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.


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)