Defense Budget Hiked to 2.3 Lakh Crore

[xyxmt]

its about time we increase the desi numbering system, 2.3 lakh caror doesn't even make sense, sound like roman numeral

 

[sancho]

Indian Prime Minister Narendra Modi’s move to increase the ownership stake for foreign defense companies to 49 percent isn’t sufficient to lure high-technology investments from Lockheed Martin Corp. (LMT) or Boeing Co.

The once that brings the lowest ammount of high techs to India are disappointed? But still opened JVs with Tata, Reliance, HAL... in the recent years, so I guess we can live with disappointing them.

 

[Bang Galore]

The once that brings the lowest ammount of high techs to India are disappointed? But still opened JVs with Tata, Reliance, HAL... in recent years, so I guess we can live with disappointing them.

Thats the point. You say they bring in the lowest amount of tech but seem not to see the reason for it. Unless forced to do so as part of a confirmed order, no company will willingly tranfer tech to a company that they do not control. Thats pretty basic knowledge. Companies simply will be in no hurry to commit suicide by transferring tech for no reason. There goes any idea that these companies will use india as a primary manufacturing base. That will be our loss. India should have allowed management control by foreign companies and we could still have mandated them to form jv's when an order that required such an outcome came up.We lose nothing if companies eventually make india their manufacturing point for sales where we normally would buy in small quantities or for export. Certainly far better than not manufacturing here. Otherwise we may simply have cases like Tata in artillery where a piece gets brought in a ckd condition and gets passed off as local. With a suitable mark up. Cheaper always to buy from companies who own the tech rather than a company having to pay royalty. Technology transfers will happen mostly in a grey area, not through open transfers. That probability(of grey area transfer) increases if something is manufactured here.

 

[WAR-rior]

its about time we increase the desi numbering system, 2.3 lakh caror doesn't even make sense, sound like roman numeral

Mu ki baat chhen li. If I aint wrong,

100 Crore -> 1 Arab
100 Arab -> 1 Kharab
100 Kharab -> 1 Neel
100 Neel -> 1 Padam

Hence, 1 Lakh Crore -> 10 Kharab

Hence, final figure will be 23 Kharab.

 

[TejasMk3]

Mu ki baat chhen li. If I aint wrong,

100 Crore -> 1 Arab
100 Arab -> 1 Kharab
100 Kharab -> 1 Neel
100 Neel -> 1 Padam

Hence, 1 Lakh Crore -> 10 Kharab

Hence, final figure will be 23 Kharab.

I was thinking the same thing a few days ago

I wonder why they needed such numbers back in those days o.0

 

[my2cents]

My identity has been verified 100 times by now. You Hinduvati bigots always want to supress voice of Indian Muslims.

First try to get your spellings right.

How did we suppress your voice?? You are here aren't you? Unless you are pretending to be Indian.

 

[sancho]

Thats the point. You say they bring in the lowest amount of tech but seem not to see the reason for it. Unless forced to do so as part of a confirmed order, no company will willingly tranfer tech to a company that they do not control.

Wrong, because the reason is the US law, that restrict high tech transfer! We wanted AESA and EW techs through MMRCA, but the US vendors were not allowed to share it and 100% FDI would not have changed that! Javelin ATGM offered with limited ToT, while SPIKE is offered with better ToT and 100% FDI would not have changed that!
GE 414 engine with basic ToT to assemble the engine in India, while EJ 200 was offered with critical ToT of engine blades or TVC and 100% FDI would not have changed that!

So the US companies can't give us any critical techs, even if they wanted and why should we then giveway control for JV's that doesn't even include high techs? IF they can share high techs, even the older FDI limit allows them to have a higher share.

Companies simply will be in no hurry to commit suicide by transferring tech for no reason.

They don't have to, they can start JV without critical techs and manufacture as many airframe parts in India as they want, but why should we give them control over these JVs when they don't give us much in return?
If a company however sees a benefit in sharing critical techs with India, be it wrt to a product for the Indian market, or by offering a high tech at lower costs on foreign markets, than if the same product would be produced in Europe for example, they can do it too and will get more control over the project. So there are options for them, but there is no need for us to give free goodies to them.

Again, we are on the upper side of the negotiations, therefore we demand things and if the one can't or don't want to comply, others can and already do!

 

[Bang Galore]

Wrong, because the reason is the US law, that restrict high tech transfer! We wanted AESA and EW techs through MMRCA, but the US vendors were not allowed to share it and 100% FDI would not have changed that! Javelin ATGM offered with limited ToT, while SPIKE is offered with better ToT and 100% FDI would not have changed that!
GE 414 engine with basic ToT to assemble the engine in India, while EJ 200 was offered with critical ToT of engine blades or TVC and 100% FDI would not have changed that!

So the US companies can't give us any critical techs, even if they wanted and why should we then giveway control for JV's that doesn't even include high techs? IF they can share high techs, even the older FDI limit allows them to have a higher share.

The point is that they cannot even if they did want to & were given permission. If it does not change, we don't buy, what do we lose? Let them manufacture in India if they want, without any technology transfers, what would be our issue with that if we are not buying? In any case, its relevance is moot when we are buying stuff directly from foreign vendors (100% foreign owned, foreign located). You seem obsessed with technology transfers upfront, that will not happen, We need to have a defence manufacturing base here, we can always insist on tech transfers when we give out large orders.

They don't have to, they can start JV without critical techs and manufacture as many airframe parts in India as they want, but why should we give them control over these JVs when they don't give us much in return?
If a company however sees a benefit in sharing critical techs with India, be it wrt to a product for the Indian market, or by offering a high tech at lower costs on foreign markets, than if the same product would be produced in Europe for example, they can do it too and will get more control over the project. So there are options for them, but there is no need for us to give free goodies to them.

There is still no logic to that argument because apart from a few cases where offset requirements will necessitate manufacture in India, why would companies choose as their preference a manufacturing outlet which they do not control? Profits from lowered costs will still be shared by ownership percentages (excepting license fees), why take a lower percentage of profit? These JV's, give us a lot in return, a building up of a base and benefits for the economy. If we are placing no direct orders for our forces from 51% or 100% foreign owned companies, what logic would suggest that we are not benefiting? The decision to look at such stuff as goodies(?) is why we lag in almost all investment.

Again, we are on the upper side of the negotiations, therefore we demand things and if the one can't or don't want to comply, others can and already do!

Completely disagree, it's a bit like saying economic liberalisation didn't help the investment climate because some companies were already operating prior to the liberalisation, in restricted control. Proves nothing. We need more investment, not less and unless mandated & justified by our orders, we should welcome any company wanting to use India as a manufacturing base even with 100% ownership. Defence procurement rules can be separated from investment rules and decided on a case by case basis depending on the size of the order & critical nature of the technology involved. We must welcome all investment, defence is just one of them. Manufacturing in India under whatever ownership will simply reduce leverage of anyone wanting to squeeze us. The fact that their manufacturing point is here reduces leverage.

 

[sancho]

The point is that they cannot even if they did want to & were given permission.

Please, that's only their claim. We see the Europeans, Israelis or Russian manufacturers have no issue with tech transfer. It's logical that a privat company is trying to get as much own benefits as possible and getting control over these JV's is obviously in their interests, but that doesn't mean no JV's would be set up in India or that no tech transfer is provided to India, it's even the opposite and with the FDI hike, we opened ourselfs towards the foreign companies. Just because they cry that they want more, doesn't mean we have to do it, unless it serves our interest.

You seem obsessed with technology transfers upfront, that will not happen, We need to have a defence manufacturing base here, we can always insist on tech transfers when we give out large orders.

Who said we need ToT upfront? I want critical ToT, because that is the only way to improve our industry and I don't see a reason to limit that only for orders we make, but if companies want to use the benefits of manufacturing in India, they should give more in return to India too, that's all.

There is still no logic to that argument because apart from a few cases where offset requirements will necessitate manufacture in India, why would companies choose as their preference a manufacturing outlet which they do not control?

First of all, ALL orders for Indian forces includes offsets, even C130J, C17 or P8I orders that were done via FMS route! Secondly, even if they don't produce things for our forces, they want to benefit from the low production costs in India. Why do you think Boeing produces parts of the F18SH at HAL? Why TATA just recently got a new contract to produce airframe parts of the Do 228NG from RUAG? Why Airbus and Boeing are producing parts of their civil airliners at HAL?
=> Because we can do it cheaper than they could do it in their countries, as simple as that!

So the interest in our aero industry is already established (in times when the limit was at 26%), what we now need to do is once increase the interest for more production (which is what the FDI hike is meant to do) and to get more critical techs to not only improve the manufacturing side, but also the development side (and that's only possible by forcing the foreign vendors, either by ToT requirements or by offering higher shares in JV's only in return for such techs).

We must welcome all investment, defence is just one of them.

Wrong! The defence field is not comparable with textile, agriculture or other less important fields. It's a strategically important one, where Indian interests wrt security of the country comes first and not just increased revenue of some companies (be it private or government owned).

Manufacturing in India under whatever ownership will simply reduce leverage of anyone wanting to squeeze us. The fact that their manufacturing point is here reduces leverage.

Not at all, because it's important what they produce here and that's what you keep ignoring! It doesn't matter if we produce 90% of a fighter in India, when it's core techs like engine or radar will be just delivered for assembly in India, because we still will be dependent on the foreign vendors to get these core parts! Take, the MKI where we can produce the airframe parts and subsystems indigenously, even some parts for the radar and engine, but for any upgrade of these core techs, we remain dependent on Russia, because we can't offer something remotely comparable!
That's exactly why it's important for us to develop an own AESA and Kaveri engine for Mig 29Ks, to not remain depentend on Russia for later upgrades of these core techs. The problem is, in both areas (radar and engine) we still are years behind and that know how needs to be added to our industry now, which is only possible by getting critical techs in these areas (=> MMRCA offsets and ToT requirements).

 

[Bang Galore]

Please, that's only their claim. We see the Europeans, Israelis or Russian manufacturers have no issue with tech transfer. It's logical that a privat company is trying to get as much own benefits as possible and getting control over these JV's is obviously in their interests, but that doesn't mean no JV's would be set up in India or that no tech transfer is provided to India, it's even the opposite and with the FDI hike, we opened ourselfs towards the foreign companies. Just because they cry that they want more, doesn't mean we have to do it, unless it serves our interest.

Everybody has issues with tech transfer. No one is here to do charity. In any case you are confusing different points. My thinking was on the line that where tech transfers are mandated by order, the current rules will apply. Where they are not, it shouldn't be our concern what type of ownership exists. After all, if everyone was happy, we would not have felt the need to change the investment limits to 49%. They should have been happy at 26%.

Who said we need ToT upfront? I want critical ToT, because that is the only way to improve our industry and I don't see a reason to limit that only for orders we make, but if companies want to use the benefits of manufacturing in India, they should give more in return to India too, that's all.

Actually that is exactly what you said. Why should companies not being favoured with Indian orders transfer tech or give up ownership? India is not the only country in the world for cheaper manufacturing. What we have is the advantage of also being a potential market. Until that potential is translated to a real order, we should not expect anyone to offer us the moon merely for the right to manufacture in India.

First of all, ALL orders for Indian forces includes offsets, even C130J, C17 or P8I orders that were done via FMS route! Secondly, even if they don't produce things for our forces, they want to benefit from the low production costs in India. Why do you think Boeing produces parts of the F18SH at HAL? Why TATA just recently got a new contract to produce airframe parts of the Do 228NG from RUAG? Why Airbus and Boeing are producing parts of their civil airliners at HAL?
=> Because we can do it cheaper than they could do it in their countries, as simple as that!

Your logic would suggest that these companies have no long term offset plans, they do & therefore manufacture. In any case, outsourcing to vendors happens across the board, we are talking about quantum here. If we are happy with the present position like you are, maybe we should all just go back to sleep because everything is already working very well.

So the interest in our aero industry is already established (in times when the limit was at 26%), what we now need to do is once increase the interest for more production (which is what the FDI hike is meant to do) and to get more critical techs to not only improve the manufacturing side, but also the development side (and that's only possible by forcing the foreign vendors, either by ToT requirements or by offering higher shares in JV's only in return for such techs).

Do it when you place orders, what has that to do with ownership of companies? After all whether the partner is a 100% foreign owned company based in the U.S. or Europe or working out of India should have no bearing on the rules of the contract.

Wrong! The defence field is not comparable with textile, agriculture or other less important fields. It's a strategically important one, where Indian interests wrt security of the country comes first and not just increased revenue of some companies (be it private or government owned).

It is increased revenue for India. And jobs. Also, unlike you, I believe that manufacturing here opens up ability to both gain knowledge & technology even if they are not mandated or licensed. People work, local suppliers partner, skills are enhanced. Happens across all fields. If there is no Indian government contract at play, it should be no concern of ours how investment works just as long as there is investment. Long term, our costs come down. Any company that looks at ToT & local manufacture factors that cost into the bid (the Rafale negotiations is a classic case), having a unit here makes them the more desperate ones & the costs might have already been reduced for them by manufacturing here.

Investment is investment. Defence investment too is primarily that, only certain orders have attached a different value, not all. Mandate it where contracts necessitate it, mandating outside of that is simply silly. Nobody will give an Indian company 51% when the order is not even from India.Even 20% savings in cost pale compared to only 49% in holding. Where local companies add value, they will seek them out anyways. Otherwise, we just another layer of cost .

Not at all, because it's important what they produce here and that's what you keep ignoring! It doesn't matter if we produce 90% of a fighter in India, when it's core techs like engine or radar will be just delivered for assembly in India, because we still will be dependent on the foreign vendors to get these core parts! Take, the MKI where we can produce the airframe parts and subsystems indigenously, even some parts for the radar and engine, but for any upgrade of these core techs, we remain dependent on Russia, because we can't offer something remotely comparable!
That's exactly why it's important for us to develop an own AESA and Kaveri engine for Mig 29Ks, to not remain depentend on Russia for later upgrades of these core techs. The problem is, in both areas (radar and engine) we still are years behind and that know how needs to be added to our industry now, which is only possible by getting critical techs in these areas (=> MMRCA offsets and ToT requirements).

You seem to not get my point. 51% foreign ownership does not imply a change in ToT rules. Where necessary, we mandate. Makes no difference to us whether the company is based in the U.S. or here, those are the rules of the order. Where not mandated, we should not unduly concern ourselves with the ownership pattern. You seem to be labouring under the misapprehension that 51% or 100% foreign owned companies would mean no transfers, that does not necessary follow. Our rules of the contracts need not change.

Investment in defence units is still only investment, the rules that we wish to set for our orders are our decision. Ownership simply does not matter to that idea. Getting costs down is extremely important. Even a 10% saving in our import bill is huge.

 

[INDIC]

Mu ki baat chhen li. If I aint wrong,

100 Crore -> 1 Arab
100 Arab -> 1 Kharab
100 Kharab -> 1 Neel
100 Neel -> 1 Padam

Hence, 1 Lakh Crore -> 10 Kharab

Hence, final figure will be 23 Kharab.

I didn't know about Neel and Padam.

 

[WAR-rior]

I didn't know about Neel and Padam.

Its not only that. After Padam comes Sankh.

Thoda google kar leta chhote to rona na padta.

Indian Numbering System - Wikipedia, the free encyclopedia

 

[INDIC]

Its not only that. After Padam comes Sankh.

Thoda google kar leta chhote to rona na padta.

Indian Numbering System - Wikipedia, the free encyclopedia

bhains ki aakh mujhe laga tujhe pehle se maloon hai.

 

[WAR-rior]

bhains ki aakh mujhe laga tujhe pehle se maloon hai.

Arre maalum to Bachpan se hai. Mere nana ne sikhaya tha. He was a school teacher.

But, its on internet too. Itna freely available hai fir bhi tum dukhi?

 

[INDIC]

Arre maalum to Bachpan se hai. Mere nana ne sikhaya tha. He was a school teacher.

But, its on internet too. Itna freely available hai fir bhi tum dukhi?

Kharab ke aage jane ki kabhi zarurat hi nahi padi.