Indian Military

New Delhi — With a view to achieve substantive self reliance in design, development and production of defence equipment, weapon systems and platforms, the Defence Minister Shri AK Antony unveiled the first ever Defence Production Policy (DPrP) here today. The policy also aims at creating conditions conducive for the private industries to play an active role to achieve the objective. The DPrP will act as a catalyst to enhance potential of Small and Medium Enterprises (SMEs) for indigenisation as also for broadening the defence research and development base of the country.

Releasing the document, Antony said the Policy aims to achieve maximum synergy among the Armed Forces, DPSUs, OFBs and Indian Industry and Research and Development institutions. The Defence Production Policy has been prepared after extensive consultations with various stakeholders such as the three Services, Coast Guard, Integrated Defence Staff, DRDO and Indian Industry Associations – CII, FICCI, and ASSOCHAM etc.

The purchase of ten C-17 Globemaster III aircraft for the Indian Air Force (IAF) is ready to be approved by the Cabinet Committee on Security (CCS).

The Contract Negotiation Committee of the Ministry of Defense has finished thrashing out all the outstanding issues related to the purchase, including approvals for the proposals to satisfy the 30 per cent offsets requirement under the Defense Procurement Procedure (DPP) of 2008.

The Finance Ministry has also approved the purchase, expected to be worth USD 4.1 billion.

While it is not clear exactly when the CCS will discuss the acquisition for approval, it is understood that the defense budget for the Financial Year 2010-11, which expires at the end of this month, provides for capital expenditure on the aircraft, manufactured in Long Beach in the US by Boeing.

The Indian Defense Ministry is planning to amend the Defense Procurement Procedure (DPP) barely three months after its latest version was released, in an attempt to streamline the process for evaluation of offsets for defense contracts.

The policy revision will provide for invitations to offer offsets proposals to be issued to only those vendors who are validated as technically qualified by the respective service and shortlisted to be invited for the opening of their respective commercial bids.

Under the existing rules, technical and commercial offsets proposals have to be submitted by all vendors competing in a tender. While the Technical Offsets proposals are examined and validated by the Technical Offsets Evaluation Committee, the Commercial Offsets are submitted as sealed proposals, to be opened only when the respective Commercial Offer for the vendor is opened.

The ministry has increasingly felt the submission of offsets proposals by all vendors in a particular tender to be unnecessary, since only the proposals of the shortlisted vendors will be relevant to the tender process.

The Indian Air Force (IAF) commander Air Chief Marshal Pradeep Vasant Naik had announced in February at Aero India 2011 in Bangalore that the shortlist for the 126 Medium Multi Role Combat Aircraft (MMRCA) tender would be announced in the next few weeks. Then a few weeks back, he upped the pressure on the Ministry of Defense again, while addressing the Indian Women’s Press Corps. Indo-Asian News Service reported him as saying, “The cost negotiation for MMRCA will begin by the end of this month. I expect the contract to be signed before I retire from service in July this year.”

This pressure is likely intended to get the ministry to move on the outstanding issues related to the MMRCA tender process. Work remains to be done for it to be taken to its logical conclusion (The response this pressure elicits may well be a separate soap opera altogether). But the ministry is also under pressure to meet the April-end deadline for the expiry of the commercial offers submitted by the six vendors.

The process leading up to the decision by the Indian Ministry of Defense to issue invitations to eliminate four of the six companies in the contest to win the Indian Air Force (IAF) tender for 126 Medium Multi Role Combat Aircraft (MMRCA) has large holes in its standard of diligence.

Only the the French Dassault’s Rafale and the European Eurofighter Typhoon were invited to extend their commercial bids, with the Russian MiG-35, the Swedish SAAB’s Gripen, Boeing’s F/A-18 Super Hornet and Lockheed Martin’s F-16, all left out of the contest.

While much has been written about this decision, the news of which was first broken by StratPost, questions have surfaced in the subsequent two weeks, that show crucial gaps in the diligence of the process followed by the ministry. Many of the issues arising from these questions have been earlier reported and analyzed by StratPost.

The tender process entailed the examination of the aircraft on offer on three key aspects. Firstly, the IAF was required to conduct a technical evaluation of the six aircraft, the report for which it submitted after completion last July.

The Indian Air Force (IAF) trials for an estimated USD 2 billion order for 22 attack and 15 heavy lift helicopters have been held up because the Russian contenders in the two shortlists have failed to arrive in India.

Senior IAF officials said on Monday that for reasons that were, as yet, unclear, the Russian Mil Mi-28 and the Mi-26 helicopters had not been cleared to come to India for trials. The trials for both categories of aircraft began in July.

IAF officials have chosen not to label this a delay and deny they’ve set any deadline for the Russian aircraft to arrive for trials, even though this could put the two acquisition contests in limbo. Boeing’s Apache AH-64D attack helicopter and the Chinook heavy lift helicopter are the other aircraft in the competition.

The IAF would, presumably, want to prevent the process of acquisition of the two types of aircraft from being jeopardized by the withdrawal of the Russian helicopters from the contest.

New Delhi– India’s new Defence Production Policy (DPP) which will take the domestic defence industry into the new era of self-reliance and indigenisation has been released this week. The draft of the new DPP was approved in December last year by the Defence Acquisition Council (DAC) headed by Defence Minister AK Anthony.

The draft DPP indicates that the Indian government has decided that preference will be given to indigenous design, development and manufacture of defence equipment. The new policy will apply to long-term needs such as equipment required over 10 years into the future and a robust defence industrial base will be developed for self-reliance. The industrial base will harness the potential of private sector for design, development and manufacture of defence equipment. In the case of strategic and critical technologies, the draft DPP stresses the need to be self-reliant.

The DPP 2011 also has a new offset policy that accepts a key request of foreign as well as Indian vendors in the aviation and homeland security sectors by expanding the existing list of products in the offset category to include internal security and civil aircraft.

The acquisition process for 126 Medium Multi Role Combat Aircraft (MMRCA) for the Indian Air Force (IAF) is facing delays due to uncertainties about offset policy and with vendors facing the prospect of having to redo their homework.

The IAF had submitted its report on the technical evaluation of the six aircraft competing to win the tender last summer. After this submission, the Ministry of Defense had to evaluate the offset proposals submitted by the six vendors and also compare the respective proposals for transfer of technology.

Last September, the respective vendors were invited to a review of their offset proposals by ministry officials, when they were all told that the proposals submitted by them failed to comply with the parameters set by the ministry. They were also informed at the time that in the case of offsets for third party suppliers, all vendors would need to have Memoranda of Understanding (MoU) in place with their suppliers’ suppliers as well, and that a letter to this effect would be issued shortly, which would also list out discrepancies in the offset proposals of the respective vendors.

The Indian Army has issued a Request For Information (RFI) for towed artillery guns, effectively canceling the previous process for procurement of these weapons systems, in which BAE Systems was fielding the FH77 B05, (an upgraded version of the FH77 B02 in service with the army) against Singapore Technologies (ST) Kinetics’ iFH 2000.

The army, which had issued the RFI on Thursday, gave much cause for confusion, by initially alluding to ‘A Self Propelled Gun System mounted on a vehicle chassis such as CEASER 155 mm Self propelled Gun’. The line was deleted on Friday evening, to remove any doubts about the earlier tender process being canceled.

During the day, on Friday, sources in the Ministry of Defense confirmed that the RFI, indeed, indicated a fresh tender for 155 mm/52 caliber Towed Artillery Guns. The reason the ministry gave for this decision was the creation of a single-vendor situation due to the non-appearance of the ST Kinetics’ gun at the trials.