Defence Industry

Even as the new amendments incentivise domestic companies to enter defence production, the government has made it clear that it wants a competitive environment in defence industry.

• Laxman Kumar Behera
• November 10, 2009
• IDSA Comments

The orientation of the existing administrative set up in Service Headquarters and in departments under the Ministry of Defence is to plan for the utilization of defence budget allocation. They are not in a position to pay attention to the aspect of defence receipts.

• Arvind Kadyan
• November 05, 2009
• IDSA Comments

The US Department of Defence has been contemplating whether to lift the ban on F-22 exports, the fifth generation stealth aircraft. This would mean that many of the US allies namely Japan, Israel and others might become interested in procuring the aircraft. For Japan it would provide much needed air superiority to the Japanese Air Force concerned at North Korean long range missiles and nuclear capabilities (even though the US has stationed a dozen F-22s at Kadena air base in Japan since May 2009). Israel would like to get the aircraft to launch any pre-emptive strike on Iran.

• Pankaj K Jha
• July 13, 2009
• IDSA Comments

Is the French 4th+generation fighter aircraft doomed? This question must be anguishing people in Dassault and the French government. The Rafale has not won any contract in the export market since its entry into service in 2004 and is now apparently out of race for the MMRCA contract. What lies behind all these repeated commercial fiascos? The Rafale lost five major bids against its US counterparts in recent years: in South Korea (2002), Singapore (2005), Saudi Arabia (2007), Morocco (2007) and apparently India.

• Guillem Monsonis
• May 14, 2009
• IDSA Comments

Although India has established a formal mechanism for implementation of the defence offset policy, the structure and procedures lack the thrust to fulfil the objective of energizing the Indian defence industry. Besides, the policy is not supported by the existing Foreign Direct Investment (FDI) and licensing policies. While evidence suggests that domestic industry can absorb offsets, what India needs is an effective body to handle offsets, liberal FDI and licensing policies, and a better banking provision.

• Laxman Kumar Behera
• March 2009
• Strategic Analysis

What does it take to be ‘a vibrant industry’ or more specifically ‘vibrant defence industry’? Broadly, it would demand that the industry should be innovative in terms of processes and products, its base and structure should have large dimensions horizontally, vertically, and technologically to be responsive enough to keep pace with the changing strategic expectations of the nation. Defence exports and imports should be a matter of deliberate political or commercial policy choices and not a result of security compulsions.

• N. Neihsial
• October 08, 2008
• IDSA Comments

The above question arises in the context of publicly known government plans of arms procurement amounting to over $64 billion1 as part of the modernisation programme of the armed forces. The majority of these acquisitions will obviously be from abroad and will be concluded in the next five years or more.

• N. Neihsial
• August 22, 2008
• IDSA Comments

The Ministry of Defence (MoD) recently issued a new set of rules for the procurement of arms, ammunition and other defence related products and services. The rule book, known as Defence Procurement Procedure 2008 (DPP 2008), has revised, among others, the offset policy that was first promulgated in 2005 and subsequently revised in 2006. The revised offset policy which retains the earlier minimum 30 per cent offset requirements in defence imports of Rs. 300 crore or more has added a provision of offset banking, besides enlisting a number of categories of defence products.

• Laxman Kumar Behera
• August 19, 2008
• IDSA Comments

Ordnance Factories constitute a major segment of India’s defence industrial set- up, whose other constituents are the Defence Public Sector Undertakings (DPSUs), the Defence Research and Development Organisation (DRDO) and varied Service-specific workshops, repair and maintenance establishments. The gross production of ordnance factories during the year 2005-06 was Rs. 8811.59 crores. Total sales including issues to armed forces and other agencies and civil trade in the same year was Rs. 6891.68 crores. This constitutes approximately 40 per cent of domestic supplies to the armed forces.

• N. Neihsial
• July 17, 2008
• IDSA Comments

In early May 2008 Tata Group of India and Israel Aerospace Industries Ltd (IAI) signed an agreement to establish a joint venture (JV) in India to develop, produce and support defence products such as missiles, unmanned aerial vehicles (UAVs), radars, electronic warfare (EW) systems and homeland security (HLS) systems. The agreement is in sync with Tata’s broader objective of becoming a “lead system integrator” in the Indian private sector, by consolidating its own resources, diversifying into various fields of production and forging partnerships with major global defence companies.

• Laxman Kumar Behera
• June 17, 2008
• IDSA Comments