One of the main objectives of the Ministry of Defence of India regarding defence equipment, is the achievement of self-sufficiency in defence production. Currently the country is far from achieving this goal as according to estimates, nearly 70% of the defence requirements are met through imports, with only 30% being met through domestic production. In order to improve upon these figures, the Indian government has pursued the enhancement of the services and products offered by the Indian Ordnance Factories and Defence Public Sector Undertakings (DPSUs). Such products include arms and ammunition, tanks, armoured vehicles, heavy vehicles, fighter aircraft and helicopters, warships, submarines, missiles, ammunition, electronic equipment, earth moving equipment, special alloys and special purpose steels.
The Indian Ordnance Factories is an industrial setup, functioning under the Ministry of Defence. They include among others: 41 factories, 9 training institutes and 3 regional marketing centres. The 41 factories are geographically distributed as following:
On the other hand, Hindustan Aeronautics Limited (HAL) is the largest DPSU. HAL has established itself as a comprehensive solution provider of the Indian Armed Forces in the field of aviation, providing products such as fighter aircraft, trainer aircraft and helicopters. The Indian Army is the biggest customer of HAL, as the vast majority of the company’s sales are destined to cover its needs. HAL has 20 Production Divisions, 11 R&D Centres and one Facility Management Division.
Other important DPSUs are the following:
- Bharat Electronics Limited (BEL)
- Bharat Dynamics Limited (BDL)
- BEML Limited (BEML)
- Mishra Dhatu Nigam Limited (MIDHANI)
- Mazagon Dock Limited (MDL)
- Garden Reach Shipbuilders & Engineers Limited (GRSE)
- Goa Shipyard Limited (GSL)
- Hindustan Shipyard Limited (HSL)
The value of production of Defence PSUs & Ordnance Factories for the fiscal year 2013-14 was 43745 ₹ Crore (about 6.4 billion US dollars), while in 2014-15 it reached 46428.66 ₹ Crore (some 6.8 billion US dollars).
|
Value of Production of Defence PSUs and OFB in ₹ Crore |
2012-13 |
2013-14 |
2014-15 |
2015-16 (up to Dec, 2015) |
|
HAL |
14202 |
15867 |
16289 |
10228 |
|
Bharat Electronics Limited (BEL) |
6290 |
6127 |
6659 |
4466 |
|
BEML Limited (BEML) |
3360 |
3165 |
2599 |
1840 |
|
Bharat Dynamics Limited (BDL) |
1177 |
1804 |
2770 |
2446.7 |
|
Garden Reach Shipbuilders & Engineers Limited (GRSE) |
1529 |
1611 |
1651.31 |
1030.95 |
|
Goa Shipyard Limited (GSL) |
507 |
509 |
569.55 |
465.09 |
|
Hindustan Shipyard Limited (HSL) |
484 |
453 |
294.16 |
340.16 |
|
Mazagon Dock Limited (MDL) |
2291 |
2865 |
3592.6 |
2174.64 |
|
Mishra Dhatu Nigam Limited (MIDHANI) |
537 |
572 |
640.04 |
477.77 |
|
Ordnance Factory Board (OFB) |
11975 |
11123 |
11364 |
7526 |
|
Total |
42352 |
44096 |
46428.66 |
30995.31 |
Source: Ministry of Defence, Government of India, Annual Report 2015-2016
The value of exports of all DPSUs, OFB and the Private Sector Companies for the FY 2015-16 (up to December 2015), was ₹ 1379.42 crore (some 212.4 million US dollars), compared to ₹ 994.04 crore (153.1 million US dollars) for FY 2014-15. Some of the major export destinations for Indian defence products in 2015, were Algeria, Afghanistan, Israel, Ecuador, Russia, the UK, Indonesia, Nepal, Oman, Romania, Belgium, Vietnam, Myanmar, South Korea and Sudan. Specifically, the main defence products exported by India in 2015, included personal protective items, Offshore Patrol Vessels, spares for radars, Cheetal helicopters, turbo chargers and batteries, electronic systems (EOPOD ALH System) and light engineering mechanical parts.
As aforementioned, one of the main political and socioeconomic challenges for India, regarding the local defence industry, is the achievement of self-sufficiency in terms of defence production. Offsets/Industrial Cooperation is one of the “tools” the Indian government is currently using in order to develop the indigenous defence industry and in the long term to achieve self-sufficiency. Actually, nowadays offsets in India are evolving into a more sophisticated mechanism, reflecting the political decision of the Asian country to further enhance the local industry, so as to be able to effectively equip its defence forces and to be integrated in the global aerospace and defence supply chain. Being one of the biggest buyers of defence equipment on an annual basis, India can greatly benefit from a concrete and targeted offset policy.
Additionally, it is worth noting that the opening in recent times of the ‘strategic’ defence sector to private sector participation, has already led several foreign Original Equipment Manufacturers (OEMs) to enter into strategic partnerships with Indian companies, aiming to leverage the domestic market, with a view to further expand to the global scene. Besides helping the enhancement of domestic capabilities, this will bolster related exports in the long run. Some prominent cases of OEMs investing in India’s defence industry, are the following:
Airbus
Airbus Group exceeded the US$500 million annual procurement mark in India, in 2015. Over 6,000 people, at more than 45 suppliers, both public and private, are directly engaged in providing engineering & IT Services, aero-structures, detail parts & systems, materials and cabins to the Group, for several of its leading platforms, including the A380, the A350 XWB, the A320 Family, the A330, the C295W, the A400M, the Eurofighter, the Tiger and NH90 helicopters. The Group has now set its sights on exceeding the US$2 billion mark in cumulative sales to the country, covering both civil and defence items, in the period 2016-2020. The 2015 figure represents a 15% growth over that of 2014.Overall, the Airbus Group’s procurement from India, has grown 16 times in the last decade (2005-2015). Today, every Airbus commercial aircraft being produced, is partly “Made-in-India”.
Hindustan Aeronautics Limited (HAL), makes half of the entire global production of the A320 Family’s forward passenger doors. Dynamatic Technologies makes flap track beams for the A320 Family, on a global single source basis, and in 2015 was given the contract to manufacture them for the A330 Family too. Flap track beams are the assemblies on which the wings extend and retract every time the aircraft takes-off and lands.
Companies such as Tata, Mahindra and AEQUS, manufacture sub-assemblies and detail parts across various Airbus programmes. AEQUS has recently inaugurated a dedicated machining facility in Belagavi, the largest of its kind in India, adding to a pre-existing sheet metal, assembly and forging facility and special process operations for Airbus commercial aircraft programmes.
Tata Advanced Materials Ltd. (TAML) provides composite parts for the wings of the A350 XWB and A320 programmes, while another Tata Group company, namely TAL Manufacturing solutions, supplied over 500 sheet metal and machined parts and sub-assemblies for the A320 programme. In addition, Tata Advanced Systems Ltd. (TASL) will supply refuelling pods for the A330 MRTT, to Airbus Defence and Space, via the company Cobham.
Wipro has received technology transfer from an Airbus Defence and Space Joint Venture company in Spain, to manufacture more than 8000 aerospace actuators per year, which are then used in platforms such as A400M, CN235 and C295W. Finally, another Indian company, Tech Mahindra provides consulting services on Quality and Business Support.
SAAB
Saab and the Indian company Tata Power Strategic Engineering Division (Tata Power SED) started in March 2016 the process of manufacturing Self-Protection Systems for Land-based Platforms, for the Indian market and for export to Saab’s global markets. The partnership will also involve the joint development of a next generation of Self-Protection Systems. The process of Transfer of Technology (ToT) and the production of initial orders for Saab’s global customers, had already started at the Indian company’s facility in Bangalore, in early 2016.
Boeing
Under the “Make in India” initiative, Boeing is developing an indigenous aerospace and defence ecosystem in India, focusing on capitalizing on the country’s competencies, to build a supply-chain capability that will be globally competitive. This ecosystem will, in the long run, support the production activities of a wide range of Boeing aerospace and defence programs.
Recently, the US giant, formed a Joint Venture (JV) with the Indian company Tata Advanced Systems Limited (TASL). The scope of the JV is for the two companies to collaborate in aerospace and defence manufacturing and potential integrated systems development opportunities, including unmanned aerial vehicles.
In September 2014, Dynamatic Technologies and Boeing inaugurated a plant to manufacture critical parts for the Chinook Heavy Lift Helicopters. Additionally, TAL Manufacturing Solutions Ltd manufactures complex floor beams for the Boeing 787-9 Dreamliner and ground support equipment for the C-17.
Moreover, Dynamatic Technologies and Tata Advanced Materials Limited (TAML) have delivered P-8I power and mission equipment cabinets, and TAML is on contract to provide P-8I auxiliary power unit door fairings and composite tailcones for the P-8I. Avantel has delivered the mobile satellite systems for the P-8I and Maini. Cyient (formerly Infotech) currently provides design and stress support for the 747-8 Freighter and the 787-8 and 787-9 models.
Additionally, Bharat Electronics Limited (BEL) has delivered the Indian-designed Data Link II for the P-8I, the friend-or-foe interrogator, a battle management system that enables the aircraft to distinguish friendly aircraft and forces. Finally, BEL is on contract to provide F/A-18 flight deck cockpit panels, while the Electronics Corporation of India (ECIL) has provided the speech secrecy systems for the P-8I.
Finally, Hindustan Aeronautics Ltd. (HAL) was the single-source producer of 757 overwing exit doors. HAL has also manufactured the 777 uplock boxes, F/A-18 gun bay doors, F/A-18 wire harnesses, P-8I weapons bay doors, and the P-8I identification friend-or-foe transponders.
BAE Systems
Developing a supply chain in India is key to the company’s vision to develop technologies and solutions in India, for both the home market and for export. BAE Systems has been developing India as one of its five Home Markets since 2009, in addition to Australia, the Kingdom of Saudi Arabia, the United Kingdom and the United States.
Under this notion, in late 2011, BAE SYSTEMS secured a £59 million contract for the provision of spares and ground support equipment to aid the Hawk training aircraft operations. This brought the total value of Hawk related contracts won in India, to more than £600 million over an 18 month period. The Hawk aircraft is manufactured in India, under license by Hindustan Aeronautics Limited, with materials, parts and support services provided by BAE Systems.
In addition, Defence Land Systems India (DLSI), the company’s joint venture with Mahindra & Mahindra, won an important order from the police in the Eastern state of Jharkhand, for the company’s mine protected vehicle. DLSI, will use skills, technologies and knowledge transferred to the joint venture by BAE Systems South Africa. This is the first such vehicle to be indigenously designed and manufactured by a privately owned defence company in India.
More recently, in early 2017, BAE SYSTEMS was awarded a contract for 145 M777 155mm/39-calibre ultra-lightweight howitzer guns, 120 of which will be assembled at the proposed assembly integration and test facility for the weapon system in India, in partnership with Mahindra Defence, located in Faridabad.
Lockheed Martin
Lockheed Martin’s largest program in India is the C-130J Super Hercules, the first major military contract between the US and India, in more than 40 years. India joined the growing list of first time C-130 operators, with 72 countries operating the aircraft by 2014, worldwide. In addition, Lockheed Martin and Tata Advanced Systems Limited (TASL), have formed a joint venture company in India, for manufacturing airframe components for the C-130J.
Israel Aerospace Industries (IAI)
Israel Aerospace Industries (IAI) and India's Alpha Design Technologies signed a teaming agreement for the production and marketing of mini-Unmanned Aerial Systems (UAS) in India, in February of 2015. The IAI-Alpha cooperation includes IAI's Bird-Eye 400 and Bird-Eye 650 mini UAS as well as other mini-unmanned aerial systems, to accommodate the operational needs of Indian customers. Production of the systems will take place in India, while the marketing will be a joint effort of the two companies. Integration of additional applications and subsystems will be performed by Alpha in India with IAI's support.