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DEFENCE PROCUREMENT NEWS –– FEB TO OCT '08
(Compiled from media reports)

27 October, 2008

India Orders Over One Hundred SIGMA 95 Navigation Systems

The aircraft manufacturer Hindustan Aeronautics Ltd. (HAL) of India has just ordered from Sagem Defense Securite (SAFRAN Group) more than 100 SIGMA 95N navigation systems.

These systems will be used on the Indian Air Force Sukhoi fighters and the Tejas fighters from the Indian LCA (Light Combat Aircraft) program.

India to induct two squadrons Tejas Light Combat Aircraft from 2010

India is to induct two squadrons of the long-delayed Tejas Light Combat Aircraft from 2010, with up to six squadrons possible if the first batch impress in operations.

“There were hitches in the past but in the tests that we have been doing over the last few months indicate that those have been resolved. The programme was streamlined and it is a much better aircraft now. We are confident that it can serve our needs,” says Air Chief Marshal Fali Homi Major, Chief of Air Staff, at the Singapore Airshow.

HAL Teams Up With Dassault To Upgrade Indian Mirage 2000s

Following the successful Mirage 2000 update programs in Greece and the United Arab Emirates, Dassault and Thales have joined forces with Hindustan Aeronautics Ltd. (HAL) to provide a similar upgrade for the Indian air force’s Mirage fleet.

In early July 2007, Dassault, Thales and HAL signed a partnership deal, submitting an offer to the Indian air force covering a Mirage 2000 upgrade immediately afterward. The proposed upgrade is based on the RDY-2 radar and is an adaptation of the existing 2000-5 Mk 2 and 2000-9 configurations, with provisions to integrate existing and planned Indian equipment.

Thales Bags Major Order From India Army

European military systems integrator Thales has announced it has bagged an order to install advanced fire control systems and night vision devices on 1000 frontline T-90 tanks of the Indian army.

Catherine FC thermal imagers are in operational service in more than 10 countries and give tank commanders ability to see up to a range of 8-12 kms. Computerised images can see through dust, rain and smoke while remaining largely impervious to dazzling effects of sunlight and explosions.

Indian Army to receive Pinaka

Indian Army is all set to receive a warhead for Prithvi nuclear capable, Pinaka rocket from the Ordnance factory in neighbouring Chandrapur district on Feb 27, top defence sources said. The indigeniously developed Pinaka had undergone a series of successful tests before being finally inducted in to the army. The ordnance factory will supply about 300 Pinaka rockets to the Army in the first year and will increase it to about 1,000 subsequently, defence sources told PTI. The Pinaka which is fired from a Multi-Barrel Rocket Launcher (MBRL) has a short range. The rocket system has two pods with six rockets each, capable of firing in salvo mode in 44 seconds.

India's Army set to double combat helicopters by 2020

The Indian Army intends to double its fleet of attack and other types of helicopters to 500 by 2020, a spokesman for the country's Ground Forces. Around 250 helicopters are currently in service in the Indian Army, mainly obsolete domestically manufactured Cheetah attack helicopters and Chetak multipurpose helicopters, as well as Advanced Light helicopters. He said around $1 billion would be spent on replacing the Cheetahs and Chetaks with new models. The principal bidders in the new tender will be Eurocopter, the U.S.'s Bell, and Russia's Kamov.

Hawks Arrive at IAF Bidar

Following the arrival of two more Hawk advanced jet trainers at Indian Air Force (IAF) base Bidar on 5th February, a total of six aircraft out of the 66 on order have now been delivered. With further deliveries scheduled throughout 2008 and 2009, the programme to equip the IAF with the world's most successful advanced jet trainer is well underway.

A total of 24 Hawks are being built in the UK, the 22nd of which made its maiden flight from the BAE Systems site at Brough in the UK earlier this month. The remaining Indian Hawks are scheduled to take to the air in February and March. In addition to the supply of the 24 UK built aircraft, 42 are being built under licence by Hindustan Aeronautics Ltd in Bangalore.

India awards Russia billion dollar MiG-29 upgrade

India has awarded Russia a 965-million-dollar contract to upgrade its multi-role MiG-29 warplanes. The deal is to extend the life of India's fleet of 70 MiG-29 jets another 15 years from their current 25 years. The project entails two to three years and only six aircraft would be re-fitted in Russia while the work on the remaining squadrons would be carried out at Indian bases. Under the contract Russia will re-arm the twin-engined MiG-29s with air-to-air missiles, modern bombs, increased fuel capacity and the latest avionics

India reconciles to price hike for Gorshkov

India has reconciled to a price hike for procurement of Russian carrier Admiral Gorshkov and the government has constituted an experts committee to work out the increase, Naval Chief Sureesh Mehta on Tuesday said.

"There will be some price hike. We need to pay extra amount and whatever amount is due as per contracts we will pay," Mehta, who had in the past opposed any renegotiations with Russia on a price hike demand, said.

His remarks assume significance in the wake of Defence Minister A K Antony's statement in Parliament that the expert team had discussed aspects of all additional works projected by the Russian side on the carrier.

The Russian side has submitted a revised Master Schedule indicating a delay and an increase in price for repair and re-equipping of ex-Admiral Gorshkov aircraft carrier. The price escalation proposed by the Russian side towards repair and re-equipping, spares and training, etc., is USD 1202 million. Only technical evaluation is underway and no cost negotiations have been initiated in this regard.

Russia offers India aviation secrets in fighter contract bid

Russia is ready to hand India military aircraft engineering secrets in a bid to win a 12-billion dollar (7.65-billion euro) aviation contract tender, Interfax agency reported Friday.

"If the Indian government decides to buy the MiG-35 (fighter), we will transfer to India the key technologies used in these aircraft including fifth generation technologies," manufacturers MiG said in a statement.

These 'fifth generation' elements include what analysts have said is greatly improved manoeuvrability on older models, plus a new radar system capable of simultaneously tracking, and attacking, over 20 targets from the cockpit. Under the tender conditions, 18 aircraft will be delivered up front -- with the rest to be built in India.

Other world military aviation giants competing for the contract include Americans Boeing and Lockheed Martin, French group Dassault, the European consortium behind the Eurofighter and Saab of Sweden's Gripen brand.

RFID Supply Chain Solutions For Indian Market

Savi Technology, a Lockheed Martin company, and India-based AVAANA have entered into a strategic partnership for active Radio Frequency Identification (RFID)-based supply chain solutions, products and services to prospective government and commercial customers in India.

The partners announced that they have signed an exclusive teaming and marketing agreement focused on markets in India.

"There is tremendous interest in India to capitalize on the proven benefits of active RFID, and Savi Technology clearly has distinguished itself as a world leader and innovator in this field," said Bimal Sareen, chief executive officer of AVAANA.

"From defense and homeland security to transportation and port infrastructure, the opportunities to apply active RFID solutions with Savi in India are diverse and vast."

Maritime Aircraft Induction

Addressing the investiture ceremony at the southern Naval Command, Chief of Naval Staff Admiral Sureesh Mehta said negotiations for the induction of Long Range Maritime Patrol Aircraft in the Indian Navy are in the final stages. 33 ships and six submarines are under construction in various shipyards in India besides the 'Vikramaditya' (Aircraft Carrier) and more ships of the Talwar class were being built in Russia.”

The MIG 29 and helicopters are also expected soon, he said. With the economic development and growth in GDP, trade over the seas, which play a major role in the nation's development, adds on to the Navy's responsibilities and this necessitates the need for new inductions, he said.

Overhaul of DRDO

A high-powered Committee set up by the government to suggest revamping of the Defence Research and Development Organisation has recommended that the DRDO focus on critical weapons programme and offload research in other areas to the private sector.

The report of the committee, headed by eminent scientist P Rama Rao, suggested that the DRDO focus all its attention on 10 to 14 critical projects like missiles, anti-missiles systems, light combat aircraft, aero engines, electronic warfare, development of high altitude extreme endurance weapons and unmanned aerial vehicles.The organisation should focus on key weapon development projects and set up more “Brahmos-like” joint development programmes with foreign countries. It also suggested a massive restructuring of the 50-year-organisation to ensure greater participation of the private sector in defence research.

HAL Agreement With Boeing

The Hindustan Aeronautics Limited (HAL) had signed a MoU with Boeing in December 2007 to source sub-systems for fighter aircraft and helicopters, which also envisages exploration of business opportunities principally relating to defence related work packages. Such MoUs are expected to benefit HAL through enhanced export opportunities, development of new technologies and processes; and implementation of best practices and skills for global competitiveness.

The proposal regarding procurement of Long Range Maritime Reconnaissance (LRMR) aircraft is in progress.

Defence Expo In New Delhi

475 Exhibitors from 31 countries including 273 international companies participated in the Defexpo India 2008. Approximately 40,000 business visitors visited the exhibition. 3,490 business inquiries were generated during the exhibition and 21 MoUs were signed. These are likely to further boost the export of defence items from India.

However, no purchase agreements were signed by the government during Defexpo India 2008.

Defence Procurement Procedure (DPP) 2006 and Defence Procurement Manual (DPM 2006) under implementation with effect from 1st September 2006, provide for direct dealing with Original Equipment Manufacturers (OEMs) or Authorised Vendors or Government sponsored Export Agencies (applicable in case of countries where domestic laws do not permit direct export by OEMs). Further, the procedures inter-alia incorporate provisions for penalties being imposed if any seller engages any individual or firm, whether Indian or foreign whatsoever, to intercede, facilitate or in any way recommend to the Government of India or any of its functionaries, whether officially or unofficially, to the award of the Contract to the Seller.

Development Of ECM And RCM by BEL

Bharat Electronics Limited (BEL), a defence PSU had developed Air Borne Com ECM System for demonstration to IAF. About Rs. 2.5 crores investment was made for the same by BEL through its own fund.

Requirement Of Aircraft For The Navy

Government constantly review the security environment and accordingly decide to induct appropriate equipment including aircraft for Navy for adequate defence preparedness. Reconnaissance aircraft are required for maritime surveillance. Sea Harrier aircraft are used for air defence of the fleet. The need for reconnaissance aircraft has increased in the present context. The number of reconnaissance and Sea Harrier aircraft in the Navy has decreased over the past years. However, this shortfall is being met by induction of additional Dornier aircraft, procurement of MiG-29 K and Long Range Maritime Reconnaissance aircraft. Limited upgrade of Sea Harrier aircraft undertaken through M/s Hindustan Aeronautics Limited is expected to be completed by 2009.

Development Of Indigenous AWACS

Defence Research and Development Organisation is pursuing development of Airborne Early Warning and Control System (AWACS) at a cost of Rs. 1,800 cr with a probable date of completion in the year 2011. Development and manufacture of indigenous Radar is included in AWACS programme.

The possibilities of marketing Indian technology for surveillance equipment in world markets have not been assessed.

This information was given by Defence Minister Shri A K Antony in Lok Sabha.

Induction Of Advanced Jet Trainer In IAF

Government have approved induction of 66 Hawk Advanced Jet Trainer (AJT) aircraft from M/s BAE Systems of the United Kingdom. Twenty four of these aircraft will be supplied by BAE Systems in flyaway condition and the remaining 42 aircraft will be licensed manufactured in India by Hindustan Aeronautics Limited (HAL).

10 AJTs supplied by BAE Systems have been inducted so far. Out of remaining 14 AJTs in flyaway condition, 13 aircraft are expected to be inducted by July 2008 and one aircraft is expected to be delivered in December 2009. The 42 aircraft being licensed manufactured will be delivered by HAL in a staggered manner from March 2008 onwards.

This information was given by Defence Minister Shri A K Antony in Lok Sabha.

No Middlemen In Defence Deals: A K Antony

With India poised to spend another $30 billion in importing arms over the next five years, the government is keen to ensure that crucial defence projects are not derailed by shadowy middle-men lurking near the corridors of power. "The government stance is very clear...there is no question of middlemen in defence deals," said defence minister A K Antony on Saturday, after inaugurating the DefExpo-08, which has seen a record 475 participants this time.

"Whenever we get any complaint, we go to its root," said Antony, adding that no complaint had so far been received about alleged kickbacks in the $1.1-billion contract for the three Israeli Phalcon AWACS (airborne warning and control systems) signed in 2004.

The government had acted fast in the past to scrap two-three contracts after valid kickback allegations (the South African Denel anti-material rifle contract) or deviations from proper procurement procedures (the scrapping of the almost finalised $1 billion Eurocopter deal for 197 light helicopters), he said.

Government constantly reviews the security environment and accordingly decides to induct appropriate equipment for adequate defence preparedness. Various countries from which imports were made during the last five years include Russia, Israel, France, the USA, the UK, Germany, Canada, Italy, Sweden, Australia and Ukraine

ALH for Navy

Indian Navy has not rejected the Advanced Light Helicopter (ALH) developed indigenously by Hindustan Aeronautics Limited (HAL). Eight ALH (Utility) helicopters have been inducted in the Navy so far. However, Anti Submarine Warfare (ASW) variant has not been inducted in service

Procurement of Defence Equipment

Procurement of defence equipment is made by the Government from various indigenous as well as foreign sources to meet the requirements of the Armed Forces. The import option is exercised when it is necessary to procure the items within a definite timeframe on operational grounds to bridge the capability gaps and normally when such equipment cannot be sourced indigenously within a specified timeframe . Expenditure incurred on import of defence equipment during the last three years is as follows :

Year	Expenditure Incurred On Import Of Defence Equipment (Rs. in Crores)
2005-06	12101.49
2006-07	10022.00
2007-08	15026.68

Major countries from which the imports are made include Russia, the USA, the UK, France, Germany and Israel. Divulging further details with regard to import of defence equipment will not be in the national interest.

Steps taken to encourage indigenous manufacturing include: (a) rationalization of offset policy to include offset credit banking to enable creation of offset programmes by foreign participants in anticipation of future obligations; (b) products developed by the respective Workshops of the Armed Forces for `in house’ requirements can be procured from these agencies under `Buy (Indian)’ category; (c) provision of Transfer of Technology, if required, to an Indian public/ private firm for providing maintenance infrastructure to be applicable for `Buy’ category cases, where equipment is being bought from foreign vendors; and (d) procurement under `Buy’ (Indian) category to have minimum 30% indigenous content if the systems are being integrated by an Indian vendor.

On an average, the expenditure on capital acquisition from indigenous sources has been above 71% during last three years.

MiG 29 Upgrade

On March 11 Russia and India signed a contract for the modernization of India's MiG-29s. After the modernization the machines, delivered to India by the former Soviet Union, will remain in service for another 20-25 years with greatly enhanced combat characteristics. The contract to modernize the fleet of India's MiG-29s and the deal over the Admiral Gorshkov aircraft carrier put paid to the allegations about a brewing crisis in the military-technical cooperation -- MTC -- between Russia and India.

New Inductions

CNS Admiral Sureesh Mehta today said negotiations for the induction of Long Range Maritime Patrol Aircraft in the Indian Navy are in the final stages.

Addressing the investiture ceremony at the southern Naval Command here, Admiral Mehta said “33 ships and six submarines are under construction in various shipyards in India besides the 'Vikramaditya' (Aircraft Carrier) and more ships of the Talwar class being built in Russia.”

Overhaul of DRDO

The report of the committee, headed by eminent scientist P Rama Rao, has suggested that the DRDO focus all its attention on 10 to 14 critical projects like missiles, anti-missiles systems, light combat aircraft, aero engines, electronic warfare, development of high altitude extreme endurance weaponised unmanned aerial vehicles. The Committee also has suggested that the organisation should focus on key weapon development projects and set up more “Brahmos-like” joint development programmes with foreign countries.

HAL Signs MOU with Boeing

The Hindustan Aeronautics Limited (HAL) has signed a MoU with Boeing to source sub-system for fighter aircraft and helicopters. An MoU has been signed by HAL with Boeing in December 2007 which envisages exploration of business opportunities principally relating to defence related work packages.

The proposal regarding procurement of Long Range Maritime Reconnaissance (LRMR) aircraft is in progress.

Such MoUs are expected to benefit HAL through enhanced export opportunities, development of new technologies and processes; and implementation of best practices and skills for global competitiveness.

Gorshkov Delivery

Contracts and supplementary agreements comprising of repair and re-equipping, logistics supports, shore infrastructure, training of ships’ crew, repair and technical documents etc. were signed with Russia on 20th January, 2004 for acquisition of “Admiral Gorshkov” with delivery schedule in August 2008. The cost of repair and modernization of Admiral Gorshkkov including Logistic Support, Training and documentation is US Dollar 974 million. It is, however, apprehended that delay may take place in the delivery of the ship.

The existing contract with Russia is still valid. The process of examination of the scope and necessity for additional works projected by the Russian side has been initiated.

Gorshkov will be ready for delivery by 2012: Russian shipyard

Russia's Sevmash shipyard, currently retrofitting aircraft carrier Admiral Gorshkov, today said the warship would be ready for transfer to the Indian Navy in 2012 though the price escalation issue is yet to be resolved. Announcing its readiness to begin sea trials for the carrier in 2011, the shipyard officials said these could be carried "provided all the financial issues are resolved.

At the end of 2012, the aircraft carrier is expected to be fully prepared for its transfer to the Indian navy in accordance with the schedule approved by the Russian Navy," they said. The Sevmash shipyard which is retrofitting the 44.5 thousand tonne vessel is asking for USD 1.2 billion in addition to the original agreed deal of USD 1.5 billion, which also includes the supply of MiG-29K fighter fleet. As the talks are deadlocked, the makers of the Mig-29K fighters have indicated that they would begin deliveries of these aircraft on schedule by September this year.

Under a contract worth USD 1.5 billion signed between Russia and India in 2003, Moscow was to deliver the carrier along with its compliment of MiG-29K fighters in August last year.

But just months short of the scheduled delivery, Moscow stunned New Delhi by asking for an increase in cost to almost double, saying the warship needed a lot of additional work and would have to undergo almost a year-long sea trial in Russian waters.

Requirement Of Aircraft For The Navy

Development Of Indigenous AWACS

The possibilities of marketing Indian technology for surveillance equipment in world markets have not been assessed.

Induction of Advanced Jet Trainer in IAF

Discrepancies In Eurocopter Deal

The helicopter offered by Eurocopter for field trials was a civilian version whereas helicopter offered in their bid was the military version. Further, the engine fitted on the helicopter during trial was different from the one offered along with the military version of helicopter in the bid of Eurocopter.

This Ministry is not aware of any person or agency as a go-between for Eurocopter in this acquisition process.

This case has been foreclosed and the process as per the extant Defence Procurement Procedure (DPP), has been initiated afresh. Requisite provisions to eliminate middlemen in defence deals already exist in the extant DPP.

Middlemen In Defence Deals

On the basis of Ministry of Finance’s instructions issued on 31st January, 1989 relating to Indian Agents of foreign suppliers for all the Ministries/Departments under the Government of India, supplementary instructions were issued by the Ministry of Defence in April 1989 and in November, 2001 to regulate authorized Indian representatives/agents of foreign suppliers.

The instructions provide for the regulation of representational arrangements through a system of registration, categorical and open declaration by the foreign suppliers of the services to be rendered by their authorized representatives/agents and the remuneration payable to them by way of fees, commission or any other method.

So far no authorized Indian representatives/agent has been registered by the Ministry of Defence in terms of these instructions.

Defence Procurement Procedure (DPP) 2006 and Defence Procurement Manual (DPM 2006) under implementation with effect from 1st September 2006 provide for direct dealing with Original Equipment Manufacturers (OEMs) or Authorised Vendors or Government sponsored Export Agencies (applicable in case of countries where domestic laws do not permit direct export by OEMs).

Further, the procedures inter-alia incorporate provisions for penalties being imposed if any seller engages any individual or firm, whether Indian or foreign whatsoever, to intercede, facilitate or in any way recommend to the Government of India or any of its functionaries, whether officially or unofficially, to the award of the contract to the seller.

Proposal to Equip Indian Air Force with Super Hornet Fighters

The Boeing Company today delivered a detailed, 7,000-page proposal offering its advanced F/A-18E/F Super Hornet to the Indian Air Force as part of India's Medium Multi-Role Combat Aircraft (MMRCA) competition.

The Super Hornet variant being offered to India, the F/A-18IN, is based on the F/A-18E/F model flown by the U.S. Navy and currently being built for the Royal Australian Air Force (RAAF). Advanced technology -- such as Raytheon's APG-79 Active Electronically Scanned Array radar -- and proven reliability are drawing U.S. and international customers' increasing interest in the aircraft as a cost-effective and lethal air defense.

Defects Found In Arjun Tank During Trials: Govt

The country's indigenous main battle tank Arjun was found to have low accuracy, frequent break down of power packs and problems with its gun barrel in the recent accelerated user-cum-reliability trials, the Lok Sabha was informed on Monday.

The Cabinet Committee on Political Affairs approved project for design and development of Main Battle Tank with an outlay of Rs. 15.50 crores. The same was enhanced to Rs.305.60 crores due to changes in the General Staff Qualitative Requirements and cost escalations caused by inflation.

There has been some delay in issue of tanks to Army due to design modifications and removal of defects noticed during various trials by Army. The manufacture of Arjun tank is being regularly monitored through Working Group headed by Director General Mechanised Forces and Steering Committee under the co-chairmanship of Secretary (Defence Production) and Scientific Advisor to Raksha Mantri.

Following defects have been noticed during the ongoing Accelerated User Cum Reliability Trials by Army:-

Failure of power packs
Low accuracy and consistency
Failure of Hydropneumatic Suspension Units
Shearing of Top Rollers
Chipping of Gun Barrels

The rectification of defects and performance of tanks are being closely monitor

The Navy Wants F18

The Navy has asked Boeing - a contender for In dia's $10-billion tender for 126 air force fighters - if the F/A-18E/F Super Hornet can operate off the INS Vikramaditya, the rechristened Russian aircraft carrier Admiral Gorshkov cur- rently being refurbished in Russia for the Indian Navy None of the . fighters in the IAF's existing fleet have the capability to operate from the deck of an aircraft carrier.

After detailed simulations conducted at the company's test centres, the Super Hornet on offer to India, can in fact operate off the Gorshkov The . significance of Boeing's finding lies in the fact that the Super Hor net - which by de fault is launched using a steam-powered catapult on American super-carriers - has never before been known to be able to take off from an angled skijump - the launch mechanism on India's sole aircraft carrier INS Virat, as well as the Gorshkov and the under-construction indigenous aircraft carrier.

C-130J-30 Hercules Aircraft for the Indian Air Force

The Government has signed a Letter of Offer & Acceptance with the US Government for the procurement of six C-130J-30 aircraft for the Indian Air Force. The estimated value of the aircraft along with associated ground support equipment, ground handling equipment and the role equipment is USD 962,454,677. The US defence firm Lockheed Martin has won an order worth about $1bn (£512m) from India for six Super Hercules C-130J military transport aircraft.

The delivery of these aircraft is likely to be completed by December 2011.

126 Fighter Aircraft for IAF (MMRCA)

Aviation giants are scrambling to meet a deadline to bid for a 12-billion dollar deal to sell 126 fighter planes to India, but tough arms purchase rules are dogging the global contenders.

The contract includes outright purchase of 18 war jets by 2012. India also holds the option of buying another 64 fighters from the top bidder. New Delhi called for the bids as the operational fighter fleet of its air force plunged to a low of 576 aircraft in 2007, from nearly 750 in early 2000.

Boeing is offering F-18 Superhornets. The European Aeronautic Defence and Space Company (EADS) said it also was ready to file the papers detailing its offers, which includes technology transfer and its Typhoon Eurofighter. US-based Lockheed Martin is pushing its F-16s. Russian MiG-35, MiG-29, Saab's Gripen and Dassault's Rafale and Mirage from France are also in the market. Dassault has promised to supply 40 top-flight Rafale jets on a fast-track basis as part of the deal, while Gripen is offering larger technology transfers.

Torpedo All Set For User Trials

THE INDIGENOUSLY built heavyweight torpedo, Varunastra, is scheduled to undergo extensive user trials by end 2008 and go into production in 2009. Being developed by the Defence Research and Development Organisation (DRDO) to counter threats from the sea, Varunastra can be fired against hostile submarines and ships. The DRDO's Visakhapatnam-based Naval Science and Technology Laboratory (NSTL) is currently developing two types of torpedoes.

The lightweight anti-submarine torpedo is currently under production. The heavyweight Varunastra requires more user trials before it can be inducted into the Navy It will undergo extensive trials by the end of this year and will be ready for production in 2009.

A torpedo, on entering water, performs pre-programmed search patterns, detects and homes in on targets and explodes on impact to destroy/damage them. A heavyweight torpedo like the Varunastra is fired from a submarine or ship.

Cheetah, Chetak Helicopters to be Replaced by 2010

In a major drive to modernise the armed forces and expand its aviation wing, the Defence Ministry will issue a request for proposal (RFP) to procure 197 helicopters. The armed forces will modernise their helicopter fleet by 2010 by replacing the age-old Cheetah and Chetak, which have been in service for last 40 years. The Army will get 133 light utility helicopters and the Air Force will get 64 of them.

Six foreign companies will bid for the helicopter deal. The companies are Bell (US), Eurocopter, Augusta Westland (Italy), Rosobornexport (Russia), MD Helicopters (US) and Sikorsky (US). The source said that the defence procurement policy (DPP) 2006 would be applicable because the DPP 2008 has still not been announced. The offset would be 50 percent and the companies will be given three months time to respond.

Earlier, the Defence Ministry had scrapped the deal to purchase 197 helicopters from Eurocopter in December 2007 due to irregularities and a deviation in the contract.

The total number of helicopters may increase to 384 units from 312 due to a new requirement for a large number of heavy-lift helicopters

Indian Army Orders Additional BrahMos Cruise Missiles

The Indian army has ordered an additional batch of BrahMos supersonic cruise missiles from the Russian-Indian BrahMos Aerospace joint venture, the company's CEO said Tuesday.

"The army leadership realizes that weaponry such as the BrahMos missiles will ensure victory to the country which posses it in any conflict," Sivathanu Pillai, who is also the managing director of BrahMos Aerospace, said without disclosing the exact size of the order.

The BrahMos missile has a range of 290 km (180 miles) and can carry a conventional warhead of up to 300 kg (660 pounds). It can hit ground targets flying at an altitude as low as 10 meters (30 feet) and has a top speed of Mach 2.8, which is about three times faster than the U.S.-made subsonic Tomahawk cruise missile.

India Russia Billion Dollar Helicopter Deal To Be Signed Soon

The Indian Air Force said on Thursday that India will soon sign a contract with Russia to receive 80 Mi-17 Hip-H multirole helicopters.

Air Chief Marshal Fali Homi Major said preparations for signing the contract are now in their final stages. The deal is estimated at $1 billion.

Indian media earlier reported that the contract was under threat over Russia's attempt to significantly raise the delivery price, and that negotiations were stalling.

A preliminary agreement to sell Mi-17 helicopters to India was reached in March 2007 at a meeting of the Russian-Indian intergovernmental commission on military cooperation.

The Mi-17 is a version of the Mi-8 airframe. The helicopter has a takeoff weight of 13 metric tons and can carry up to 36 people or a payload of 4 metric tons within the cargo compartment, or 4.5 tons externally. The helicopters have been supplied to 80 countries.

Modified Kaveri Engine To Propel Indian Navy Ships

The Gas Turbine Research Establishment (GTRE), Bangalore of Defence Research and Development Organisation (DRDO) which has been indigenously developing Kaveri engine for propelling the Indian Light Combat Aircraft (Tejas), has now come up with a modified marine version, as a spin off during research, to develop shaft power for propelling Indian Naval ship.

Using the core of the Kaveri engine, the scientists of GTRE have added low pressure compressor and turbine as a gas generator and designed a free power turbine to generate shaft power for the maritime application.

The Kaveri Marine Gas Turbine (KMGT) as it has been named has been transported to naval dock yard, Vishakapatnam and installed on to the marine gas turbine test bed which is an Indian Navy facility capable of testing the gas turbines up to 25 MW of shaft power through a reduction gearbox and a water brake dynamometer.

With this development, India will become self-reliant in the technology of gas turbines for ship propulsion. This will put India in the elite club of Marine Gas Turbine designers for example USA, Russia, UK and Ukraine.

First Indian Built Hawk Advanced Jet Trainer Delivered

BAE Systems today joined Hindustan Aeronautics (HAL) to celebrate the handover of the first HAL built Hawk Advanced Jet Trainer (AJT) to the Indian Air Force (IAF).

The aircraft is the first of 42 Hawk aircraft being built under license by HAL, and is the 15th Hawk advanced jet trainer handed over to the IAF following 14 which have been delivered from BAE Systems in the UK. The aircraft will join the fleet of BAE Systems built Hawks that have recently commenced training the next generation of Indian Air Force pilots at Air Force Station Bidar.

India Sweeps Up Australian Defence Technology

The Australian Minesweeping System, developed by the Defence Science and Technology Organisation (DSTO), has scored another export success with India being the latest to acquire the innovative system that protects ships from underwater mines.

The system is in service with the navies of Australia, USA, Denmark, Poland, Japan, UAE, Indonesia and Thailand. The DSTO-designed system is the world’s first operational sweep to emulate the magnetic signals of ships, causing sea mines to detonate prematurely and safely out of range of target vessels. The technology has been further improved in collaboration with Thales Australia.

The Australian Minesweeping System was famously used during the 2003 Gulf War when it was used by the Royal Navy to clear smart mines from the port of Umm Qasr in order to deliver humanitarian aid to the Iraqi people.

India Eyes New-Generation Russian Tank

India could consider plans to produce a new-generation tank jointly with Russia. Russian experts earlier said Russia and India could launch production of a new tank in the near future.

India currently assembles T-90S main battle tanks under a Russian license. The T-90S version is in service with the Indian Army, and the local production of T-90S Bhishma tanks started recently in India. In 2001, India bought 310 T-90S tanks from Russia.

India To Relax Arms Purchase Rules

India, which plans to purchase billions of dollars worth of military hardware in the next five years, will soon relax strict rules on arms imports, officials say. "We have been fine-tuning and improving the DPP based on periodical reviews (and) the current procurement procedure is also under review to make it more transparent and user-friendly," he said.

Many of the major players in the race to grab a share of arms deals worth 30 billion dollars by 2012 see the current so-called offset policy part of the DPP as restricting growth. The policy stipulates foreign firms selling products to India must re-invest up to 50 percent of the total amount through tie-ups and services in the country.

Stinging CAG Report

Despite two long pending unresolved border issues with two potential enemies, both equipped with nuclear weapons, successive governments have floundered in plugging two critical gaps in India's defence preparedness — air defence and underwater combat capabilities.

In wake of the latest stinging CAG report on the functioning of the ADGES (air defence ground environment system) in IAF and the operational availability of submarines in Navy, defence minister A K Antony on Saturday candidly admitted the government's failure in providing necessary weapon systems and platforms to the armed forces in time. The CAG report has held that the defence ministry has failed to ensure timely upgradation, replacement and modernization of radars and associated equipment, with the effect that the very "eyes" of the ADGES network are virtually blind. The IAF's holding of low-level transportable radars, for instance, is just 24% of the actual requirement.

Similar is the shocking story of the dwindling strength of the Navy's submarine fleet, which will dip to only eight or nine from the present 16 diesel-electric submarines, by 2012.

India, at present, has only 10 Russian Kilo-class, four German HDW and two virtually-obsolete Foxtrot submarines, none of them a nuclear-powered one. Compared to China’s 57 attack submarines, a dozen of them nuclear ones, this represents a stark asymmetry. It gets worse.

CAG holds the operational availability of Indian submarines is as low as 48% due to an aging fleet and prolonged refit schedules. This means if India goes to war at present, it will have to make do with only seven to eight submarines, even less than Pakistan’s dozen or so submarines, which include three spanking new French Agosta-90B vessels.

‘‘With serious slippages in the induction plan, Navy is left with an aging fleet with more than 50% of its submarines having completed 75% of their operational life. Some have already outlived their maximum service life,’’ said CAG. The ongoing Rs 18,798-crore project to construct six French Scorpene killer submarines at Mazagon Docks, under which one submarine will be delivered per year from 2012 onwards, was approved by the government rather late in the day.

India’s Offsets Policy

Defence Minister A K Antony’s speech at a recent seminar on offsets policy:

“I am really pleased to be present at this National Seminar on defence offsets being organised by the Institute for Defence Studies and Analyses (IDSA). Offsets are an important component of the Defence Procurement Procedure. I hope that the Seminar’s deliberations will result in valuable suggestions from all the key stakeholders to strengthen this vital component of our Defence Procurement Procedure. With this end in view, the deliberations and outcome of the Seminar are eagerly awaited.

Offsets are today a common feature of international arms trade. It is estimated that offsets and related forms of counter-trade constitute five to thirty per cent of global trade. More than 100 countries use the mode of offsets in their arms contracts. Business and trade analysts put the exact volume of defence offsets at the global level at over five billion dollars each year. The United States, the biggest arms exporter in recent times, is obviously one of the largest providers of offsets. In 2006 alone, it signed nearly $3.5 billion worth of offset contracts with more than 20 companies located in 12 different countries. At the global level, the threshold of defence offsets, that is the minimum value of the contract at which offsets apply, is as low as 0.5 million dollars, where as offsets as a percentage of the value of arms contract is more than 100 for some countries.

India’s defence offset policy has been promulgated as part of Defence Procurement Procedure. The offset policy has undergone two revisions since it was first promulgated in 2005. The latest revision was carried out recently and has been in vogue since September 1, 2008. India’s offset provision applies to all Capital Acquisitions categorised as “buy (Global)" or “Buy and Make with Transfer of Technology”, where the estimated cost of the acquisition proposal is Rs. 300 crore or more. A minimum offset of 30 per cent of the indicative cost is required in such acquisitions. The offset obligations of the foreign vendors can be met either through investment in our domestic defence industrial infrastructure, including defence R&D, leading to Joint Ventures, co-development and co-production of defence items, or through purchase or execution of export orders for defence goods and services produced by Indian defence enterprises, both in public and private sector.

The Ministry of Defence has set up a dedicated single window agency called DOFA or Defence Offset Facilitation Agency to facilitate offset related work. DOFA’s mandate is to interact with various stakeholders, assist in implementation of the policy and suggest improvements in the offset policy.

Our offset policy has been revised a couple of times in a short duration. This reflects our commitment to take into account the genuine demands of our stakeholders into our offset policy. The policy has been designed to enable our domestic defence industry to participate actively in the complex job of defence production, and forge partnerships with international defence majors to bring in latest technologies and manufacturing efficiencies. We welcome any suggestions to further this objective.

In this context, I would like to mention some of the salient features of our revised offset policy under Defence Procurement Procedure 2008. Some of the improvements include introduction of offset banking, listing of defence products and relaxation of industrial licensing requirements. The revised policy has rationalised the industrial licensing process. The mandatory requirement of an industrial license for a domestic firm to participate in offset programmes has been relaxed. The private sector will henceforth require industrial license “only if so stipulated under the licensing requirements for defence industry issued by the Department of Industrial Policy and Promotion”. It is hoped that this will save valuable time and effort of the applicants and expedite their cases.

The new offset policy provides a list of 13 categories of defence products. The product list has been added to help foreign as well as Indian companies in devising their offset strategies.

Under the new banking provisions, foreign vendors are now allowed to create prior offsets and bank the same to discharge their future offset obligations. This will benefit both the foreign as well as Indian companies to forge a long-term partnership, which would enhance India’s defence industrial capability. The new banking guidelines allow vendors to discharge the banked credits within two financial years of the date of approval of the banked offset credits. If a foreign company generates more offsets than their stipulated obligations under the terms of the existing contract, the surplus credits can be banked and would remain valid for a period of two financial years after the conclusion of the said contract.

The Ministry of Defence fully recognises the importance of the Indian private sector in defence production. We have allowed participation of Indian private sector in defence production and also opened up our defence industry to foreign direct investment. At present, FDI is permitted up to 26 per cent. I am sure that today’s seminar to have a comprehensive debate on the issues of licensing and FDI and come up with practical suggestions.