Just a head’s up, but there’s a very very long review article by Piotr Butowski on the Su-30MKI in this week’s edition of IDR. I would post it, but it’s very long, and out of deference to Mr. Butowski’s hard work, will refrain from doing so.

Yeah, what’s with the 6 bladed prop? testing out An-70 technology, or something for the Y-8X?

Fair Use:

Date Posted: 27-Jan-2005

JANE’S DEFENCE WEEKLY – FEBRUARY 02, 2005

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INDIAN DEFENCE INDUSTRY – Two-way stretch
Rahul Bedi JDW Correspondent
New Delhi

Industry, military and political officials in India await the forthcoming committee report recommending how to reform the country’s moribund defence sector. Rahul Bedi reports

The monolithic and ambitious Defence Research and Development Organisation (DRDO), which is tasked with creating self- sufficiency in weapon development and modernising India’s military apparatus, has nonetheless, agreed to a recent plan to import equipment worth more than Rs1.2 billion ($26.66 billion) until 2015 to maintain the armed forces’ operational preparedness.

A large portion of India’s defence outlay of Rs770 billion for Fiscal Year 2005 (FY05), for example, is committed to servicing payments for acquisitions like 66 BAE Hawk advanced jet trainers from the UK for $1.77 billion, three Phalcon early-warning systems from Israel costing $1.1 billion and the Admiral Gorshkov package. This latter acquisition comprises the Russian 44,570-ton Kiev-class aircraft carrier and a complement of 20 MiG-29K fighters as part of its air group worth more than $1.5 billion. The carrier, acquired for the cost of its refit (estimated at between $625 million and $675 million), is being retrofitted at Russia’s Sevmash shipyard.

In March, before the end of FY05, the Ministry of Defence (MoD) is expected to finalise the purchase of two ‘schools’ of Israel Aircraft Industries (IAI)-manufactured Heron II unmanned aerial vehicles (UAVs), each with six drones for around $266 million; 12 Russian Splav 300 mm BM 9A52 Smerch multiple rocket systems; and special forces’ equipment. A$1 billion deal for six French Scorpene-class submarines to be built at Mazagon Dockyard Limited (MDL) in Mumbai – for which price negotiations were completed two years ago – also awaits closure.

Privatisation efforts

Despite repeated declarations of achieving 70 per cent self-reliance in all its defence needs by 2005, through a focused approach and private sector involvement, India remains decades away from even remotely achieving such an ambitious goal. Former defence minister George Fernandes had called India a “third-rate” weapon-producing country, forced to source its defence demands from outside.

“India’s defence industry has no game plan,” military analyst Gopalan Balachandran tells JDW. Its strategies are ad hoc, placing little or no emphasis either on product strategy or on developing equipment for operational requirements, he adds.

Military officials concede that no clear government policy exists that formalises the much-hyped “alliance and strategic partnership” between the armed forces and private industry. “Imports remain the services’ mainstay,” laments a senior army officer.

Four years ago the Industrial Policy Resolution of 1956, which prohibited private participation in the defence sector after independence in 1947, was amended, permitting 26 per cent foreign direct investment (FDI) to facilitate badly needed technology transfers. This change has had no effect.

“No overseas manufacturer has so far invested in India’s defence sector. Most prefer to manipulate the corrupt acquisition system and make direct equipment sales for greater profit,” says a weapons dealer, who declined to be named.

“Precious little has been achieved if the participants – private industry, the state-owned defence sector and the MoD – take stock of what has been achieved since they first began interacting, particularly in an information age in which time is the key factor,” says Lieutenant General Vinay Shankar, former director general of artillery. The problem, he adds, is “institutional inertia” and “insufficient” pressure being exerted to bring about change.

Political obstacles

Armament industry sources say reformation in this vital sector has been further hampered by the socialistic leanings of successive Indian administrations, which believe public ownership of defence safeguards national strategic interests. This sentiment was reinforced after the Communist-supported Congress Party coalition assumed office last year.

The Left-leaning parties, whose backing is crucial in keeping Prime Minister Manmohan Singh in office, remain opposed to the privatisation of the 39 state-owned ordnance factory board (OFB) units, eight defence public sector units (DPSUs) and the DRDO that collectively form the backbone of India’s military industry. They are also opposed to downsizing the organisations’ bloated labour force of over 1.4 million, fearing social chaos if workers were laid off and the disintegration of a committed “vote bank”.

The powerful All-India Defence Employees Federation (AIDEF), linked to influential left-wing trade unions, opposed the decision in December 2004 to allow 100 per cent private participation with 26 per cent FDI investment in defence production. Federation General Secretary Sri Kumar also demanded the withdrawal of manufacturing licences issued to 16 private corporations to build military equipment, signalling a potential roadblock to badly needed defence industry reforms.

Recommended reforms

Severe criticism by successive parliamentary defence committees on its inefficiencies resulted in the OFB, as a first step towards reformation, scaling down its employee strength from 150,000 in 1989 to around 120,000 in 2003-04 by freezing recruitment.

However, officials say the reduction in personnel was lopsided and has resulted in diminishing returns as several OFB units, where production lines face closure or are winding down, have a labour surplus. Other units, where new machinery has been installed and additional product lines introduced, face a human resources crisis. The average age of OFB staff has also risen as a consequence, adversely affecting the “technological adaptability” of its personnel, further intensifying its existing inefficiencies.

Parliamentary committees have also accused the OFB of operating its 39 factories in a “sub-standard environment” and under-utilising their capacity. In 1999, for example, the committee recommended increased privatisation and cost-cutting measures to improve productivity. Additional manufacturing costs acquired by supporting uneconomic ancillary industries coupled with rising inflation – currently hovering at over 6 per cent – has invariably led to OFB-produced items, like Russian armoured vehicles, being built under licence costing more than those imported in completed form.

For example, the problem-ridden DRDO/ OFB-manufactured Indian Small Arms System (INSAS) 5.56 mm assault rifle costs Rs16,000 ($355,550) per unit, while the tried and tested Romanian AK-47As, of which the army imported 100,000 pieces in the mid-1990s, cost around $93 each – nearly 75 per cent cheaper.

“Unlike the financially accountable private sector, the OFB’s costing remains flexible,” says a senior official from business giant Tata, one of 16 private companies recently awarded licences for defence production. As a state-owned company, staff are considered ‘free’ and cost and time overruns matter little, he adds.

On occasion the OFB even offers equipment at prices lower than the projected production costs, confident that all losses will eventually be underwritten by a protective MoD.

Between 1992 and 2002 OFB overall production grossed Rs345.40 billion. Its exports for this decade, however, amounted to a mere Rs1.25 billion, or less than 0.4 per cent of the overall production, and comprised low-end items like uniforms, boots, and various ammunition, ordnance and explosives.

Parliamentary committees have also urged the OFB to “intensify the interface” with the private sector to promote “commonality” and to avoid duplicating technologies that are freely available in the civilian sector, especially in the area of information technology (IT). They have also recommended the cessation of work on “low-end and obsolete technologies” and exploration of ways to lease out the OFB’s under-utilised capacity to the private sector in order to cover costs.

Between 1993 and 1998, however, only close to half of the OFB’s declared capacity was used, yet the MoD refused to hand it over to private industry despite repeated requests from the private sector.

The MoD also ignored recommendations by at least two subsequent government-appointed committees: the Nair Committee, which recommended the corporatisation and privatisation of ordnance factories; and the Jaffa Committee, which suggested trimming the powers of the omnipotent Directorate General of Quality Assurance (DGQA). The AIDEF also contested these recommendations.

Under procedures inherited from the colonial government, the OFB has no choice but to accept questionable DGQA-cleared materials, armament industry sources say. As a consequence, it has produced sub-standard products that the services have been forced to accept, according to senior military officers involved in the production process.

The issue of inadequate OFB production became a stark reality six years ago during the 11-week conflict with Pakistan in the mountainous Kargil region of disputed Kashmir. Soldiers complained of malfunctioning INSAS assault rifles, sub-standard ammunition, faulty ordnance, ineffective and cumbersome body armour, and inferior boots and high-altitude clothing. Even the normally reticent MoD conceded shortcomings in basic infantry weapons and ground surveillance capability during the conflict, in which some 1,200 soldiers died, 519 of them Indian.

For the first time last year, OFB units were sanctioned Rs20 million each for R&D, raising the military’s hopes that it will lead to better end-quality products.

Meanwhile, all concerned parties await the recommendations over the next few weeks of the Kelkar Committee, headed by economist and former federal finance ministry technocrat Vijay L Kelkar, on modernising and streamlining India’s moribund defence sector.

Sceptical armament industry analysts, however, maintain that, like similar earlier reports, this one too will be “selectively” applied by the MoD to preserve the monopoly of the DRDO, the OFB and the DPSUs to replace and upgrade predominantly Soviet and Russian weapon systems that have reached ‘block’ obsolescence.

Efforts to restructure the 46-year-old DRDO, for example, began in the early 1990s when several hundred projects were terminated due to lack of progress, non-viability, or technological obsolescence. Four years ago the Hindu nationalist-led government opened up to the private sector seven hitherto secretive DRDO laboratories involved with biotechnology, developing dual-use technologies and software projects. However, they reportedly hindered free access.

Planning to maintain modernised forces and address obsolescence issues is carried out in two tiers. First, a long-term perspective plan (LTPP) is prepared by the individual services. The LTPP is then turned over to the newly created Integrated Defence Staff (IDS) that co-ordinates and prioritises the different plans, eventually spelling out force structures and India’s military capability profile over a 15-year period.

IDS’ recommendations are then discussed by the Defence Acquisition Council (DAC), headed by the defence minister, and decisions are taken on whether to “make, buy-and-make or simply buy” equipment. The outcome is finally factored into five-year defence plans and, theoretically, forms part of the capital acquisition planning of individual services to address respective modernisation needs. The DAC, however, has met only once over the last two years and the meeting it did hold was inconclusive.

Acquisition plans continue to be subjected to strong pressures from two sides: by the services’ desire to procure the latest weaponry without thought or consideration to fully integrating the systems; and the MoD’s propensity to be guided continually by the DRDO’s misplaced capabilities for indigenous production.

The result, according to a senior army officer involved in the process, is delays and costly acquisitions that eventually end up merely as “product enhancers” with limited benefit to local industry.

Over the past decade, the gap in India between acquisition planning and procurement and upgrades has been rising steadily. In the past five years the MoD has returned Rs327.40 billion to federal funds earmarked for new equipment and modernisation following both its and the services’ inability to take timely decisions.

The MoD has also frequently ‘parked’ unspent funds with DPSUs and the OFB to prevent them from lapsing, thereby boosting the institutions’ highly ambitious relevance to India’s defence industry.

Of the eight DPSUs, five are state owned, including Hindustan Aeronautics Limited (HAL), MDL, Garden Reach Shipbuilders and Engineers, missile manufacturers Bharat Dynamics Limited (BDL) and Mishra Dhatu Nigam (MIDHANI), specialists in metals, super alloys and special material used in processing nuclear fuel for plutonium extraction. Bharat Electronics, Bharat Earth Movers and Goa Shipyard Limited are partially privatised.

HAL, BDL and Bharat feature in the Top 100 Global Defence Industries.

Indigenous limitations

“Empires need protecting,” says the division head of a leading private military contractor. Another private manufacturer says the MoD finds it “safer” to place orders with the DPSUs and the OFB as they are fearful of being investigated at some later stage in a corrupt, watchful and suspicious milieu for “unduly favouring” the private sector irrespective of its relative efficacy.

This regressive state of affairs was precipitated by the continuing investigations into the 2001 arms corruption scandal in which Tehelka, a Delhi-based news website, filmed senior politicians, army officers and MoD officials accepting bribes to facilitate the purchase of a fictitious piece of equipment. “The Tehelka scam has considerably weakened the MoD’s resolve to favour the private sector,” according to an arms industry source.

Foreign defence vendors shortlisted to sell India their equipment also prefer entering into collaborative agreements with the OFB or the DPSUs for the mandatory technology transfer requirement, rather than with private sector companies, since the vendors enjoy MoD patronage.

Trading on this patronage – and in many cases actively encouraging it – the OFB and DPSUs have ended up merely as equipment importers but under the ‘credible’ guise of technology transfer. “By effecting insignificant additions, the DPSUs passed on this new equipment to the military at a considerable mark-up, facilitating little or no benefit to local industry,” says an army officer.

Between 2000 and 2002, DPSU overall production totalled Rs322.06 billion while the country’s defence exports in 2003-04, the highest in five years, remained a meagre Rs1.04 billion – some Rs1.28 billion less than the modest projected target. “The DPSUs have no need to be competitive as they face no competition and have a captive market in the military,” an MoD officer admits.

Self-reliance is further hampered by the defence industry’s lack of an extensive range of ready components and subsystems that could be incorporated into new or retrofitted equipment.

Nor does it, for the moment, have an established network of subcontractors to supply them, and is further hampered by the absence of a credible programme or system that identifies future technologies for incorporation.

Instead, the MoD undertakes ad hoc surveys of foreign equipment, shortlists what it believes to be the best technologies and introduces them unmindful of their relevance or the limited ability of either the DRDO or the DPSUs to adapt them, say senior military officers involved in the production process.

Future requirements

In the late 1990s, India’s Finance Commission criticised the services for concentrating on big price ticket items like aircraft, ships, submarines, tanks and artillery systems at the expense of sensors, command and control, logistics support and missile systems that could be built locally. They were also criticised for inadequate consideration of the long-term trade-offs between upgrading existing platforms and the longer-term need for new acquisitions.

Military planners concede that India’s equipment policies and proliferation of an “ad hoc arsenal” are not synchronised with the region’s unfolding short- to medium-term security challenges.

According to the army’s newly released doctrine, these will centre on insurgencies requiring specially trained forces equipped with light but sophisticated firepower, detection systems and night-vision capabilities to overwhelm the shadowy opposition rather than attempting to occupy territory.

It is argued that large armies backed by tanks and artillery will become obsolete by 2020-25 with the emphasis shifting to cyber-based war that will require a ‘holistic’ modernisation approach. The projected ‘hyper war’ will also seek to neutralise enemy forces using smart munitions well before they come into visual range.

A debate is brewing in technological circles on the kinds of future military products India will require. While the MoD wants to nurture the ability to design and build major weapon systems, the armed forces argue that India’s burgeoning technical talent should be focused on developing weapons in conjunction with foreign partners, concentrating on competitive niche areas. The latter view favours neighbouring China’s plans of shifting from ‘mechanisation’ to ‘informisation’.

However, the MoD’s views appear to be in the ascent, posing a Herculean challenge to India’s defence industry and acquisition process over the next two decades.

Official estimates indicate that the Indian Air Force (IAF) will need between 350 and 450 new fighters, 80 to 100 transport aircraft and 120 to 140 helicopters. It will also need to replace almost its entire arsenal of surface-to-air missiles (SAMs).

The army plans to acquire between 1,200 and 1,500 main battle tanks (MBTs), 350 to 500 infantry combat vehicles (ICVs) and 1,200 to 1,500 155 mm/52-cal towed, wheeled and tracked howitzers as part of its strategy to standardise its field artillery.

The Kargil conflict also gave new urgency to armaments modernisation, especially missile components, electronic warfare (EW) systems, radar, metals, robotics, fibre optics, lasers, UAVs, stealth technology and communications systems.

By 2015 to 2020, the Indian Navy (IN) envisages itself as a two- if not three-aircraft carrier force alongside 140 to 145 vessels, more than half of which will be seagoing for bluewater operations and power-projection visibility. It plans to make up for the “lost decade” of the 1990s during which naval force levels dropped drastically by acquiring 15 to 20 submarines, adequate surface combatants, robust reserves and sound logistic support.

India has also announced a comprehensive development programme designed to develop, build and upgrade a broad range of missiles besides developing its minimum nuclear deterrence (MND) based on a triad of land- , sea- and air-delivered assets.

Senior military officers, MoD officials and leading private manufacturers faced with this monumental modernisation task say a mere declaration of intent does not “automatically” translate into action, claiming that most proposals remain at a conceptual stage.

“We buy everything from ships to artillery pieces from overseas private companies, but so far we have not allowed our indigenous private sector to make military equipment nor have we reposed faith in them,” says former parliamentary affairs minister Pramod Mahajan.

Lack of support

“No government directive exists to support or nurture privatisation of the defence sector,” says a source from the Confederation of Indian Industries (CII), which has been working for increased private participation in the military-industrial sector since the early 1990s. There is neither a planned approach based on product strategy, nor projection of future requirements nor an offset policy to attract joint ventures and nurture the infusion of much-needed defence technology, he adds.

The CII has organised more than 65 major events to facilitate greater interaction between the private and military sectors. However, it has failed to ‘dent’ the defence establishment’s hidebound and secretive mindset, which is loath to share information and impervious to change, says the source. “The lack of transparency in defence matters generates fear among potential local suppliers,” a private sector manufacturer says. CII sources say foreign vendors have a price advantage, exempt from paying the 25-30 per cent sales tax that is levied on all indigenous suppliers.

CII’s persistent lobbying, however, has resulted in the formation of a group of around 4,000 private suppliers to provide around 40 per cent of components and subassemblies to the DRDO, the OFB and the DPSUs. This group is expected to triple in size by 2010.

The CII, however, wants to evolve the government’s long-term commitment, like in Western countries, to the private sector to include the payment of R&D costs and to reserve all upgrades for local companies. It is also working to persuade the MoD to adopt a ‘consortium’ approach to developing military technology, which would involve the designer/developer, end user and manufacturer and not confine private industry merely to making components and subsystems.

Companies like Tata, Larsen and Tubro (L&T) and Mahendra & Mahendra, all based in Bombay, and Optic Electronics (India) headquartered in Delhi, which three years ago were granted licences to build complete weapon systems, also want greater predictability in defence funding to offset the large entry costs into the military sector.

Tata and L&T were the first private manufacturers to be jointly awarded the Rs50 billion contract to develop the launcher, fire-control system and guidance electronics for the Pinaka multiple rocket launcher systems (MRLSs). They are expected to build 40 launchers.

L&T, one of India’s largest private defence contractors with a Rs80 billion turnover, has also been involved in building India’s highly classified nuclear submarine (SSN) known as the Advanced Technology Vessel (ATV). It has also developed the test launcher for Sagarika (Oceanic): the equally secretive nuclear-armed submarine-launched cruise missile (SLCM) that forms an integral part of the country’s nuclear deterrent.

Official sources say interminable production delays by the DRDO, which launched the ATV programme in the late 1990s, led to L&T being awarded the contract to build the ATV’s hull. Both L&T projects are based at its Hazira facility in Gujarat state, some 350 km north of Bombay. The armed forces, meanwhile, are avidly looking to the country’s growing and competitive private industry as an alternative to the over-extended DRDO for new and upgraded systems. They say the ‘bloated’ and omnipotent DRDO, which insists on developing all and any weapon systems it wants is ill-equipped for this crucial role as it has produced little of much worth over several decades.

The DRDO’s flagship Arjun main battle tank project, put forward as a major success, is one such example. Sanctioned in 1974, the Arjun remains years away from entering service due to operational and technological shortcomings and an import content of over 60 per cent. This, in turn, forced the army to acquire 310 Russian T-90S MBTs in 2001 to fill an essential operational gap for around $780 million. The first T-90S assembled at the OFB’s heavy vehicles factory (HVF) at Avadi, southern India, was handed over to the army in January 2004 after the induction into service of 186 MBTs imported in completed form. The remaining 123 MBTs are to be assembled with Russian assistance over the next year before local production of the MBT under licence begins in 2007.

The Light Combat Aircraft (LCA), the DRDO’s other high-profile programme, is currently undergoing trials, but the IAF is sceptical about its technological efficacy by the time it enters service by the end of the decade or beyond.

Missiles

The DRDO has delayed retrofitting 125 MiG-21 bis fighters with Russian, French and Israeli imports by more than five years while the SAMs – Akash (Sky) and Trishul (Trident) – and the 4 km-6 km-range fire-and-forget anti-tank missile Nag (Snake) are still undergoing trials. These systems began as part of the Integrated Guided Missile Development Programme (IGMDP) started more than two decades ago.

The failure of the Trishul short-range SAM and Dhanush ship-launched medium-range ballistic missile to enter service, led to the three locally designed and built Delhi-class destroyers being armed with Russian SA-N-7 Uragans. The navy also acquired the 300 km-range 3M-54E1 (Klub N) vertical-launch missile system to equip three Russian Krivak III (Project 1135.6)-class frigates, the last of which joined the service last year.

The navy is also equipping the Delhi-class destroyers and INS Viraat, its lone aircraft carrier, with Israel Aircraft Industries/Rafael Barak point air-defence missile systems.

“The DRDO’s problem is that it is over-ambitious. There is no co-ordination between the DRDO and the users,” former army chief General Shanker Roy Chowdhury says. It ends up merely copying dated Soviet designs, he adds.

The DRDO, however, has notched up some successes, such as the liquid-fuelled Prithvi surface-to-surface missile for the army and air force. The nuclear-capable Agni (Fire) I,II and III intermediate-range ballistic missiles (IRBMs), with ranges of 700km- 900 km, 1,500 km and 2,300 km-2,500 km respectively with payloads of 1,000 kg each, has also proven successful with a circular error of probability of around 150 m-180 m. Two Agni IRBMs with ranges of 700 km-900 km and 2,300 km-2,500 km are currently under series production, also with BDL.

The DRDO believes the BrahMos supersonic anti-ship cruise missile developed as an India-Russia joint venture (JV) has “promising” export potential because it is the only one of its kind available in the world today.

The JV, in which India is represented by the DRDO and Russia by NPO Mashinostroyeniye, was set up at a time when Moscow wanted to change the buyer-vendor relationship to that of joint developer.

Configured on the Russian 3M55 Oniks/ Yakhont, the Brahmos has undergone seven successful tests – the latest in November 2004 – from sea and mobile land-based platforms to a range of 290 km with a 250 kg-300 kg conventional warhead. It is now in series production with BDL at Hyderabad, southern India. The 8.4 m-long BrahMos is also being developed to be fired from submarines and aircraft.

During Russian President Vladimir Putin’s December 2004 visit to Delhi he signed three protocols with India for additional investment in developing the cruise missile with Russia, agreeing to put $50 million into the JV to build the missile and export it. Russian officials say the JV plans to produce between 360 and 370 missiles annually, with first deliveries going to the Indian armed forces. Moscow and Delhi also agreed to draft an intellectual property right accord later this year to patent weapon systems that have been jointly developed and built. The lack of such an agreement has, in the past, prevented India from exporting products that were manufactured locally under licence such as T-72 MBTs, MiG-21 variants and a host of varied Soviet Russian military hardware.

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So crobato,

Is this subscription to Kanwa worth the money? Granted, it’s only $200 some odd dollars a year, but looking at the way Pinkov steals pictures off the ‘net, it would seem that his articles are merely rehashes of what’s found on the Internet.

I read the full article.

To sum it up, too much ado over three reinforcing bands. The rest of the article has nothing to do with problems of the J-10.

Please post the full article so that we may all read it! Do you have a subscription?

Thread is too long. Closing now- please start another one, thanks.

Thread is too long. Closing now- please start another one, thanks.