|
New
Delhi, 18
February 2004
Defexpo
04 witnessed a feel good factor and a number of foreign
delegations from 20 countries commented favourably on the show. HT's
Vishal Thapar reported how the Pakistani Defence Attache attended
the SWS Defence Press Briefing, posing as a journalist and asked
many probing questions.
There
was severe competition between SWS, the new incarnation of Bofors,
with its FH 77 BO5 -52 cal gun which was at the show, Denel Soltam
G6 and Soltam's ATMOS –– all offering 155mm guns. All have done
two summer trials. The Army mid level are all for the Swedish proven
155mm guns but the Army will be required just to submit tecnical
evaluations, as per the new procedure.
We
found that after looking all the lethal stuff on display, most
professionals wanted to know more about India's nuclear status and
whether the BrahMos was going to be nuclear capable –– now that
Dr A Q Khan's stories are doing the rounds. Gen Padmanabhan in his
press conference had rightly placed confidence in India's nuclear
capability. Humphrey Hawksley after visiting BARC at Mumbai had said
on BBC that the "Pits" meaning warheads were at BARC and
they would be transported and fitted for delivery when required and
hence the procedure is something like USA had in Germany in the cold
war days. Defense News said the 155 mm Guns were to be retried and
one contract had gone to Denel and RM George Fernnades was there
recently. But here is a revisit to Defexpo 04 to appreciate India's
future defence activities. Money is now available as ‘India is
shining’.
The
demise of the cold war and the winds of globalisation, which were
sweeping over India and ramping up the economy, had led to a sea
change in India’s defence purchase options. India had shifted from
being a seller’s market for defence goods, to a more open
buyer’s market. Indian defence planners can choose vendors and
partners for large projects, though Russia followed by Israel
continued to be India’s largest defence suppliers for the present.
The
permitting of 100% private participation and 26% FDI in defence
industries saw new Indian defence kids on the block, like Larsen and
Tubro and Tatas. Both reported revenues from this sector, which is
set to rise. There was larger outsourcing by the Ordnance Factory
Board, PSUs, Armed Forces and DRDO. In 2003–04, out of the budget
of Rs 65,300 crores ($15 bill) which included the unspent part of
the previous year, there had been quicker clearances for imports and
the two major deals for 66 AJTs and the Gorshkov package alone
accounted for $2.8 billion. The Army was sanctioned Rs 3000 crores
($700 million) for much needed modernisation and the process of
inducting surveillance and communication equipment, specialized
rifles and grenade throwers had begun. In 2002–2003 the defence
sector purchased spares worth Rs 5166 crores ($1.3 billion) from
Industry while the Ordnance Factors Board made purchases worth Rs
3192 crores ($800 mill). Private participation in DRDO projects had
increased and is now welcomed.
Even
the USA had lifted restrictions to share a piece of India’s
defence cake. America–India strategic relations were getting
warmer, and large companies from USA’s military industrial complex
including Raytheon, Boeing Defence, Northrop Grumman, Honeywell,
General Dynamics and Lockheed had opened shop and made impressive
presentations to the Indian Armed forces on their range of advanced
systems and Airborne Early Warning AEW planes. USA had recently
supplied 98 badly needed spares for Sea King helicopters of the
Navy, and two out of 12 Raytheon ANTPS 37 Fire Finder weapon
locating radars at a cost of $140 million, were
supplied under the US Foreign Military Sales scheme, to the
Army.
Finance
Minister Jaswant Singh recently steered a Rs 66,000 crores ($16
billion) Defence Budget, which had more than 20 percent import
content. The Government also announced a Rs 25,000 crore ($ 5.8
bill) non lapsable defence fund for capital expenditure. This shows
India is back to “a roll on plan” for defence, as opposed to the
stop and start policy for acquisitions, witnessed in the past. If
the planned purchases and collaborations like the 6 Type 75 Scorpene
submarines and other ships sanctioned for the Indian Navy, the large
155mm Gun deal and modernization of the Army and the Phalcon AWACS
go through in 2004, India will rank as one of the largest importers
of defence goods competing with China and the Middle East.
It
was under this changed attractive atmosphere that Defexpo 04,
India’s third bi-annual Land and Naval systems exhibition
attracted 370 exhibitors from India and 19 foreign countries to
display their wares over some 20,000 sq meters of space in Delhi’s
Pragati Maidan. Defence Minister George Fernandes inaugurated the
show on 4th February and it was 30% larger than the last
show and was predicted to mark a watershed in India’s defence. Foreign
media highlighted George Fernandes’ opening remarks by pointing
out that India had shed its Gandhian reticence about its arms
industry and wanted partners to develop and sell the kind of
high-tech weapons the United States used in two Iraq wars. In this
context it is apt to quote what Fernandes had said, “Until
not so long ago, India was shy to display its weapon making
capabilities. That coyness may have had Gandhian overtones once upon
a time. We are looking at the production of spare parts (under)
license since we have a lot of equipment, which needs spares that
are hard to come by. India’s military export earnings have grown from US$17.4 million
in 1999–2000 to US$47 million in 2002–2003, and earnings for the
current financial year ending March 31 are expected to show further
growth. The two Gulf wars have demonstrated to us the meaning of
revolution in military affairs. Information technology and
electronic warfare are the sheet anchors of this revolution.”
Defence
shows are where buyers meet sellers and the activity this time
around was very positive for business. Many Indian defence products
and services on display showed potential to compete in the world
market, and Lord Bach, UK’s Minister for Defence Procurement
noticing the cost advantage and improved quality, invited Indian
companies to take part in UK’s procurement. India’s quest for
defence exports can now move forward with marketing and support from
the Government in easing the procedures. Three seminars were held
concurrently with the show on Offsets in Defence, Foreign Direct
Investments and Research and Development. It was heartening to see
senior bureaucrats including Defence Secretary Shri Ajay Prasad,
Secretary Defence Production and Supplies Shrimati Uma Pillai and Dr
V K Aatre DRDO Chief personally taking active part alongside other
foreign delegates and Captains of Indian industry. The conclusions
were that India can easily become a manufacturing base for many
systems, and greater quantum of FDI is the key for this. India can
now demand transfer of technology but it has to also to devise a
policy for offsets, which will make it mandatory for the country
that India is buying or collaborating with, to do reverse trade.
Many
foreign delegates found to their surprise that there was potential
to collaborate with Indian companies, and Israel had taken the lead,
by transferring technology and products for co manufacture. Mr
Shimon Eckhaus Vice President Israel Aircraft Industries explained
how IAI had taken on the marketing of India’s ALH Dhruv, which HAL
will showcase at Asian Aerospace at Singapore, and IAI will market
in Chile in end March. He also disclosed five other collaborations
in radars and communications, UAVs and electro-optical systems by
Israeli companies with Bharat Electronics Ltd and Hindustan
Aeronautics Ltd. This he claimed had enabled India to clinch a deal
to export the Indian built Dornier 228 to Mauritius with an Israeli
Elta radar. Ramta had already transferred technology to Goa Shipyard
Ltd, which had delivered two Advanced Fast Attack Craft of the Super
Dvora class to the Navy. Rafael of Israel, which had supplied the
Litening EW pods to the Indian Air Force, was now close to
manufacturing the Barak missiles in collaboration with Bharat
Dynamics Ltd, which was at the show and emerging as India’s
missile maker.
In
today’s weapon systems software inputs and simulation form a large
part of the system as the battlefield is getting digitised in what
is called Revolution in Military affairs (RMA). Indian private
companies like L & T, Tatas, Macmet and Zen Technologies had
shown strength in this sector at the show and had produced
world-class solutions and manufactured simulators for the Armed
Forces. Most DRDO products and collaborations were on display. This
trend is set to increase. Russia’s and India’s very successful
BrahMos supersonic cruise missile project was the darling of the
show where Larsen and Toubro displayed the firing control console
being made operational for the Navy.
What
was interesting about Defexpo 04 was that the show attracted many
more official delegations including those from UAE, Zimbabwe, Italy,
UK and USA while non exhibiting visitors came from other countries.
The “feel good factor” was being transmitted to the Defence
sector. This time around, the main organizers of the show the
Confederation of Indian Industries (CII) added fillip and greater
commercialism into the show, with suave marketing. The MOD also
renovated the entire permanent Defence Pavilion at Pragati Maidan,
including a chalet with five star facilities to entertain VIP guests
from India and abroad.
The
large Indian private players in defence, like Larsen and Tubro,
Kirloskars, Tata group, Mahindra Defence Systems and Treveni
Engineering displayed their wares alongside Government shipyards,
DRDO, Ordnance Factory Board and PSUs. A fact missed by many was
that India’s paramilitary and police forces had been given
substantive budgets to upgrade their forces and their shopping list
includes military hardware and systems similar to the Indian Armed
Forces.
India’s
Intelligence services had also received enhanced budgets post 9/11,
and a new set up, the NTFO the National Technical Facilities
Organisation to keep a listening watch on communications had been
carved out of the RAW. The Border Security Force took part in the
show and the show was visited by paramilitary force and intelligence
agencies for the learning it provides. An India company with foreign
collaboration Shoghi Communications showed off digitized secrecy
communications equipment and reported good orders, while Speck and
Rolta were strong on space imaging and GIS both virgin niche
markets.
Disclaimer
Copyright
|