Wednesday, 16 October 2019

Single agency being set up to process defence exports

Rajnath Singh's defence ministry has been talking up the need for increasing defence exports

By Ajai Shukla
Business Standard, 16th Oct 19

In a new initiative to boost the export of Indian defence products, army chief, General Bipin Rawat will on Friday launch the Indigenous Defence Equipment Exporters Association (IDEEA) in New Delhi.

IDEEA is conceived as a non-profit association, set up under Section 8 of the Companies Act. It has the stated objective of making India “one of the top three defence equipment exporters in the world.” 

The association will effectively be a nodal agency for receiving and processing export inquiries from all prospective customers across the globe. Its director, Major General Prem Mohan Vats (Retired) says: “IDEEA will provide a platform for defence exporters, particularly MSMEs (micro, small and medium enterprises), to air their concerns and to reach customers.”

Sanjay Jaju, the defence ministry official who interfaces with industry,had announced in June the creation of a Defence Export-Import Portal, that “will post export opportunity leads that our sources have obtained, which exporters can follow up and translate into business.” IDEEA, it appears, is intended to meet the same purpose promise.

IDEEA is directed towards achieving the defence ministry’s ambitious aim, stated in the Defence Production Policy of 2018 (DPrP-2018), of exporting defence products worth of $5 billion (Rs 35,000 crore) annually, by 2025. 

Given that defence exports were Rs 11,000 crore in 2018-19, achieving this target requires defence exports to more than triple in six years. The 2018-19 export figure was itself a more than two-fold jump over the preceding year’s exports worth Rs 4,682 crore, according to the defence ministry website.

The ministry assesses that enhanced exports would be essential for meeting the DPrP-2018 target of making India one of the world’s top five defence producers, with an annual defence production turnover target of US $26 billion (Rs 180,000 crore).

India’s current defence production is Rs 90,000 crore per year, says Jaju. Export markets would be crucial for absorbing production levels that are double of this, given that the defence capital allocation is currently Rs 108,248 crore.

The defence ministry has moved gradually towards creating an enabling environment for exports. The first step was to loosen barriers by gaining Indian entry into the four global export control regimes. India has already obtained membership of the Missile Technology Control Regime, the Wassenaar Arrangement and the Australia Group. New Delhi is now lobbying for entry into the fourth – the Nuclear Suppliers Group.

Meanwhile, as an export promotion measure, the government has steadily increased the levels of foreign direct investment (FDI) permitted in defence. If this continues, foreign defence firms might soon be allowed a majority stake in joint ventures (JVs) they set up in India.

In 2016, the prevailing 26 per cent FDI cap in defence manufacturing was raised to 49 per cent through the automatic route. Additionally, FDI above 49 per cent was permitted through case-by-case government sanction “wherever it is likely to result in access to modern technology or for other reasons to be recorded.”

So far, this has failed to spur foreign investment. The defence sector has received FDI worth just $ 0.18 million (Rs 1.26 crore) from April 2014 to December 2017, the defence ministry told Parliament on March 7, 2018.

The biggest recipient of Indian defence exports is currently the US, which has imported nearly Rs 5,000 crore worth of equipment. Next comes Israel, and then the European Union.

Tuesday, 15 October 2019

We said, Xi said…

By Ajai Shukla
Business Standard, 15th Oct 19

Notwithstanding the gushy media coverage, which even featured the detailed dinner menu, of last week’s “informal summit” between Prime Minister Narendra Modi and China’s President Xi Jinping at Mamallapuram, outside Chennai, this was hardly a breakthrough in the testy relations between the two countries. If there was diplomatic success, it lay in New Delhi’s forebearance in allowing the summit to take place at all. A country less complaisant towards China might well have called off the summit three days before it happened, when Beijing, after Xi’s meeting with Pakistan’s Prime Minister Imran Khan, publicly declared that China supported all Pakistan’s “core concerns”. This amounts to backing Islamabad’s claim over all of Jammu & Kashmir (J&K) and, in effect, the abandonment of Beijing’s professed neutrality on the Kashmir dispute. New Delhi’s placid acceptance of this, without even a strongly worded rebuke, must have signalled to Xi that New Delhi desired the optics of a Modi-Xi summit far more than Beijing did. This would have been confirmed during the summit when Modi silently heard out Xi’s account of his meeting with Khan.

The key achievement of the summit, as prominently advertised by both sides, apparently was that Modi and Xi spent over five hours in one-on-one talks on global affairs, investment and trade, combating terrorism, tourism and people to people contacts. Afterwards, Modi talked up the “Chennai Connect” that, he felt, would usher in “a new era” in Sino-Indian ties. Xi declared these were “heart-to-heart” conversations and that he and Modi were “like real friends.” However, experience teaches that an exchange of national visions between the leaders of two countries does not naturally pave the path to peace, especially when there exists a deep-rooted strategic rivalry between them. Observers with a sense of history would recall the four-and-a-half hours of documented conversations between Mao Zedong and Jawaharlal Nehru in October 1954 in which the two leaders similarly discussed America’s role in the region, the global environment and India’s and China’s place in it. Yet, eight years later they were at war.

Courtesy: Ajay Mohanty, Business Standard

True, New Delhi has little choice but to diplomatically engage an increasingly powerful, wealthy and assertive Beijing. However, it cannot be so distracted by the rhetoric of friendship and fraterntity as to miss the fact that, since the first “informal summit” at Wuhan last year, China has done nothing to allay India’s key security or economic concerns. The Indian Army has been unable to reduce a single soldier on the borders and our military’s deployment posture remains predicated on the possibility of a two-front war. We are no closer to resolving the Sino-Indian border dispute, with the Chinese continuing to stonewall even the first step towards that – which is to exchange maps marked with each side’s perceived alignment of the Line of Actual Control (LAC), the de facto border. Recent delegations from influential Chinese think tanks (which accurately reflect Beijing’s official stance) have recited to Indian audiences the hackneyed formulation that a border solution “should be left to future generations.” The official briefings after Chennai indicate that the Chinese stuck to the same line. With little accommodation in the present, Xi’s proposal for a “hundred-year plan” for cementing ties between the two countries only kicks the can so far down the road that it ceases to be visible at all.

New Delhi’s economic concerns remain unaddressed too, primarily its expanding $53 billion trade deficit with China and misgivings over the terms of the Regional Comprehensive Economic Partnership – a gigantic free trade pact being negotiated between 16 countries that together constitute some 40 per cent of the world’s economy. Here too the can has been kicked down the road, with a “High-Level Economic and Trade Dialogue Mechanism” being set up to tackle these issues. That this is merely a hastily-applied band-aid was tacitly acknowledged by Foreign Secretary Vijay Gokhale’s admission: “It was a brief discussion.” 

The experience of previous committees warns us to temper expectations. In the realm of border management, the Working Mechanism for Consultation and Coordination on India-China Border Affairs, signed in January 2012; and the Border Defence Cooperation Agreement, signed in October 2013 failed spectacularly to calm the Line of Actual Control (LAC). Instead, there was a three-week-long standoff at Depsang, Ladakh in April 2013; followed by a 16-day face-off at Chumar, Ladakh in September 2014; and then the tense 73-day confrontation at Doklam, Bhutan in June-August 2017. The brief spell of peace on the LAC after Wuhan reverted inexorably to the scattered confrontations of earlier days.

Gokhale told the media that the two leaders did not discuss Kashmir as it is “an internal matter” for India. There was good reason to avoid discussing Kashmir, but it is, in fact, far from an internal matter. China physically occupies about 45,000 square kilometres of J&K state as claimed by India, including 3,000 square kilometres captured in the 1962 war and never returned; and 5,180 square kilometres ceded to China by Pakistan in 1963. If the only J&K issue that remains to be discussed with Pakistan is the return of Pakistan Occupied Kashmir to India, it is hard to justify remaining silent about the return of China Occupied Ladakh.

The concept of “informal summits” seems here to stay, with Modi having already accepted Xi’s invitation to come and chat next year in China. However, there is little to be gained from a summit that is reduced to a spectacle and where competitive rhetoric far outpaces the reality. If Modi was reduced to writing poetry, China’s envoy to India, Sun Weidong tweeted: “From Wuhan to Chennai, from Yangtze river to Ganges, China and India join hands and stand together. Dragon and Elephant have a tango.” Sun should have known that such saccharine descriptives sound patronising to Indians when China and India still stand far apart on so many issues. If a dragon ever tangos with an elephant, that seems a long way from where we are now.

Wednesday, 9 October 2019

On IAF 87th anniversary: India gets first Rafale, celebrates Balakot strike

By Ajai Shukla
Business Standard, 9th Oct 19

As the Indian Air Force (IAF) celebrated its 87th anniversary on Tuesday, a clear theme was the operations of February 26, when Indian fighter aircraft attacked the Balakot terrorist training camp in Pakistan and skirmished with counter-attacking Pakistan Air Force (PAF) fighters the next morning.

Drawing thunderous applause from spectators at Hindan Air Base outside Delhi was the “Avenger formation” in the fly-past, a three-aircraft formation led by Wing Commander Abhinandan Varthaman in his MiG-21 BISON fighter, flanked by two Mirage 2000 fighters flown by pilots who had bombed Balakot.

Varthaman was shot down and captured by the Pakistani military in that skirmish, but only after shooting down a PAF F-16 fighter, as claimed by the IAF. 

On Friday, the IAF had released a promotional video, celebrating the bombing of Balakot and the subsequent aerial skirmish as major accomplishments.

Meanwhile in Merignac, France, aerospace firm Dassault delivered to Defence Minister Rajnath Singh the first of 36 Rafale fighters the IAF has bought for Euro 7.8 billion. Prime Minister Narendra Modi has claimed that the outcome of the aerial confrontation in February would have been “something very different” had the IAF had Rafales at that time.

Yet, despite Singh’s symbolic “acceptance” of the first Rafale fighter in Merignac, the IAF is still years away from fielding Rafales with the full capability New Delhi has paid for. 

On Friday, the IAF boss, Air Chief Marshal Rakesh Bhadauria, revealed that the first IAF Rafales, a batch of four aircraft, would only reach India next May. That means an eight-month delay from the contracted delivery date of September 2019 – or three years after the contract was signed.

Further, these Rafales, and tens more that will follow them, will not have the enhanced capabilities – termed “India Specific Enhancements” (ISEs) – the IAF has demanded and paid Euro 1.7 billion for. The Comptroller and Auditor General (CAG) report of February 2019 reveals that, until December 2021, the IAF will receive less potent Rafales, built to the lower capability specifications of the French Air Force.

According to the CAG report, the IAF will receive its first Rafale with ISEs installed only in December 2021 – 63 months after the contract signature. Then, over the subsequent eight months, i.e. till August 2022, Dassault (and its French avionics partner, Thales) will install and retrofit ISE capabilities on all 36 Rafale fighters contracted by the IAF. 

The IAF chief has downplayed the eight-month delay in delivering the first Rafales by arguing that IAF pilots would get more time to train in France. 

On Friday he stated: “The aircraft will come at the end of May next year in Indian skies. The advantage is that our pilots will be substantially trained by then. That group of pilots will be near ‘operational’ to take on any task after landing here.”

Bhadauria also dismissed speculation that the delivery of 36 Rafales could be followed by an order for 36 more. He indicated that, to supply more Rafales, Dassault would have to win the IAF tender for 114 “multi-role fighter aircraft” (MRFA).

“Our plan is for building 114 MRFA in the Strategic Partner (SP) model and that is currently being followed,” said Bhadauria.

The tender will involve choosing original equipment manufacturers (OEMs) from seven firms that have expressed interest– Dassault, Lockheed Martin, Boeing, Sukhoi, MiG, Saab and Eurofighter. Simultaneously, Indian SPs will be chosen from private and public sector firms that meet the qualifications. Qualified SPs will then partner selected OEMs and submit proposals to the government.

Aerospace analysts believe Dassault is well-positioned to win the MRFA tender, since it has already amortised many of its costs in the tender for 36 Rafales.

Before flying to Merignac, the defence minister had a 35-minute meeting with French President Emmanuel Macron in Paris.

The Air Force Day parade and fly-past at Hindan also saw debut participation from the Apache AH-64E and Chinook CH-47F – both American helicopters that were inducted into the IAF over the preceding year.

Saturday, 5 October 2019

Air Force chief outlines plan to solve shortage of fighter squadrons

Jaguars to retire, additional MiG-29 and Su-30 squadrons being bought

By Ajai Shukla
Business Standard, 5th Oct 19

Four days after assuming command of the Indian Air Force (IAF), Air Chief Marshal RKS Bhadauria has described in detail what his fighter fleet will look like a dozen years into the future. 

There is already concern that the IAF is down to just 30 fighter squadrons, against the assessed requirement of 42 squadrons. Bhadauria’s plan, unveiled in an interaction with the media on Friday, will only raise numbers to 37 squadrons by 2025, before falling again to 33 squadrons by 2032. 

Behind the continuing shortfalls is the impending retirement of the last of six remaining MiG-21 squadrons when their technical life ends in 2021.

Jaguar to retire without new engines

In addition, Bhadauria announced that six Jaguar squadrons would retire in the early 2020s, since it would be too costly to equip then with new engines needed to extend their service lives into the 2030s.

“We have had to drop the plan for re-engining the Jaguar because it has been delayed inordinately and the cost went too high,” said the IAF chief. 

“The non-BISON MiG-21s will retire by the end of this year, or go up to March 2020 at the most. Only the MiG-21 BISON fleet will be left and will go up to the end of its technical life [in 2021], he said.

Worryingly, the shortfalls could be even worse if there is delay in processing the purchase of 114 eponymous Multi-Role Fighter Aircraft (MRFA), which an Indian “strategic partner” (SP) will build in technology partnership with a global “original equipment manufacturer” (OEM).

Requests for Interest (RFIs) have already been sent out to prospective SPs and OEMs for this tender.

“The [vendors’ responses] have already been received for the 114 MRFA case. We have started the process for obtaining AoN (Acceptance of Necessity) now,” said Bhadauria. The AoN, which the defence ministry accords, is the first step in a procurement and is followed by the issuance of an RFP (request for proposals) – the basic tender document.

Bhadauria’s plan also includes building 83 Tejas Light Combat Aircraft (LCA) is quick time to fill the light fighter vacancies left by the retirement of the MiG-21 and MiG-27 fighters.

On a parallel track, India would build the Advanced Medium Combat Aircraft (AMCA), a fifth generation medium fighter.

More MiG-29s and Sukhoi-30MKIs

Meanwhile, the IAF chief confirmed the IAF would buy 21 MiG-29 fighters that are lying ready built in Russia. “We are going to go in for 21 MiG-29, which has already been informed [to Moscow],” he said. 

Adding those to the IAF’s existing three MiG-29 squadrons, which are undergoing a mid-life upgrade, would take the number of IAF MiG-29 squadrons up to four. In addition, the navy flies two squadrons of the navalized MiG-29K/KUBs.

Bhadauria also confirmed reports that additional Sukhoi-30MKI fighters would be built by Hindustan Aeronautics Ltd (HAL) in Nashik. HAL will soon complete delivery of the last squadron of Sukhoi-30MKIs, bringing up the IAF fleet to 13 squadrons.

“We are moving towards ordering 12 more Sukhoi-30s. Whether we need some more in lieu of aircraft that are going to get phased out from 2025 onwards… we will have to take a look later. But at the moment, 12 is what is being followed up straightaway,” said Bhadauria.

The chief also confirmed plans to upgrade the Sukhoi-30MKI, with modern “radar and weapons capabilities and also tackling obsolescence management and electronic warfare aspects.”

No plan for 36 more Rafale

Dismissing rumours that India is buying 36 more Rafales from France, Bhadauria stated: “Our plan is for building 114 MRFA in the SP model. There is no separate plan for this (36 more Rafales).

He confirmed a delay in Dassault’s delivery of the first four Rafale fighters. While Defence Minister Rajnath Singh is going to France next week to accept the fighters, they would only fly to India in May 2020, said Bhadauria.

Friday, 4 October 2019

As Project 28 nears end, GRSE feels it’s equipped to build more corvettes

INS Kadmatt, the second ASW corvette built under Project 28, sails into Sasebo, Japan

By Ajai Shukla 
Garden Reach, Kolkata
Business Standard, 4th Oct 19

Workmen bustle over INS Kavaratti, a sleek anti-submarine warfare (ASW) corvette nearing completion at Garden Reach Shipbuilders & Engineers (GRSE), Kolkata, on the monsoon-swollen Hooghly River. The last of four corvettes built under Project 28, Kavaratti will be commissioned before end-2019 – three years later than contracted.

Besides being badly late, Project 28 is also over-budget – by an incredible 250 per cent. The four corvettes were sanctioned for Rs 2,700 crore, but INS Kamorta, Kadmatt, Kiltan and Kavaratti will end up costing about Rs 7,000 crore in all.

Even so, there is no complaint from the Ministry of Defence (MoD), or from the usually demanding navy. The admirals regard the delay as an acceptable price for making the Kamorta-class India’s most highly indigenised warships – about 90 per cent “Made in India”.

The ASW corvettes, which are designed and equipped to detect enemy submarines and destroy them with torpedoes, have also ended up far more silent – and, therefore, better equipped to listen for submarines – than originally envisioned.

Project 28 time-and-cost overruns mounted progressively. The first delay was caused by the MoD’s decision that INS Kamorta and its successors would be constructed from indigenous warship-grade steel – called DMR 249A, and manufactured by Bhilai Steel Plant. Developing and producing DMR 249A in sufficient quantities took two years longer than anticipated. 

Then, after constructing the first two corvettes (INS Kamorta in 2014 and Kadmatt in 2016), the navy decided that the third and fourth corvettes would have superstructures (the part above the deck) built from composite materials. 

The lower radar reflectivity of composites makes the corvettes harder to pick up with radar. Also, being far lighter then steel, composite superstructures have reduced the weight of INS Kiltan and Kavaratti from 3,150 tonnes to just 3,000 tonnes, thereby increasing their speed to 46 kilometres per hour (kmph) and their sea endurance to 6,400 km at a speed of 33 kmph.

However, that also imposed another year’s delay, as Swedish firm Kockums taught GRSE workers the intricacies of building with composites. Since composites cannot be welded, sheets must be held together with rivets that are finely calibrated according to the weight they support.

Over the course of Project 28, indigenization levels have reached 90 per cent, says GRSE chief, Rear Admiral VK Saxena (Retired). These include the difficult areas of sensors and weapons, where import content is usually high.

Bharat Heavy Electricals Ltd has built the 76 millimetre Otomelara gun, while Larsen & Toubro has built the heavyweight torpedo tubes and rocket launchers used to destroy enemy submarines. The Kavach chaff launchers that serve as decoys for incoming missiles are built by the Ordnance Factory Board in Ambarnath.

Bharat Electronics Ltd has built most of the sensors and combat management systems in the Kamorta-class corvettes. These include the Revathi radar that detects enemy aircraft out to 300 km, the Lynx fire control radar that guides missiles and the Combat Management System (CMS) that integrates all the weapons and sensors.

Kirloskar Oil Engines Ltd (KOEL) has built the four diesel engines that power these corvettes, while the on-board power generation system (consisting of 3 MegaWatt generators) is manufactured in India by Cummins and Kirloskar Electric.

Given the success in designing, manufacturing and evolving a successful ASW corvette, GRSE executives say the MoD should order more corvettes, which the navy badly needs.

Yet, despite the manufacturing eco-system already created, the navy is now evolving a design for the so-called “Next Generation Corvette”. 

“We have taken up a case with the navy and are in talks with them. It makes sound economic sense to freeze the design and specifications of the successful Kamorta-class and build around that,” says Saxena.

The GRSE chief points to the US Navy’s so-called DDG-51 programme, under which it has built 82 destroyers of the successful Arleigh Burke-class. Currently, every one of the US Navy’s destroyers is of this class, which has allowed incremental design and process improvements and economy of scale for vendors and sub-vendors.

Wednesday, 2 October 2019

Warship woes: Stop the bluster and build capability

INS Tarkash, a Krivak-III frigate built for the Indian Navy

By Ajai Shukla
Unsigned editorial for Business Standard
2nd October 2019

Defence Minister Rajnath Singh was correct in stating that the Indian Navy could deal Pakistan a heavier blow today than in 1971, when Indian missile boats attacked Karachi port. But Mr Singh has set his sights very low. The Karachi strikes, while morale boosting, were eventually peripheral to the outcome of that war. Today, given that Indian Navy’s budget of $8 billion is only slightly smaller than Pakistan’s entire defence allocation of $11 billion; far more would be expected from it. New Delhi’s strategic vision of the Indo-Pacific requires the Indian Navy to exercise control over not just the Arabian Sea and Bay of Bengal, but all of the northern Indian Ocean from the Strait of Hormuz in West Asia, to the Malacca Strait in the East. In achieving this, the key challenge would come not from Pakistan’s weak navy, but from a bigger and stronger China, which is already asserting its presence in these waters. The question for Indian planners is: How ready is our navy for that?

Serious capability shortfalls are evident from the navy’s demand for a larger share of the defence modernisation budget. In an unusually blunt statement last fortnight, the navy vice chief publicly lamented that, in the last seven years, its share of the overall defence budget has dropped from 18 per cent to under 14 per cent today. Meanwhile, its share of the capital budget has fallen from over 30 per cent to less than 24 per cent today. The Indian Navy’s long-term capability plan envisions a fleet of 200 warships and 450 aircraft by 2027, but it currently has just 131 warships and 230 aircraft. Worse, most shortfalls are in capital warships – the multi-role destroyers, frigates and corvettes that are the navy’s workhorses. Submarines are in short supply and the government’s inability to conclude a long-delayed contract for building 24 minesweepers has left the navy with not one of these crucial vessels.

Equally worryingly, many capital warships built in the last two decades are operating without sensors and weapons that are central to their capability. Most of the navy’s modern vessels are not fitted with modern towed array sonars, essential for detecting enemy submarines. These warships, each costing several hundred million dollars, risk being torpedoed because of the absence of sonars worth a few million dollars each. Similarly, the Scorpene submarines now entering service at half a billion dollars each are toothless because contracts have not been concluded for modern torpedoes. As a stopgap, the navy’s decades-old SUT torpedoes have been given a lifetime extension but numbers are falling to barely six torpedoes per submarine. 

Part of the blame lies with the navy, which designs quality warships, but builds just three-to-four vessels in each design class. In comparison, the US Navy builds to a standardised design – it commissioned USS Arleigh Burke in 1988, and has since built 82 destroyers of that class. This allows for incremental design and process improvements and economy of scale for vendors and sub-vendors. In comparison, the Indian Navy’s 12 destroyers are spread over three different designs.

The challenges before the navy are clear. Rather than bluster, it is time for the government to set a clear roadmap, allocate the finances needed and facilitate the navy in creating the capability needed for supporting India’s strategic vision in the region.