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Rapidly burgeoning defence manufacturing capacity of India

mgmech

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KOLKATA:The ministry of defence on Saturday called on the private sector to take advantage of its Offset Policy which will throw up a Rs 40,000
crore opportunity in the next five years to manufaturers and service providers.

"Our anticipation is that the Offset opportunity will grow to Rs 40,000 crore (about $10 bn) in the next five years. This offers a tremendous opportunity (for the private sector)," minister of state for defence M M Pallam Raju told a press conference in Kolkata.

The Defence Offset Policy stipulates that foreign contractors catering to the Armed Forces source systems and components from local vendors for at least 30% of the value of orders of more than Rs 300 crore.

For a multi-role combat aircraft, the Offset value is 50%, Raju said...:victory:

Most global aerospace industries have started looking towards India as a hub for development of technology, he said, adding the primary driver for this outsourcing of Aerospace Engineering and Manufacturing was the Offset Policy....:smitten::chilli:

He said the value of the country's Offshore Aerospace Engineering stood at around $700 to 800 million, he said, adding this will grow to $3 bn by 2020. The value would rise to 12 bn if manufacturing was included...:yahoo::yahoo:

Defence Offset Policy to open Rs 40,000cr opportunity in five years - India - The Times of India
 
this defence offset policy has caused companies to pull out from gun helicopter competition.This should be avoided at all costs.
.We need to buy the stuff and start reverse engineering it just like china does it.
 
india's problem on defence manufacturing is not about money, not about such offset, it is about the overall industrial capacity and the way how people do things.
 
this defence offset policy has caused companies to pull out from gun helicopter competition.This should be avoided at all costs.
.We need to buy the stuff and start reverse engineering it just like china does it.

when there is no book on "How to build a 3/4th generation fighter", you have to seek alternative way of learning.

it is also a common misunderstanding that weapons are all protected by the international copyright laws. for state owned companies, it is 100% ok for them to clone whatever they want as long as it is not provided to any 3rd party country.

the same can be said for many things, e.g. you can buy a copy of microsoft windows, analyze it, build your own one with the same idea/design/structure. as long as you don't put onto market, as long as you don't make it publically available in which microsoft's interests can be potentially damaged, it is 100% ok for you to play with it at home.

india/indian fail to understand this very simple rule and this partially leads to the current 30-40 gap on defence manufacturing.
 
when there is no book on "How to build a 3/4th generation fighter", you have to seek alternative way of learning.

it is also a common misunderstanding that weapons are all protected by the international copyright laws. for state owned companies, it is 100% ok for them to clone whatever they want as long as it is not provided to any 3rd party country.

the same can be said for many things, e.g. you can buy a copy of microsoft windows, analyze it, build your own one with the same idea/design/structure. as long as you don't put onto market, as long as you don't make it publically available in which microsoft's interests can be potentially damaged, it is 100% ok for you to play with it at home.

india/indian fail to understand this very simple rule and this partially leads to the current 30-40 gap on defence manufacturing.

that is called piracy..... it does effect business of Microsoft great deal..
 
this defence offset policy has caused companies to pull out from gun helicopter competition.This should be avoided at all costs.
.We need to buy the stuff and start reverse engineering it just like china does it.

it is fair enough... when u r getting so many dollars... it is only better to put back into Indian defence sector 30-50% of it...
it is win win for both....the supplier and the Indian defence sector....
 
it is not. it is perfectly legal.

there are many projects done by people all over the world, all based on the reverse engineered details.

ReactOS - Wikipedia, the free encyclopedia
Wine (software) - Wikipedia, the free encyclopedia

time to upgrade you narrow mind.

Oh really?? Is it perfectly legal in your country??
Is that what is taught to you?..
Well.. Very fair then..

But here in India we have to stick to something called Intellectual-Property Rights.. Its creates a more favourable financial climate and gives the investor more confidence to do R&D as he knows his investment will be safer..

Now if you would talk about China attracting more FDI compared to India.. well.. Lets just say, Kudos to your government, which is offcourse more sincere towards the goal of social upliftment of its people..

But we aren't much far behind either.. Our growth is not state sponsored but its a natural outcome of the government apathy to its people.. Its taken a totally different path than your growth story, but still, we are growing, and will continue to grow.. Just imagine, with a corrupt and incapable government we have reached this far, what it would be like the day our government too starts taking progressive part in the growth story..

Whatever it be.. We, as the people of a billion strong country, have a vision, to rise above all else.. And we will prevail..

China is great.. And so is my India...
 
Oh really?? Is it perfectly legal in your country??
Is that what is taught to you?..
Well.. Very fair then..

But here in India we have to stick to something called Intellectual-Property Rights.. Its creates a more favourable financial climate and gives the investor more confidence to do R&D as he knows his investment will be safer..

Now if you would talk about China attracting more FDI compared to India.. well.. Lets just say, Kudos to your government, which is offcourse more sincere towards the goal of social upliftment of its people..

But we aren't much far behind either.. Our growth is not state sponsored but its a natural outcome of the government apathy to its people.. Its taken a totally different path than your growth story, but still, we are growing, and will continue to grow.. Just imagine, with a corrupt and incapable government we have reached this far, what it would be like the day our government too starts taking progressive part in the growth story..

Whatever it be.. We, as the people of a billion strong country, have a vision, to rise above all else.. And we will prevail..

China is great.. And so is my India...

Both countries are growing independently not in a form of competition. Why compete if economy is going well.
 
You know i was just thinking about the real reasons why China reverse engineers and why India doesn't

when i came upon this thread. And have been itching for reason to post my views.

Now this is going to be a but long winded but i feel it would be worth a read.


Now We all know China Can reverse engineer stuff, and they can do it really good. A mot of Chinese are proud of that, And why shouldn't they be. Not many people can do it.

But everything has a price and when you reverse engineer you get advanced tech really cheap, With very little R&D costs.
But the cost is usually the original supplier, who would be really pissed of. As is the case with Russia and China.

So Now the main Question why did China choose to reverse engineer things. well lets role the clock back to 1961.

Stalin is dead, Mao is pissed. Relations with USSR and CHINA go down hill(this is the short version of the story).

But now this leaves China with a real problem. Almost all their defense needs were served by the USSR. with their own defense sector very much in its infancy, and in the age before freedom of information and the internet. China had a huge technological disadvantage.

They had the US threat and A US supplied Taiwan, to deal with.
With absolutely no means of procuring weapons to defend them selves or their interests (bummer).

There were 3 major sources of Weapons back then, Europe, America and USSR. And not one of them was going to sell to China.

So what did China do the only thing it could, took the soviet inventory they already had. Broke it down and rebuilt all of it, under the Chinese flag. Which was not an easy thing mind you.

Sure China rolled out with some of her own gear as the decades rolled on. But then again their defense sector was still growing and still very much behind the USSR and the West.

But then 1991 happened, Communism lost, USSR imploded. **** got real. The world bloody changed.

But what about China, where defense was concerned, The Americans still wouldn't sell them anything. China is under the EU sanction, so nothing from Europe. Us blocking trade with the New Israeli defense market.

But China now had Russia and all the other Soviet fallout states, with Vast quantities of Soviet equipment, and no where near the money to maintain the whole arsenal.

China steps in and buys as much of it as it can, and at low low prices.
And since the original supplier was less than concerned about what China would do with all these new toys. China reverse engineered all of it, they jumped 10-15 years in a matter of 5 years. Absorbing the capabilities of the old USSR and then building on it. Other wise its defense sector would only be a shadow of its former self today.

Even Russia so strapped for Cash could do little to stop China making the J-11 a rampant rip of the Su-27, instead they choose to compromise and take in what sales it could to china's as they still controlled the engines. and thus limiting China's own exports.

And that my friends is why China reverse engineer's, it was more due to cause and effect, then capability. The situations it was in facilitated this kind of system, and it has served them rather brilliantly in My opinion.

(my next post, why India does not reverse engineer, at lest not publicly. that post is both equally long winded and i believe there is a limit to how many characters you can have in the post )
 
Why India does not reverse engineer ?

Well many people would jump the gun and say India cant that why , and to some extent that's true. But that's because that's not how the Indian defense sector has developed. It has different goals and is subject to a vastly different situation than that of China.

You cant ask someone who's been training for a Marathon to race in the 100m sprint. its just not the same.

So whats different.

Pakistan that's what. India's main security concern. Now once again we are rolling back the clock to the 1962.

While at this point China could not find any one to sell weapons.
India could still buy from Europe and Russia. That's the key deference we had suppliers.

Guess who else had suppliers, Pakistan getting some of the most advanced weapons in the world. from America and Europe.

Coming out of the Indo-china conflict as the losers, there was an increased focus on the armed forces. which more than doubled in size by 1965.

Of course that meant that the Indian defense establishment had an almost non-existent defense sector. So all of the weapons had to imported and Munitions plants constructed to kick start the Indian defense sector. Imports were primarily from Russia to counter the American Equipped Pakistan.

See that s important to note, India has an active conflict with Pakistan, and thus if Pakistan had American made tech. India's only option was to get Russian tech to counter it.

1965 proved just that, India's efforts to improve her domestic sector (if unhindered would have been somewhere along the line of Turkey which is a good example as turkey was not engaged in any active conflicts had access to most arms suppliers and could build it capabilities over time.), had to take a back, to our arms race with Pakistan.

we need equipment that could compete with the US built stuff that Pakistan was fielding. India needed to get soviet tech and alienating it with attempts at reverse engineering, would just put India in a thing spot against a US supported Pakistan.

In 1971 our relations with USSR forced forced the US to back down, which in the end worked out for India.

But The game changed for the defense sector after 1975, India detonated a Nuclear bomb, the west places heavy sanctions. USSR still sell to India.

But India has countered almost all of Pakistan's conventional power.
It no longer had to worry about every little thing Pakistan gets as in the long run India had the Bomb and Pakistan did not. So India started a lot of her first Indigenous projects(at least the big ones) at about 1976. And if Pakistan got something Game changing in the conventional sense, India just bought the Russian counter.


But those years if Peace at Gun point by India, allowed the defense sector to Improve and Grow for the first time, Our missile projects were initiated back in the 80's . Once we pulled out of the Arms race as it were or at least slowed the Pace. Domestic sector was what captured the defense budget.

But the Game changes once again as during the Rajive Ghandi's terms in Office the economy was liberalized by the then Finance minister Manmohan Singh. Granted India was facing Bankruptcy if it didn't its still the most important recent event in India's history.

The India economy started to grow at an astonishing rate. And by 1998 when Pakistan Detonated her first Nuclear device.

And the threat of low scale quick conventional wars surfaced, for evidence look at Kargil . India had a lot more money than Pakistan.
and whilst both nations had significantly more mature domestic defense sector.

Pakistan as a result still relied on imports to offset the R&D costs.
India on the other hand showed that it could import and simultaneously fund domestic projects.

This was further helped by the fact that India could import from almost anybody today, reverse engineering imports would just serve to alienate suppliers and let India loose a Position that not many nations have,
- A capable Domestic sector
-A huge budget
-Foreign suppliers lining up to get a share of the Indian defense market

How best do you take advantage of this Situation.

-you use that Extra cash to pay for ToT and Offset clauses, forcing foreign suppliers to invest in the Indian defense market to get these big deals.

-You sign JV with foreign suppliers to get Even more TOT and intellectual property

This is in essence having the Best of Both world, What you import is essentially adding to you r domestic capabilities. Lets say for example
India in five years will be manufacturing 3 different aircraft, the MKI, MMRCA and LCA. Will all me built from scratch in India. Imagine the improvement in manufacturing capabilities alone.

while today India defense is more focused on countering China's growing power.And what better way is there to counter the capabilities of more capable nation, then to get capabilities form an even more capable nation, which in turn will improve your own capabilities.

That's a little but contrived but i hope you get the gist of What i am saying.

And that my friends is why India does not reverse engineer at least publicly. Its not in our best interests to do so. Our Domestic sector can grow and expand a lot faster if we work with and learn for the foreign supplier we buy from, rather then going at t all by our self which China was forced to do. Now i know people may point out that China is years ahead of India , well China really did not have any choice but go at it alone, Which nearly 40 years latter payed of. with the soviet collapse and subsequent fire sale. also China stated developing its domestic sector in the early 60's as opposed to India in the late 70's so given that there is a gap of at least 15 years. There will be an obvious disparity between the two in comparison today. But India is catching up, And i guess we have to see what happens in the future.

Thanks for reading
 
Thanks for all the words of thanks, nice to know my posts are appreciated.
:cheers:
 
Thanks for all the words of thanks, nice to know my posts are appreciated.
Good posts will always be appreciated. The thanking system available in this forum is an added bonus for those who don't want to create another post just to say thanks. Good post indeed.
 
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