Friday, 29 June 2018

Dassault offers Rafale, stage set for MMRCA 2.0

If no other vendor appears before July 6, IAF will find itself conducting what experts disparage as MMRCA 2.0

By Ajai Shukla
Business Standard, 29th June 18

French aerospace vendor Dassault says it will offer the Rafale in a global tender floated by the Indian Air Force (IAF) on April 6, inviting vendor interest for supplying 110 fighter aircraft.

Dassault’s representative in India, Posina Venkata Rao, confirmed to Business Standard on Wednesday that the Rafale would be fielded in the contest.

That sets the stage for a re-run of the failed “medium multi-role combat aircraft” (MMRCA) procurement that the IAF conceived in 2000, officially tendered in 2007 and eventually abandoned in 2015.

With Airbus Defence and Space confirming on Tuesday that Eurofighter GmbH would offer the Typhoon fighter to India the IAF will have to choose from the same six vendors that participated in the aborted MMRCA tender.

The other four contenders in that procurement – Swedish company, Saab, Russia Aircraft Corporation (RAC), and US vendors Lockheed Martin and Boeing have already signalled their eagerness to participate in the new tender.

If no other fighter manufacturer makes a surprise appearance before July 6, the date by which vendors must respond to an IAF request for information (RFI), the IAF will find itself conducting what aerospace industry experts disparage as MMRCA 2.0.

Aviation analysts wonder how the IAF will go about flight-testing six aircraft, when it had already announced in 2011, at the conclusion of the MMRCA testing process, that only two – the Rafale and Typhoon – met its requirements. The F/A-18E/F Super Hornet, F-16 Super Viper, Gripen C/D and MiG-35 were all rejected as inadequate.

After selecting the Rafale, negotiations broke down over its price and “Make in India” terms. Eventually, the government bought 36 Rafales, in fly-away condition, to alleviate the IAF’s dire shortfall of fighter aircraft.

“Clearly, the IAF will have to scale down performance expectations this time. Else it might be left with the same choices that it found unacceptable in the MMRCA tender”, says one aviation expert.

Of the six vendors in MMRCA 2.0, Boeing is offering the same aircraft, the F/A-18E/F Super Hornet, which it intends to build in India with Hindustan Aeronautics Ltd (HAL) and Mahindra. Like Dassault, Boeing will leverage its offer with another simultaneous tender for 57 carrier-borne fighters for the Indian Navy (IN).

Lockheed Martin has offered the F-16 Block 70, a cosmetic improvement over the F-16 Super Viper it offered the last time. It has tied up with the Tata Group to shift the F-16 production line to India, provided it wins the contract. However, IAF pilots see the Block 70 as little better than the Super Viper, and remain wary of buying an aircraft so closely associated with the Pakistan Air Force.

RAC plans to offer the same MiG-35 as it did for the MMRCA contest, with no indication yet about whom it will partner to build the fighter in India. While it remains a dark horse in this race, analysts point out that both the IAF and IN already fly the MiG-29 – the baseline fighter for the MiG-35.

Only Saab is offering a significantly improved fighter, the new Gripen E. In contrast to the Gripen C/D that Saab offered in the MMRCA contest, the Gripen E has a more powerful General Electric F-414 engine, newer avionics, more payload and greater range. If it meets the IAF’s performance requirements, this single-engine aircraft (like the F-16, but without that fighter’s drawbacks) will have the advantage of being priced more cheaply than the larger, twin-engine F-18, MiG-35, Typhoon and Rafale.

Industry estimates are that single engine fighters would cost about $80-85 million each, while twin-engine fighters would be priced closer to $120 million apiece. Given the Defence Procurement Procedure’s emphasis on cost, that could be a winning advantage for a single-engine fighter that meets the IAF’s performance requirements.

The RFI of April 6 called for vendor proposals for supplying 110 fighters, of which 75 per cent (82-83 fighters) would be single-seat aircrafts, while the remaining 27-28 fighters would be twin-seat variants.

The emphasis was on “Make in India”, with no more than 15 per cent of the order – or 16-17 fighters – to be supplied fully built. The RFI specified that a “Strategic Partner/ Indian Production Agency” must build the remaining 93-94 aircraft in India.

That leaves the door open for both private firms and HAL to be the Indian partner.

Delivery of the 16-17 ready built fighters must begin within 36 months, and be completed within 60 months of the contract. The fighters built in India must start being delivered 5 years from the contract and delivery completed 12 years from the signing date.

In the RFI, the IAF has stated it wants a “day and night capable, all weather, multi-role combat aircraft.” It must outperform enemy aircraft in air-to-air combat, strike ground targets, and do reconnaissance, electronic warfare and air-to-air refuelling. It must also be capable of maritime strike, i.e. destroying targets far out to sea.

Based on the RFI responses, the IAF will issue vendors a formal tender. That will be followed by a process – which in the past has lasted years – of technical and flying trials, cost evaluation and then price negotiation with the winning vendor. 

Haley talks up US-India ties, says trade differences are “growing pains”



By Ajai Shukla
Business Standard, 29th June 18

Nikki Haley, America’s envoy to the United Nations and reputedly a confidant of President Donald Trump, stated in New Delhi on Thursday that the last minute postponement of a high-level US-India meeting did not reflect any tensions or disagreements in the relationship between the two countries.

On Wednesday, US Secretary of State, Mike Pompeo had called up Indian Foreign Minister Sushma Swaraj to postpone a “two-plus-two” meeting on unspecified grounds. The meeting, scheduled for July 6 in Washington, was between Pompeo, US Secretary of Defense Jim Mattis, Swaraj and Defence Minister Nirmala Sitharaman.

“The delay in that meeting was completely unrelated to India. The time and location are being rescheduled now. It will happen very soon. This is an important sign of how much our defence and security has grown in recent years; a new level of strategic confidence in our partnership”, said Haley.

This is the second time the “two-plus-two” meeting has been postponed. Originally planned for April, it was put off after Trump fired then Secretary of State Rex Tillerson in March and his successor, Pompeo, had to be confirmed by the US Congress before assuming office.

Hailing the two-plus-two dialogue as “a new milestone”, Haley said, “[The US-India] relationship is stronger now, and the opportunities greater now than they have ever been.”

Pressing the right buttons on Pakistan, Haley said the Trump administration values Pakistan as a partner, but it would never tolerate that country becoming a haven for terrorists.”

Haley took a swipe at China’s Belt and Road Initiative (BRI), saying that project disrespected countries’ sovereign rights.

She contrasted that with India’s vision for free trade in the Indo-Pacific, hailing Prime Minister Narendra Modi’s allusion to this in his speech on June 1 at the Shangri-La Dialogue in Singapore.

Downplaying trade disagreements as “growing pains”, Haley pointing to the doubling of trade volumes over recent years. “The fact that we’re talking about trade is a good thing… Where you have this many discussions, it means you have a lot in common. It means you’re doing more business together. It means you’re communicating more. And it means that you’re going through the growing pains of doing that.”

Even so, there are growing trade disputes between Washington and New Delhi. After Trump hiked tariffs on Indian steel and aluminium, India raised import duties on US farm products last week.

Asked about US sanctions on Iran, which could create difficulties in India-Iran ties, Haley indicated India would face increased pressure to reduce dealings with Iran.

I did [talk about this] with Prime Minister Modi and… I think India also recognises the threat from Iran. The US is going to continue to try and work with our partners, our friends and our allies to make sure that we are all pushing Iran to be a good, accountable, international member”, she said.

“We’re going to keep the pressure on Iran and hope that other countries will join us because in our eyes, Iran is the next North Korea”, said Haley.

In remarks that will go down well in New Delhi after a controversial report from the UN Human Rights Council (UNHRC) slammed India’s record in Kashmir, Haley explained why America walked out of the body.

Sharply criticising the UNHRC, Haley said serial human rights violators, including Venezuela, Cuba, Saudi Arabia, China and the Democratic Republic of Congo got into the Council to make sure they did not get called out for human rights.

“If the Human Rights Council doesn’t do anything, why would the US give them credibility?” asked Haley. “We will be our own human rights council. And we will continue to bring up the issues that we think are important.”

In an allusion to Haley’s reported presidential ambitions, she was asked when would “a woman of Indian origin, a Republican, run for high office?” Unfazed, she replied: “What I can tell you is that a woman of Indian origin is trying to survive the job that she has now.”

Haley, a second-generation American born to Sikh parents in North Carolina, visited a temple, mosque, gurdwara and church earlier on Thursday. 

Tuesday, 26 June 2018

Indian sailor to circumnavigate the world again; with no gadgets this time

Abhilash Tomy, pictured here in France, readying to start on the 30,000-mile Golden Globe Race, being held to commemorate the 50th anniversary of the world's first successful solo, unassisted, non-stop circumnavigation

By Ajai Shukla
Business Standard, 26th June 18

On April 6, 2013, Commander Abhilash Tomy of the Indian Navy completed an epic solo circumnavigation of the world – a non-stop, round-the-world voyage in a small, Indian sailboat named Mhadei. At the finish of what was dubbed the Sagarparikrama, President Pranab Mukherjee received him at the Gateway of India, Mumbai.

Now Tomy faces an even more hazardous challenge. On Sunday, he will set sail from France on the 30,000-mile Golden Globe Race, being held to commemorate the 50th anniversary of the world’s first successful solo, unassisted, non-stop circumnavigation by the sailing legend, Sir Robin Knox-Johnston.

Like in the original Golden Globe Race, no modern digital and satellite gadgetry is permitted for this race. Navigation and communications equipment, tools, and the boat itself, can only incorporate technology that was available to Knox-Johnston.

In 1968, nine skippers had started the race from Falmouth, UK. Only Knox-Johnston completed the challenge, taking 312 days – almost a year, alone at sea.

This time, 18 skippers are starting from Les Sables d’Olonne, France. Tomy, now famous and a winner of the Kirti Chakra for peacetime gallantry, is a special invitee.

The Indian Navy officer says he aims to complete the race in 311 days – one day less than Knox-Johnston.

“During the Sagarparikrama (the first circumnavigation), I had used GPS-based maps and other satellite-based technologies. But at the Golden Globe Race, I have to make do with a compass, printed maps, and star and planetary movements. There is a solitary high-frequency radio set for contact. The size of the boat limits the water I can carry. Sir Robin [Knox-Johnston] had stored and used rain water and I will do the same. There is no help from the outside world throughout the race”, says Tomy.

Sailors can carry satellite phones exclusively for medical emergencies. The boats have outboard engines, but are allowed only 140 litres of fuel, usable under strict conditions.

Starting from Les Sables d'Olonne, the race route heads south till Cape Agulhas, at the southern tip of Africa. Rounding the stormy cape, the skippers will sail eastward past Cape Leeuwin (Australia) and Cape Horn (South America). From there, they will sail north into the Atlantic for the final leg back to France.

A key element of Tomy’s quest is his sailboat, the 10 metre-long Thuriya, built to a design identical to Knox-Johnston’s famous boat, Suhaili, which was built in Colaba, Mumbai.


Ratnakar Dandekar, who has built the Thuriya at Aquarius Shipyard, Goa, had also built the Mhadei --- the sailboat on which the pioneer of Indian solo sailing, Captain Dilip Donde, Tomy himself, and most recently a crew of Indian Navy women sailors earned their spurs.

Editor's Note: If you're interested in my account of Abhilash Tomy's preparations for Sagarparkrama in 2012, written just before he set out on that voyage: (October 20, 2012, “On board the Mhadei: The voyage ahead”) it is on Broadsword at: http://ajaishukla.blogspot.com/2012/10/on-board-mhadei-voyage-ahead.html

But building a sailboat to an almost century-old design is a far greater challenge than constructing a modern sailboat. The 52-foot Mhadei had more space for miniaturised modern gadgetry, but it is far more difficult to accommodate bulky sextants, charts and older equipment on the 32-foot Thuriya. Furthermore, the giant waves in the stormy Southern Ocean, toss around smaller boats more violently, slowing them down and increasing the sailor’s fatigue.

However, Tomy has a team with which he is entirely comfortable. The Indian Navy and Aquarius Shipyard are supporting him officially. Dilip Donde, the first Indian to circumnavigate the world (albeit with stops) is overseeing the race as base manager. 

At Les Sables d’Olonne, participating boats have had their safety checks. Tomy and his team are spending the rest of the week stacking up on food, stationary and toiletries for the coming months. The boat will carry 1,000 “ready-to-eat” meals, including from the popular South India eatery, Mavalli Tiffin Rooms. There will be 300 litres of water to tide over periods where it does not rain.

During the coming year at sea, Tomy will not be entirely out of communication. Those following Tomy’s race will find three-hourly position updates on the Golden Globe Race website, along with a weekly sound-bite from Tomy himself. He can also post one-way text messages on the website.

Like during Sagarparikrama, Tomy’s media team will also be posting regularly on his official Facebook page: https://www.facebook.com/abhilashtomysailing/

Saturday, 23 June 2018

Crucial defence agreement with US within reach

Three points remain to be negotiated, COMCASA will not be signed during 2+2 meeting on July 6th

By Ajai Shukla
Business Standard, 23rd June 18

A key defence agreement with the United States (US) that India once staunchly opposed, is now tantalizingly within reach.

After three days of intensive negotiations in New Delhi, from Monday to Wednesday, only three points of disagreement remain in finalizing the Communications Compatibility and Security Agreement (COMCASA), which will allow the US to transfer highly secure communications equipment to India. 

Top defence ministry sources say negotiations were conducted with unusual purpose, with both sides hoping the agreement could be announced at the inaugural “two-plus-two” US-India dialogue on July 6, when Foreign Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman will jointly meet their American counterparts, Mike Pompeo and Jim Mattis.

However, agreement on those three points remains elusive and at least one more round of negotiations would be required. A key part of the dispute relates to “sovereignty issues”, including visits by US inspectors to Indian bases where the COMCASA-safeguarded equipment is deployed.

Business Standard learns that the proposals India provided to break the deadlock are being taken back by the US legal negotiating team to Washington, for legal vetting.

Similar issues led to a decade of Indian resistance to signing the Communication and Information Security Memorandum of Agreement (CISMOA) – as the agreement was earlier named.

Since India objected to signing a blanket agreement like CISMOA, which several other countries had signed, its name was changed to COMCASA to convey an India-specific nature.

For similar reasons, India also resisted two other agreements that the US regards as “foundational” for a viable defence partnership. Eventually, in August 2016, the US and India signed the Logistics Exchange Memorandum of Agreement (LEMOA), which allows both countries’ militaries to replenish from the other’s bases and facilities, subject to permission. India has no similar agreement with any other country, not even Russia.

Negotiations on the third agreement, termed Basic Exchange and Cooperation Agreement for Geo-spatial Cooperation (BECA), will follow COMCASA, say defence ministry sources.

Without COMCASA, the US has been legally obliged to supply India weaponry equipped with commercially available communications systems in place of the more capable equipment safeguarded by COMCASA.

When the Indian Navy bought the P-8I maritime aircraft, Boeing supplied it without CISMOA-safeguarded voice and data channels --- called Data Link-11 and Link-16 --- through which the P-8I alerts friendly naval forces about enemy submarines. The absence of these links prevents the generation of a Common Tactical Picture with partner navies that operate over CISMOA-protected links.

The non-availability of Link-16 also prevents Indian fighter aircraft from generating a “common air picture” with friendly air forces. Non-signature of CISMOA also denies India precision Global Positioning System (GPS) gear, and state-of-the-art guidance for the Advanced Medium Range Air-to-Air Missile (AMRAAM) that the air force is procuring for its fighter aircraft.

Finally, unless COMCASA is signed soon, the 15 Chinook CH-47F helicopters that Boeing is building for India in Philadelphia will have less sophisticated navigation and radio equipment than US Army Chinooks. 

Thursday, 21 June 2018

Apache “copter scam” is fake news: allegation of overpricing, even before price fixed


By Ajai Shukla
Business Standard, 21st June 18

=================

Caught in the rotor blades

·      The deal to buy the AH-64E Apache is a particularly complicated one: the basic helicopter, including the airframe, is a direct commercial sale (DCS), which New Delhi has negotiated directly with Boeing

·      However, the engines, fire control systems and radar, key avionics and weapons and missiles are being bought under foreign military sale (FMS) category, which is negotiated with the Pentagon
 

·      The sale amount the US government notifies to the US Congress is a “not to exceed” estimate, while the contract is almost invariably signed for a significantly lower amount

=================

Washington’s June 12 notification to the US Congress informing it that the US government is proceeding with the sale of six Apache attack helicopters to India for an estimated $930 million dollars has evoked allegations of wrongdoing.

Noting that this amounts to $150 million for each Boeing AH-64E Apache helicopter, National Herald wrote that Israel paid less for its F-35A fifth generation fighters. Observing that the price “seems outlandish”, the newspaper wrote: “In 2017, Boeing and US Army signed a $3.4 billion contract for 268 AH-64E Apache helicopters at a unit cost of about $13 million per chopper, albeit remanufactured with a few newly built.”

On June 13, activist Prashant Bhushan tweeted: “Modi gov[ernmen]t to buy 6 Apache 64E [heli]copters for 930M$ (Rs 1000Cr each). US army bought 35 of the same helicopters 3 yrs ago for 691M$ (Rs 120 Cr each). Modi pays 8 times market price and sends >5000Cr of our money down the drain! Kickbacks?”

Business Standard has investigated these allegations around the Apache purchase and found that the uproar stems from a lack of understanding of the way America processes foreign arms sales.

Such sales fall under two main categories: In the Foreign Military Sales (FMS) category, the US Department of Defense (the Pentagon) acts on behalf of the customer, negotiating costs with the US vendor, usually benchmarked at the price the vendor last sold the equipment to the US military. Very often, the foreign customer gets the equipment cheaper than the US military did, since the production line would have been amortised earlier.

For impending FMS sales, the Defense Security Cooperation Agency (DSCA) – a branch of the US State Department – must notify Congress, giving the legislature the opportunity to question the sale.

The second category is Direct Commercial Sales (DCS), in which the foreign customer negotiates directly with the US vendor company, with the permission of the US government. No Congressional notification is required for this.

The case of the AH-64E Apache is a particularly complicated one: the basic helicopters, including the airframe, is a DCS, which New Delhi has negotiated directly with Boeing. However, the engines, fire control systems and radars, key avionics and weapons and missiles are being bought under FMS.

The DSCA’s notification to the US Congress, therefore, relates to only half the Apache helicopter – the parts that come under FMS.

That should make the $930 million estimation for six helicopters even more outrageous, because it relates to only the FMS portion of the Apache – effectively, just half the helicopter.

In fact, the figure the DSCA puts forward in the Congressional Notification is seldom what the international customer pays. Instead, it is the most expansive of estimates, which one US official describes as the “not to exceed” cost of the equipment being cleared. The eventual contract price, which the customer signs with the Pentagon, is almost invariably lower.

Interestingly, the customer often pays less than even the contract price. The Pentagon monitors the cost at which the equipment is manufactured, driving down prices continually to keep its industry efficient. The customer eventually pays a “cost plus” price, which is very often less than the contracted price.

There are numerous examples of this. In 2010, the DSCA notified Congress about the sale to India of 22 AH-64D Apache helicopters (only the FMS portion) for $1.4 billion. In 2015, when the contract was finally signed, India paid only $900 million for the FMS portion of the contract. With the DCS portion contracted for an additional $900 million, the entire sale cost India $1.8 billion – or $80 million per Apache, inclusive of large stocks of weapons and missiles.

Once all 22 Apaches are delivered, India might end up paying less than that.

Similarly, the DSCA notified the US Congress about the sale to India of ten C-17 Globemaster III transport aircraft for $5.8 billion. Eventually, India paid $4.1 billion for those aircraft.

The complexity of the data about prices paid by other buyers – especially by the US government – sometimes causes misapprehensions that India has paid a higher cost.

For example, the National Herald data – that the US government bought 268 Apaches in 2017 for $3.4 billion, or less than $13 million each – glosses over the fact that 244 of those helicopters were “remanufactured”. That means they were overhauled and upgraded earlier model Apaches.

Last August, India’s defence ministry cleared the purchase of six additional Apaches for an indicative price of Rs 4,168 crore – which Washington notified the US Congress as a $930 million sale. But that too is a “not to exceed” estimation, which also includes a large amount of weaponry and training equipment. Once India signs the contract for these helicopters, a more exact figure will be available.



Wednesday, 20 June 2018

Solar Industries India partners EURENCO for major artillery tender

The two firms will bid jointly for a forthcoming multi-billion dollar Indian tender to manufacture artillery propellants

By Ajai Shukla
Business Standard, 20th June 18

On Tuesday, Solar Industries India Ltd (hereafter Solar), one of India’s fastest growing companies in defence manufacturing, announced a strategic tie-up with EURENCO – the European leader in high-energy materials – for explosives and propellant technologies.

Announcing the partnership at the EUROSATORY 2018 defence exhibition near Paris, the two firms said they would bid jointly for a forthcoming multi-billion dollar Indian tender to manufacture artillery propellants, called the bi-modular charge system (BMCS).

“We have built a strong relationship with Eurenco and are working on a collaborative approach to set up infrastructure facilities under the 'Make in India' program of the Government of India to fulfill the needs of the Indian Army”, said Solar’s chief executive, Manish Nuwal.

The Nagpur-headquartered Solar, India’s largest manufacturer and exporter of explosives and initiating systems, is highly regarded by the defence ministry. In January, Defence Minister Nirmala Sitharaman handed it technology to manufacture solid propellant boosters for the Indo-Russian BrahMos cruise missile – a favour normally bestowed only on defence public sector undertakings (DPSUs).

Solar’s ambitious growth plans in the defence sector rest on the military’s increasing requirement of ammunition and propellants. Besides needing to make up a large shortfall in war reserve ammunition stocks, the military requires warhead explosives and propellants for indigenous weaponry like the Pinaka rocket launcher, the Akash, Nag, Astra, BrahMos and LR-SAM missiles, indigenous artillery guns like the Dhanush and the Advanced Towed Artillery Gun System (ATAGS), and a range of new artillery gun systems entering service, such as the M777 ultra-light howitzer.

India currently imports 35 solid propellant boosters annually for the BrahMos cruise missile. In addition, the IAF will be inducting large numbers of BrahMos as an air-launched cruise mssile (ALCM), mounted on the Sukhoi-30MKI fighter. Solar would benefit directly from these orders.

In July 2016, Eurenco and Solar signed a preliminary agreement to “evaluate various cooperation options”. On Tuesday, that was translated into a “strategic partnership” for supplying “propellants, bombs, ammunition filling and modular charges technologies under the ‘Make in India’ policy for the private sector”, according to a Solar press release.

“This partnership agreement is at the heart of our strategy in India which is today one of the key markets that we aim for as part of our global export policy in Asia”, said EURENCO chief, Dominique Guillet.

Solar said today it “is willing to build dedicated infrastructure facilities with the technical assistance of EURENCO on its explosives and propellant facilities in Nagpur, India.”

Besides Nagpur, Solar manufactures at 24 locations in India and six locations abroad – in South Africa, Turkey, Zambia, Nigeria, Australia and Ghana – for a significant portfolio of American and European customers.

Since it was established in 1995, Solar has built facilities to produce sophisticated, military-grade explosives such as HMX, RDX and TNT. Solar also builds composite propellants, rockets, warheads, mines, tank ammunition, bombs and electronic fuzes.

Besides serving defence requirements, Solar also manufactures explosives for the mining and infrastructure sectors, serving Coal India Limited, Singareni Collieries, Vedanta, Reliance, Jindal and other companies.

Thursday, 14 June 2018

Policy viewpoint: Govt decision to give up on “Make 1” defence projects is flawed


By Ajai Shukla
Business Standard editorial
13th June 18

Private defence firms with ambitions to be platform developers, rather than mere manufacturers, are disappointed at the defence ministry’s decision to step away from reimbursing the cost of developing complex, high technology defence platforms. An existing “Make” procedure for developing such systems involves the ministry paying back 80 per cent of the development cost, but its unease with this category was already evident. After having hailed the “Make” procedure as a vital driver of indigenization, only three “Make” projects have been initiated over the preceding decade: the Tactical Communication System (TCS), the Battlefield Management System (BMS) and the Future Infantry Combat Vehicle (FICV). In the first two projects, after lengthy tendering and evaluation, the winning “development agencies” (DAs) were announced, but no order was placed. The BMS is close to being scrapped, since the army has unwisely declared it does not want to spend the money on such a “futuristic system” and save it for rifles instead. The FICV makes for an even more depressing story: After issuing two abortive tenders, the defence ministry has failed to select the DAs. Instead, the ministry has now declared that “Make” projects would be progressed under the “Make 2” category, promulgated in 2016, in which industry itself pays the development cost. This saves the ministry money and also the fraught responsibility of selecting DAs.

To expect “Make 1” -- as the government renamed the “Make” procedure in 2016 -- to be subsumed by “Make 2” is unrealistic and self-defeating. “Make 1” requires government funding because it costs heavily to develop futuristic, cutting-edge defence platforms incorporating multiple technology domains. In contrast, “Make 2” has a smaller scope, primarily targeting “import substitution”, or indigenising systems or sub-systems already in service. Crucially, “Make 1” contracts demand that DAs import specified critical technologies from their foreign partners – something that is enforceable only in large, expensive projects. All this would hold back a “Make 2” FICV from being a next-generation platform that brings in critical technologies.

In this strange decision for defence indigenisation, none of the protagonists has covered itself with glory. Companies that were eliminated during FICV project evaluation approached the ministry, offering to develop this complex, multi-dimensional platform at their own cost. It is unlikely that any firm would take on the Rs 800-2,000 crore (Rs 8-20 billion) burden -- going by the bids submitted -- of developing an FICV prototype, especially since the “Make 2” procedure provides neither for assured orders, nor for reimbursement of full development costs if an order is not forthcoming. Rather, this was a “dog in the manger” tactic to scupper a tender from which they had been eliminated and hope they would fare better in whatever came in its place. None of these spoilers could have anticipated such fulsome success wherein the government would throw out not just the FICV project, but the “Make” procedure itself.


Private firms, in their fratricidal competitiveness, have been scuppering a vital defence project and providing ammunition to those who oppose a larger role in defence for private firms. Defence ministry decision-makers have proven yet again that confronted with a difficult decision, they will back away. The gainers from this will be the public sector, which has been granted a reprieve from private sector competition in developing new weaponry.