Land Identified for Defence Corridor Near Sulur
State Industries Promotion Corporation of Tamil Nadu (SIPCOT) Limited has identified 500 acres of land near Sulur and Karanampettai to set up a defence corridor. SIPCOT will provide the compensation for patta lands to be acquired.
SPICOT plans to conduct talks with the landowners to acquire the land from them to set up industrial units in the defence corridor. It was also trying to identify 500 more acres of land in the same locality.
SIPCOT would bear the land acquisition cost and later the acquired land will be sold to industries willing to start their units in the defence corridor in Coimbatore.
The Tata Group has approached SIPCOT seeking land in the defence corridor in Coimbatore. Hindustan Aeronautics Limited (HAL), Bangalore, was also planning to establish its unit in Coimbatore defence corridor.
Uttar Pradesh to Provide Subsidy for Defence Industry
The Uttar Pradesh government, on 3 December, decided to provide 25 per cent subsidy and 100 per cent stamp duty waiver for setting up defence industry in the state. The decision was taken at a cabinet meeting chaired by Chief Minister Yogi Adityanath.
Now, the companies that will set up defence industries will be provided all facilities including power, road and fencing of land, according to Industrial Development Minister Satish Mahana.
F-16 Wings by Tata-Lockheed to be Ready by October 2020
TATA Lockheed Martin Aerostructures Limited (TLMAL), a joint venture between $50 billion Lockheed Martin and TATA Advanced Systems Limited (TASL), is gearing up to roll out the first F-16 wing by October 2020 from its Hyderabad facility. The company is currently building the prototype for the wings of the aircraft, which flies in 26 countries.
TLMAL will have a capacity to make 3-4 wings a month in the steady state. It has completed the 3D modelling for the F-16 wings.
The company will be roping in MSMEs in the country to supply structural components such as wiring and harnesses.
Hyderabad has a strong defence ecosystem for manufacturing. TLMAL in its Adibatla facility near Hyderabad will focus on composites, metal-to-metal bonding and assembly. Using these, the company is going to bid for multiple areas and structures catering to defence, commercial and transport sectors.
The company which has created the metal-to-metal bonding facility in Hyderabad is getting ready now to cater to aircraft makers such as Boeing and Airbus.
TLMAL is also looking at building Bulk Fuel Tank Transport (BFTT) to transport fuel or oil (up to 5,000 gallons) for vehicles through C130J at times of medical emergencies or natural disasters. This is the first design and build programme in India by the private sector. There is demand in India, Africa, Indonesia, Canada and Netherlands. The first prototype will be ready by February-March 2020.
Going forward, TLMAL is also looking at structural repair, electronics, system and integration repair and harnesses for not only Indian Air Force but for the global defence forces.
Reliance Buys 51.78% Stake in Asteria Aerospace
Reliance Industries said, on 13 December, that its wholly-owned subsidiary Reliance Strategic Business Ventures Ltd (RSBVL) has acquired over 51 per cent stake in Asteria Aerospace for Rs 23.12 crore. The said investment represents 51.78 per cent holding in the equity share capital of Asteria.
RSBVL proposes to make a further investment of up to Rs 125 crore, subject to Asteria achieving agreed milestones, and is expected to be completed by December 2021.Post the further investment, the shareholding of RSBVL will increase to 87.3 per cent of the equity share capital of Asteria.
Asteria, incorporated in India in June 2011, is a full-stack drone technology company with in-house drone manufacturing capabilities, and also offers software solutions to provide actionable insights from aerial data, intending to deliver “drone-as-a-service” digital platform.
An early stage company, Asteria had a turnover of Rs 1.96 crore in 2018-19.
Hurdles Cleared for HAL’s Goa Helicopter MRO Project
The Hindustan Aeronautics Limited’s proposed project of helicopter maintenance, repair and overhaul (MRO) in Goa would become functional soon as all the hurdles have been cleared now, Union minister Shripad Naik said on 8 December. The project is meant for maintenance, repair and overhaul of engines that are fitted on HAL-designed and manufactured helicopters.
The HAL and French company, Safran Helicopter Engines, had entered into a joint venture – Helicopter Engine MRO Private Limited – to set up this helicopter maintenance plant at Honda village in North Goa.
Manohar Parrikar, as defence minister, had announced the project in October 2016. As per the plan, the facility was expected to have a total investment of Rs 170 crore, to be invested by both the parties in a phased manner.
The engines of advanced light helicopters of various versions, light combat helicopters and future light utility helicopters that are common between HAL and Safran would be maintained at this facility.
With a fleet of over 1,000 engines, including 250 TM333 and 250 Shakti, India’s armed forces are one of the largest operators of Safran-designed helicopter engines.
Arms Sales of Top Indian Firms Drop
The combined sales of three Indian companies that figure among the world’s 100 top arms suppliers stood at $5.9 billion in 2018, a drop of 6.9% compared to the previous year, according to the latest data released by Stockholm International Peace Research Institute (SIPRI), published on 9 December. The sales fell during the one-year period because of fewer orders from the Indian armed forces.
The three Indian companies on SIPRI’s list of top 100 global arms firms are Hindustan Aeronautics Limited (HAL), the Indian Ordnance Factories and Bharat Electronics Limited (BEL); their global ranks last year stood at 38, 56 and 62 respectively.
They accounted for 1.4% of the arms sales of the top 100 companies. “All three are state-owned and are dependent on domestic demand. Arms sales by Hindustan Aeronautics and Bharat Electronics increased in 2018 – by 3.5 and 5.9% – respectively. However, these were offset by a 27% fall in the arms sales of Indian Ordnance Factories,” the report said.
The overall sales of the defence sector’s top 100 companies totalled $420 billion in 2018, an increase of 4.6%. The top 100 firms exclude Chinese companies “due to the lack of data to make a reliable estimate”.
Strategic Electronics
Factory by HAL
Strategic Electronics Factory (SEF) of Hindustan Aeronautics Limited (HAL) at Kasaragod, Kerala is established for assembly, testing, repair & manufacturing of various types of airborne computers.
HAL has allocated Rs. 67 crores for setting up the facility of SEF at Kasaragod in 2008, out of which Rs 66.31 crore has been incurred so far.
SEF, Kasaragod has so far produced 1210 and repaired 2237 airborne computers like Mission Computers, Radar Computers & Display processors for various types of fighter aircraft.
PSU Status of BEML
The Government had given ‘in-principle’ approval for strategic disinvestment of BEML Ltd. to the extent of 26% out of the Government shareholding of 54.03% with transfer of management control to strategic buyer. Thereafter, Transaction Advisor, Legal Advisor and Asset Valuer were appointed by the Government as per the procedure and mechanism laid down for this purpose. The Expression of Interest & Preliminary Information Memorandum document have been prepared by the appointed Advisors and submitted to the Government.
Some organisations have made certain representations against the aforesaid disinvestment proposal of BEML Ltd, but they were disregarded since disinvestments through strategic sale are considered based on recommendations of NITI Aayog after taking into consideration, all aspects of the matter.
Corporatisation of Ordnance Factory Board
Raksha Rajya Mantri Shri Shripad Naik gave the following information in the Parliament on 2 December regarding corporatization of the Ordnance Factory Board (OFB).
During the past two decades, several High Level Committees like TKA Nair Committee, Vijay Kelkar Committee & Raman Puri Committee have recommended that Ordnance Factories should be converted from a Government Department into a Corporate entity.
The OFB is an attached office of Department of Defence Production, Govt. of India. There is no plan at present for strategic tie-up between private sector and OFB.
In respect of non-core items, OFB can still participate in RFPs of the users, i.e. Armed Forces on competitive basis. Decision to declare items as non-core was taken in consultation with all the stake holders and was done to enable OFB to focus on core areas and complex systems like artillery guns, tanks, ammunitions etc. The above position has been adequately explained to the employees of OFB through various meetings in the Ministry. Further, in order to ensure smooth transition from non-core to core areas for production, re-training of workers of non-core factories has also commenced to enable them to work in the core areas.
New Defence Projects
Raksha Rajya Mantri Shri Shripad Naik gave the following information in the Parliament on 4 Decemebr, regarding special measures undertaken to promote new and innovative defence production projects under the “Make in India” programme in Tamil Nadu and other States:
• A new category of procurement ‘Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}’ has been introduced in Defence Procurement Procedure (DPP)-2016 to promote indigenous design and development of defence equipment.
• The ‘Make’ Procedure has been simplified with provisions for funding of 90% of development cost by the Government to Indian industry and reserving Government funded Make-I projects not exceeding development cost of Rs. 10 Crore & procurement cost Rs. 50 Crores per year for MSMEs. Industry funded Make-II Projects not exceeding development cost of Rs. 3 Crore & procurement cost Rs. 50 Crores per year have also been reserved for MSMEs.
• A separate procedure for ‘Make-II’ category has been notified to encourage indigenous development and manufacture of defence equipment including provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested by industry/individual etc.
• ‘Innovations for Defence Excellence (iDEX)’ was launched in April, 2018 to create an ecosystem to foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, Start-ups, Individual Innovators, R&D institutes and Academia including grants/fund.
• The ‘Strategic Partnership (SP)’ Model for establishment of long-term strategic partnerships with Indian entities through a transparent and competitive process, enabling tie up with global Original Equipment Manufacturers (OEMs) for technology transfers to set up domestic manufacturing infrastructure and supply chains was notified.
• FDI Policy has been revised to allow FDI under automatic route upto 49% and beyond 49% through Government approval for technology acquisition etc.
• A ‘Policy for Indigenisation of Components and Spares used in Defence Platforms’ was notified in March, 2019 to support indigenization of imported components (including alloys & special materials).
• ‘Mission Raksha Gyan Shakti’ was notified in November, 2018 to support Intellectual Property Rights (IPR) culture in indigenous defence industry.
• Defence Products list requiring Industrial Licences was rationalised and initial validity of the Industrial Licence granted under the IDR Act increased from 03 years to 15 years with provision of extension by 03 years.
• 112 items were notified under Public Procurement Order 2017 of Department for Promotion of Industry and Internal Trade (DPIIT) whereby Defence PSUs/OFB give preference to deomestic manufacturers in procurement.
• Government announced two defence industrial corridors to promote defence industrial base in the country in Tamil Nadu and Uttar Pradesh (UP).
• In the last five financial years i.e. from 2014-15 to 2018-19, Government has accorded Acceptance of Necessity (AoN) to 204 proposals worth Rs. 4,04,880 Crore approximately under ‘Buy (Indian-IDDM)’, ‘Buy (Indian)’, ‘Buy and Make (Indian)’, ‘Strategic Partnership Model’ or ‘Make’ categories of capital procurement as per Defence Procurement Procedure (DPP) – 2016, in which Request for Proposal (RFP) is issued only to Indian Vendors.
Contracts Signed Since 2014 With Domestic Industry
The Ministry of Defence has signed more than 180 contracts valued at over Rs 1,96,000 crore with the Indian Industry since 2014 while a few are in the pipeline to be signed in near future.
A contract for manufacture of Frigates under Project P 17A was signed in February 2015 with Mazagon Dockyards Limited (MDL), Mumbai valued at Rs. 45,000 crores while 02 Frigates under Project P1135.6 are slated to be manufactured by Goa Shipyard Limited (GSL) under a contract signed in Oct 2018 valued at Rs. 14,100 Crore. Further, contracts for manufacture of 41 Advanced Light Helicopters for Indian Air Force (IAF) and 32 ALH for Indian Navy (IN) have been signed with Hindustan Aeronautics Limited (HAL) in March 2017 and Dec 2017 with a combined value of Rs. 14,100 crore. This is in addition to procurement of 14 Dornier 228 aircrafts from M/s HAL valued at Rs. 1100 crore through a contract signed in February 2015.
Seven Squadrons of Akash Missile System are being procured from BEL through a contract of October 2019 valued at Rs. 6,300 crore as also the Integrated Advanced Command and Control System (IACCS) Nodes valuing Rs. 7,900 crore. OFB has been tasked to supply 464 T-90S/SK tanks worth Rs. 19,100 crore for which indent has been placed on it by the Ministry as recently as November 2019. Also 100 Nos. of 155x52mm cal Self-Propelled Guns are being procured under the ‘Make in India’ initiative of the government from Ms/ L&T valued at Rs. 4,300 crore. Also Contract for Modernization of Airfield Infrastructure (MAFI) to be executed through Indian vendors is under final stages of contracting.
Further, Services have also placed a number of contracts on the Private Sector vendors like Titagarh Wagons Ltd, Force Motors Pvt Ltd, Tata Power SED, Tech Mahindra Ltd, Tata Motor Ltd, Ashok Leyland Ltd, Bharat Forge Ltd, MKU Ltd, SMPP Delhi, Alpha Design for items like 1000 Tons Fuel Barges, Light Strike Vehicles, Portable Diver Detection Sonar (PDDS), RFID based SMART Card, 6×6 and 8×8 High Mobility Vehicle with Material Handling Crane, Dual Technology Mine Detector, Ballistic Helmet, Bullet Proof Jacket (BPJ) and Integrated Gunnery.
Three of the cases, viz, P-75(I) Submarines, Naval Utility Helicopters (NUH) and 114 Fighter Jets for IAF, shown as stuck in the long-winded procedures are the cases which are being progressed under SP Model [a procurement procedure, which in itself has been promulgated in May 2017 as part of DPP-2016]. However, even the cases under SP model have been processed expeditiously as evident from the fact that the responses to EOIs [Expression of Interest] have been received in respect of P-75(I) and NUH cases and are under final stages of selection while SQRs are being finalized in respect of 114 Fighter Aircrafts case.
In addition, under Make-II, 44 projects have been given approval. Under Innovations for Defence Excellence (iDEX). Forty plus startups are working in new technology-related products. Make-II and iDEX reflect new level of active engagement with industry where not only manufacturing but technology development for defence is being taken up.
