Svipja's Offset Practice

Our Offset Practice helps high-tech Defence and Aerospace Industry in offset projects. www.svipja.com/ refers.

We also empanel Offset Consultants with Industry knowledge in A & D. You could fill Your 'Resume' on http://www.svipja.com/careers.php , or 'Join as a Consultant' on www.indiandefenceindustry.com/


Steps in Our Offset Process

Step 1: Acquaint Yourself first on Offset business. Please visit www.IndianDefenceIndustry.com , its connected Blogs and www.svipja.com in addition to other subject matter elsewhere. Offset Partnership and projects go thru rigorous 'Due Diligence' / 'Gate Reviews' by Vendors / Obligors.

Step 2: Register online on www.IndianDefenceIndustry.com using Internet Explorer to be part of the database of the Defence Industry. We are developing a consortium of MSMEs globally with India focus for them to participate in Aerospace and Defence direct and indirect Offset Projects.

Step 3: Obtain Industrial License, if required.We take Advisory on Products / Services to target, Capacity Creation, JV and Capital tructure incl FDI & Technology Agreements, etc.

Step 4: Become Industrial Sector Partner (ISP) of Svipja / India. We will guide the ISP firms go through qualified vendor registration process for Supply Chains of aerospace & defence firms.

Some of these steps could be attempted concurrently.


1. Yearly Membership Fee for Registering on the Site and using e-Marketplace Engine for Buying/Selling, and accessing Info System, is as indicated in Tariffs on the Site. Fee is variable.

2. Separate Fee for Offset Consulting / Industrial Co-operation would apply. Contact svipja@gmail.com for further details.

3. Addl Fee will apply in case of market research, study and other services.


1. Svipja provides guidance to the Indian ISP on project suitability and document/plan preparation for the Gate Review Process, and it's Presentation as required.

2. Svipja does not take responsibility for offset fund allotment to ISPs. This is decided by A &D Major Company based on the capability of the ISP to meet the needs of the A & D Major.


Wednesday, December 30, 2009

Defence Expenditure Review Committee (DERC) Panel Proposals

A high-level committee, the Defence Expenditure Review Committee (DERC), looking into defence expenditure has recommended a host of sweeping reforms, including a hike in the foreign direct investment (FDI) limit in the defence sector to 49%, and divestment of defence public sector units (PSUs).

The DERC has made far reaching recommendations in our Acquisition System, such as:

  • The Govt should encourage the private sector to take over foreign defence firms.Consider setting up a sovereign wealth fund to assist this activity.
  • A five-fold increase in the financial powers of the defence minister -- up to Rs 500 Crores.
  • For accountability, transparency and efficiency, time-bound disinvestment plans should be worked out for each PSU.
  • Across the board increase in FDI limit to 49% with the provision for a case by case enhancement to 74%-100%.
  • Extensive use of ICT in the defence procurement processes.
  • Compress the time between RFI and actual procurement.
  • Read the full Report: DERC Panel Proposals

    Brigadier (Retired) Sukhwindar Singh

    Saturday, December 19, 2009

    Foreign A & D Majors Insist on Higher FDI Limit

    FDI cap in Defence Sector is perceived lower by potential suitors. The upper limit prescribed for foreign companies to invest in JVs is 26 per cent. Echoing the view of industry bodies and foreign companies, the pre-budget economic survey this year suggested that FDI limit in defence industries be raised to 49 per cent from 26 per cent, and even allowed up to 100 per cent on a case-to-case basis, in high technology, strategic defence goods, services and systems that can help eliminate import dependence.

    All this needs deliberations in wider national security interests, and NOT purely a business proposition.

    Indian Defence Industry is very keen to forge JVs with foreign partners. For example, BEL is keen to forge JVs in the areas such as missiles, electro-optics and "portions of radars like radars for civilian areas". BEL is ready to work with potential partners either through a JV or some sort of arrangement like long-term partnership (not called a JV).

    Click to read the full Report: Foreign A & D Majors Insist on Higher FDI Limit

    Comments: MOD could always consider higher % of FDI limit on case-to-case basis for technologies extremely essential for India in next 4-5 years of time frame, with some 'special rider' on the JV company ownership and management.

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: USIBC News & Its Agencies.

    Friday, December 18, 2009

    DRDO & MOD Units for Self-Reliance and Self-Sufficiency

    No country would wish to part with its state-of-the-art front line technology know how despite any arrangements. Technology leadership in Aerospace and Defence is a 'strategic tool' and an instrument of policy dictation. This basic fact is reiterated.

    Under these terms, we need to view our indigenous capabilities and the fact that we are a large-sized country which can not remain dependent on imports. It has its implications, strategic, developmental and financial. DRDO and MOD Units' Role needs to be viewed in this context; any advocacy contrary to it notwithstanding.

    Aerospace and Defence capability can not be seen as a business proposition alone by large-sized countries including India in complex power play game.

    The Defence Minister's stance on the DRDO & MOD Units is timely.

    Click to read the full Report: DRDO & Govt. Units for Self-Reliance and Self-Sufficiency

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: USIBC News & Its Agencies.

    Thursday, December 17, 2009

    Mahindra Buys 2 Australia Aerospace Firms

    Mahindra & Mahindra and India's Kotak Private Equity had bought majority stakes in component firm Aerostaff Australia and aircraft maker Gippsland Aeronautics for 1.75 billion rupees ($37.5 million). Aerostaff supplies components to companies such as Boeing, Airbus, but the firms were not in a position to scale up their operations.

    Australian firms would get a small upfront payment, some shares in the group's aerospace unit, and be eligible for milestone payments. Mahindra coming in with capital, they will have the ability to scale up and able to duplicate the facilities in India.

    Mahindra are eyeing a potential $100 billion Indian defence market over the next 10 years.

    Click to read the full Report: Mahindra Eyeing Offsets

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: Reuters India.

    Wednesday, December 16, 2009

    Ten Offset Contracts Signed

    Government today said about ten offset contracts worth Rs 8,909 crores have been signed under Defence Procurement Procedure (DPP) with weapons making companies from countries like Russia, Israel and the United States.

    "About 10 offset contracts have been signed so far under the DPP. The companies with which the offset contracts have been signed include Rosoboronexport and RAC MiG from Russia, Lockheed Martin and Boeing from the US, Israel Aerospace Industries and Elta from Israel and Fincantieri from Italy," Defence Minister A K Antony said in a written reply to a Lok Sabha query.

    Read the full Report: Ten Defence Offset Contracts Signed

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: Business Standard

    Tuesday, December 15, 2009

    Engine for Tejas, Imported and Indigenous

    European Aerospace Company, Eurojet, and America's General Electric (GE) has submitted offset proposals for their bids for Tejas engines of LCA to the MOD on Friday, 11 Dec, a day before the deadline expires -- Dec 12.

    Eurojet, which will be supplying its EJ200 for the new LCA Tejas, appears to have got clearance from Nato Eurofighter and Tornado Management Agency (Netma) for the transfer of "key technology" under the offset programme.

    GE, which will supply the F-414 engine, also appears to have taken approval of the US Govt. for technology transfer for the LCA programme.

    The two companies have bid for the 750 mUSD order for 99 engines for Tejas.

    Pse Click for full Report: Offset Offers for Tejas Engine

    Kaveri Engine meant to power the indigenous Tejas, after completing flight tests that are underway in Russia, comes alive. Eurojet EJ200, and the GE F-414 engines are its two alternatives.

    The MoD wants to keep its options open, apprehending that Eurojet and GE may hang back from providing India with critical engine technologies, even if ToT was mandated in the purchase contract - now wants to co-develop an engine in India rather than manufacturing one under licence.

    Pse Click for full Report: Kaveri Engine of Tejas Comes Alive

    OEMs would get more 'friendly' in offering substantive state-of-the-art technologies in co-development & co-production once they infer that if not given, India is up with its alternative(s) - our win mantra. DRDO or any other R & D Houses in India should therefore be fully supported by the MOD for relevant technologies/ products / services.

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: USIBC News and Its Agencies.

    Friday, December 11, 2009

    M&M and BAE Systems Set-up JV

    India’s Mahindra and Mahindra (M&M) and UK’s BAE systems signed an agreement on November 30 to set up a joint venture (JV) with an initial investment of $21.25 million. The JV has already been approved by the Department of Foreign Investment Promotion Board earlier in the year. M&M has a 74 per cent stake in the JV, which will operate out of a facility in Faridabad, Delhi.

    Initially employing about 100 employees, the JV is expected to manufacture the Axe high mobility vehicle, bulletproof Scorpios, Boleros, Rakshak, Rapid Intervention Vehicles and Marksman light armoured vehicles. It will also manufacture the Mine Protected Vehicle India (MPVI), the developmental process of which has been completed as well as artillery equipment like the M777 light weight howitzer and the FH77B howitzer

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: http://www.mahindra.com/

    Friday, December 4, 2009

    Defence Acquisitions, Time Overruns, Costs and Military Preparedness

    The basic is that a nation undertakes burden of defence acquisitions to maintain edge of its military. Within this overall objective our procedures must flow however multi-faceted or complex these may be. Our 'thinking executives' which includes our bureaucracy , military and process experts, must keep this in view in all their activities.

    Shifting causes of delay / failures within any complex acquisition chain is inevitable and may even be 'past time' of some. The bottom line is, Is nation's military getting it wherewithal in time? If not, we need to worry. As is often said 'radical problems need radical solutions'. Lip service or minor changes to existing procedures and practices will not suffice. Let there be an overhaul of the Process.

    An Article by Mr Harinder Singh, IDSA, and the recent Seminar by the IDSA on Defence Acquisitions is timely. Click to read the full Article:

    Defence Acquisitions, Time Overruns, Costs and Military Preparedness

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: Institute for Defence Studies & Analyses, http://www.idsa.in/

    Thursday, November 26, 2009

    Offset Policy Implementation

    The success of India’s defence offset policy should not be measured in agreements signed, or goods manufactured. An offset policy is successful only in so far as it generates long-term industrial partnerships, which function even after the vendor has discharged his offset liabilities. For this, the partnership must benefit both vendor and buyer. The challenge for India is to develop the domestic defence industry, both public and private sector, to create an ecosystem of potential partners for foreign vendors. This is not difficult; India’s auto component manufacturers have already demonstrated domestic capabilities in high-tech manufacture and cutting-edge R&D. These are precisely the qualities that global arms corporations seek in offset partners in India.

    The most far-reaching change is the introduction of “offset banking” last year, allowing vendors to accumulate offset credits towards a future liability. But South Block has been less than responsive in the justifiable demand for “offset trading”, which would allow accumulated credits to be sold by vendors who may not have a use for them at that time. As foreign vendors struggle to find offset partners for their mounting offset liabilities, there is rising clamour — particularly from US companies — for allowing “indirect offsets”, or the discharge of offset obligations through investment in non-defence fields like infrastructure, health, housing, etc. The MoD, focused on building up the domestic defence industry, considers “indirect offsets” as a potential turf infringement. But unless a well-conceived policy and regulatory framework is created for handling billions of dollars of offsets liabilities each year, New Delhi may have to allow some of that money to spill over into non-defence fields.

    Pse Click to read the full Report: Offsets' Take Off?

    Our Comments: FDI is an option in Defence & Aerospace now. What is important is, how does offset as a package work for domestic consumption and exports? Or it is only for the domestic clientele. Dual-Usage Industry, or areas typically important to our strategic options could be considered, where MOD spends.

    Brigadier (Retired) Sukhwindar Singh

    Wednesday, November 25, 2009

    Indian Defence Industry Development

    It is reported in the Business Standard that the Indian Defence offsets rise to Rs 8,000 Crores.

    In 2007, a mere Rs 243 Crores worth of offsets were firmed up. The figure rose tenfold to Rs 2,598 Crores in 2008. In 2009, DOFA has already cleared Rs 4,870 Crores worth of offsets and counting. These values are of Planned Productions. Actual Production has still to begin. Only a handful of Offset Partnerships that were tied up over the last three years have gone in production. The investment into Indian R&D has been negligible.

    Pse read the full Report: Defence Offsets Rise to Rs 8,000 Crores

    Our Comments: All these tie-ups are in anticipation of MMRCA and Other major A & D contracts. A very moderate inflow of Offsets against the signed-up contracts is appreciated as of now.

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: USIBC News Based on a Report by the Business Standard.

    Saturday, November 21, 2009

    Indian Defence Industry Development

    India has ever been keen to attain self-sufficiency and self-reliance in the Defence and Aerospace Sector. Somehow this Objective has remained 'illusive', to say the least, in high-tech and state-of-the-art domains. New Policy of the MOD, India, on Defence Procurement with Offset Policy embedded in it and its regular updating, presents a streak of hope towards attaining the Objective of self-sufficiency and self-reliance, along with ongoing efforts of the DRDO. There are many 'ifs-n-buts' in the Defence Professional Community, and advocacy issues. We need to show far deeper insight into our Defence needs as an Indian Nation.

    Under the subject heading 'Indian Defence Industry Development' on our Blog(s), we wish to record important media reports plus our own assessment to help policy makers arrive at 'win-win' decisions without fear or favour. India's Defence should be the concern of all Indians without any 'inclinations'. Our Armed Forces should always get the 'best'. It is they who pay with their lives for any 'compromises' -- their concern always.

    The following important developments are reported:

    1. High-Tech Companies May Need Govt. Support

    2. Fighter Jet Deal Trials Likely to End July

    3. US Wants India to Raise FDI Cap in Defence

    4. IAF Wants Govt to Allow More FDI in Defence

    We need to take decisions on the India's Defence Matters forgetting our 'personal gains', whatsoever.

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: USIBC News and Connected Agencies.

    Wednesday, November 18, 2009

    SMEs from US/EU for A & D Manufacturing in India

    Small and Medium American and European firms wish to tap the $100-billion Indian defence and commercial aviation markets.

    Aerospace manufacturing company Carlton Forge Works (CFW), producer of seamless rolled rings, plans to invest $100-150 million to set up an aerospace centre (forging,tooling and machining)in India in JV with some local partner. The company is, at present, scouting for suitable locations in India, such as Karnataka and Hyderabad, where it can have access to natural gas that is very important to run its business.

    The US department of commerce is looking forward to working on defence projects with the Indian government. “It is very important for tier-I and tier-II companies to explore business opportunities in India,” Ms Karen L Zens, Deputy Assistant Secy at the US department of commerce, said during the US Delegation's visit to Bangalore. Karnataka's 1000 Acre A & D Park could offer the opportunity.

    Read the full Report on:

    Small US, European Firms Eye India’s Defence, Aviation Markets

    Brigadier(Retired) Sukhwindar Singh
    Svipja Technologies
    (A Global Solution for Offsets)
    The Economic Times.

    Tuesday, November 17, 2009

    Belgaum Gets an Aerospace SEZ

    A 300-acre Aerospace SEZ (Special Economic Zone) has been launched in Belgaum , North Karnataka on 14 Oct 2009. Senior representatives of aircraft and aircraft-component makers from around the world, including Boeing, EADS, Rolls Royce,Pratt & Whitney, United Technologies and Lockheed Martin attended the launch.

    The SEZ has already seen an investment of Rs 150 crore from Quest, and hosts three operations — an engineering services facility, a precision machining facility and a sheet metal facility. The last of these is in a JV with Canada’s Magellan Aerospace.

    Three more MoUs were announcedat the launch; one was with with Belgian aerospace company SABCA to manufacture metallic parts and assembly work for the Airbus A350. This deal is expected to be worth $100 million over the next ten years. A second MoU was signed with Magellan to evaluate setting up a dedicated facility to manufacture components and sub-assemblies for aero engines . The third MoU was with Farinia Geie, a French foundry and forgings company to establish an aerospace forging facility.

    Pse Click to read the full Report: Belgaum Gets an Aerospace SEZ

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: The Economic Times

    Lepakshi Aerospace and Defence Cluster to Come-up in Anantapur, AP

    Lepakshi Knowledge Hub, Anantapur, AP, will have the Aerospace and Defence Cluster within it which is a 10,000-acre hub.

    It is learnt that an Australian firm has proposed to set up a helicopter unit on a 500-acre site in the cluster that would undertake design to manufacturing and training. At a later date, it may set up an aviation leisure facility. Representatives from the company have recently visited the facility and are expected to shortly sign a MoU.

    This input was provided to the The visiting US delegation of the Dept. of Commerce which comprised companies engaged in manufacture of different components in the aerospace segments such as avionics, sensors, aircraft hardware and power distribution systems. Read the full Report:

    Lepakshi Aerospace and Defence Cluster to Come-up in Anantapur, AP

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: The Hindu Business Line

    Saturday, November 14, 2009

    Samtel Thales Avionics & Offset Credits

    All six aerospace giants competing in New Delhi’s tender for 126 medium multi-role fighters have signed MoUs with Samtel Display Systems for manufacturing cockpit displays in case their fighter is selected. While these are pure “Build to Print” arrangements, purely to meet offset obligations, those foreign vendors, too, would consider designing in India and sourcing globally from here, provided offset benefits were clearly attractive.

    “All displays produced in Samtel Thales Avionics are fully eligible for offsets under the Defence Procurement Policy of 2008 (DPP-2008)”, argues Puneet Kaura, executive director, Samtel Display Systems. “It is an Indian company and it value-adds more than 70 per cent to whatever is supplied from Thales, France. But if offset credit is given only for products that are fitted onto Indian weapons platforms, Thales would hesitate to transfer sensitive technologies to a JV in which it holds only 26 per cent.”

    Gaining offsets credits would be sufficient incentive for Thales to supply HMDs worldwide from Ghaziabad, rather than from the Thales production unit in France. But, while the MoD has permitted the “banking” of offsets, it is unwilling to clearly state that the entire production of Samtel Thales Avionics is eligible for offset credits. Read full Report on:

    Samtel Thales Avionics & Offset Credits

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: The Business Standard.

    India's Anti-Aircraft Missile Akash

    Akash anti-aircraft missiles are to replace aging Russian SAM-6 Kvadrat air defense missile system. The Akash is part of India's Integrated Guided Missile Development Program.

    The missile system is for the T-72 main battle tank and has a Hyderabad-developed Rajendra phased-array radar capable of tracking up to 64 aircraft simultaneously over a radius of just under 40 miles. It can shoot down aircraft within 15 miles, according to Indian media reports.

    Analysts have said that one Akash missile has an 88 percent probability of kill. But two missiles fired five seconds apart raises this to 98.5 percent. The payload is reportedly around 140 pounds.

    The Akash has been developed by the Defense Research and Development Laboratory, which will oversee the weapon system integration and provide support throughout the missile's 20-year lifecycle.

    The missile is in the same class as the U.S. Patriot, Israel's Barak and the U.K. SAM system, the article said. It is around 19 feet long, weighs 1,550 pounds and travels at nearly 2,000 feet per second, according to India's Business Line newspaper. Read the full report on:

    India's Anti-Aircraft Missile Akash

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: www.bharat-rakshak.com

    Friday, November 13, 2009

    Indian Defence Industry Development

    India has ever been keen to attain self-sufficiency and self-reliance in the Defence and Aerospace Sector. Somehow this Objective has remained 'illusive', to say the least, in high-tech and state-of-the-art domains. New Policy of the MOD, India, on Defence Procurement with Offset Policy embedded in it and its regular updating, presents a streak of hope towards attaining the Objective of self-sufficiency and self-reliance, along with ongoing efforts of the DRDO. There are many 'ifs-n-buts' in the Defence Professional Community, and advocacy issues. We need to show far deeper insight into our Defence needs as an Indian Nation.

    Under the subject heading 'Indian Defence Industry Development' on our Blog(s), we wish to record important media reports plus our own assessment to help policy makers arrive at a 'win-win' decisions without fear or favour. India's Defence should be the concern of all Indians without any 'inclinations'. Our Armed Forces should always get the 'best'. It is they who pay with their lives for any 'compromises' -- their concern always.

    The following important developments are reported:

    1. Sikorsky Aircraft Corp. and Tata Advanced Systems Limited (TASL) today announced the signing of an agreement creating a joint venture that will manufacture aerospace components for Sikorsky in India, including components for S-92® helicopter cabins. The joint venture agreement builds upon a long-term contract signed in June 2009 for TASL to assemble Sikorsky S-92® helicopter cabins. Sikorsky is a subsidiary of United Technologies Corp. (NYSE: UTX), and TASL is a wholly owned subsidiary of Tata Sons. Read full Report:

    Sikorsky and Tata Create Joint Venture in India

    2. A 1,000-acre Aerospace Park will be developed near the international airport at Devanahalli. Land has been acquired by the State agency Karnataka Industrial Areas Development Board. The area will include aviation MRO-related activities and 250 acres of an export-oriented aerospace SEZ. Report:

    1,000-acre aerospace zone planned in Bangalore

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: USIBC News

    Friday, November 6, 2009

    Defence Procurement Procedure - 2008 (Amendment- 2009)

    The following amendments to DPP-2008 have been made:

    (a) Introduction of new category for acquisition - Buy & Make (Indian).
    (b) Sharing of information with Indian Industry.
    (c) Enhancing role of Independent Monitors.
    (d) Removal of ambiguity regarding EMD in signing the Integrity Pact.
    (e) Formulation of SQRs including issue of Request for Information (RFI).
    (f) Offsets requirement in 'Option Clause', cases and change of offset partner in exceptional cases.

    The amendments to DPP-2008 are being issued in the form of Defence Procurement Procedure - 2008 (Amendment - 2009), details of which are given on

    These amendments are incorporated to the existing DPP-2008 in relevant pages/paragraphs as mentioned and will take effect from 01 Nov 2009.

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: http://www.mod.nic.in/

    Wednesday, November 4, 2009

    National Seminar on Defence Acquisition

    National Seminar on Defence Acquisition was organised by the Institute of Defence Studies & Analyses on 27 Oct 2009 in New Delhi. The Defence Minister and Fomer DG, Defence Acquition Council (DAC) delieverd addresses which contained important points. These may find inclusion in the Revised DPP 2008, due in 2009. The following addresses are linked:

    Address by Defence Minister

    Address by Former Director General (Acquisition)

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)

    Credit: Institute of Defence Studies & Analyses, http://www.idsa.in/

    Monday, November 2, 2009

    Likely Policy Changes to Boost Indian Defence Sector

    A new category of Buy and Make (Indian) is likely to be introduced in DPP 2008. If a project is selected by the Defence Acquisition Council to be categorised as Buy and Make (Indian), Indian firms, both public and private, will play a lead role in negotiating and obtaining technology and co-production arrangements with the foreign original equipment manufacturers (OEMs). As such, the request for proposal will be issued to the Indian firms and not to the foreign OEMs.

    Indian firms identified to have requisite technical and financial capabilities would be required to submit project proposals indicating detailed roadmap for development and production of the items over its life cycle. They will also be required to spell out the proposed production arrangement with the foreign OEM along with the content of the Transfer of Technology (ToT). The product so manufactured and supplied by the Indian Company to the MOD / Its Agencies must have 50% indigenous content. Thus amended DPP-2008, would enable pro-active participation of Indian Defence Industry in manufacturing defence products through co-production arrangements, such as JVs, with foreign manufacturers and through ToT.

    Under Amendment 2009 to the DPP-2008, a public version of the Long Term Perspective Plan of the Armed Forces outlining technology perspective and capability roadmap covering a period of 15 years will be widely publicised and made available on MoDs website.

    Further, to facilitate active participation of domestic industry in acquisition planning, Reps of Companies and Industry Associations will be invited for presentations and consultations in procurement meetings before decisions on the source of procurement are taken.

    By an amendment, the role of the Independent Monitors (IM) is more defined and enlarged. It would enable them to scrutinize complaints with regards to violation of Integrity Pact.

    Pse read the full Article on http://in.biz.yahoo.com/091029/50/baugiy.html and http://www.defencetalk.com/dpp-2009-to-boost-technology-transfer-to-indian-industry-22748/

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    http://www.in.biz.yahoo.com/ and www.defencetalk.com

    Friday, October 23, 2009

    HAL to Supply Flaperons for Boeing 777

    State-owned aerospace firm Hindustan Aeronautics Limited (HAL) has signed an agreement with Boeing to supply flaperons for the Boeing's 777 series commercial jetliners. It is understood that HAL will supply 600 units of flaperons to Boeing which will be delivered in phases by 2019.

    Indian carriers have already ordered a total of 36 Boeing 777s. This includes 23 from Air India and 13 from Jet Airways.

    The 777 flaperon is a complex composite assembly that is instrumental in controlling the airplane’s maneuverability in flight. Referred to as a 'control surface', flaperons work both as an aileron to control roll and as a flap to control lift.

    “HAL and Boeing share a very special relationship. Showcasing HAL’s composite manufacturing capability on one of the world’s premier long-haul commercial jets positions us for even greater opportunities at the forefront of technology,” Soundara Rajan, Director, Corporate Planning & Marketing, HAL said. Boeing's relationship with HAL date back to 1991. Boeing India President Dinesh Keskar said, "The composite 777 flaperon that HAL will produce represents a significant leap forward in technological capability, and supports Boeing’s strategy to work in partnership with India’s aerospace industry for the long-term.”

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Business Standard.

    Wednesday, October 21, 2009

    FDI Norms in Defence Production

    The Finance Ministry is taking up the new regime for calculating foreign investment in Indian companies. The MOD has voiced concern that it opens up the possibility of foreigners taking ownership in defence production companies in excess of the 26% if allowed now, and creating more pressure to modify the policy later.

    The Ministry has argued with the Finance and Commerce Ministries the need for putting safeguards to prevent the abuse of the new norms that do not recognise indirect foreign investment if the investing company is owned and controlled by the Resident Indians.

    Foreign Direct Investment (FDI) ceiling for defence production is not applicable to services such as defence product design and development. Therefore, companies in this service segment with up to 49% FDI can invest in defence production without their investment being counted as FDI as they are 51% owned and controlled by resident Indians, said a Government official. Read the full article on http://economictimes.indiatimes.com/articleshow/5140216.cms

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    The Economic Times.

    Friday, October 16, 2009

    Indigenous Manufacure of Components/Sub-Systems/Systems for Defence

    Indian industry should mature to manufacturing complete systems for the Defence sector on par with international standards and deliver them on time and at competitive costs, said Dr V.K. Saraswat, Scientific Adviser to the Defence Minister.

    So far, most companies have been doing components and sub-systems of good quality. More than 800 industries are involved in projects taken up by the Defence Research Development Organisation (DRDO), but the scale of self reliance index is around 30-40 per cent indigenous production and rest is import.

    Calling for a reversal of this scenario and overcoming the syndrome of imports, Dr Saraswat said: “There is a need to make big investments in focused areas to bridge the technology gap and reduce dependence on imported components.”

    Read the full Article on http://www.thehindubusinessline.com/2009/10/15/stories/2009101551051700.htm

    Components, sub-systems & systems supply to the Armed Forces has been a 'burning issue' for Years especially for the erstwhile USSR origin equipment held in the inventory with Us. DRDOs focus on the issue is a welcome step. However there are issues of technology, and numbers needed which make indigenous manufacturing problematic. Detailed thought is needed on these issues.

    Brigadier(Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Business Line of The Hindu.

    Thursday, October 8, 2009

    Govt Should Encourage Pvt Players in Defence R&D: A Study

    The government should encourage private players in defence R&D and also fund 80 per cent of the research and development activities to emerge as a significant player in the global defence market, a study said. Since defence research, design and development is fraught with risks, the privte sector is unlikely to come forward, the joint study of Assocham and Ernst and Young said.

    If India wishes to emerge as a significant player in the global market, it would have to fund export driven products and make export variants of high end systems, it said. "Therefore, there is a need for a policy as per which 80 per cent of Indias R&D is funded from government resources, effectively encouraging the private sector to undertake risks associated with developing defence products," it said.

    Read the full Article on http://in.news.yahoo.com/20/20091001/372/tbs-govt-should-encourage-pvt-players-in.html

    Brigadier(Retired) Sukhwindar Singh


    (A Global Solution for Offsets)

    Credit: http://www.in.news.yahoo.com/

    Friday, September 4, 2009

    Offsets: Ordnance Factories of India

    Ordnance Factories and the OFB have served the country well. It is a mammoth set-up controlled by the MOD. Strategic considerations, not purely business outlook, makes this system survive.

    There are very heavy spare capacities built in them for 'war times'. These are located in remote areas due to developmental issues, follow the Govt. Directives of Reservation, Taxes, etc, truthfully. The OFB has done Us well under the circumstances.

    It needs to upgrade its technologies, quality of the products, efficiencies, adherence to delivery schedules, customer satisfaction, aging workforce, etc, like DPSUs and Civil Sector do. Investments needed to upgrade them are huge. MOD can't afford to fail them, and follow the line of 'Indian Defence Industry' critics for whatever motivation. These should stay but as 'flags of efficiency'. You could consider existing from certain horizontals, but carefully. It is the strategic sector You would be tampering with.

    Mr LK Behera's Article in the IDSA is valuable. He analyses the reasons behind the poor performance of the Indian Ordnance factories (OFs) and recommends measures to revitalize them. To achieve this, the author identifies six core areas pertaining to OFs. After identifying the problems in these areas he goes on to suggest measures so that the functioning of the Ordnance Factories can be improved. Pse read the complete Article on

    Brigadier (Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    In Arrangement with the IDSA, http://www.idsa.in/, A Think Tank of India on Matters Defence.

    Friday, August 28, 2009

    IDSA's Journal of Defence Studies: Defence Offsets

    The Journal of Defence Studies attempts to encourage research on the core issues of defence. The journal serves as a platform for sharing research findings and opinions of scholars working on defence-related issues, both within and outside IDSA. It will be our continuing endeavour to give priority to issues concerning defence policy, reforms in defence and defence economics. The journal contains a mix of research articles, essays, topical commentaries, opinion pieces and book reviews.

    Journal of Jan 2009 focuses on Defence Offsets. It contains Papers presented during the Offset Seminar of the IDSA. Provides insight into Defence Offsets in the Indian Context, and issues that still need to be resolved.

    Please Click the Link http://www.idsa.in/jds.htm to read the Journal online.

    Brigadier Sukhwindar Singh (Retired)
    (A Global Solution for Offsets)

    Sunday, August 2, 2009

    Defence Acquisitions & Procedures

    We need to be logical, rational and balanced in our Views. Everything can't be 'wrong', improvements are needed everywhere. Can't discredit the System en bloc. We need to understand our defence industry capabilities 'holistically', and needs of the Armed Forces in real terms.

    Credit: An Article in The Economic Times, 31 Jul 2009.

    Friday, July 17, 2009

    Offsets Contracts of Over Rs 7,500 Crore Signed in Defence Deals

    Government on wednesday said contracts worth more than Rs 7,500 crore have been signed under the offsets clause of the Defence Procurement Procedure (DPP).

    "Offsets contracts of more than Rs 7,500 crore have been signed till date. Contracts between foreign suppliers and Indian defence companies are resulting is setting up of manufacturing, design, testing and service centres in the defence industry," Minister of State for Defence M M Pallam Raju said while replying to a query in the Rajya Sabha.

    Under the Offsets Clause, foreign suppliers winning Indian defence contracts of over Rs 300 crore are required to invest a minimum of 30 per cent of the deal's worth back into the Indian defence Industry. Replying to another query, Raju said the Heavy Vehicles Factory in Avadi would be overhauling 120 T-72 tanks in the present fiscal.

    Brigadier (Retired) Sukhwindar Singh


    (A Global Solutionfor Offsets)

    Credit: http://economictimes.indiatimes.com/articleshow/4781103.cms

    Wednesday, July 8, 2009

    Some Excerpts from Interview of Shepherd Hill, The President of Boeing International

    Some of Boeing’s largest contracts in India require a 30-50% offset. Do you see such compulsions being waived in the near future?

    We have offset requirements traditionally around the world and take them very seriously. On the BCA side, related to Air India, our offset requirement is to the tune of $1.7 billion. We submitted a plan and we will meet that offset requirement. On the defence side, we’ve submitted a plan for P-8 (military aircraft currently being developed for the US Navy) as well as MMRCA. We’ll put plans together to meet the offset requirements. We would, however, like and continue to encourage our Indian customers to look at the best means of designing an offset program. Right now, the Indian government has one and we’ll meet that. We, however, do believe in the fact that the program can be modified to get India more of what it wanted with slight changes to the existing offset requirements.

    How’s the Boeing-Tata JV doing? Of the $500-million aerospace component work in India (that’s the pact), how much has been utilised?

    Well, we haven’t put a value to the JV but it could be up to $1 billion. But the floor beams is in place. It has been affected somewhat by the delay in the 787 program. But this is going to be one-of-its-kind. It will be new to India, and unique around the world — sign wave floor beams of titanium — it takes out the weight and strengthens floor at the same time. Now that’s an example of how a joint venture can provide value to India, and India can provide value to Boeing.

    So when do we get to see the 787?

    The current schedule shows the first flight in the second quarter of 2009, and the first delivery in the first quarter of 2010. Boeing has been in India for 60 years. But why has it taken so long to see co-development between Boeing and its India division or other Indian companies? Sixty years ago, India didn’t ask for co-development. They were happy to buy DC-2s and DC-3s and 707s. The world has changed in India. So the prices in terms of expectations have changed. There have always been collaborations in India. In 2007-08, there were nearly $100 million in terms of collaboration. In 2009, there will be almost twice that amount. In 2012, there will be $500 million worth of manufacturing, IT and R&D. We’ll be investing in and partnering with Indian companies. You have the floor beam program, then the collaboration with HAL in terms of lean processes, program management and best practices and work content going into HAL. We believe there will be more tangible programs over time. Were we to win the MMRCA program of 126 aircraft, 108 of those will be co-built and co-manufactured by HAL. That’ll be a significant sharing. The manufacturing capability of HAL will transcend even what they’ve had in the past.

    What kind of aerospace manufacturing work is being done with HAL as part of the $1 billion MoU Boeing has signed with them in 2007?

    Well, it’s everything from component parts to manufacturing of larger pieces and ultimately, its systems integration. Ultimately, they have to assemble the F-18. So it goes beyond the actual manufacturing of parts.

    So how much has diplomacy got to do with more co-development work?

    I think that the very fact that we are in the defence side of the business is factored into the warming relationship between the US and India that has occurred in the past six years and as a direct result of the Bush administration’s priority in dealing with India as a strategic partner. I think that will carry forward in the Obama administration, the enduring common interests of the two largest democracies of the world.

    Is Boeing planning to make India a manufacturing base anytime soon?

    No, we won’t go it alone. I see continued work with partners on large-scale component manufacturing. I don’t see Boeing setting up a manufacturing facility here.

    Brigadier(Retired) Sukhwindar Singh


    (A Global Solution for Offsets)

    Credit: The Economic Times

    Tuesday, June 23, 2009

    India Inc Makes Strategic Moves on Defence

    Corporations sign joint ventures with foreign majors to tap a potential market of over Rs 50,000 crore in 5 years.

    Just 10 days ago, the Tata group signed an agreement with US-based Sikorsky Aircraft Corporation to manufacture its S-92 helicopter cabins in India. The cabins for the four-bladed helicopter, meant for both military and civilian markets, are expected to roll out from a green-field facility in Hyderabad by late 2010.

    On May 5, Larsen & Toubro (L&T) announced a joint venture with European defence electronics major EADS to manufacture high-end defence electronics products. The venture is expected to start by March next year and L&T is expecting to get Rs 2,500 crore worth of business within five years.

    Just 10 days later, in a first for an Indian military aircraft programme, L&T, Godrej & Boyce and Tata Advanced Systems put in bids to develop and build an unmanned aerial vehicle, or drone, used in surveillance operations. The medium-altitude, long-endurance aircraft, named Rustom, will be designed to fly at least 250 km at a stretch.

    A month before that, Mahindra & Mahindra inaugurated a state-of-the-art, six-acre plant in Faridabad to make specific military manufacturing applications, including armoured vehicles.

    Sensing a booming opportunity, India Inc is making rapid strategic moves on the defence business. Rolta India chief Kamal K Singh said the defence business was growing at a stunning compounded annual rate of 40 to 50 per cent and most Indian companies were working on cutting-edge technology.

    Rolta, which has been in the defence business for over two decades, renewed its agreement with IntergraphCorp in April this year for engineering and geospatially-enabled software. It also has a venture with the $30-billion Thales of France to build equipment for military intelligence.

    One major reason why Indian companies have been in a hurry to step up their footprint in defence is the “offset clause”, under which all foreign companies that get a defence contract of above Rs 300 crore from the Indian government will have to bring back 30 per cent of the contract value into the country, either by way of purchases or as investments in the sector. That means a huge opportunity just waiting to be tapped.

    Here’s why. Chales Pybus, head (defence advisory) at KPMG, said the Indian government was expected to issue over Rs 150,000 crore worth of defence orders in the next five years. At 30 per cent offset, that’s a plough-back of over Rs 50,000 crore into the Indian defence industry. It’s something India Inc can hardly ignore.

    That explains the flurry of moves by companies like the Tata group, L&T, Godrej & Boyce, Mahindra & Mahindra, Walchandnagar Industries, Punj Lloyd and the like.

    The array of joint ventures signed is mind-boggling. Apart from Sikorsky, Tata Advanced Systems has also formed joint ventures with Israel Aerospace Industries for building unmanned aerial vehicles, missiles, radar systems. The group also builds components for Hindustan Aeronautics, DRDO and the Indian Space Research Organisation.

    Mahindra Defence Systems has a joint venture with Lockheed Martin to jointly develop simulators for the Indian defence sector and with BAE Systems for building heavy artillery. Another major in the fray, Godrej & Boyce, supplies the Vikas engines for India’s rockets.

    L&T makes military vessels for the Navy and has built a radar system with Bharat Electronics for the Army in addition to being involved in other aerospace projects. The company’s defence division already makes ancillary equipment for ships, such as propulsion steering gears and shafts and is now planning to build ships for the Indian Navy.

    There’s more. Infrastructure major Punj Lloyd has joined hands with Singapore Technologies Kinetics (STK) to manufacture land defence systems — essentially weapons, including howitzers, mortars and small arms — and has announced a greenfield project near Gwalior, with an initial investment of Rs 200 crore. The Hero Group has also announced a Rs 500 crore, 292-acre defence and aviation special economic zone (SEZ) in Madhya Pradesh.

    One of the major benefits of the offset clause is that foreign companies have no option but to forge partnerships with Indian companies to make the country part of its global supply chain. Take US major Boeing. Last year, the company entered into an agreement with TAL Manufacturing Solutions, a wholly owned subsidiary of Tata Motors, to make structural components for the latter’s 787 Dreamliner. Boeing has signed up with another 37 Indian companies too.

    Lockheed Martin, one of the world’s largest defence companies, is also aiming for deals with India worth $15 billion in the next five years and wants to develop defence technology with Indian companies.

    Companies looking to be part of the Indian expansion include US aircraft parts maker Rockwell Collins Inc, which plans to quadruple its staff in India by 2012. Lockheed Martin and BAE Systems are also forming multiple partnerships in India.

    But the ambitions of some Indian companies have gone much beyond these partnerships. M V Kotwal, director and senior executive vice president (heavy engineering), L&T, said Indian players were competent enough to build large systems and sub-systems. “But the government should make sure the participation of Indian industry goes much beyond parts sourcing only,” he said.

    That’s threatening to become a chorus and India Inc cites the support provided by the US government that enabled Boeing and Lockheed Martin to compete for military plane projects. The F-16 is built by Lockheed, while Boeing builds the F-18.

    Companies said the delay on the part of the government to allow greater entry of private companies in defence had already done enough damage. For example, L&T and Tata Power Strategic Electronics Division had partnered with Defence Research and Development Organisation (DRDO) to develop the prototype of a multi-barrel rocket launcher, Pinaka, for the Indian Army about 20 years ago. But business scope materialised only in 2002 when the government opened up defence equipment production to private sector companies. It took four more years for the two companies to get orders for Pinaka.

    Kuljeet Singh, head-defence advisory, Ernst & Young, said “The offset clause was working out well for Indian companies in acquiring orders or signing for technologies. But for more growth, research and development (R&D) and manufacturing should be outsourced to private players. And, in turn, the companies should acquire or develop proprietary technology.” The government is taking some more initiatives as well to facilitate this. For example, it has revived the Raksha Udyog Ratna (RUR) scheme that was put in cold storage because of opposition from the Left. Tata Motors, L&T, Tata Power, M&M, Godrej, Bharat Forge, Infosys, Wipro and Tata Consultancy Services are among the 12 companies that have been cleared by a defence ministry committee.

    Once awarded RUR status, these companies will be treated on a par with defence public sector enterprises. RUR-status companies will also be allowed to access foreign technologies and build main systems for the defence department, besides getting substantial government financial investment (up to 80 per cent) for design, development and manufacture of defence products, including fighter aircraft, tanks and warships.

    Brigadier (Retired) Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: Business Standard

    Friday, June 19, 2009

    Ukraine to Upgrade 100 x AN-32 Planes of the IAF

    India has signed a deal with a Ukraine firm to modernise its 100 medium lift AN-32 cargo aircraft.

    The contract, worth over 400 million dollars, was signed between Ukrainian military export monopolist, Ukrspetsexport, and India to upgrade the planes operated by the IAF.

    Antonov Aircraft Company, HQ at Kiev, will give the eponymous 20-tonne-capacity aircraft, a full upgrade of on-board communications and navigation systems.

    The Antonov-32s are the lifeline of Indian soldiers fighting in uninhabitable weather conditions and the harsh terrain to protect Siachen Glacier, the world's highest battlefield.

    The aircraft is mainly used for carrying cargo, supplies and troops to Siachen.

    Brigadier (Retired) Sukhwindar Singh
    Credit: Asian News International (ANI).

    Thursday, June 18, 2009

    A & D Opportunities in the Middle East

    The Middle East is one of the few regions, which still show strong spending on defense equipment. While the unstable political situation is certainly an influencing factor for this, a number of regional countries use their defense spending also as a way to leverage the industrial development through Offsets, which as a result opens interesting possibilities for foreign Aerospace & Defense companies.

    The United Arab Emirates are leading the way in this development with a wide range of small to very large defense procurements, which have recently even outpaced Saudi Arabia, traditionally the Middle East's largest military market.

    Indian Defence Industry too could take advantage of this market with the advantages that we have in this Region.

    Pse read the full report on http://www.epicos.com/epicos/portal/media-type/html/role/content/page/default.psml/js_panename/News+Information+Article+View?articleid=147932&showfull=false

    Brigadier (Retired) Sukhwindar Singh
    (A Global Solution for Offsets)

    Tuesday, June 16, 2009

    Flight Evaluation of Medium Multirole Combat Aircraft(MMRCA)

    The Indian Air Force’s bid to acquire 126 Medium Multirole Combat Aircraft (MMRCA) has got a push.

    The Defence Ministry has issued “the letters of invitation for flight evaluation trials” to six companies that are vying for the $10-$12-billion contract.

    They are the European Aeronautic Defence and Space Company(EADS), which pitches in with Eurofighter Typhoon, America’s Lockheed Martin (F-16 Falcon) and Boeing Integrated Defence System (F/A-18F Super Hornet), Russia’s Mikoyan (MiG-35), Sweden’s Gripen (JAS-39) and France’s Dassault (Rafale).

    The IAF now has “to speedily complete the flight evaluation and indicate its choice,” say Ministry officials.

    Between July and March next, the IAF will have to undertake the trials, initially in India to test the performance of the aircraft under local conditions and then in the countries of their origin. Armament trials will be conducted in the country of origin as bringing weapons to India could be problematic.

    For the evaluation trials, the IAF is likely to form two teams composed of test pilots, flight test engineers and maintenance crew, drawn primarily from the Aircraft Systems and Testing Establishment and, to a lesser extent, from fighter squadrons. The teams are also likely to include officials of Hindustan Aeronautics Limited (to look into technology transfer and industrial partnership) and the Centre for Military Airworthiness and Certification.

    Besides enabling the IAF test pilots to try out the aircraft, the trials will allow flight and ground test crew to know about the maintenance and overhaul facilities required.

    Once the IAF makes its evaluation, some time in 2010, commercial negotiations could begin. The terms indicate that the first aircraft will have to be delayed 48 months after a contract is signed.

    Time-consuming, expensive

    The time-consuming and expensive process — it could cost each competitor $5 million — will test each aircraft whether it can measure up to the performance indicators set forth in flight manuals in Bangalore, Jaisalmer and Leh (under normal conditions, in hot weather and at a high altitude).

    Each competitor is sending two aircraft. Informed sources have indicated that Rafale will be one of the first to be evaluated. It will fly into Bangalore in the first week of September. Officials of the companies said that they had initiated a survey of the locations, where their aircraft would be tested.

    Brigadier(Retired)Sukhwindar Singh
    (A Global Solution for Offsets)
    Credit: The Hindu.

    Saturday, June 13, 2009

    L&T, and EADS to set up a JV for Engineering and Research in the Defence Sector

    Larsen and Toubro Ltd (L&T) and EADS NV will shortly approach the Foreign Investment Promotion Board (FIPB), for setting up a JV for engineering and research activities in the defence sector.

    This JV company will then make downstream investments for manufacturing of defence equipment such as radars, avionics and electronic warfare equipment in India to cater to the domestic and overseas markets. EADS, a European A & D firm, will hold nearly 24% stake in the JV and the balance will be with L&T. The ownership and control of the JV company will be with L&T.

    The JV will conform with India’s offset policy in defence, which encourages domestic manufacturing of defence equipment.

    EADS and L&T state that the benefits of the JV include a large investment, with initial job creation of nearly 400 and FE savings. Access to EADS’ technology will be another benefit that will occur.

    EADS had reported revenue of €43.3 billion (about Rs 3.4 trillion) in 2008.

    Brigadier (Retired) Sukhwindar Singh

    Credit: Nayantara Rai / CNBC-TV18

    Thursday, June 11, 2009

    Army to Induct First Network-Centric Artillery System

    Known as Project Sakthi, the Artillery Combat Command and Control System (ACCCS) is a major division of the Tactical Command Control Communication and Intelligence (Tac C3I) System. The System is a step towards acquiring the capability of Network-Centric Warfare at the tactical level.

    Sakthi is the first C3I System being fielded in the Indian Army. The role of ACCCS is to automate and integrate all artillery operational functions and provide decision support at all levels of artillery command from the corps level down to the battery or guns level in a networked environment. The System is scheduled to be inducted on Friday, 12TH Jun 2009, as per media reports.

    Developed by the Army's Directorate General of Information Systems, the Sakthi's three main electronic Sub-Systems, Enhanced Tactical Computer, Gun Display Unit and Hand Held Computer, are produced by Bharat Electronics Limited.

    Brigadier Sukhwindar Singh (Retired)
    (A Global Solution for Offsets)

    Friday, May 29, 2009

    India's Defence Minister Warns Against Arms Deal Corruption

    India Plans to Spend $30 b (around Rs 1.43 trillion) by 2012 on Arms Purchases. About 30% of it is to be Ploughed Back as Defence Offsets.

    India’s defence minister on Wednesday, 27 May, said arms firms trying to bribe their way into big-ticket defence contracts will be “ruthlessly” excluded from the country’s huge weapons acquisition programme.

    India plans to spend $30 billion (around Rs1.43 trillion) by 2012 on arms purchases. “At times, we found certain manipulations and malpractices. We cannot ignore that so we ruthlessly cancelled big ticket items,” defence minister A.K. Antony told reporters. “We will ruthlessly cancel contracts in the future also as in the past. This is not a happy experience but we will be forced to take such action.”

    In December 2007, the Indian Air Force scrapped a $600 million deal for 197 helicopters after allegations of corruption in the bidding process. The deal had been awarded to Eurocopter, the helicopter unit of the EADS, which makes civil and military aircraft.

    Another deal for 22 attack helicopters was scrapped in March, on the grounds that the firms in the race had failed to meet contractual parameters. Indian defence sources, however, said there were suspicions of irregularities in bidding for the $550 million contract.

    “While we are determined to speed up procurement, we cannot compromise on transparency,” Antony said.

    Meanwhile, India expects to evaluate jets made by Boeing Co., Lockheed Martin Corp., Dassault Aviation SA and others in two-three months as the government moves to decide on the world’s biggest fighter plane order in play.

    India’s plan to buy 126 jets worth $11 billion, is contested by six companies, and is the biggest fighter-plane order in 15 years, according to Chicago-based Boeing.

    Bloomberg Contributed to this Story.

    Friday, May 22, 2009

    Offsets in Indian Defence Sector: The Indian Way

    (An Article in TOI, New Delhi, on May 22, 2009)

    Indian Offset Policy articulations are based on the Indian Perspective of its domestic consumption, technology issues, and exports. And rightly so. All DPPs / Offset Policy Issues point in this direction, routinely revised as we learn, with national interest at its core.

    Barring the US, a very few other countries have experience in Defence Offsets, and that too ‘rapped-up’ in the Offsets are both Direct & Indirect Offsets. Most of these Recipient Countries of Offsets are small or Allies of the US. In case of India, it is entirely different. Reasons are many.

    India, as I have understood, has articulated its Offset Policy in the spirit of ‘by India, for India’, leaving enough scope for modifications as we gain experience. India’s Offset Policy therefore does not fit into any ‘blue print’.

    The primary aim of the Policy is to make Indian Defence Industry state-of-the-art, and competitive with a view to retain independence in defence & policy matters. Some of the important decision matrix discerned by Me on critically analysing the Policy is:

    Issue of ‘Hostile Take Over’. This limits the FDI to 26%.

    Indian Investors are encouraged to invest their money in the Indian Defence Industry infrastructure. Control of the strategic industry is needed.

    Govt. has permitted the ‘Obligor’ to select the ‘local partner’, but remains interceded to ensure that the contract to Manufacture / TT / Buy-Back / Exports, etc, from India fits into the Strategic Defence Policy parameters, Indian Defence Industry being part of it.

    Licensed Production in India in the past needs to be differentiated in the present context where the Govt. of India may now insist on clauses like, Meeting the Domestic Need First, Buy-Back, Exports, etc. We are now in a strong bargaining position as a Buyer. We need not carry the baggage of the past. Co-development and Co-production with contracts suitably concluded are a distinct possibility to launch the Industry into the world defence market.

    Security & Suspicion are co-related. The Govt. is likely to give information to the production agencies on ‘need-to-know’ basis, enough to move ahead. Suspicion is likely to end progressively.

    ‘Banking of Offsets’ could be revisited.

    We need to allow the existing Offset Policy to move on the maturity curve. The ground situation would force it to correct itself.

    What the Private Defence Industry should ask is how the Govt. proposes to assure ROI for them against global competition, especially in view of the Technology Issues, and needs of the Armed Forces to remain state-of-the-art always?

    Brigadier (Retired) Sukhwindar Singh
    (A Global e-Solution for Offsets)

    Thursday, May 14, 2009

    The Offset Policy of Portugal

    The responsible authority for the implementation of the Portuguese Offset Law is the Permanent Commission of Reciprocal Concessions (CPC) which is an executive collegial body part of the Ministry of the Economy and Innovation responsible for the areas of national Defense and for the Economy.

    The CPC is made up of a president and four voting members. The president is nominated in a joint ordinance by the Government members responsible for Defense and the Economy and Innovation. The voting members are nominated one each by the Government members responsible for Defense, the Economy and Innovation, Finance, and Science, Technology and Higher Education.

    The existing legislation regarding the subject of multipliers in Portugal is that each offset program receives a multiplier after the valuation by CPC. Minimum multipliers are specified according to the type of program.

    The programs that are related with transfer of technology have a multiplier of no less than 3.

    Programs that are of socio-economic interest and the one linked to the defense industry have a multiplier of no less than 2.

    Finally, programs linked to creating national capacity to sustain lifecycles of acquired equipment and systems have a multiplier of no less than 2.5.

    According to the Offset Law, projects not related to defence can be included in a contract. Actually, there are 3 groups of projects that can be incorporated in an Offset program. Direct programs, meaning programs directly linked to the object of acquisition, indirect programs but connected to the defense industry, (defense related design, development, product or process engineering and production and servicing or any other activity of proven added value) and finally indirect programs meaning programs not connected to defense.

    Offsets are being implemented in Portugal with greater flexibility, by giving priority to defense related projects but open to other sections such as IT, energy, automotive etc. Link for the full Article:

    Brigadier (Retired) Sukhwindar Singh
    (A Global e-Solution for Offsets)

    Credit: http://www.epicos.com/

    Tata Advanced Materials Aims $1 b Revenue in 10 Years

    Exports is a major thrust area for the company, mainly in the aerospace sector and it expects exports to contribute 60-70% of revenues in the next five years.

    Tata Advanced Materials, maker of composite components for defence, aerospace and industrial applications, is aiming to become one of the top 10 global players and record $1 billion revenue over the next 10 years from a meagre $20 million now.

    “I see Tata Advanced Materials as a significant global player in composite solutions in defence and aerospace and in the global top 10 in the businesses we operate in,” as per the April issue of Tata Review, an in-house magazine.

    “This would mean attaining revenues of a billion dollar, from the current level of just $20 million,” he said. Major portion of this could be appropriated for Offsets if properly worked out, adds this Blogspot.


    Brigadier (Retired) Sukhwindar Singh
    (A Global e-Solution for Offsets)

    Credit: PTI & LiveMint.com

    Thursday, May 7, 2009

    Greek Offset Policy

    Greece has amended its Offsets Guidelines. The main reason behind this was the fact that the new Guidelines should reflect the shift of focus from the Armed Forces to the Defence Industry. The new legislation was approved on December 2006 as a Ministerial decision (a law) and not as guidelines as it used to be up to then. According to the new law, "Offsets Benefits (OB)" are the additional benefits provided within the scope of a specific procurement and should be regarded as a compensation/recovery towards the local industry.

    Offset Benefits should be perceived as a part of the armament expenses, which the foreign suppliers are liable, following an inspection by the competent MOD bodies. Offset Benefits are obligations deriving from the main procurement contract.

    Furthermore the new legislation also foresees the introduction of Greek Added Value (at least 35% for Greek bidders) , and Greek Industrial Participation (for International bidders - % to be specified) as an additional requirement to offsets.

    Read the full Article on Link: http://www.epicos.com/epicos/portal/media-type/html/role/content/page/default.psml/js_panename/News+Information+Article+View?articleid=143855&showfull=false

    Brigadier (Retired) Sukhwindar Singh
    (A Global Solution for Offsets)

    Wednesday, May 6, 2009

    Proposed JV: L&T and EADS

    Larsen & Toubro and the Defence and Security Division of Europe's EADS will form a JV to make defence electronics in India.

    The JV will focus on design and development of electronic warfare, radar, military avionics and mobile systems for military applications for India and rest of the world.

    The JV is subject to approval by the Indian government.

    "The Indian Defence and Security market is growing fast and we want to grow with it," Stefan Zoller, Chief Executive of EADS Defence & Security said in the statement.

    India is among the largest buyers of defence equipment as it plans to spend more than $30 billion over the next five years to modernise its largely Soviet-era weapon systems, and is also launching its first military spy satellite next year.

    Reuters India

    Wednesday, April 29, 2009

    BEL for Offsets Business

    Bharat Electronics Limited plans to diversify its portfolio with 70% focus on the defence sector and 30% on civil sectors , including homeland security, infrastructure and e-governance. As per its CMD, "BEL is taking proactive steps to protect and further consolidate its leadership position in the Indian Defence Sector while accelerating efforts to get into new business areas".

    The company had appointed KPMG consulting firm to identify new growth opportunities. BEL was looking at avenues like energy efficiency solutions, nuclear power instrumentation and was in discussion with reputed foreign and Indian players for forming joint ventures in areas of defence electronics. It was exploring joint venture opportunities in the field of missile electronics and guidance system, microwave super components and airborne EWs. Some of these proposals are in the advanced stages of finalisation.

    MoUs are in place with Hyderabad-based firm M/S Astra Microwave Products Limited for microwave components; with Boeing to jointly develop an Analysis and Experimentation Centre in India to offer customers the ability to make better informed decisions on modernising the country's defence forces; with SELEX Galilieo. MoU has also been signed to explore formation of joint venture for solar photovaltic business.

    BEL has been selected as offset business partner by multinational companies like Boeing, Lockheed Martin and Northrop Grumman.

    Brigadier (Retired) Sukhwindar Singh
    (A Global e-Solution for Offsets)
    Business Standard

    Monday, April 27, 2009

    FDI in A & D Sector

    FDI in sensitive and strategic sectors like A & D has always been a point of debate the world over. National interests are considered paramount in such decisions with views of other stakeholders happily considered /meshed .

    India permits only 26% FDI in the A & D Sector as of now. It would purchase 'sensitive' technologies, if needed, on down payment. Reasons for these policy decisions are NOT very difficult to fathom. And also its Defence Offset Policy, called restrictive by many, is India focused to meet the declared objectives.

    Control, Ability of Indian Corporates and GoI to Invest in the Strategic Industry, Hostile Takeover(s), Strategic Imperatives, Technology Issues / Implications, In-house Capabilities, etc, are some of the factors that dictate the policy parameters.

    An Article by Mr Julian Scopes, President BAE Systems, India, FDI in India's Defence and Security Sector, presents the Industry concerns on the issue of FDI and TT. Explains concerns of major stakeholders who wish to be part of India's strategic initiatives. Link: http://www.freemarketsdefence.com/show_content.asp?cid=29 to read the full Article.

    Needs an open debate.

    Brigadier (Retired) Sukhwindar Singh
    (A Global e-Solution for Offsets)

    Credit: The Economic Times

    India's Private Defence Sector Will Not be Affected by Economic Downturn

    The growth of India's private defence sector is unlikely to be affected by the global economic slowdown, a director of the Federation of Indian Chambers of Commerce and Industry (FICCI) has said.

    Speaking to Jane's on 21 April, Vivek Pandit said the most influential factor in the country's private sector, which has been allowed to manufacture defence equipment since 2001, would be the Indian general election that commenced on 16 April and is scheduled to end a month later.

    "India's private sector is broadly insulated from the economic crisis and is certainly less affected than other countries," said Pandit, who is responsible for defence industry matters within the FICCI.

    "India is forecast to grow at 6.5 to 7 per cent this year, which is a slowdown from the previous 8 per cent growth, so you will see some private defence companies having to reallocate resources and become efficient, although the impact will not be major."

    The private defence sector in India currently receives about 9 per cent of the country's total USD7.3 billion procurement budget, or around USD700 million.

    About 21 per cent of this budget is spent on procuring capabilities from the state-owned public sector undertakings (PSUs) - such as Bharat Electronics Limited and Hindustan Aeronautics Limited - with the remaining 70 per cent being awarded to overseas vendors.

    Brigadier (Retired) Sukhwindar Singh
    Credit: http://www.janes.com/

    Sunday, January 4, 2009

    Offset Projects

    Indian Defence Industry is seeking offset investments against ongoing defence purchases within DPP 2008. It needs to be noted that rigorous 'due diligence' is done by Vendors prior to selecting a project. The project should be profitable, relevant to the Vendors, and meet DOFA/MOD conditions. You need to be supported for the offset projects through well-experienced Consultants working in tandem in India & Abroad, and in concert with Vendors and Buyer organisations. This needs a stable and long-term relationship.

    TTT Svipja Defence and Aerospace Development Company (TSDADC) , USA, fills this crucial gap.

    We have created an e-Solution for the Indian Defence Industry especially the MSMEs for offsets facilitation globally by linking our Sites http://www.defenceoffsetsindia.com/ and http://www.indiandefenceindustry.com/ It is a unique e-offering in line with global standards. Both these Sites are home-grown and operate with high ethics.

    You are welcome to contact Us for the support in a most transparent manner, and within Govt. Guidelines / Regulations.

    Brigadier (Retired) Sukhwindar Singh