Russian experts to visit India soon to evaluate prospective partner companies
By Ajai Shukla
Business Standard, 19th Sept 15
Business Standard learns that the Khemka-owned Sun Group, which enjoys influence with leaders in Moscow, has recommended to Russian Helicopters the names of four-five Indian companies from which to select a partner for manufacturing the Kamov-226T light helicopter in India.
With the Sun Group scion, Shiv Khemka, on the board of Russian Helicopters, the Indian group regards its role as “shepherding the Russian company” through the process of establishing a production line in India, say sources close to the company.
The prospective Indian partners include public sector giant, Hindustan Aeronautics Ltd (HAL), and Anil Ambani’s Reliance Defence and Aerospace (RDA).
It is learnt that a team of Russian Helicopter officials will visit India shortly to evaluated the capacities and capabilities of the Indian corporations recommended by the Sun Group. Based on their evaluation, Moscow would finalise an Indian partner.
The Russian government hopes to sign an inter-governmental agreement (IGA) with New Delhi when Prime Minister Narendra Modi visits Russia later this year for his annual summit meeting with Russia’s president, Vladimir Putin.
An IGA would constitute a firm commitment for New Delhi and Moscow to oversee the building of the Kamov-226T in India. An IGA would also release the acquisition from the restrictive provisions of India’s defence procurement procedure (DPP).
So far, there is no written agreement to procure the Kamov-226T, only a statement by Mr Modi after Mr Putin requested him in their annual summit meeting last December to choose the Kamov-226T for India’s requirement of 197 reconnaissance and support helicopters (RSH).
In that statement on December 11, 2014, Modi said: “I am pleased that Russia has offered to fully manufacture in India one of its most advanced helicopters. It includes the possibility of exports from India. It can be used for both military and civilian use. We will follow up on this quickly.”
This effectively shut down a tender, issued by New Delhi last October, for buying 197 helicopters in the “Buy & Make (Indian)” category of the DPP. In responding to that, HAL had partnered Russian Helicopters in offering to build the Kamov-226T in India.
Separately, Russian Helicopters has a Memorandum of Understanding with Reliance Group’s RDA. Dismissing the Sun Group’s mediation, RDA sources claim Russian Helicopters has already decided to partner the Ambanis in building the Kamov-226T. They say Russian Helicopters has written to the ministry accordingly.
Defence ministry officials say no such intimation has been received from Moscow. The Sun Group and the Ambani Group have declined comment.
Top Russian officials, including Sergey Chemezov, the powerful chief of Rostec, say New Delhi will choose the Indian partner, not Moscow. “It is up to the Indian government to decide who to grant this project, who they feel is better suited for this. For us this is no different, we could work with either”, Chemezov told Business Standard at last month’s MAKS 2015 air show in Moscow.
Aerospace industry experts say the estimated one billion dollar order for co-producing 197 Kamov-226T helicopters in India is crucially important for Russian Helicopters. With falling oil prices and western economic sanctions over Ukraine stalling Russia’s rearmament plan, galvanised exports are essential for the Russian aerospace industry.
India, a traditional buyer of Soviet and Russian weaponry, has been an especially big customer of Russian Helicopters, the state-owned monopoly for helicopter design and manufacture. Since 2011, India has bought 151 Mi-17V-5 helicopters, of which the Indian Air Force (IAF) operates 139. In July, the IAF revealed it would order another 48 Mi-17V-5s for an estimated Rs 6,980 crore. These “medium lift helicopters” supply army pickets on the Himalayan border that are unconnected by road. They are also used for VVIP travel.
In addition, the navy relies heavily on Kamov-28 and Kamov-31 helicopters, which operate from warship decks on anti-submarine warfare missions and for airborne early warning and control.
In contrast, the smaller and lighter Kamov-226T will replace the IAF’s aging fleet of Chetak and Cheetah helicopters, which carry 3-5 passengers each. To enhance its high altitude performance, it has been modified with the Turbomeca Arrius 2G1 engines.
Separately, HAL is designing and manufacturing 187 “light utility helicopters”, which would serve the same purpose.