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DefInsights - Sugosha Newsletter Nov 2018

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Published by sohilpat, 2019-01-23 08:37:45

DefInsights - Sugosha Newsletter Nov 2018

DefInsights - Sugosha Newsletter Nov 2018






India’s Act East Policy MSME SOPs

P6 P 10

India-France : Strategic De- DPP Primer: Part 7
fence Partnership
P 18
P 12
Business Opportunities
P 22
2 | DefInsights | November 2018
Industry Buzz

P 15

From the MD’s Desk - The month
that was

Welcome November, after a wonderful festive season with Deepawali behind
us, we are eagerly looking forward to more festivities in the form of Karthikai
or Karthik Purnima, then Christmas and heralding a new year full of

Mrs. Shanti Kuber October has been an interesting month with plenty of activities in the
Defence Sector in India and some interesting developments across the world,

e.g., the mid term elections in the USA, Trump calling it a victory while the Republicans hold on to just
the Senate, the trade war between US and China, standoff in Saudi over Khashoggi, China’s overreach
and many others. Let us first concentrate on Defence developments in India.

The Indian Air Force's fighter Jet repair depot in Ojhar, Maharashtra, has successfully overhauled the
first Su-30MKI multirole air superiority fighter jet. The Su-30MKI is the mainstay of India's fighter jet
fleet and the first overhauled version of the aircraft was handed over to the Operational Squadron of
the IAF on 23 Oct 2018. "Earlier, the first Su-30 MKI overhauled by this depot successfully took off on
April 24 and has been flight tested for its airworthiness, before inducting it for operational tasks at a
flying squadron," an IAF statement read. During the overhaul, the aircraft was stripped completely and
rebuilt from scratch, replacing certain worn out parts/components. 11 Base Repair Depot is the only
fighter aircraft repair depot of the IAF and undertakes repair and overhaul of frontline fighters such as
the MIG-29 and Sukhoi-30 MKI. India had initially contracted for 272 Su-30MKI from Russia. While the
first 50 twin-seater, twin-engine Su-30MKI were built in Russia, the remaining fighter jets were
assembled at the Hindustan Aeronautics Ltd (HAL) facility in India. The last 23 Su-30MKI on order are
currently being assembled at the HAL facility.

The Indian Navy has inducted a Submarine Rescue System with a Deep Submergence Rescue Vessel
(DSRV) along with associated equipment. This System has a Side Scan Sonar for locating the position of
the submarine in distress at sea, providing immediate relief by way of posting Emergency Life Support
Containers with the help of Remotely Operated Vehicle (ROV) and thereafter rescuing the crew of the
submarine using the DSRV itself. In a submarine accident, rapidity of response is most crucial to safety
of life. To ensure early mobilisation, the System has been procured in a Flyaway configuration which
permits rapid transportation of the Rescue System from the base to the exact location of the distressed
submarine by transportation using air/land/sea vessels. The Indian DSRV has the capability to rescue
personnel from a distressed submarine (DISSUB) up to a depth of 650 m and it is the latest in terms of
technology and capabilities. It has been designed and supplied to meet unique requirements of our
submarines by M/s James Fishes Defence, UK. We have ordered two Systems which shall be based on
the West and East Coast of India respectively to provide redundancy, high operational availability and
early response to deal with a submarine contingency.

With this capability, India has joined a select league of nations which have this unique capability and
we are now in a position to not only provide rescue cover to our own submarines but also to other
friendly nations in the IOR and beyond. Our vision is to emerge as a centre of regional excellence for
Submarine Rescue Services in line with the stature of our great nation.

November 2018 | DefInsights | 3

India’s Strategic Forces Command (SFC) has successfully test-fired a nuclear-capable Agni-I ballistic missile,
on 30 Oct 2018. The missile, launched from a test range off the coast of the eastern state of Odisha as part
of regular training activities, hit the target area with accuracy, according to The Times of India newspaper.
The trajectory of the flight was closely tracked by radars and telemetry equipment, the newspaper added.
The Agni-I missile was developed by DRDO and tested for the first time in January 2002. Its operational
range is 700 kilometers (about 435 miles). The 12-tonne missile is capable of carrying warheads weighing up
to 1 tonne.

GRSE bagged an order from the MoD for 4 x survey vessels from the MoD on 30th Oct 2018. Request for
Proposal was issued by Indian Navy to four PSU shipyards viz. GRSE, Goa Shipyard Limited (GSL), Hindustan
Shipyard Limited (HSL), Cochin Shipyard Limited (CSL) and two Indian Private Shipyards in April 2016, with
GRSE emerging as the lowest & successful bidder. The order value for these four vessels is Rs. 2435.15 crore.
The first ship is to be delivered within 36 months and remaining within an interval of six months for each
vessel. The project completion time is 54 months from date of signing the contract. With this prestigious
contract, GRSE’s Order Book as on date stands at Rs. 22,604 crore. The GRSE is currently handling a major
project to make three Stealth Frigates for Indian Navy under P17A Project. At the same time, USC, Russia,
was awarded the contract for the upgraded 2 x Krivak class III Frigates at USD 950 million.

HSL last month had won a tender for 2 x Diving Support Vessels. HSL has now issued an RFP for technical
collaboration for building 5 x Fleet Support Ships, to support operations of the Carrier Group.

Israel Aerospace Industries (IAI) announced that it has been awarded an additional, $777-million mega-
contract for supply of LRSAM Air & Missile Defense systems (the marine version of the AMD system Barak 8)
for seven ships of the Indian navy. The contract was entered with Indian state-owned company Bharat
Electronics Limited (BEL) which serves as the main contractor in the project.

Pilots training to join the Indian Air Force (IAF) and the Indian Navy are flying jets fitted with inferior engines
and “Category B” or “second-hand components” that seriously affect the “quality of the aircraft”, a recent
audit by the Comptroller General of Defence Accounts (CGDA) says. Faced with an ageing fleet of
intermediate jet trainers, India bought 123 Hawk - 106 for IAF and 17 for the Navy from British company
BAES in 2004. Twenty-eight of these 123 jets were to be bought in flyaway condition whereas the rest were
to be assembled by the state-owned Hindustan Aeronautics Limited (HAL) with the engines being made by it
based on technology transfer. The total value of the deal was about $2 billion. The aircraft were ordered in
three phases, starting March 2004. The problem is with the aircraft assembled here, according to the audit.

Fighter jets made by Hindustan Aeronautics Limited (HAL) cost more than the same jets produced abroad by
the original equipment manufacturer (OEM), a recent review of the state-owned company by the ministry of
defence (MoD) has found. Su-30MKI – the mainstay fighters of the Indian Air Force (IAF) which is
manufactured by HAL under licence from Russia – is about Rs 150 crore costlier than the ones made in
Russia, according to the document, a copy of which has been reviewed by Hindustan Times. “The aircraft
produced at HAL comes at a significantly higher cost when compared to direct purchase from the OEM,” the
document added. A Su-30MKI made in Russia cost Rs 269.77 crore whereas one made by HAL in India costs
Rs 417.69 crore, almost “Rs 150 crore” more per aircraft, the review said. Similarly, there is a huge cost
difference between the cost of the Hawk trainer aircraft manufactured by British Aerospace and those made
HAL. After long and tortuous negotiations, India bought British made Hawk jets to train pilots in 2004. Of the
initial 62 Hawk jets, 24 were to be bought in a fly-away condition and the remaining were to be


4 | DefInsights | November 2018

bought in a fly-away condition and the remaining were to be manufactured under licence by HAL. Each
Hawk aircraft manufactured Britain in 2004 cost Rs 78 Crore. Those manufactured at HAL would have cost Rs
88 crore that year. The cost Hawk aircraft produced by HAL continued to increase. In 2010, the cost shot-up
to Rs 98 crore and in 2016, Rs 153 crore. The difference in price “is primarily due to lesser efficiency and
exorbitant man hour rates,” the review has found.

India and Japan signed six agreements, including on a high-speed rail project and naval cooperation, and
agreed to hold 2+2 dialogue after Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe
held talks Monday during which they discussed a range of bilateral, regional and global issues including the
situation in the Indo-Pacific region. They agreed to hold a 2+2 dialogue between the foreign ministers and
defence ministers of the two countries. India has a similar agreement with the US and the two sides held the
first round of 2+2 dialogue in New Delhi last month. we are looking forward to the US-2 progress as it gets
listed in the joint statement, although an indirect reference.

After a thorough study and research, the Department of National Defense (DND), Phillipines, is most likely to
buy the Swedish-made Gripen, multi-role supersonic jet fighter for the Philippine Air Force (PAF). Defense
Secretary Delfin Lorenzana made this disclosure in an exclusive interview with the Philippine News Agency
(PNA). Lorenzana said aside from being cheaper and less expensive in maintenance cost, the Gripen has
been proven to be an excellent supersonic fighter aircraft with a top speed of Mach 2 or 1,236 kilometers
per hour, or twice the speed of sound. The Gripen has a delta wing and canard configuration and is powered
by the Volvo RM12. It is being used by various countries in Europe and the Middle East. The PAF has been
scouting for over a decade of what jetfighter aircraft it would buy to replace the US-made F5A/B jet
interceptors that retired in 2005 due to old age and lack of spare parts. Since the F-5s were pulled from
service, the Air Force tried to acquire advanced jetfighters such as the supersonic F-16 from the United
States, but no progress was made.

There is good news in terms of enhancement of financial powers of the Vice Chiefs. The Ministry of Defence
has delegated greater financial decision-making powers to Vice Chiefs of the three Services in order to
expedite the decision-making process involved in the revenue procurements of the Armed Forces. With the
new delegation, the Vice Chiefs will be able to exercise financial powers up to five times more than the
existing powers with an enhanced ceiling of Rs. 500 crores. This is likely to give another fillip to the capacity
of the three Armed Forces.

Raksha Mantri Smt Nirmala Sitharaman has taken this important decision to augment the arms and
ammunition reserves of the Armed Forces to enhance their operational preparedness.

Will the IFA continue to have a stranglehold, will this be of any value, or is there a case to do away with the
IFAs, while the Service Vice Chiefs exercise their powers?

The trade war between China and America is escalating and casting a long shadow of uncertainty on the
commercial future of the world. Do we see an exports opportunity here?

November 2018 | DefInsights | 5


Ashwini Sharma And Dr Navin Varma. Dept of Defence Studies, Meerut College, Meerut


India and China have multifaceted interests in ASEAN. Both countries work towards collaboration and co-
operation. Strategic interests of such major powers cannot be always complementing, but competing. India's
Act East Policy (AEP), which has major stakes in the ASEAN, thus ought to compete with the Chinese interests
in the region while charting its plan of action. Economic and security concerns of both countries assume
greater primacy and drive the significance of their interests in the competition. It is therefore imperative to
study as to how India and China are disposed off towards East Asian Nations and in turn, how they see their
role and influence in the region. This article discusses the strategic imperatives of India’s AEP.


Post Cold War developments at the domestic, regional and global level presented ample opportunities for
India and South-East Asia to develop close multi-faceted ties with huge potential for benefits for both sides.
To this effect, India’s launch of Look East Policy (LEP), which later evolved as Act East Policy (AEP) had its
focus primarily on Association of South East Asian Nations (ASEAN). Accordingly, ASEAN had since then
acquired priority in India’s foreign policy agenda and continues to receive sustained focus. The strategic
dimension of AEP has multiple facets of which security and economy assume prominence that are
deliberated in this paper.

Strategic Imperatives

The strategic underpinning and key drivers that have propelled India to pursue ‘Look East’ policy that
eventually graduated as AEP are essential as a prelude and discussed below. The LEP was evolved with an
attempt to rediscover Asia, restore and strengthen its past historical, cultural and economic relations with
the region of Southeast Asia that had for many decades been neglected. The chief drivers of the LEP are its
large and growing population and the need to sustain economic development in order to keep up with the
population, the need for natural resources and combating the potential regional or global security threats.
India’s current foreign policy especially as entrenched in the LEP is driven primarily by its desire to maintain,
sustain or increase its security. The necessity to address the challenges is brought about by the changed
world order. The policy evolved out of the need to developing stable political, economic and strategic


6 | DefInsights | November 2018

relations in the changing global scenario and the need to forge stronger ties with the countries of Southeast
Asia. At the political level, through the LEP, India seeks political integration with the Southeast Asian
countries and then to East Asia. The common security concerns relating to transnational crimes and
maritime security have brought India to closely engaging with the countries of Southeast Asia. India’s
strategic interests demand a close defence and security partnership with the countries of the region, both in
facing external threats and in meeting its aspirations to be a global power. By closely engaging strategically
with ASEAN, India seeks to hedge its vulnerability of eastern sectors. China’s expanding footprint in
Southeast Asia and in particular in Myanmar, is a case of concern for India. Besides, India seeks to prevent
the insurgent groups operating in Northeast region of our country from gaining shelter and support from the
Globalisation and Liberalisation
The process of globalization and liberalization had its own consequences for India’s AEP and its strategic
engagement with Southeast Asia. Post Cold War, liberalization of the Indian economy, and the launch of LEP,
have compelled India and ASEAN to strengthen the partnership and play a more proactive role in regional
and world affairs. It is also evident that the economic complementariness and the socio-cultural affiliation
with the ASEAN offered an opportunity for deeper engagement in the initial phases. With gaining political
understanding India has not only proved itself to be a reliable partner but also as a co-investor of political
and economic stability in South East Asia. The imperative for stronger ties stems from the political and
security environment, globalization, technological changes, and institutional foundations, is well evident in
the AEP framework.

November 2018 | DefInsights | 7

Geo-Strategic Interests

Geo-strategic interests of India and China in South East Asian region, are essential strategic dimension and
are discussed below. The substance of any strategic relationship depends on the closeness and depth of
interactions, the convergence of interests and the devotion of the countries to accommodate each other’s
concerns. It is driven by converging long-term political, economic and strategic interests, aspirations and
concerns, underpinned by a common commitment to democracy, open society, human rights, rule of law
and free market economy. India and ASEAN economies are among the most successful in terms of economic
growth and development. Their cooperation would be crucial for their economic progress and this would
reflect in their standing among the
countries of the world. India’s partnership
with ASEAN is well within these tenets
and has the potential to not only serve
the long-term interests of these countries,
but also enhance all-round cooperation to
address regional and global challenges.
India and ASEAN can help each other in
fulfillment of common objectives by
enhancing mutual cooperation in the
political, economic and strategic sphere.
Following are major geo-strategic
interests of AEP :-
1. Security of the Sea Lanes of
Communications (SLOCs)
2. Combating Terrorism and its Related
3. Supporting Peace, Security and Stability
in the Region

Convergence of Strategic and Economic Interests

It is evident in the way India conducted its business with ASEAN countries in last three decades, that
converging economic and strategic interests are bringing India and Southeast Asia together on stronger
footing. India and ASEAN economies are among the most successful in terms of economic growth and
development. Their cooperation would be crucial for their economic progress and this would reflect in their
standing among the countries of the world. India and ASEAN can help each other in the fulfillment of
common objective by enhancing mutual cooperation in the political, economic and strategic sphere. They
have in the recent past developed close convergence in security prospects and have vital stakes in peace,
security and stability in the region, including the fight against terrorism, piracy, arms and drug trafficking and
the security of the SLOC in Indian Ocean for smooth flow of raw materials, merchandise and energy
supplies. Establishment of ASEAN India Network of Think Tank (AINTT) in New Delhi can be seen as one of
the major strategic partnership forged between India and ASEAN. Joint fight against terrorism and security
of Sea Lanes of Communications, are another set of major considerations for strategic partnership between
India and ASEAN. However, this convergence should not be conceived or directed against the rise of China.
Economic and trade cooperation is an important aspect of the growing multi-dimensional partnership
between India and ASEAN. The potential of economic engagement can be reflected from the fact that both
the economies of ASEAN and India together account for US$ 2,809.58 million. India is one of the largest
economies of the Asian region and the ASEAN countries together have become both prominent and


8 | DefInsights | November 2018

influential owing to their increased importance in trade and commerce.

Influence of China

The possible measures, India can and should adopt to contain the influence of China over ASEAN countries
to enhance the effectiveness of its AEP, are outlined below. The role and influence of China over ASEAN is
well established. Much against India’s wishes, the economic ties between China and ASEAN are well above
that of India. In addition, the China’s soft power initiatives in the region are substantial and growing.
However, India can extend its cultural ties and economic co-operation slowly and steadily in the region.
Exploiting the cultural and traditional ties of North Easter Region (NER) with some of its needy neighbour,
are well within its capabilities. Military cooperation and joint exercises in Indian Ocean and Bay of Bengal, to
assert itself as superior maritime power continues to be its major option. India’s power projection and
strong partnerships in the region as a big brother, who understands and shares the interests of the region,
helps fostering better ties to contain China. Development of NER as a major trading route and economic
development in the region will eventually contain insurgency and bring in political stability, which is one of
the major concerns of India.


International relations are invariably based on mutual trust and mutual benefits. Cooperative endeavours
based on mutual trust and confidence will lead to enduring development and proper accomplishment of the
Policy. The very nature of LEP is based on this strategic underpinning. India’s growing geo-strategic interests
in East Asia and specially ASEAN, in the back drop of Chinese influence in the region, defines the strategic
dimensions. India’s globalization in the last two decades has resulted in a grand strategic shift in favour of
India. While the Chinese influence is predominant in the region, India has done fairly well to engage the East
Asian community and stay engaged. The ascendancy of India in regional forums of East and Southeast Asia,
is major evidence of India’s growing ties and reciprocity it enjoys. Convergence of economic and strategic
interests of India as well as China and ASEAN, coupled with policy shift and multitude of Free Trade
Agreements, help India foster better with ASEAN countries for common benefits.

• Baladas Ghosal(2013), “China's Perception of ‘India's LEP’ and Its Implications”, IDSA Monograph Series.
• Lalit Mansingh(2012), “The LEP and Its Implications for Eastern India”, in Amar Nath Ram (ed.), Two

Decades of India's LEP : Partnership for Peace, Progress and Prosperity, Manohar Publications, New
• S. D. Muni(2012), “LEP : Beyond Myths”, in Amar Nath Ram (ed.), Two Decades of India's LEP :
Partnership for Peace, Progress and Prosperity, Manohar Publications, New Delhi.
• Shankaran Nambiar(2011), “India's Engagement with ASEAN: Beyond Trade in Goods”, ISAS Working
• Surjit Mansingh(2005), “Indo-US Relations: A Closer Relationship?”, Economic and Political Weekly,
• Suryakanthi Tripathi(2012), “Impress the East, Know the East, Engage the East: India's Relations with
ASEAN”, Manohar Publications, New Delhi.
• Vikram Nehru(2013), “Six Reasons for India to Look and Act East”, accessed at http://

November 2018 | DefInsights | 9


Prime Minister Narendra Modi has shifted his entire focus on revival of the MSME sector, which may have
suffered the most in the wake of demonetisation and the implementation of the Goods and Services Tax
(GST). The prime minister launched ‘MSME Support and Outreach Program’ and announced twelve big
decisions to support the growth of small businesses in the country.

“The government has taken 12 decisions for the small industries which are like Diwali gifts for the sector,” the
prime minister said.

1. 59-minutes loans : The GST-registered micro, small and medium enterprises (MSMEs) will be sanctioned a
loan of Rs 1 crore in just 59 minutes through a new portal. Read how MSMEs can get loans in just 59 minutes.

2. Rebate in interest rate : The GST-registered MSMEs will get 2% subvention or rebate on incremental new
loans of up to Rs 1 crore. Interest subvention on pre- and post-shipment credit for exports by MSMEs has also
been increased from 3% to 5%.

3. Cash flow certainty : It is now mandatory for companies with a turnover of more than Rs 500 crore to join
Trade Receivables e- Discounting System (TReDS) so that MSMEs do not face trouble in cash flow, PM Modi

4. Procurement by PSUs : Public sector companies, which were mandated to source 20% of their annual
procurement from MSMEs, will now source at least a quarter of their requirement (25%) from the sector.

5. Women entrepreneurs : Out of the 25% procurement mandated from MSMEs, 3% must now be reserved
for women entrepreneurs.

6. Government e-Marketplace (GeM) : All central public sector enterprises will have to take membership of
the Government e-Marketplace (GeM) to facilitate online procurement of common use goods and services by
various government departments and organisations.

7. Technological upgradation : The government announced Rs 6,000 crore package to facilitate better
technological support and tools to small industries. The money will be used for 20 hubs and 100 tool rooms
for technology upgradation.

8. Pharma companies : The government will form MSME pharma clusters. 70% cost of establishing these
clusters will be borne by the government.

9. One annual return : MSMEs will have to file just one annual return on eight labour laws and 10 central

10. No more inspector raj : Inspections of factories in the MSME sector will be sanctioned only through a
computerised random allotment and inspectors will have to upload reports on the portal within 48 hours.

11. Relaxation in environmental clearances : MSMEs will now need single air and water clearance and just one
consent to establish a factory.

12. Ordinance in Companies Act : An ordinance has been promulgated to simplify the levy of penalties for

mi1no0r offences under the Companies Act.

10 | DefInsights | November 2018

November 2018 | DefInsights | 11


India-France relations have traditionally been close and friendly and both
countries share an exceptionally warm relationship. Both nations have more
than a few centuries old history of trade relations. With the establishment of
the strategic partnership in 1998, there has been significant progress in all
areas of bilateral cooperation through regular high-level exchanges at the
Head of State/Head of Government levels and growing commercial exchanges
including in strategic areas such as defence, nuclear energy and space.

Defence and Space Cooperation

By Sohil Patel Defence partnership and cooperation is built on historic French and Indian
military interactions which stretch back to the Carnatic Wars (circa 1740-1763).

A 400-strong contingent of the Indian armed forces led the Bastille Day parade

in 2009 for which the Prime Minister of India was the Guest of Honour, the first time ever that Indian

troops took part in another country’s national day parade.

Indo-French Air Force Exercise Garuda IV was held at Istres air base in France from 14–25 June 2010. Indo-
French Joint Naval Exercise Varuna was held in the Mediterranean Sea off the port of Toulon from 19–22
July 2012. The first Indo-France joint army exercise named Shakti was conducted in India at Chaubattia
from 9–22 October 2011. In 2013, Army chief General Bikram Singh visited Commandement des Forces
Terrestres Land Forces Command in Lille and the French Military School at Draguignan. In 2015, Vice
Admiral SPS Cheema, FOC-in-C West was hosted by the French Navy at Toulon. The Indo-French Joint Army
exercise was held in Rajasthan, India from 19–21 January 2016. The Indian and the French navies
conducted joint naval exercises, Varuna-18, off the coast of Goa from 20th to 24th March 2018.

ISRO and CNES (French National Space Agency) have an umbrella agreement, operating successfully since
1993, under which joint missions like Megha-Tropiques and SARAL have been successfully developed. ISRO
has launched French SPOT satellites (Spot-6 & SPOT-7) on PSLV satellite launch vehicles. More recently the
two agencies, ISRO and CNES, had agreed to work together on autonomous navigation of rovers on Moon,
Mars, and other planets, and aero-braking technologies for planetary exploration. They have been holding
discussions to work on inter-planetary missions to Mars and Venus as well.
Recent Developments
The recent visit of the French President Emmanuel Macron to India in March 2018 saw significant
advancements in cooperation between the two countries. Prime Minister Narendra Modi and French
President Emmanuel Macron held wide-ranging deliberations during which they also decided to create an
annual defence dialogue at the ministerial level to explore ways to further deepen defence and strategic
ties. The two countries also signed a pact on exchange and reciprocal protection of classified or protected
information which came in the backdrop of the Indian government refusing to divulge details of the multi-
billion dollar Indo-French Rafale fighter jet deal.

The Indo-French agreement on reciprocal logistics support for armed forces came nearly two years after
India signed a similar pact with the US on use of each other's land, air and naval bases. The agreement will
facilitate the reciprocal provision of logistic support, supplies and services between the armed forces of the
two countries during authorised port visits, joint exercises and joint training among others. "Our defence


12 | DefInsights | November 2018

cooperation is very strong and we consider France among the most trusted defence partners" Prime
Minister Modi said in a statement to the media.
Raksha Mantri (RM) Smt. Nirmala Sitharaman visited France from October 11-12, 2018 for the first India-
France Ministerial level annual defence dialogue with her French counterpart, the Minister for the Armed
Forces Ms. Florence Parly. During her visit Smt Sitharaman also interacted with CEOs of French defence
industry and visited a defence manufacturing site.

During the defence dialogue held on October 11, 2018 in Paris, the two Ministers comprehensively
reviewed the entire gamut of the bilateral defence cooperation, which is a key pillar of the India-France
Strategic Partnership. They also exchanged views on contemporary regional & international developments
of mutual interest.
Both sides discussed ways to deepen defence related official as well as operational level interactions. It was
agreed to expand the scope and complexity of the regular joint exercises (SHAKTI, VARUNA and GARUDA)
in the future.
In her interaction with the top leaders of the French defence industry, RM urged them to undertake and
expand their defence manufacturing in India under the Make in India initiative as well as promote defence
technology and R&D cooperation with Indian stakeholders such as Bharat Dynamics Limited, Hindustan
Aeronautics Limited, Bharat Electronics Limited, Bharat Earth Movers Limited, Goa Shipyard Limited,
Mazagaon Dock Shipbuilders Limited etc.
The Defence Minister also visited a production facility of French aerospace major Dassault Aviation near
Paris where the Rafale jets to be supplied to India are being manufactured, official sources said.
During her visit to the plant in Argenteuil, Sitharaman spoke to officials of Dassault Aviation, the makers of
Rafale, and took stock of progress in production of the fighter jets whose delivery to India will begin in
September next year.

November 2018 | DefInsights | 13

Defence Industry Outlook
The French defence industry has been supplying military equipment to India since 1949. 71 MD-450
Ouragan aircraft were acquired in 1953 which was followed by purchase of 110 Mystere-4A fighters and
164 AMX-13/Model-51 light tanks in 1956 followed by 12 Alize anti-submarine warfare aircraft and the
popular SA-316 B Alouette light helicopters (HAL Chetak). French companies also supplied three Alize
aircraft, 50 AS-30 Air to Surface missiles, 2000 ENTAC and 4000 SS-11 Anti-tank missiles during 1970s. 36
single-seat Mirage 2000Hs and 4 twin-seat Mirage 2000THs were procured from Dassault Aviation in
Today all the major French Defence manufactures have their presence in India. Airbus, Dassault Aviation,
Thales, Naval Group, Safran and MBDA have strong establishments in India.

Safran, which has a significant presence in India across commercial aerospace and defence segments, has
inked a USD 12.5 billion worth deal with SpiceJet for CFM aircraft engines. There are also ongoing
discussions between DRDO and Safran on developing a combat aircraft engine for LCA Tejas.

Six Scorpene-class submarines are currently being built under 'Project 75' of the Indian Navy. The
submarines, designed by French firm Naval Group, are being built by the Mazagon Dock Limited in
Mumbai. The third Scorpene-class submarine Karanj was launched at MDL in Jan 2018. There is project P-
75 (I) which will be a follow-on for Project 75.

Airbus Group in India is ready to transfer critical technology to India for the helicopter programme and
discussions are underway on it with the Defence Ministry and other stakeholders. Airbus has offered its
H225M helicopter in response to the Indian Navy's initial tender for 123 Naval Multi Role Helicopters
(NMRH) and the model AS565 Panther for the 111 naval utility helicopter (NUH) requirement.

All these programs along with India’s strong focus on Make in India coupled with the Defence Offset
obligations on the FOEM provide a tremendous opportunity for the Indian Defence Industry to
collaborate and partner with French Defence companies to fulfil the requirements of the Indian Armed

14 | DefInsights | November 2018

Industry Buzz

On the Air force day, the Indian Air Force launched the “Mehar Baba Swarm Drone” Competition -
named after Air Commodore Mehar Singh – and the winner will be awarded a contract worth ₹ 100
Crore INR, and the acquisition procedure will be through Buy Indian IIDM. The interested participants –
also open to Start Ups & MSMEs - will have to submit their entries by 14th November 2018

Swarm drones - Unlike the traditional drones which are large, and can carry bulky payloads - are
miniature drones with limited capabilities, but are very effective in a bunch, and operate akin to a flock
of birds. These swarm of tiny man-made “birds” are categorized under smart weapons and can be
produced in large numbers - thousands at a time – using 3D technology, making it a cost-effective
alternative. They can also be quite potent, when armed with small weapons

IAF REQUIREMENTS: IAF intends to use these Swarm for civilian purposes, such as relief and rescue
operations. Broad specifications of the Swarm for IAF requirement are that they have a range of 100
Km; payload carrying capability of 1 Kg; endurance of 1 Hour, and portable Ground Control Unit (GCU)
which supports control of up to 50 drones by a single operator. The contest is in three phase, as
Phase 1: Presentations will be decided by 28th December 2018, and ₹ 25 lakh development cost will be

Phase 2: Using 10 drones as a swarm and fitted with GPS, the capabilities of the drones such as, 50 Km
range, at an altitude of 3,300 ft. ₹10 Crore will be reimbursed

Phase 3: There will be 50 drones per Swarm, and will have to fly 100 Km


The MoD has awarded the OFB ₹ 200 Crore
order to up gun the vintage 130 mm M-46
artillery guns to 155/45 mm caliber. With 300
towed artillery guns of 130 mm M-46 in the
Indian Army’s inventory, spread across fifteen
regiments, the upgunning project is likely to be
completed and supplied to the Indian army by


The MoD has tweaked the “buy & Make”
procedure of the DPP-2016, to be able to select private companies for weapons production bought
from foreign vendors with the ToT. This will also be applicable to G2G deals. The selected private
companies will be selected based on the following eligibility criteria:

• The selected Indian company should have at least two years of experience in the defence industry,
and should have strong manufacturing capabilities

• The selected private company should be controlled by Indians

November 2018 | DefInsights | 15

Industry Buzz

• The company’s turnover should be more than 10% of the project value for the last two financial years

• The company should have clean financial records, with no history of willful defaulting etc.


IAI has confirmed that it was awarded the $777
Million U$D order from India for the purchase the
Barak 8 defence systems, for the Indian Navy. The
deal with Bharat Electronics Limited is meant to
equip seven more ships with the Barak 8 missile
defence system

Incidentally, an order worth ₹200 Crore, has been
awarded to the DPSU Bharat Dynamics Limited (BDL)
by Defence Research and Development Organisation
(DRDO) for the supply of the rear section of Medium
Range Surface to Air Missile (MR-SAM). MRSAM is a
joint development project between DRDO and Israel
Aerospace Industries, Israel and BDL is the
Nominated Production Agency


Sterlite Tech has subcontracted country wide digital communication project to Tejas Networks, worth ₹111
Crore. The scope of the project includes supply of terabit capacity DWDM systems and Layer-3 multi gigabit
Ethernet switches, by Tejas Networks. This project is part of the larger multi-year contract awarded to
Sterlite Tech by the Indian Navy’s communication network to link multiple Indian naval offices and India-
administered islands. Sterlite bagged this contract recently for ₹3,500 Crore, and the scope includes design,
execution, operations and maintenance of the Navy Digital Network


The Defence Acquisition Council (DAC)
chaired by the Defence Minister Nirmala
Sitharaman, has approved the mid-life
upgrade of 17 Dornier aircraft of the
Indian Coast Guard (ICG) at a cost of
₹950 crore. The Coast Guard has a fleet
of Dornier aircraft which plays a pivotal
role in maritime surveillance. The
upgrade will enhance the capabilities of
the fleet, which will be fitted with the
state-of-the-art technology, spares,
special maintenance tools (SMT) and
special test equipment (STE). The Indian
Coast Guard is responsible for
protecting the national interests in


16 | DefInsights | November 2018

Industry Buzz

in maritime zones of the country which entails surveillance of sea areas of approximately 2.01 million square
km of India's Exclusive Economic Zone (EEZ)

UAE Minister of State for Defence Affairs, Mohammed Ahmed Al Bowardi Al Falacy is keen on buying the
totally indigenous Akash Missile, designed and developed by Defence Research and Development
Organisation (DRDO) and produced by defence PSU Bharat Electronics Ltd (BEL). If the deal goes through, it
will be the first time for India to export a system like this to a Gulf country.

The Akash Missile is a surface-
to-air missile system (SAM),
packed with a battery that can
track and attack several targets
simultaneously; the missile can
carry a warhead of 60 kgs and
can hit the target up to 30
Kms. The missile can be
launched from static or mobile
platforms and can handle multi
-target and destroy
manoeuvring targets such as
unmanned aerial vehicles
(UAV), fighter aircraft, cruise
missiles and missiles launched
from helicopters. The Akash
missile is comparable to the
SPYDER (Surface-to-air Python
and Derby) Missile of Israel.
The SPYDER is a short and medium range mobile air defence system developed by Rafael Advanced Defence
Systems with assistance from Israel Aerospace Industries (IAI)

 INS Arihant: India’s first nuclear ballistic missile submarine completes deterrence run

The indigenous INS Arihant India’s first nuclear-powered submarine successfully completed its first
deterrence patrol on 5 Nov 2018, is a watershed event making India only the sixth nation after the Big 5 to
achieve this capability, according to experts.

The ship submersible ballistic, nuclear (SSBN) submarine is part of Indian Navy’s India’s Eastern Naval
Command. The name Arihant derives from two words – Ari meaning enemy and Hanth meaning destroy. The
second SSBN under the project, INS Aridhaman, is undergoing sea trials. These submarines are part of a top-
secret project under which India aims to have at least five nuclear submarines.

A nuclear triad refers to strategic bombers, intercontinental ballistic missiles (ICBMs) and submarine-
launched ballistic missile (SLBM)., in other words the capability of firing nuclear weapons from land, air and

November 2018 | DefInsights | 17

Defence Procurement Procedure Primer

Part 7 – Procurement Procedure for ‘Buy’ and ‘Buy
and Make’

In part 6 of the primer we began with chapter 2 of the DPP 2016 and the
procurement procedure for categories under ‘Buy’ and ‘Buy and Make’
schemes. We covered the RFI and SQR thus far, we shall continue from the
next phase i.e. Acceptance of Necessity (AoN)

(c) Acceptance of Necessity (AoN)

In order to seek AoN, the SHQs would prepare a SoC and draft RFP. One copy

By Sohil Patel each would be forwarded to DDP, DRDO, MoD (Fin), Acquisition Manager,

Technical Manager and Administrative Branch of MoD. The SoC would include

the total quantities required, the break up based on five years plans and the quantity that is required to be

procured in next two years. The SoC would thereafter be placed for consideration of the Categorisation

Committees (SCAPCC/SCAPCHC).

After evaluating the recommendations of the SHQs/initiating departments, the SCAPCC/HC will refer the
cases for according AoN

• to SCAPCHC for an estimated cost up to ₹150 Crores.

• to DPB for the cases upto ₹ 300 Crores

• to DAC for the cases beyond ₹ 300 Crores

Timeframe: 4-6 weeks

Cases in which Transfer of Technology (ToT) is being sought, the appropriate Production Agency (PA) would
be approved by the AoN according authority. The PA could be selected from any of the public/private firms
including a joint venture company based on the inputs from DDP and if required, from DRDO.

AoN Validity for categories under ‘Buy’ and ‘Buy and Make’ is six months and one year in case of ‘Buy and
Make (Indian)’ category and all Turnkey projects. AoN would lapse for all cases where the RFP for approved
quantity is not issued within the original validity period of AoN.

Preference will be given to indigenous design, development and manufacturing of defence equipment.

(d) Solicitation of offers

Will be as per ‘Single Stage - Two Bid System’. It will imply that a RFP would be issued soliciting the
technical and commercial bids together, but in two separate and sealed envelopes.

RFP : Vetting And Issue

 draft RFP will be circulated to AM, TM, FM and other stakeholders.

 In cases where ToT is being sought, the nominated PA would prepare the detailed ToT requirements for
inclusion in the RFP.

 Approval of DG (Acq)/VCOAS/VCNS/DCAS/CISC/DG ICG for issue of RFP would be obtained after accord
of AoN.

18 The RFP will be issued by the respective TMs.

18 | DefInsights | November 2018

Request for Proposal (RFP)

The RFP will be a self-contained document that will enable vendors to make their offer after
consideration of full requirements of the acquisition. It will generally consist of four parts as under:

 The first part elaborates the general requirement of the equipment, the numbers required, the
time frame for deliveries, the environmental parameters for functioning, conditions of usage and
maintenance, requirement for training, Engineering Support Package (ESP), Offset obligations (if
applicable) and warranty/guarantee conditions etc. It specifies the prescribed procedure and last
date and time for submission of offers.

 The second part of the RFP incorporates the SQRs describing the technical parameters of the
proposed equipment in clear and unambiguous terms.

 The third part of the RFP outlines the commercial aspects of the procurement, including clear
statements on Payment Terms, Performance-cum-Warranty Guarantees, and Additional Bank
Guarantee in respect of Essential Parameters-B (if applicable)

 The fourth part of the RFP defines the criteria for evaluation, trial methodology and acceptance,
both in terms of technical and commercial contents.

In cases where ToT is involved, the RFP would include the requirement for indigenous manufacturing
under ToT.

In case a single bid is received at the bid submission stage, SHQ may proceed with the process and
complete the Technical Evaluation without retracting the RFP.

(e) Technical Evaluation Committee (TEC)

A TEC will be constituted by the SHQ for evaluation of the technical bids received in response to RFPs,
with reference to the QRs, under an officer from the SHQ.

It will include representatives of the user service, maintenance agency and representatives of QA.

A technical offer, once submitted, should not undergo subsequent material changes, except for the

(a) To ensure fair play, an opportunity to revise minor technical details should be accorded to
all vendors in equal measure.

(b) No extra time to be given to any vendor to upgrade their product to make it SQR compliant;
except in case of Essential Parameters-B, as detailed in Para 10.2 (Chapter II).

(c) No dilution of SQR is carried out.

(d) The original commercial quote submitted earlier must remain firm and fixed.

The DG (Acquisition) will formally accept the report of the TEC, after due examination by the TM

I shall conclude this primer here and will continue the procurement procedure in Part 8.

November 2018 | DefInsights | 19

GKN Aerospace India extends its CSR initiatives
to bridge the skill gap of rural students

Bengaluru, 5th November 2018
GKN Aerospace India (GAI), a global first tier supplier of complex wing and fuselage structures and engine
components, is pleased to announce the successful implementation of their CSR initiative. GAI partnered
with Aerospace and Aviation Sector Skill Council (AASSC) and P3 Academy (P3A) to bridge the skill gap of
engineering students from rural and underprivileged background across India.
Formed under the aegis of Skill India and funded by GAI, these students were trained in the Aerospace
Structural Engineering. The complete training program was managed and executed by P3A, a leading
engineering training solutions provider in aerospace, automotive and other high-tech domains. The course
was defined and qualified by AASSC, an organization formed under the Ministry of Skill Development and
Entrepreneurship. The collaborative efforts of government and private initiative has resulted in positive
social impact by creating high skilled aerospace engineering jobs for underprivileged students.
To commemorate the successful completion of this program, a certificate distribution ceremony was held on
31st October at GKN Aerospace India Bengaluru facility. The Chief Guest for the certificate distribution was
Mr. Dominic McAllister, UK Deputy High Commissioner to India.
Speaking on the occasion David Orth, GKN Aerospace India said, “It gives me immense pleasure to be among
the students who have been trained by P3A and I express my gratitude to AASSC and P3A for supporting our
Corporate Social Responsibility initiatives.”

20 | DefInsights | November 2018

Prarthana U, GKN Aerospace India,
gave an overview of the project
and thanked Peter Immanuel, the
Chief Executive Officer of
Aerospace and Aviation Sector Skill
Council and Anurag Sharma and
Sharath Keremane from P3
Academy for collaborating with
GKN Aerospace India towards their
Corporate Social Responsibility.

Peter Immanuel, CEO, AASSC
spoke on the project and said that
it is an honor for AASSC to be
associated with the project and
facilitate the CSR partnership
between two aerospace companies. The Skill Training for Youth through P3A was under the complete
oversight of AASSC as part of the CSR commitment of GKN Aerospace India. He also gave a word of
advice to the students for their future careers.

Deepak Rawat, Director, P3 India said, “I am happy to see this partnership flourish with GKN
Aerospace India and I am proud to be part of the certificate distribution to the students. It is one of
the best CSR utilization, which besides serving its primary purpose, also benefits the aerospace
industry, it’s a win-win situation.

Dominic McAllister, UK Deputy High Commissioner to India said that he was overwhelmed to be
invited as a Chief Guest for the certificate distribution ceremony and it is great to recognize the hard
work and efforts of GKN Aerospace India, P3A and AASSC in making this project a huge success.
The course completion certificates to the 10 students were distributed by Dominic McAllister, David
Orth, Prarthana U, Deepak Rawat, Anurag Sharma and Peter Immanuel.

Immense thanks goes to the CSR team of GKN Aerospace India: Prarthana U., David Orth and Cedric
Dsouza, AASSC Team: Peter Immanuel and Chetan S. and P3A Project Team: Sharath Keremane,
Anurag Sharma and Charles Martin for successfully implementing the project.

About GKN Aerospace: GKN Aerospace is a world leading global tier one supplier of airframe and
engine structures, components, assemblies and transparencies to a wide range of aircraft and engine
prime contractors and other tier one suppliers. More details:

About Aerospace and Aviation Sector Skill Council (AASSC): AASSC has been formed under the
Government Ministry of Skill Development and Entrepreneurship and industry led initiative to skill
Indian labour force. AASSC is one of the various Sector Skill Councils (SSC) which has been formed with
the help of grant from National Skill Development Corporation (NSDC). More details: http://

About P3 Academy: P3 Academy is a training initiative of P3 Group. P3 Group provides Engineering
and Consultancy excellence in numerous sectors, including Automotive, Aerospace, Energy,
Telecommunications and Public Sector. More details:

November 2018 | DefInsights | 21

Business Opportunities : November 2018

12th Nov 2018 RFP-Open
1 Composite Indoor Shooting Assam Rifles


2 3DS MAX Design Software 12th Nov 2018 CSL MAT/PRM2/168/17-18 RFP-Open

3 Supply of Fabrication and Supply 3rd Dec 2018 DRDO DL/ST/1602/2018-19/ENQ RFP-Open

of High Altitude Water Purifica- -110

tion System (HAWPS)

4 Supply of High Temperature Hall 3rd Dec 2018 DRDO DL/ST/1610/2018-19/FE/ RFP-Open

Measurement System ENQ-16
5 Development of Electro- 8th Nov 2018 DRDO-NSTL NSTL/19FCT009/LP2B/18- RFP-Open

Magnetic Gun for Super Cavi- 19/OT32

tating Projectile
6 Realization of RF Modules, Mod- 27th Nov 2018 DRDO-LRDE LRDE/MMFD-PUR/18-19/ EoI

ule Controllers, and DC Power EOI-04

Supplies (As per Scope of work)

7 Biological Agent Detector 26th Nov 2018 DRDO- LASTEC/LP/BU/CAP/ RFP-Open

LASTEC 19LBD011/110/18-19

8 Online Invitation of Bids for Rug- 13 Nov 2018 DRDO-CABS CABS/19ATT139/18-19 RFP-Open
ged Communication Control Unit

9 Video Conversion, Buffering and 22nd Nov 2018 DRDO-ADE ADE/MMD/180114/A/ RFP-Open
Two Bid
Streaming Unit for flight simula- DRDO-
tor DRDO

10 Thermal Management System 19th Nov 2018 DDP LASTEC/LP/P-272/103/18- RFP-Open
19 RFP-Open
11 Supply, Installation and Commis- 22nd Nov 2018 GSL
sioning of Surface Grinding Ma- PM/OPEN/RR/05/2018-
chine 19/ENGG

12 Supply Erection and Commission- 21st Nov 2018 3350/01RR1819/ RFP-Open
ing of Air Compressor Capacity AIRCOMP/1819/EO
(FAD) minimum 550 CFM
GSL/OS/1235-37/E/13B RFP-Open
13 Shipping in, installation, installa- 15th Nov 2018 dated 16.10.18
tion inspection, STW and trials of
engineering Auxiliary machinery HSL BD/FP/FSSRFP/8101135 RFP-Open
(Part II) onboard 105M CGOPVs,
Yard 1235-37 IHQ of MOD 54793/22/HQ32 WEU RFP-Open
(Navy) RFP - Open
14 RFP towards selection of collabo- 04th Jan 2019 15/GSL/GES/FRPBOATS/
rator towards construction of 05 GSL Goa Police/Glasses dt
Nos. Fleet Support Ships (FSS) 20.08.18

14 Procurement and Installation of 08th Nov 2018
CCTV Camera

15 Supply of Bullet Resistant Glasses 10th Sep 2018
for 5t and 12t frp boats

22 | DefInsights | November 2018

Business Opportunities : November 2018


16 Installation of heavy duty Video 12th Nov 2018 IHQ of MOD 747/DATAWALL RFP-Open
Wall (Navy)

17 Development and Supply of PG 12th Dec 2018 IAF DEVELOPMENT OF PG RFP-Open
70 Hydraulic Jack for IL76 AWACS 70 HYDRAULIC JACK
IAF 5BRD/6251/5/3/ISC(T) EoI-Limited
18 EoI for Indigenous Development 26th Nov 2018

19 Procurement of Autonomous 16th Nov 2018 Indian Navy DD/2605/PAUV DT 17 RFP-Open
Underwater Vehicle(PAUV) MIDHANI SEP 18
20 Supply of Bullet Resistance Jacket 05th Nov 2018 MDL MDNPUR/0381104/ National
as per Scope of Work DoS RMELT/662/1819 Competitive
21 Machining of Super Alloy Materi- 05th Nov 2018 MDNPUR/4687044/ RFP-Open
al OFEADVT241/1819
EY/CD/P75/ RFP-Open
22 Additional Procurement of Alu- 23rd Nov 2018 PG/1200001477

minium Profiles (US01-C) for Yard

11880 for PROJECT P75

23 FPGA Board 23rd Nov 2018 MCF/ RFP-Limited

24 Installation and commissioning of 26th Nov 2018 WW/Bhuj/Marine// RFP-Open
TVRO System at Floating BOP TVRO/2018/9828 dtd
(vessel) 27/10/18

25 Target System Electronic Pop Up 04th Dec 2018 DG,CRPF,MHA U.II-1249/2018-19- RFP-Open
Target Electronic Turning Target PROC-1
systems and Electronic Moving
Target system colour Camouflage Indian Army RFI

26 RFI for 60MM Mortar along with 24th Dec 2018

27 RFI for Light Vehicle GS 4x4 800 14th Dec 2018 Indian Army RFI
KG (Soft Top) Indian Army RFI

28 RFI for Night Sight(TI) for 30th Nov

7.62MM Mag 58 2A1 Medium

Machine Gun for Indian Army

29 RFI for Lorry 5/7.5 Ton GS 4X4 14th Dec 2018 Indian Army RFI
Indian Army RFI
30 RFI for 2 KL Water Bowser Fabri- 14th Dec 2018
cated on Truck 2.5 Ton 4X4 GS

November 2018 | DefInsights | 23

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