Saturday, 22 April 2017

South Korea storms into India's defence manufacturing with contracts worth $2.3 billion

Bags deals for building warships and tracked artillery in India. Another Rs 30,000 crore buy of minesweepers likely this year

By Ajai Shukla
Business Standard, 22nd April 17

Since the turn of the century, six arms suppliers have dominated India’s defence imports --- USA, Russia, Israel, France and the UK. Now, a muscular new player, South Korea, is storming this lucrative club.

On Friday, in New Delhi, the governments of India and the Republic of Korea (or RoK, as South Korea is called) signed a memorandum of understanding (MoU) for joint shipbuilding, which clears the decks for cooperatively building five fleet support ships (FSS) for about Rs 10,000 crore.

These FSS will replenish ammunition, fuel, food and supplies to navy flotillas operating far from their bases. The RoK wants to build one FSS in Korea, and four in Hindustan Shipyard Ltd, Visakhapatnam (HSL), while New Delhi is pressing to build all five in HSL.

Separately, Indian company, Larsen & Toubro (L&T) earlier on Friday signed a contract with RoK firm, Hanwha Techwin, for jointly building in India 100 self-propelled artillery guns, worth Rs 5,000 crore.

Meanwhile, for an even bigger production order worth about Rs 30,000 crore, Goa Shipyard Ltd (GSL) is in advanced negotiations with South Korea’s Kangnam Corporation for building 12 mine counter measure vessels (MCMVs) in Goa. In Delhi on Tuesday, the navy’s warship acquisition chief, Vice Admiral DM Deshpande, said that deal too could be concluded this year.

“By the fourth quarter of this year, we should be in a position to have pen to paper so far as this [MCMV] project is concerned”, said Deshpande.

That would involve South Korea in defence production contracts worth 45,000 crore. However, a significant part of that money would flow to Indian production agencies.

The K-9 Vajra-T gun that L&T and Hanwha Techwin will build together is a 155-millimetre, 52 calibre gun, mounted on a tracked, armoured vehicle. Artillery units equipped with this highly mobile gun will be a part of the army’s strike corps, whose tank spearheads need artillery guns that can keep pace with them.

“L&T plans to begin production of this vital weapon system at its Strategic Systems Complex at Talegaon near Pune in Maharashtra and deliver the first batch of 10 guns [from Talegaon]. L&T also has initiated setting up of a greenfield manufacturing line at Hazira, Gujarat, integral with a state-of-the-art test track, to produce, test and qualify the K9 Vajra-T guns”, stated Jayant Patil, chief of L&T’s defence business.

L&T committed on Friday that it would not just build the Vajra in India, with over 50 per cent indigenous content, but also provide the army through-life support.

The defence ministry is especially pleased with the shipbuilding MoU, which is likely to galvanise Hindustan Shipyard Ltd (HSL) that would build the FSS in partnership with a reputed RoK shipyard, probably part of Hyundai Heavy Industries (HHI).

Officials expect that HSL, a government-owned shipyard that was transferred from the ministry of shipping to the defence ministry in February 2010, will now have the high value orders and expertise needed to put it on a firm financial footing.

A key component of the RoK-India MoU is the agreement for Seoul to nominate a South Korean shipyard to “upgrade and modernise [HSL’s] facilities and execute naval shipbuilding projects in a timely and cost effective manner”, according to a defence ministry release on Friday.

After years in the red, HSL’s chief, Rear Admiral Sarath Babu (Retired), revealed this week that HSL would, for the first time, make an operating profit of Rs 30 crore, on a turnover of Rs 625 crore in 2016-17.

Interestingly, the FSS order will be the second cooperative project between HSL and a RoK shipyard. In the early 1990s, HSL and Korea Tacoma cooperated to build seven offshore patrol vessels (OPVs) of the Sukanya class. Three of these OPVs were built in Korea and four in HSL, and all are still in service.

One of the Sukanya-class OPVs built in HSL, INS Sarayu, was sold to the Sri Lanka Navy, where it continues to perform the role of navy flagship, now named Sayura.

Defence cooperation with RoK is backed by a burgeoning political engagement between New Delhi and Seoul. In May 2015, when Prime Minister Narendra Modi met the (now impeached) RoK president, Park Geun-hye in Seoul, the two countries upgraded their relationship to a “Special Strategic Partnership”. Modi also visited Hyundai Heavy Industries shipyard during that trip and expressed his hope that Korean expertise could benefit Indian shipyards soon. 

Friday, 21 April 2017

Rolls-Royce sets up Bengaluru facility to support military aircraft engine fleet

Significant move, given concerns over Sukhoi-30 and MiG-29 engines

By Ajai Shukla
Business Standard, 21st Apr 17

Rolls-Royce has opened a facility in Bengaluru to support the 750 Rolls-Royce engines that power Indian military aircraft, and provide repair and service to engines that urgently require it.

The UK-based engine giant announced on Thursday that its so-called Defence Service Delivery Centre (SDC) in Bengaluru will provide the army and navy with “fleet management, services engineering and supply chain co-ordination. It will also be the base from which Field Service Representatives can be rapidly dispatched to frontline bases, subject to contract coverage, to provide on-ground technical support.”

With the Indian Air Force (IAF) having publicly acknowledged concerns over the serviceability and in-flight failure of Russian engines that power the Sukhoi-30MKI; and given unacknowledged concerns over the engines on the navy’s MiG-29K, Rolls-Royce’s engine support initiative is significant.

The SDC aims at increasing the serviceability of 750 Rolls-Royce engines that power aircraft in service with the IAF, navy and Hindustan Aeronautics Limited (HAL).

These aircraft engines include: the Adour, which powers the Hawk advanced jet trainer and the Jaguar deep penetration strike aircraft; the Gnome engine that powers the navy’s Sea King helicopters; the Dart, which powers the air force’s HS-748 Avro transport and communications aircraft; and the AE2100 and AE3007 engines that power the C-130J Super Hercules and the Embraer 145 airborne early warning (AEW) aircraft respectively.

HAL’s Engine Division in Bengaluru has decades of experience in building Rolls-Royce engines under licence, which have powered India’s serving and retired aircraft.

Said a Rolls-Royce official today: “This Service Delivery Centre has been configured specifically for the Indian Armed Forces and HAL with Bangalore being a logical location close to Engine Division [of HAL]. Overall this contributes to the broader “Make in India” agenda through skills development and increasing self-sufficiency. The overriding goal is to improve availability of ‘engines-on-the-wing’ through a step change improvement of in-country responsiveness for current fleets as well as for future Defence programmes.”

Rolls-Royce has earlier successfully implemented this model of logistic support by setting up and operating SDCs at the Royal Air Force base at Marham, UK; and in the US Navy base at Kingsville, Texas.

Rolls-Royce features in most years in the world’s top four engine companies, along with Pratt & Whitney, General Electric and Safran. Besides aero engines, it does a significant proportion of its business in marine engines. The Bengaluru SDC, however, supports only aerospace engines.

Over the years, as India’s military opted for predominantly Russian aircraft, Rolls-Royce’s share of the Indian market has dwindled. There was disappointment in the company recently at not having a suitable product to offer for the air force’s proposed upgrade of the Jaguar fighter engine. However, with HAL building and upgrading the Hawk trainer in India, and planning to export it to regional buyers in partnership with its original manufacturer, BAE Systems, Rolls-Royce is expecting more business.

The Centre was officially inaugurated by Mr Dominic McAllister, British Deputy High Commissioner, Bengaluru.

Thursday, 20 April 2017

As China races ahead, MoD dithers on India’s aircraft carrier

Even as it learns to operate a carrier (Liaoning, above), the PLA Navy is thinking three carriers ahead

By Ajai Shukla
Business Standard, 20th April 17

As Beijing decisively implements its vision of aircraft carrier-based naval power, New Delhi seems uncertain about the form and structure of its naval combat aviation.

Last month China’s defence ministry announced the impending launch of Shandong, its first indigenous aircraft carrier. On Friday, a Beijing-based naval expert revealed that the People’s Liberation Army (Navy)’s, or PLA(N)’s, third carrier could be a US Navy-style nuclear-powered vessel, featuring an electromagnetic aircraft launch system (EMALS).

In New Delhi, however, a senior navy admiral revealed uncertainty about India’s indigenous aircraft carrier programme. The first indigenous aircraft carrier (IAC-1), named INS Vikrant, will roll out of Cochin Shipyard Ltd (CSL) later this decade. But the navy and the ministry are still making up their minds about its successor, IAC-2.

Vice Admiral DM Deshpande, the navy’s warship acquisition head, stated on Tuesday that the ministry remains uncertain about spending billions of dollars on a carrier.

“Right now there is a bit of a question mark from the ministry’s side, [although] we have taken this up to the ministry on a few occasions. [An aircraft carrier] is a huge ticket item and, before some commitments are made on allocation of these funds everybody wants to be very clear on the requirement, whether we actually need that. So these are being addressed [before] we actually take it up to the government for final clearances”, said Deshpande, addressing defence industrialists in New Delhi.

The three services are competing for the same limited budget. With the cost of INS Vikrant (IAC-1) reportedly nudging $4 billion, the Indian Air Force argues that land-based combat aircraft, with their ranges enhanced with in-flight refuelling, would project offensive air power more cheaply than an aircraft carrier. The navy counters that an aircraft carrier is a mobile air base, that can move to a combat zone quickly.

Even within the navy, some argue that the same amount spent on submarines, or a larger number of smaller surface warships like destroyers, frigates and corvettes, would generate greater combat effect than a carrier.

This is the longstanding debate between sea denial (denying the enemy the use of the sea, primarily with submarines) and sea control (dominating the ocean with air and surface power, built around a carrier). Sea control requires massive spending on carrier battle groups, or CBGs – an aircraft carrier and the warships that accompany it. In contrast, sea denial is a defensive strategy that takes less money – the cost of a submarine-based force.

Powerful, modern navies --- like the US Navy, the Royal Navy, the French, Russian and now even the PLA(N) --- have all built their fleets around aircraft carriers, enabling the projection of power to large distances from home bases.

Although the Indian Navy doctrine talks about power projection, and the service has decisively opted for aircraft carriers, discussion continues over whether to build a large, nuclear-powered carrier, or a smaller one like IAC-1. Reflecting this, Deshpande says: “There are lots of discussions within the navy on what type of IAC-2 we want. From the tonnage to the propulsion --- we are debating on this. Once we are more or less clear within the navy [about] what exactly we want, we would take up the case with the ministry for various approvals.”

Sea control advocates in the navy are inclined towards a 65,000-tonne, nuclear powered carrier that embarks 55 combat aircraft; and a state-of-the-art EMALS catapult that can rapidly launch fighter aircraft as well as larger aircraft for electronic warfare and airborne early warning. The name being suggested for IAC-2 is INS Vishal.

Deshpande expresses confidence that “in the next two-three months, we should be in a position to take it up to the ministry to get the funds”. With INS Vikrant likely to be operationally ready only in 2023 – eight years late – there is little time to lose.

Currently, the PLA(N) operates only its first-ever carrier, the 65,000-tonne Liaoning, which Beijing bought from Russia, refurbished, and commissioned in 2012. India, with far greater experience, has operated at least one aircraft carrier ever since INS Vikrant joined the fleet in 1961.

The PLA(N), however, now plans to commission and operate at least 5-6 carriers. The Indian Navy plans to operate a fleet of three aircraft carriers.

Wednesday, 19 April 2017

Navy blames “strategic partner” delay for scuttling build of six submarines to follow the Scorpene class

Project 75-India to build six subs being re-evaluated (above: INS Kalvari, the navy's first Scorpene)

By Ajai Shukla
Business Standard, 19th April 17

The navy’s warship procurement chief admitted on Tuesday that key purchases, including the vital procurement of six new submarines, were foundering on the defence ministry’s failure to finalise a “strategic partner” (SP) policy.

Under the SP policy, the ministry was to nominate select Indian defence companies as designated partners for foreign vendors to build weapons platforms in India. Separate SPs were to be chosen in ten production areas, such as warships, submarines, aircraft, helicopters, etc.

Over the last two years, the defence ministry has overshot numerous self-imposed deadlines for announcing the SP policy. The Defence Procurement Policy of 2016 (DPP-2016) was released last year with a blank space for the chapter on SP policy.

Today, Vice Admiral DM Deshpande, the navy’s Controller of Warship Production and Acquisition (CWPA) became the first senior officer to admit to the possibility that the defence ministry might fail to promulgate an SP policy at all.

Explaining the delay in contracting for six submarines to be built under Project 75-India, Deshpande linked it with the absence of an SP policy, which was needed to nominate an Indian firm to build the submarines in partnership with a foreign vendor.

“We need those submarines badly because our force levels are depleted. And in case the SP model doesn’t go ahead, for whatever reasons, then we will have to look elsewhere”, said Deshpande.

He admitted that there had been “a fair amount of progress on the SP model, but as things had changed”, the project had to be looked at afresh.

Business Standard first reported almost a year ago (May 9, 2016 “Ministry of Defence struggles to nominate private sector ‘strategic partners’”) the deep divisions between the ministry, industry and military on the modalities for choosing SPs. Given that firms nominated as SPs would benefit enormously from production contracts, defence ministry bureaucrats fear their choices might expose them to future allegations of bias.

Deshpande outlined the navy’s alternatives for submarine production if the SP policy failed to take off. He said the navy might opt for a more advanced version of the six Scorpene submarines already being built at Mazagon Dock, Mumbai under Project 75; or a separate government-to-government contract; or a third choice entirely.

“If strategic partnership (SP) happens, we will be better off for that. But if that doesn’t happen, all these options come to the fore and we will have to take a call”, he said.

The scuppering of the SP policy, which former defence minister Manohar Parrikar made a key pillar of his touted “Make in India” initiative, would set back key defence procurements like Project 75-India by at least two years.

Stating that the navy was preparing contingency plans, Deshpande admitted there would be “some sort of time penalties” in implementing alternatives.

This is a worrying prospect for a navy that, as Deshpande spelt out to an industry gathering in New Delhi today, is aiming to increase its strength to 170-180 ships (from the current 140 vessels) and 400 aircraft by 2027.

The absence of a SP policy is hitting more than just submarine production. The air force has issued a Request for Information (RFI) to global aerospace vendors for building single-engine fighters in India in partnership with an Indian company. But, without an Indian firm nominated as SP for aircraft production, global firms remain unclear who they must partner in preparing their bids.

The idea of private sector SPs is the brainchild of the Dhirendra Singh Committee that the defence ministry-constituted in 2014-15. Subsequently, the VK Aatre Task Force was asked to specify criteria for nominating firms as SPs.

In its report, it recommended designating one private sector SP for each of seven technology areas --- aircraft; helicopters; aero engines; submarines; warships; guns and artillery, and armoured vehicles. Simultaneously, two strategic partners each were to be recommended for three other technology segments --- metallic materials and alloys; non-metallic materials; and ammunition, including smart munitions.

Monday, 10 April 2017

Shivshankar Menon’s book causes stir over India’s nuclear weapons doctrine

Menon hints that India could drop “no first use” and strike Pakistan's arsenal in some circumstances

Ajai Shukla
Business Standard, 10th April 17

The debate over India’s nuclear doctrine, which was first formulated in 1999 and revised in 2003, has centred mainly on whether India should abandon its doctrinal commitment of “no first use” (NFU) – the undertaking to not use nuclear weapons unless India is attacked first with weapons of mass destruction – and the credibility of the so-called “massive retaliation”. But now, after former national security advisor Shivshankar Menon hinted strongly in his recent book that India could, in certain circumstances, launch pre-emptive nuclear strikes to knock out Pakistan’s nuclear arsenal, there is a noisy debate on the doctrine.

Menon himself has not clarified what precisely he meant in his book, “Choices: Inside the making of Indian foreign policy”. However, a group of young strategic experts in the US and UK have carefully parsed Menon’s words and convincingly argued that he has departed significantly from India’s traditionally restrained and reactive nuclear strategy. In its place, India’s former top nuclear Czar, an esteemed figure in strategic circles, has outlined a pro-active strategy that increases India’s nuclear options dramatically.

Vipin Narang, a strategist at the Massachusetts Institute of Technology, says Menon’s new strategy enables Indian planners, if convinced that Pakistan might be preparing a nuclear strike, to order wide-ranging nuclear strikes to take out that country’s nuclear arsenal, disregarding “no first use”. In essence, India might adopt a position of pre-emption rather than waiting to be struck with nuclear weapons. Narang’s interpretation of Menon’s words has evoked rapid-fire agreement from Shashank Joshi of the London-based Royal United Services Institution, Sameer Lalwani of the Stimson Centre, The New York Times, The Wall Street Journal, and others.

For Indian planners, this should open a heady conversation. Yet most Indian nuclear strategists and academics have long been wedded to the status quo and to formulaic recitations of the official doctrine, which was formulated at a time of vulnerability when New Delhi was countering post-nuclear-test sanctions through responsible behaviour. These Indian strategists argue, somewhat unconvincingly, that Menon has said nothing new.

Each side believes the other has an agenda. The status-quoists (mostly Indians) say the argument that Menon has expanded nuclear strike options is alarmist, and aims at creating grounds for non-proliferation activists to curb India. Those who see Menon’s views as path breaking allege that denial of a more pro-active Indian nuclear posture stems from the fear that more Nuclear Suppliers Group members might be alarmed into opposing India’ membership. 

According to traditional war-gaming scenarios, a nuclear crisis between India and Pakistan could be triggered by a damaging Pakistan-backed terrorist strike in India. To placate a seething Indian public, New Delhi would launch military offensives into Pakistan. Unable to halt the Indian strike corps with conventional forces and with defeat looming, Pakistani generals would order a “demonstration” strike on an Indian army column, in Pakistani territory, with tactical nuclear weapons: sub-kiloton nuclear warheads borne on the short-range Nasr missile which has a maximum range of 60 kilometres. The aim would be to cause limited damage (say 14-45 tanks destroyed and about 100 soldiers killed), to warn India to withdraw and to force Great Power intervention. 

However, New Delhi’s response to such a strike, going by its declared nuclear doctrine, is currently “massive” nuclear retaliation that causes “unacceptable damage” in Pakistan. Most strategists believe this obliges India to retaliate with full-strength nuclear weapons (15-100 KT) fired at multiple Pakistani cities, in what is termed counter-value strikes. This would cause casualties in the millions, but would leave intact much of Pakistan’s nuclear arsenal that is supposedly larger than India’s. Naturally, Pakistan would retaliate with massive counter-value strikes on Indian cities, imposing catastrophic destruction on our dense population centres.

How realistic is this? New Delhi’s established restraint in the face of Pakistani aggression – including Kargil in 1999, Parliament attack in 2001, and Mumbai terror strikes in 2008 – creates scepticism that New Delhi would deliver on the mutually destructive, and therefore inherently non-credible, threat of massive retaliation. Even Prime Minister Narendra Modi’s “surgical strikes” across the Line of Control last year were characterized by careful restraint.

Menon has now made massive retaliation more credible, by including options other than visiting Armageddon on innocent civilians. He writes: “If Pakistan were to use tactical nuclear weapons against India, even against Indian forces in Pakistan, it would effectively be opening the door to a massive Indian first strike… India would hardly risk giving Pakistan the chance to carry out a massive nuclear strike after the Indian response to Pakistan using tactical nuclear weapons. In other words, Pakistani tactical nuclear weapons use would effectively free India to undertake a comprehensive first strike against Pakistan (emphasis added).”

A “comprehensive first strike”, in nuclear warfare jargon, refers to a pre-emptive strike on the enemy’s nuclear arsenal – rather than cities – with the aim of disarming it. It has the moral virtue of not threatening the death of millions of innocent civilians and the strategic logic of disarming the adversary, making it both more credible and more responsible.

Menon is hardly the first Indian official to question NFU. In the 2003 doctrine, India expanded its nuclear retaliation options in two ways over the 1998 version. One, India would retaliate with nukes not just to a nuclear attack, but also to an attack with any WMD: nuclear, chemical or biological. Two, an attack on Indian forces anywhere in the world (including inside Pakistan) would be regarded as an attack on India.

NFU’s further erosion continued through public pronouncements by serving and retired officials. In 2014, former strategic forces command chief, Lieutenant General BS Nagal, wrote an article suggesting NFU be replaced with a policy of ambiguity, leaving open the door for pre-emptive nuclear use. Nagal cited six reasons, including that India’s leadership would be morally wrong in placing its own populace in peril.

In November 2016, the then defence minister, Manohar Parrikar, stated: “India should not declare whether it has a NFU policy”. It was later clarified that this was his personal view. 

Now, Menon, known for his sobriety and restraint, has argued for pre-emptive first use:  “There is a potential grey area as to when India would use nuclear weapons first against another nuclear-weapon state. Circumstances are conceivable in which India might find it useful to strike first, for instance, against an NWS (nuclear weapons state) that had declared it would certainly use its weapons, and if India were certain that adversary’s launch was imminent. But India’s present nuclear doctrine is silent on this scenario.” Menon clearly believes that doctrinal silence allows the space for a pre-emptive strategy.

Rebuttals of this interpretation of Menon’s book have presented varied counter-arguments. Some of the more curious responses have included that Menon did not know what he himself meant by “comprehensive first strike”, which, for a strategic thinker of his sophistication, is downright insulting. Others claim that analysts are reading too much into two short paragraphs in Menon’s writings. But important nuclear strategies and doctrines have been presented in less space: India’s 2003 doctrine is only eight sentences; John Foster Dulles’ famous “massive retaliation” doctrine was contained within two short paragraphs; and, in December, President-elect Donald Trump signalled a major shift in America’s nuclear posture in 140 explosive characters.

Manpreet Sethi of the Centre for Air Power Studies and Rajesh Rajagopalan of the Observer Research Foundation observe that a comprehensive counterforce strike would require an arsenal that India does not have: high-accuracy, nuclear-tipped missiles, nuclear targeting coordination and sophisticated intelligence, surveillance and reconnaissance capabilities to locate Pakistan’s nuclear weaponry. In fact, India is developing precisely these capabilities: a larger inventory of more accurate missiles, multiple independently targetable re-entry vehicles and a missile defence shield to guard high-value objectives against retaliatory Pakistani strikes. 

Sethi also argues that retaliation makes for a more credible doctrine than first use because the first use of a nuclear weapon is never an easy decision for any leader. In fact, a first strike against enemy nuclear forces might well be an easier decision than “massive retaliation” that kills millions of innocent civilians.

Rajagopalan also says new strategies being discussed might just be the “personal views” of people who have not considered the “serious problems that comes with a first strike or first use strategy.” This is hard to sustain about Menon, who is known to carefully weigh his words.

Are Menon’s radical new proposals just a cat’s paw, a trial balloon to assess reactions to Indian nuclear assertiveness? There is little to support that view. It would appear as if Menon, a creative thinker who realizes the infirmities in India’s traditional nuclear doctrine, has interpreted it anew to create a wider menu of options for Indian decision-makers in a nuclear crisis. While declining comment on interpretations of his book, Menon revealingly commented: India’s current nuclear doctrine has far greater flexibility than it gets credit for.

Friday, 7 April 2017

Israel to pip US as India’s largest foreign arms supplier

Israel Aerospace Industries announces contracts worth $2 billion (Rs 13,000 crore) for AD systems like LR-SAM (above)

By Ajai Shukla
Business Standard, 7th April 17

Israel is set to overtake the US and become India’s largest foreign arms supplier in 2016-17 with lucrative contracts to supply advanced anti-aircraft and anti-missile defence systems to the army and navy.

On Thursday, Israel Aerospace Industries (IAI) announced the award of Indian defence contracts totalling “almost $2 billion” (Rs 13,000 crore).

One mega-contract worth over $1.6 billion, which an IAI release termed “the largest defense contract in Israel's defense industries’ (sic) history” is for the supply of Medium Range Surface to Air Missiles (MR-SAM) to the Indian Army.

In addition, IAI says it has been awarded a contract to supply additional Long Range Surface to Air Missiles (LR-SAMs) anti-ship missile defence systems for INS Vikrant, India’s first home-built aircraft carrier, which is being constructed in Cochin Shipyard Ltd (CSL).

The Defence R&D Organisation (DRDO) and IAI have jointly developed MR-SAM and LR-SAM. The DRDO developed the propulsion systems of the MR-SAM, while IAI developed the radar and guidance systems.

The LR-SAM, also called the Barak 8, detects and shoots down incoming anti-ship missiles (ASMs) at ranges out to 70 kilometres. Sea-skimming, hard-to-detect ASMs like the Harpoon and Exocet, which can be launched from aircraft, surface warships or submarines, are one of the greatest hazards a surface warship faces. The LR-SAM provides effective protection against the newest generation of these anti-ship missiles.

The MR-SAM, which uses the same missile as the LR-SAM, but a different radar and control systems, protects ground-based targets like air bases and army units. It detects incoming enemy aircraft while they are well over a hundred kilometres away and destroys them at ranges out to 70 kilometres.

The DRDO told Business Standard that the Indian Air Force (IAF) is the lead service for the MR-SAM development project, contributing 90 per cent of the Rs 10,075 crore development cost. However, the Indian Army has also come on board, convinced of the value of this system.

In March 2009, the IAF signed a contract for 18 MR-SAM fire units (each equipped with 24 missiles), which were to be delivered by October 2016. But with the first test having been conducted only last June, it is estimated that the MR-SAM will enter IAF service only by 2018.

The LR-SAM, in contrast, has already equipped the Indian Navy’s new Kolkata-class destroyers. In December 2015, INS Kolkata successfully tested two LR-SAM missiles. Now, with INS Vikrant scheduled to be commissioned next year, it will be fitted with the LR-SAM.

Besides the lucrative market for air defence systems, Israel is a big player in the “unmanned aerial vehicle” (UAV) segment, having supplied Searcher drones to the Indian military, and an order for the Heron-TP armed drones being processed currently.

Also in the pipeline are two Israeli Phalcon Airborne Warning and Control Systems (AWACS), which are essentially powerful airborne radars mounted on the Ilyushin-76 transport aircraft. Besides the flying crew, an AWACS carriers “fighter controllers”, who observe enemy aircraft movement in a range of several hundred kilometres, and direct friendly aircraft sorties to respond to that.

Israel’s success in the Indian defence market is remarkable, considering that it does not supply lucrative “capital platforms” like warships, aircraft and tanks. It supplies mainly “systems”, that enhance the performance of capital platforms supplied by other countries.


India’s foreign arms supplies

Country
2013-14
2014-15
2015-16
Total
Contracts
Value
Contracts
Value
Contracts
Value








Russia
2
1,342
7
6,085
3
947
8,374
Israel
5
3,751
1
875
4
2,979
7,605
USA
7
6,787
2
58
4
22,050
28,895
France
2
299
3
1,537
0
0
1,836
Others
5
1,072
5
2,707
6
3,195
6,974








Total
21
13,251
18
11,262
17
29,172
53,685

(Chart from Standing Committee on Defence, Report No. 31)