India, Russia finalise deal on frigates, S-400 missile system & Kamov helicopters

[StraightShooter]

India, Russia finalise deal on frigates, S-400 missile system & Kamov helicopters

BY
DIPANJAN ROY CHAUDHURY
, ET BUREAU | UPDATED: JUN 23, 2017, 11.31 PM IST
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In March, Jaitley had invited Russian companies to share some critical technologies with India and produce defence equipment in India.
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India and Russia adopted a roadmap for defence cooperation on Friday, building on Prime Minister Narendra Modi’s visit to Russia earlier this month. The two sides have taken forward their defence partnership to concretise deals on frigates, S-400 air defence missile system and Kamov helicopters, people familiar with the matter said.

Defence Minister Arun Jaitley, who is in Russia this week on his second visit since April, co-chaired the 17th meeting of the India-Russia Intergovernmental Commission on Military-Technical Cooperation (IRIGC-MTC) on Friday with his Russian counterpart, General Sergei Shoigu.

“We are determined to go ahead with building cooperation in order to enhance the combat readiness of both countries’ armed forces and to exchange experience in various defence-related matters,” Shoigu said at a meeting, according to Russian news agency Tass.

The Russian minister, according to Tass, said that in accordance with the agreements experts from both sides drafted a roadmap for the development of military cooperation, which will become the basic document for planning bilateral defence engagements. Jaitley and Shoigu discussed the final shape of defence deals that include S-400 Triumf air defence missile systems, four Krivak class stealth frigates and Kamov 226T helicopters.

Ahead of Modi’s visit to St Petersburg for the annual summit, a special arrangement was made to make Indo-Russia defence projects work around the sanctions. Under the arrangement, India is understood to have waived banking guarantee clause mandatory for securing defence contracts in India. Instead India accepted a sovereign guarantee from Russia.

Earlier this week Jaitley spoke at the newly established India-Russia High-Level Committee on Science and Technology in Novosibirsk to discuss cooperation in high technologies and emphasised on bilateral cooperation with India moving closer to Wassennar membership. In March, Jaitley had invited Russian companies to share some critical technologies with India and produce defence equipment in India.

The next month he said that both the countries had started serious discussions with Russia for setting up another defence manufacturing unit under the ‘Make in India’ programme. India and Russia have identified 485 lines for transfer of technology (ToT) to support the Su-30 MKI fleet. A total of 20 Indian vendors have been introduced to Russia to find out the feasibility of ToT by Indian vendors.

Russia may help India train its astronauts

Russia may help India train its astronauts in the future, Russia’s deputy PM Dmitry Rogozin said on Wednesday. “It is possible to train Indian astronauts... (at) Roscosmos,” Rogozin told the meeting of a bilateral highlevel commission for cooperation in advanced technologies for military and civilian purposes. Russia has been a key partner in India’s space programme; the first Indian astronaut to space went on a Russian mission.

http://economictimes.indiatimes.com...em-kamov-helicopters/articleshow/59291809.cms

 

[The BrOkEn HeArT]

I think India's actual defense budget is more than $55 billion dollars. So much happening.

 

[StraightShooter]

I think India's actual defense budget is more than $55 billion dollars. So much happening.

According to industry sources, the capital acquisition of defence hardware in the next 15 years is expected to be Rs 1.5 lakh crore (USD 225 billion)


The Defence Portfolio – grab the Rs 15 lakh crore opportunity
Moneycontrol Research has created a portfolio for long-term ‘buy & hold’ investors to capitalise on the opportunity that “Make in India in Defence” may offer.

Madhuchanda Dey & Jitendra Kumar Gupta
Moneycontrol Research

In 2016, India surpassed Saudi Arabia and Russia to become the country with the fourth highest defence budget globally. With defence spending expected to accelerate in the next couple of years, the ranking could rise to number three by 2018.

Source: IHS Markit

Why defence now?

India has the third largest military in the world and is one of the largest importer of conventional defence equipment. It spends around 30 percent of its Rs 2.75 trillion defence budget on capital acquisition. At present, 60 percent of the defence requirements are met through imports. But this mix could change dramatically as the government looks to step up indigenous sourcing to 70 percent over the next decade.

Convinced that indigenous weapons production can provide jobs, result in savings and transfer of technological know-how, defence is at the core of “Make in India”.

As per government’s own projections, contractual offset obligations—the orders required to be sourced locally--worth approximately USD 4.53 billion, are likely to come up in the next 5-6 years. The offset policy in capital purchase contracts with foreign defence OEMs, stipulates a mandatory offset requirement of a minimum of 30 percent for defence contracts. The minimum contract value for which offsets are mandatory stands at Rs 2,000 crore.

India’s defence spending has increased at a compounded annual growth rate (CAGR) of 12 percent in the last 15 years. In budget 2017-18, the allocation for defence capital outlay stood at Rs 86,488 crore out of the Rs 2,74,114 crore allotted to defence expenditure. The preferential treatment given to defence PSUs in excise/customs duty has been discontinued to create a level-playing field and customs duty exemption on import of defence equipment has been removed to incentivize domestic manufacturing.

Quantifying the opportunity – Rs 15 lakh crore in 15 years?

According to industry sources, the capital acquisition of defence hardware in the next 15 years is expected to be Rs 1.5 lakh crore (USD 225 billion), divided under- i) Land systems (Rs 6 lakh crore) - focused on small arms, ammunition, artillery and air defence guns, combat vehicles and anti-tank missiles., ii) Aerospace – Rs 5.2 lakh crore, iii) Naval – Rs 3.5 lakh crore, and iv) Security (Rs 0.3 lakh crore) – catering to all segments with Radars, electro-optics, C4I system, underwater systems, missiles and guided weapons, avionics, and communications and electronic warfare.

The Cabinet has also recently cleared a new strategic policy (SP) for private sector participation in equipment manufacturing in India. A pool of top six Indian companies will be made based upon three main criteria- Financial (Rs 40 billion turnover for 3-years and Crisil A rating), technical capability and existing infrastructure, and could bid for approximately USD 20 billion worth of projects.

Source: Deutsche Bank

How to participate in this opportunity – The Moneycontrol Defence Portfolio

While this opportunity size is significant and will run for the next eight to ten years, we suggest investors adopt a portfolio approach to ride on this theme. Moneycontrol Research has created a portfolio for the long-term ‘buy & hold’ investors to capitalise on the opportunity that “Make in India in Defence” is likely to offer.

The portfolio with 15 stocks has an eclectic mix of stocks from the large and mid-cap universe. We have judiciously created a cash cushion of 20 percent to capture the opportunities, should markets turn a tad jittery post GST implementation in the near term.

The defence portfolio is unique in many ways because the companies in the fray need not just have the requisite financial muscle, but should possess the right technical capabilities and pre-qualification to capture this opportunity. Thus, investors got to be selective as this is a high ‘entry barrier’ business and companies that manage to get qualified stands to enjoy the ‘exclusivity’ premium for a while.

We envisage this portfolio to deliver decent outperformance over the medium term as India pushes the pedal on “Make in India” through defence indigenisation.

http://www.moneycontrol.com/news/bu...b-the-rs-15-trillion-opportunity-2310975.html

 

[Yaseen1]

Pakistan should quickly increase number of high yield nuclear warheads and missiles

 

[StraightShooter]

Pakistan should quickly increase number of high yield nuclear warheads and missiles

Pakistan currently has 140 nukes and would have 250 warheads by 2025. What more are you expecting?

http://www.tandfonline.com/doi/full/10.1080/00963402.2016.1241520

 

[Yaseen1]

Pakistan currently has 140 nukes and would have 250 warheads by 2025. What more are you expecting?

View attachment 406012

http://www.tandfonline.com/doi/full/10.1080/00963402.2016.1241520

with s400 india can intercept missiles so to increase survivability more missiles are required to be fired to outnumber intercepting missiles

 

[ranadd]

with s400 india can intercept missiles so to increase survivability more missiles are required to be fired to outnumber intercepting missiles

Having more warheads does not mean MAD or Pakistan surviving. With Agni 3 already India made sure Pakistan is covered completely. Whatever happened after that from ISPR against India is propaganda for domestic consumption.

Rest of Agni series, K series to S400 is for China. They are the big dogs in Asia.

India, Pak and China are the nuclear powers with no assured MAD.

 

[B@tt!eDoom]

with s400 india can intercept missiles so to increase survivability more missiles are required to be fired to outnumber intercepting missiles

Pakistan may have more nuke but their delivery systems are not up to the mark whether air or water

 

[jaiind]

no word on PAK FA during their dialogs??

 

[nang2]

I think India's actual defense budget is more than $55 billion dollars. So much happening.

so little inked.

 

[StraightShooter]

no word on PAK FA during their dialogs??

FGFA was discussed and the agreement would be signed in the next 2 months max.