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Rearmament of India

angeldemon_007

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Nov 29, 2010
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After several years of neglect, India is spending large sums of money to upgrade its armed forces.

During the Kargil War of May-July 1999, the Bofors artillery guns used their firepower with deadly accuracy and destroyed a large number of enemy bunkers and other fortified positions. But there was a problem: Pakistani cannons accurately targeted and destroyed a number of these guns. It was learnt, only after the war, that

Pakistan’s gunners had “weapon-locating” radars that studied the trajectory of the shells fired by the Bofors guns to determine their position. And then the penny dropped: the Pakistani forces were better equipped than Indians. Alarmed, India, without further ado, bought similar equipment, called the ANQ Firefinder, from the United States.
In 2003, the Indian and French Air Forces held a joint exercise. It was found that the French pilots could hook on to the radar system of Indian fighter jets, though they were beyond visibility, and then bring them in the crosshairs of their missiles. In actual war, Indian pilots would have been sitting ducks. Exposed poorly in the exercise, the Indian Air Force is acquiring the same capabilities for its Mirage aircraft from France. Also in the works is a similar indigenous “Beyond Visual Range” missile called the Astra.

* * *

After a long pause, the rearmament of India has begun. New weapon systems are being acquired — combat jets, ships, tanks, artillery guns, missiles, radars, etc — and existing hardware is getting overhauled. Various think-tanks estimate that India will spend anywhere between $75 billion and $100 billion over the next seven years to bolster its military capabilities. The annual defence budget, at almost $41 billion, or a tad over 2 per cent of the gross domestic product, is at an all-time high. Off-book expenditure would make it at least a quarter higher. India finally has more staying power than Pakistan if there is war, defence analysts on both sides of the border have started to say.

FORCE MULTIPLIER
Source Description Units Induction
ARMY
M-77 howitzers
Source:UK/USA, Description:155mm towed light howitzers, Units:145, Induction: Final price negotiations

NAVY
Vikrant class vessel
Source:India,Description:40,000 tonne aircraft carrier, Units:3 (planned) Induction:Expected in 2014

Krivak IV frigates
Source:Russia, Description:Guided-missile frigates with stealth capacity, Units:3, Induction:Expected in 2012-13

Scorpene submarines
Source:France, Description:Converted submarines with air-independent propulsion, Units:6, Induction:Expected by 2022

P-8i Poseidon
Source:USA, Description:Surveillance aircraft, Units:8 (4 more expected),Induction:First delivery by 2013

AIR FORCE
SU 30MKI
Source:Russia, Description:Multi-role fighter, Units:280, Induction:in progress

Apache/AH 64
Source:US/Russia, Description:Attack helicopter, Units:22, Induction:Technical evaluation in progress

CH-47 F Chinook/Mi-26
Source:US/Russia,Description:Heavy lift helicopter,Units:15,Induction:Technical evaluation in progress

C-130J Super Hercules
Source:US, Description: Strategic airlift, Units:6 (6 more planned), Induction:Delivery started, will complete by 2014

C-17 Globemaster
Source:US, Description:Strategic heavy lift plane, Units:10 (4 more planned), Induction:Starts in 2014

And there is a mindset change: no longer is India running after the lowest-cost suppliers; quality is all that matters, price is irrelevant. Thus, the Dassault Rafale and Eurofighter Typhoon, the two aircraft short-listed for the medium multi-role combat aircraft, happen to be the most expensive of the original six in the fray. True, cheaper hardware from Russia helped India when its finances were precarious, but their long-term maintenance was costlier. The engines of Russian fighter jets, for example, need to be replaced after 500 hours of flying, while those of American and European aircraft need to be changed after 1,200 hours.

In fact, the rearmament has already begun. India has ordered three (two have been delivered) Phalcon early-warning aircraft from Israel, which can spot any aircraft or missile within minutes of its takeoff in Pakistan. Four more have been ordered for deployment in the east. An airborne warning and control system is being developed indigenously on the Embraer platform. Six P-8i Poseidon planes, the most sophisticated naval surveillance and detection aircraft in the world, have been ordered from Boeing. The C-130J Super Hercules from Lockheed Martin, which can carry up to 150 personnel with Jeeps and howitzers and can take off from short strips and land on dirt tracks at night, is another high-tech acquisition. The Samyukta electronic warfare system, developed by the Defence Research & Development Organisation and Bharat Electronics, can jam enemy voice, data and other signals. These are all being seen as force-multipliers.

That’s not all. The road network in the North-East is being spruced up. An all-weather tunnel at the Rohtang pass will improve access to Leh and Kargil. Frontline airfields are getting a facelift so that they can station and fly modern aircraft. The Western Naval Command has moved from Mumbai to a brand new facility at Karwar. And existing equipment is being upgraded. The Air Force, for example, has contacted Dassault of France and Mikoyan of Russia to upgrade the Mirage (for $2 billion) and Mig-29 (for $964 million), respectively.

* * *

Actually, India is catching up after years of neglect which has blunted the fighting capabilities of all three wings of the armed forces. The Air Force, for instance, has only 32 combat-ready squadrons, against the required 45. Many of these squadrons have aircraft well past their “best-use” date. On the other hand, the geo-strategic scenario in the country’s vicinity isn’t getting any simpler. India is the only country which has two nuclear-armed neighbours, and with both it has several disputes running. The situation in the western neighbourhood beyond Pakistan is certain to remain unstable for long. Almost three-fourths of India’s crude oil comes from politically-volatile West Asia. So, the Indian Navy will have to guard the sea routes; it has in fact already been in operations against Somali pirates. As a growing economic powerhouse, India cannot be impervious to developments in its neighbourhood.

At the moment, India’s numbers compare favourably with Pakistan. Thus, India has 1.3 million men and women in olive green against Pakistan’s 617,000, 4,700 main battle tanks (Pakistan has 2,500), 11,300 artillery guns (4,300), 45 warships (10) and 16 conventional submarines (8). But the numbers look puny when compared to China (2.25 million soldiers, 7,500 main battle tanks, over 15,000 artillery guns, over 100 warships and 50 conventional submarines). Defence experts say that India needs to get over its Pakistan fixation and benchmark itself against China. “The rearmament, when complete, will enable us to compete with China today. But by then, China will have progressed and we will still be chasing,” says Lt General B S Malik (retd), former chief of the Western Command. “The Chinese have used the 20 years of peace signed in the mid-1980s to develop infrastructure in Tibet, which enhances their strike capabilities.” India’s urgency begins to make sense.

The armed forces, as a result, will look very different in 2020 from today. The numerical strength could be 20 per cent below the 1.3 million now, but the capabilities will be far superior. Artillery guns — towed guns, ultra-light howitzers, track-mounted howitzers and self-propelled guns — worth $4 billion will have been purchased, there will be 15 stealth frigates as compared to six now, 12 guided missile destroyers (three today), three nuclear submarines (none now), three aircraft carriers (none now) and 35 combat-ready air-force squadrons (32 now). The number of T-90 (Bhishma) tanks is being upped from 320 to 1,100. Larsen & Toubro and Raytheon have been mandated to give a facelift to the T-72 tanks.

No less ambitious is the missile programme. The Agni I (700 km range) and Agni II (2,200 km) missiles, both capable of carrying nuclear warheads, have been inducted. The Agni III (3,500 km) has undergone multiple tests and user trials, and is learnt to have been deployed; the Agni V (5,500 km range) will be tested later this year. This missile will be canister-based, which means it can be dismantled and taken to any place for deployment — this will help it evade satellite surveillance. By 2017, Indian could even have inter-continental ballistic missiles which have a range of over 8,000 km. This may face international opposition, and will therefore have to be a political decision.

In addition, the K4 (3,500 km) and K15 (750 km) land-attack and submarine-launched cruise missiles, respectively, are expected to join service by 2017. The Akash air-defence missile, which had at one time spluttered and was nearly abandoned, now has the armed forces thrilled. Eight units have been ordered to defend the frontier air bases and other strategic stations. Drone capabilities are also being developed, indigenously as well as with import from Israel.

Little is known about the infantry modernisation programme except that most soldiers are being trained to operate in a net-centric environment, and will be supported by sophisticated communication systems. Individually, soldiers are being equipped with a superior rifle (the INSAS 5.56 mm was not very successful). The army may go back to the tried and tested AK47 imported from Bulgaria and countries of the former Soviet Union. Night-fighting capabilities are being progressively inducted. The earlier equipment was imported from Israel but is now made under licence by Bharat Electronics. The Russian infantry combat vehicles currently in use will be replaced with modern vehicles at a cost of $12 billion.

* * *

With such ambitious acquisition plans and large budgets, the biggest gainer ought to be the Indian defence industry. Indeed, in the last few years business groups like Tata, Godrej, Mahindra and Larsen & Toubro have entered the defence industry. But the gains are far from satisfactory. The Defence Purchase Policy has thrown open the market for domestic private companies, but hardly any order has been placed with them. As a result, most of them have to make do with sub-contracts for parts, etc — crumbs. Mahindra & Mahindra let the licence it obtained in 2003 for small firearms lapse because the government couldn’t decide one way or the other. “No decision came for five to six years; so we exited,” says Brig (retd) Khutub A Hai, the chief executive of Mahindra Defence Systems. That decision, for the record, has still not been made. Hai no longer wants to be in that business.

The public sector suffers from quality issues, which has caused serious problems of induction. For example, India had bought the Sukhoi30MKI aircraft from Russia on the condition that only 40 would be imported in “fly-away” condition, while the rest would be produced under licence by Hindustan Aeronautics. Tardy delivery made the Air Force import more jets directly from Russia, which pushed up the costs. The delays in the Scorpene submarine programme too have been caused by the inability to absorb modern technology. “The public sector has failed. In spite of its monopoly, Bharat Electronics is just a $1-billion company,” says an observer who doesn’t wish to be named.

As a matter of record, the defence ministry returned $5.5 billion between 2002 and 2009 to the treasury because it couldn’t spend the money. And Defence Minister A K Antony’s dream of importing only 30 per cent of the requirements is likely to remain a dream for quite some time. Most of the purchases have been made outside India through government-to-government contracts.

In the Gurkha war of 1815, the highlanders attacked the East India Company troops with few weapons and lots of courage, accompanied by the beats of kettledrums and strains of bagpipes. That is when the expression band baj gaya (we are done) was born. Finally, the Indian soldier will have more than just raw courage and band power to go to the battlefield.

Rearmament of India
 

angeldemon_007

SENIOR MEMBER
Nov 29, 2010
5,298
0
2,164
India to be guarded by fierce firepower

Pakistan's gunners had "weapon-locating" radars that studied the trajectory of the shells fired by the Bofors guns to determine their position. And then the penny dropped: the Pakistani forces were better equipped than Indians. Alarmed, India, without further ado, bought similar equipment, called the ANQ Firefinder, from the United States.

In 2003, the Indian and French Air Forces held a joint exercise. It was found that the French pilots could hook on to the radar system of Indian fighter jets, though they were beyond visibility, and then bring them in the crosshairs of their missiles. In actual war, Indian pilots would have been sitting ducks. Exposed poorly in the exercise, the Indian Air Force is acquiring the same capabilities for its Mirage aircraft from France. Also in the works is a similar indigenous "Beyond Visual Range" missile called the Astra.

After a long pause, the rearmament of India has begun. New weapon systems are being acquired -- combat jets, ships, tanks, artillery guns, missiles, radars, etc -- and existing hardware is getting overhauled. Various think-tanks estimate that India will spend anywhere between $75 billion and $100 billion over the next seven years to bolster its military capabilities. The annual defence budget, at almost $41 billion, or a tad over 2 per cent of the gross domestic product, is at an all-time high. Off-book expenditure would make it at least a quarter higher. India finally has more staying power than Pakistan if there is war, defence analysts on both sides of the border have started to say.

And there is a mindset change: no longer is India running after the lowest-cost suppliers; quality is all that matters, price is irrelevant. Thus, the Dassault Rafale and Eurofighter Typhoon, the two aircraft short-listed for the medium multi-role combat aircraft, happen to be the most expensive of the original six in the fray. True, cheaper hardware from Russia helped India when its finances were precarious, but their long-term maintenance was costlier. The engines of Russian fighter jets, for example, need to be replaced after 500 hours of flying, while those of American and European aircraft need to be changed after 1,200 hours.

In fact, the rearmament has already begun. India has ordered three (two have been delivered) Phalcon early-warning aircraft from Israel, which can spot any aircraft or missile within minutes of its takeoff in Pakistan. Four more have been ordered for deployment in the east. An airborne warning and control system is being developed indigenously on the Embraer platform. Six P-8i Poseidon planes, the most sophisticated naval surveillance and detection aircraft in the world, have been ordered from Boeing. The C-130J Super Hercules from Lockheed Martin, which can carry up to 150 personnel with Jeeps and howitzers and can take off from short strips and land on dirt tracks at night, is another high-tech acquisition. The Samyukta electronic warfare system, developed by the Defence Research & Development Organisation and Bharat Electronics, can jam enemy voice, data and other signals. These are all being seen as force-multipliers.

That's not all. The road network in the North-East is being spruced up. An all-weather tunnel at the Rohtang pass will improve access to Leh and Kargil. Frontline airfields are getting a facelift so that they can station and fly modern aircraft. The Western Naval Command has moved from Mumbai to a brand new facility at Karwar. And existing equipment is being upgraded. The Air Force, for example, has contacted Dassault of France and Mikoyan of Russia to upgrade the Mirage (for $2 billion) and Mig-29 (for $964 million), respectively.

Actually, India is catching up after years of neglect which has blunted the fighting capabilities of all three wings of the armed forces. The Air Force, for instance, has only 32 combat-ready squadrons, against the required 45. Many of these squadrons have aircraft well past their "best-use" date. On the other hand, the geo-strategic scenario in the country's vicinity isn't getting any simpler. India is the only country which has two nuclear-armed neighbours, and with both it has several disputes running. The situation in the western neighbourhood beyond Pakistan is certain to remain unstable for long. Almost three-fourths of India's crude oil comes from politically-volatile West Asia.
So, the Indian Navy will have to guard the sea routes; it has in fact already been in operations against Somali pirates. As a growing economic powerhouse, India cannot be impervious to developments in its neighbourhood.

At the moment, India's numbers compare favourably with Pakistan. Thus, India has 1.3 million men and women in olive green against Pakistan's 617,000, 4,700 main battle tanks (Pakistan has 2,500), 11,300 artillery guns (4,300), 45 warships (10) and 16 conventional submarines (8). But the numbers look puny when compared to China (2.25 million soldiers, 7,500 main battle tanks, over 15,000 artillery guns, over 100 warships and 50 conventional submarines). Defence experts say that India needs to get over its Pakistan fixation and benchmark itself against China. "The rearmament, when complete, will enable us to compete with China today. But by then, China will have progressed and we will still be chasing," says Lt General B S Malik (retd), former chief of the Western Command. "The Chinese have used the 20 years of peace signed in the mid-1980s to develop infrastructure in Tibet, which enhances their strike capabilities." India's urgency begins to make sense.

The armed forces, as a result, will look very different in 2020 from today. The numerical strength could be 20 per cent below the 1.3 million now, but the capabilities will be far superior. Artillery guns -- towed guns, ultra-light howitzers, track-mounted howitzers and self-propelled guns -- worth $4 billion will have been purchased, there will be 15 stealth frigates as compared to six now, 12 guided missile destroyers (three today), three nuclear submarines (none now), three aircraft carriers (none now) and 35 combat-ready air-force squadrons (32 now). The number of T-90 (Bhishma) tanks is being upped from 320 to 1,100. Larsen & Toubro and Raytheon have been mandated to give a facelift to the T-72 tanks.

No less ambitious is the missile programme. The Agni I (700 km range) and Agni II (2,200 km) missiles, both capable of carrying nuclear warheads, have been inducted. The Agni III (3,500 km) has undergone multiple tests and user trials, and is learnt to have been deployed; the Agni V (5,500 km range) will be tested later this year. This missile will be canister-based, which means it can be dismantled and taken to any place for deployment -- this will help it evade satellite surveillance. By 2017, Indian could even have inter-continental ballistic missiles which have a range of over 8,000 km. This may face international opposition, and will therefore have to be a political decision.

In addition, the K4 (3,500 km) and K15 (750 km) land-attack and submarine-launched cruise missiles, respectively, are expected to join service by 2017. The Akash air-defence missile, which had at one time spluttered and was nearly abandoned, now has the armed forces thrilled. Eight units have been ordered to defend the frontier air bases and other strategic stations. Drone capabilities are also being developed, indigenously as well as with import from Israel.

Little is known about the infantry modernisation programme except that most soldiers are being trained to operate in a net-centric environment, and will be supported by sophisticated communication systems. Individually, soldiers are being equipped with a superior rifle (the INSAS 5.56 mm was not very successful). The army may go back to the tried and tested AK47 imported from Bulgaria and countries of the former Soviet Union. Night-fighting capabilities are being progressively inducted. The earlier equipment was imported from Israel but is now made under licence by Bharat Electronics. The Russian infantry combat vehicles currently in use will be replaced with modern vehicles at a cost of $12 billion.

With such ambitious acquisition plans and large budgets, the biggest gainer ought to be the Indian defence industry. Indeed, in the last few years business groups like Tata, Godrej, Mahindra and Larsen & Toubro have entered the defence industry. But the gains are far from satisfactory. The Defence Purchase Policy has thrown open the market for domestic private companies, but hardly any order has been placed with them. As a result, most of them have to make do with sub-contracts for parts, etc -- crumbs. Mahindra & Mahindra let the licence it obtained in 2003 for small firearms lapse because the government couldn't decide one way or the other. "No decision came for five to six years; so we exited," says Brig (retd) Khutub A Hai, the chief executive of Mahindra Defence Systems. That decision, for the record, has still not been made. Hai no longer wants to be in that business.

The public sector suffers from quality issues, which has caused serious problems of induction. For example, India had bought the Sukhoi30MKI aircraft from Russia on the condition that only 40 would be imported in "fly-away" condition, while the rest would be produced under licence by Hindustan Aeronautics. Tardy delivery made the Air Force import more jets directly from Russia, which pushed up the costs. The delays in the Scorpene submarine programme too have been caused by the inability to absorb modern technology. "The public sector has failed. In spite of its monopoly, Bharat Electronics is just a $1-billion company," says an observer who doesn't wish to be named.

As a matter of record, the defence ministry returned $5.5 billion between 2002 and 2009 to the treasury because it couldn't spend the money. And Defence Minister A K Antony's dream of importing only 30 per cent of the requirements is likely to remain a dream for quite some time. Most of the purchases have been made outside India through government-to-government contracts.

In the Gurkha war of 1815, the highlanders attacked the East India Company troops with few weapons and lots of courage, accompanied by the beats of kettledrums and strains of bagpipes. That is when the expression band baj gaya (we are done) was born. Finally, the Indian soldier will have more than just raw courage and band power to go to the battlefield.

India to be guarded by fierce firepower - 1 -  National News
 

pari.mehta

FULL MEMBER
Mar 20, 2011
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197
Nice, love to see india going all out. We need to recover from the lost decade, that lasted till the mid 90's. That is why we are getting retarded development times. like 30 years to develop a weapons platform. We need to get a continuous flow of cash into development of combat systems so that by mid century we have a world class military industrial complex.
 

Tiki Tam Tam

<b>MILITARY PROFESSIONALS</b>
May 15, 2006
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Statistically, the Indian Armed Forces may appear to encourage satisfaction of numbers.

However, what is to be reckoned for a correct analysis is the what it translates on ground i.e. the kilometerage of the land frontier and the maritime frontier of India and the external and internal threats and how it compares.

That apart, the qualitative comparatives of equipment has also to be taken into account.
 

Jade

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Mar 5, 2010
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If India wants to be a great power, modernization is a necessity; however, I feel, India should give more importance to indigenization of the defence production. Thanks to the large Industrial base, India has the capabilities to do that.
 

angeldemon_007

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Nov 29, 2010
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I am still not getting, according to money sanctioned for various projects of IN like P17a, P15a, P75I. India is building some of the most expensive warship in the world, no actually they are the most expensive but they are not the best in capability wise. Corruption is way too much and in addition to this projects are always getting way too delayed resulting in cost over-run and it also effects the modernization plan. Indigenization is important but unless we do corporate restructuring of defense PSU, enlist them in market and also liquidate the assets or even allow FDI in these companies otherwise we will drain most of the money without even getting good quality product and that too after delays of 3-5 years. I also think that a separate CAG branch must be created which should solely deal with defence companies and should continuously keep tab on defence PSUs and should field their reports on the progress of every project regularly in the Parliament.
 

T90TankGuy

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Aug 12, 2010
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i believe that it is a must for us to modernize at a war footing as our neighbor is doing so .
 

EjazR

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May 3, 2009
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A call to arms

The Mahindra Group has grand plans for the defence industry. Bhupesh Bhandari finds out more

The factory south of Faridabad looks nondescript. There’s nothing to tell this is India’s first private factory dedicated to defence production. It belongs to Defense Land Systems India (DLSI), owned 74 per cent by the Mahindra group and 26 per cent by BAE Systems of Britain. In two sheds, spread over 110,000 sq ft, dozens work on armoured and bullet-proof vehicles — the Rakshak (on the Armada platform) for the Jammu & Kashmir Police, Scorpios, and even a Mahindra Navistar bus.

There are four 6X6 Ural trucks at one corner, on which will be mounted bullet-proof hulls made of imported steel once the body has been taken off the chassis. The mine-protected vehicle (it is yet to get a name) can seat 16 passengers, run 800 to 1,000 km on a fuel tank of 200 litres and can withstand 14 kg of TNT under the body and 21 kg under the wheel. The design of the hull is angular so that the pressure waves caused by the blast aren’t absorbed and get deflected. The company claims it’s just the right armoured vehicle for paramilitary operations in Naxalite-affected areas.

The factory has got an order for six from Jharkhand, and more are expected from Jammu & Kashmir. A prototype has been sent to Maharashtra, and a team from Nepal has shown interest in the vehicle. Once the orders are in, the factory is hopeful that it will roll out a mine-protected vehicle every two days. “I have told the home ministry,” says DLSI Managing Director & CEO Brig (Retd) Khutub A Hai “if the government puts in Rs 200 to 250 crore (in this vehicle), the casualties to the paramilitary forces will come down 90 per cent.”

In the basement of an adjoining building, overhead projectors create a 3D video of an infantry combat vehicle. With the help of a keyboard, one can see it from inside, behind and underneath. Any defect in design can be corrected here before the drawings are sent to the factory. There are simulators for the driver as well as the gunner seated next to him. This is the first step in Anand Mahindra’s plans to make it big in defence. It’s driven by more than just a citizen’s concern for the country’s security — various think-tank estimates suggest that the Indian armed forces will buy equipment worth $75 to 100 billion over the next seven or so years. Defence production has been opened up for the private sector with 26 per cent foreign participation. The procurement policies have been amended to allow companies to bid for orders. The flip side is that very few purchases have been made through this route.

* * * * *

Hai, commissioned into the cavalry in 1966, left the armed forces in 1998 to join Mahindra & Mahindra. The government had sent out the first signals that the monopoly of the state-owned ordnance factories and the public sector in defence could end and there could be a role for the private sector. Mahindra & Mahindra, aware that the demand for deference equipment would stay buoyant for some time, started a division called Mahindra Defence Systems. It started out by supplying to the armed forces the utility vehicles the company made. The next step was to armour-plate some of these.

Sometime in 2003, the government announced in Parliament that Mahindra & Mahindra had been issued a licence to make small firearms. The government was keen to replace the sten-guns of World War II vintage with better guns. It would initially procure 50,000 of these, and, if the quality was good, place an order for another 200,000. The licence was a huge leap of faith for Mahindra & Mahindra. It tied up with an Austrian company called Steyr. To begin with, Mahindra Defence Systems would market these guns in India; subsequently there was to be local production in a joint-venture with the Austrian company. “We did a lot of work to customise it (the gun) to Indian conditions. But no decision came for five to six years; so we exited,” says Hai who is also the chief executive of Mahindra Defence Systems. That decision, for the record, has still not been made. The licence has expired and Hai no longer wants to be in that line of business.

Around the same time, Mahindra Defence Systems got into naval systems – parts for torpedoes, decoys, mines et cetera. Over the years, its factory near Pune has also developed and sold torpedo launchers, gun cowls for anti-aircraft guns and sea mines to the Indian Navy. But its bread & butter is armour-plating. The market is worth Rs 200 crore per annum, of which Mahindra Defence Systems claims to have the biggest share. Its financials are not known because it’s a division of Mahindra & Mahindra, though Hai says the division is small yet marginally profitable. Also, armour-plating is low-tech. Clearly, if the business has to grow, it needs to move up the value chain. The answer, Hai says, resides in joint ventures. “Where we lacked was the latest technology; so we wanted joint ventures to leapfrog.”

In 2008, Mahindra Defence Systems initiated talks with BAE Systems. It then applied to the government for a 51-49 joint venture, but the proposal was turned down because foreign participation was allowed only up to 26 per cent. Last year, the venture was finally put in place in its current form (74-26). The licence it owns allows it to make armoured vehicles, infantry combat vehicles, artillery guns and even tanks. First off the block is the mine-protected vehicle. Next, Hai says, could be artillery guns. The armed forces have aRs 20,000-crore programme to modernise its artillery — towed guns, ultra-light howitzers, track-mounted howitzers and self-propelled guns. To begin with, BAE Systems will source 50 per cent of the work from Defence Land Systems India. “Ultimately, five to seven years later, it is every intention to make the full artillery gun here,” says Hai. “It may not be at the Faridabad factory. We will need 30 to 40 acres; it will be a separate factory.”

BAE Systems, to be sure, has already got an order (through the governemt-to-government route) for howitzers worth Rs 3,000 crore, but has decided not to participate in a Rs 8,000-crore tender for 1,580 towed guns. It so happened that BAE Systems was the only bidder in the fray, which the rulebook doesn’t allow. The government subsequently came out with newer specifications for the guns in the hope that these would attract more vendors. Instead of altering the specs, BAE Systems has decided to withdraw from the bid. Undeterred, Hai has his eye next on a $12-billion order to replace old infantry combat vehicles of Russian make. “We hope to be the largest defence land systems player in Asia in the next three to four years,” says Hai. “We are now applying for an all-encompassing licence for defence systems which is under process now. Small arms have been kept out of it, though it includes artillery guns, rockets and missiles.”

* * * * *

The next joint venture could happen in naval systems. “We are close to signing a memorandum of understanding with a leading company of the world,” says Hai. “This would go into niche areas because the payoff is good as there is less competition. We have stuck to underwater weapon systems. The joint venture will extend what we are doing with superior technology and a wider range of products like sonar, sonar buoys and torpedo defence systems.” After that could be the turn of communications. “It is an area which interests us. We have land systems, naval systems and hopefully at some time air systems also (we have Mahindra Aeropsace); electronics goes into all,” says Hai. “I would call it systems integration — electronics, hardware and software. We have plans to inorganically acquire that capability.” Since the country lacks these capabilities, it will have to be a global acquisition. “Ultimately, we want to become a large scale integrator of weapon platforms,” Hai adds.

In addition, Mahindra & Mahindra has set up at Ras Al Khaimah in the United Arab Emirates a company called Mahindra Emirates Vehicle Armouring to sell in markets like Afghanistan, Iraq and North Africa. (Mahindra & Mahindra owns 51 per cent of it, the rest of the stake is with Arabia Holdings and Ras Al Khaimah Investment Authority). It started operations in April. Hai, whose third hat is the chairman of this company, says a sizeable order has come from Ghana for armoured Scorpios. Oman is keen to order the Marksman light bullet-proof vehicles build on the Scorpio platform. “Ultimately, we will have to look at the international market,” says he. But there will be some restrictions. BAE Systems, thus, will not take DLSI products to sensitive markets like Pakistan and China, while Mahindra Defence Systems won’t take these products to markets like Iran which BAE Systems could be sensitive to.

But that’s in the future. Before that, Hai wants to leverage the capabilities within the Mahindra group to augment his product portfolio. His division already uses utility vehicles and buses made by the group for armour-plating. In the days ahead, Mahindra Systech companies, which make automotive components, will be called for help in making the infantry combat vehicle. “We are using Mahindra Satyam for work around battlefield management systems and Tech Mahindra for telecommunications,” says Hai. “Now we have got SsangYong as well.

Who knows how we may use it in the future.”
 

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