact the “Make in India” initiative in the defence manufacturing sector.

Highlights of DPP – 2016