eye on defence january 2016

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January 2016 Eye on Defence

Dear readers,

The Future Infantry Combat Vehicle (FICV) is a prestigious program of the Indian Army. The program was approved in 2009, whose EoI (Expression of Interest) was first issued in 2010 but was subsequently cancelled. Last year, the Army re-issued the EoI after a gap of three years to 10 Indian companies and sought responses by mid-January 2016. Two development agencies (DAs) will be selected and will compete for the US$7.5 billion (INR 500 billion) project. The Indian companies have been encouraged to form

consortium (maximum 5) and also tie up with as many foreign companies to bring home latest technologies on a license basis to strengthen the indigenous know-how. Four assessment categories with varied weightage have been listed out to pick these two agencies at the end of EoI stage. The cost of development of the prototype will be shared amongst the MoD and contenders with a 4:1 ratio. DRDO being a technical evaluation agency will not be competing/participating as a potential partner for any of the 40 key technologies identified by the Army in its proposal. The contribution of the Indian industry to acquire, develop and indigenize critical technologies will be one of the key criteria in the assessment of various proposals. This current issue captures all this in detail along with a segment wise listing of the probable technology partners for this program.

As India looks to create a strong defence industrial base for the expansion and modernization of its military force, it will be interesting to assess the industry’s competitiveness vis-a-vis the global defence industry. With the measures taken so far, the industry is at an inflexion point with an emerging ecosystem in defence manufacturing in India. Our second article details out India’s situation as it stands today, w.r.t, the global defence industry. We look at the steps taken by developed countries that propelled them to their current position, steps taken by the Government in improving the defence scenario, key topics under taxation, R&D spend, policy framework, partnership with OEMs and other relevant issues. With the few definite changes by the Government and the “Make in India” drive, it is now to be seen how much the defence industrial base can evolve and be made competent for the global supply chain.

Among the regular sections, we have industrial license applicants, RFIs/RFPs released, new projects and investments, joint ventures and alliances, country-level deals and the latest buzz in the industry.

I hope you find this issue useful. It has been our constant endeavor to make this publication increasingly relevant to you, and we will appreciate your comments and suggestions in this regard.

K. Ganesh Raj Partner and Leader

Contents

Introduction

Future Infantry Combat Vehicle (FICV): Competitive Analysis

Integrating Indian Defence Industry with Global Supply Chain

Request for Information (September–November 2015)

Request for Proposal (September–November 2015)

List of Industrial Licenses (ILs) filed for September–October 2015

Cases Approved in the 5th Licensing Committee Meeting (6 November 2015)

New projects/investments/contracts

JVs and alliances

Country-level deals and initiatives

Industry buzz

1

2

9

16

17

23

25

27

28

29

32

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There is a flurry of activities in the defence production sector for technology tie-ups and signing of MoUs, with the response date of Expression of Interest (EoI) of the Future Infantry Combat Vehicle (FICV) approaching fast. Development agencies (DAs) have been given time till mid-January 2016 to respond to the EoI with detailed proposals that will involve individual respondents or forming consortia (not more than 5 firms) with Indian and foreign vendors. Their task will be to conceive and propose the design of an FICV to best suit the Army’s requirements. Subsequently, two DAs will be shortlisted and a Detailed Project Report (DPR), comprising of technical and financial proposals will be submitted within six months.

The project was approved in October 2009 and since then the private sector is not only looking forward to participate but has also put in place the designers and technical facilities needed for developing the complex system. The initial EoI issued in 2010 was cancelled in 2012 after 20 months, since it did not define the criteria by which the winners would be selected. In December 2012, Russia offered to transfer BMP-3 combat vehicle technology if India cancelled its project, as the FICV could not be commissioned earlier than ten years’ time.

The EoI has now been re-issued after a gap of more than 3 years to 10 Indian companies, namely Mahindra, Bharat Forge, Larsen & Toubro, Punj Lloyd, Tata Power, Tata Motors, Pipavav Defence, Rolta India, Titagarh Wagons and Ordnance Factory Board in July last year under the “Make” category and as per DPP-2008. Indian companies are to be funded to develop “high technology, complex systems”, for an estimated cost of INR500 billion (US$ 7.5 billion). The “Make” project has the provision for sharing of design and development costs by MoD (80%) and the industry (20%) — this portion is likely to be shared by two selected parties. The release of payment by the MoD will be linked to achievement of well-defined milestones agreed upon in the DPR. As a matter of fact, no design of such major platform has been developed in the country and hence, no suitable data on cost of design and development is available for guidance. The platform is likely to have the existing technology subsystem integration and its prototype cost may be guided by opportunity cost and not by design and development cost. The recent upgrades done by the Indian private sector have amply demonstrated their in-house capabilities and their ability to evaluate the actual operational performance of subsystems provided by OEMs for a particular program.

Future Infantry Combat Vehicle (FICV): competitive analysis

Basic requirementsThe FICV will be basically a tracked, Armoured Vehicle (AV), operated by three crew members, which can carry eight combat-equipped infantrymen into battle. The FICV’s weight is not specified but it would have to be less than 18–20 tonnes, since it is required to be amphibious. It must be air-portable in the Air Force’s IL-76 Gajraj and C-17 Globemaster aircraft; and be able to fire Anti-Tank Guided Missiles (ATGM), which destroy tanks at ranges of 4,000 meters.

The desired end product should be comprehensive indigenous solution, which can support the requirements of the Indian Army throughout the life cycle of the product. All parameters of FICV are important, however, below mentioned parameters are critical and need to be in the proposed design solution of this program. Any response not meeting these parameters will be rejected and will not be assessed for selection of the DAs. These parameters are:

• Tracked vehicle

• Amphibious capability with full combat load

• Carriage capacity — the FICV to carry a crew of three and a stick of minimum eight personnel with combat loads

• Portability — FICV should be transportable by road, rail and in-service aircraft (IL-76 and C-17) of IAF

• ATGM

• Automatic Command to Line of Sight (ACLOS) Guidance System with Lock on Before Launch (LOBL) or Lock on After Launch (LOAL)

• Maximum engagement range of not less than 4000 metres

• Vendor/ consortium must offer core technologies

Assessment of DAsAccording to the DPP-2008, the eligibility criteria for Indian private companies is as follows:

• Registered for a minimum of 10 years

• Have capital assets in India of at least INR1 billion (US$ 15 million)

• Report turnover of more than INR10 billion (US$ 150 million) for each of the preceding three years

• Have minimum credit rating equivalent to a CRISIL/ICRA ‘A’

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• Report consistent profitable financial record showing profits in at least three years of the last five years and with no accumulated losses

The contribution of the Indian industry in acquiring, developing and indigenizing critical technologies will be one of the key criteria in assessment of various proposals; however, assessment will be based on the four evaluation criteria detailed below according to their given weightage. The response on commercial information and technical information should relate to the same operating company and operations (value additions) and not related to consolidated results, which reflect the investment and trading portfolio of the operating company.

The assessment of the responses of ”Lead Member” and his associated ”Consortium Members” will be on four major criteria as given below. As a generic rule, in case of response by an individual Eol holder, the scoring will be according to vendor response submitted. In case, the response is submitted by a consortium, the total cumulative score of all members of the consortium will be considered as aggregate score of the consortium.

An individual Eol respondent cannot, at the same time, be member of a Consortium responding to the Eol. Furthermore, a member of a particular responding Consortium cannot be member of any other Consortium responding to the Eol. Consortium will not be permitted after the submission of Eol responses until the award of a development contract for prototype development.

The Ministry of Defence (MoD), Government of India reserves the right to modify these criteria at any time before the responses are opened for evaluation. The MoD also reserves the right to disqualify a respondent/consortium if he/they fail to comply with the specific criteria at any stage of the evaluation process by the IPMT.

Assessment criteria1. Commercial (weightage 26.08%)

This will evaluate the company’s/consortiums for four parameters — the company’s/consortium’s annual turnover, profit after tax, net worth and fixed assets. On 27 October 2015, the Defence Ministry issued a note to the contenders, clarifying that domestic operations alone will count while evaluating a company’s commercial eligibility.

2. Technical capability (weightage 34.24%)

This is to evaluate the R&D capability of a company/consortium across its entire spectrum of activities. The

vendor’s evaluation will be based on the manufacturing capacities and system integration capabilities. The broad-based credit will allow some companies to benefit from R&D in their other similar projects. Incentives will be given to vendors who have high R&D spends in percentage terms, specifics being:

• Details of projects related to Land System Self Propelled Mobility Platform (Prime Mover Gross Weight as 12 Tons and above and below 12 tons) successfully implemented in the last seven years.

• Heavy Engineering Infrastructure

• Details of existing design tools and software

• Amount expended on R&D in last seven years

• Patents held by the company

3. Critical technology (weightage 31.37%)

The assessment of technologies for Project FICV will be done through two parts, core technologies and critical technologies (totalling around 40 technologies), of which almost half relate to engines and transmissions.

Core technologies

Technology partner to provide the right/license for commercial development, right/license for series production, right/license for continuing engineering support and right/license for product improvement (including exploitation and upgrade) for the following sub systems:

• Engine

• Armour material

• Guns and ammunition

• Transmission and steering

• Gears

The necessity of maximum core technologies with all the rights/licenses will be essential for the successful completion of the project. It is mandatory for a DA/Consortium to provide minimum one out of the five core technologies with all rights/licenses.

Critical technologies

DA/consortium is required to offer maximum possible critical technologies for the project with all rights/license. Consortium offering increased number of critical technologies with all rights/license will get a benefit in comparative assessment of their Eol responses.

4 | Eye on Defence

The DA will need commitment from OEM and its partners manufacturing rights and ownership of technology, which are being offered through ToT. In case where subsystems are sourced from OEM in initial stages, the DA will need a commitment for unhindered supply possible through ToT/license. Full usage exploitation and upgrades of technology may be possible in normal case; however, need for critical subsystems may be feasible with separate commercial arrangements. The export permission may require the OEM/Government approval.

4. Technical specification (weightage 8.31%)

A single response from a consortium/individual respondent is required to be submitted and is likely to be evaluated according to vendor response (duly supported by verifiable document) submitted. This involves proposing specifications for the FICV. With the EoI specifying some capabilities and demanding certain technologies, all the contenders are likely to score. The following subsystems should meet the desirable parameters criteria given in EoI.

• Guns and Ammunition

• MMG

• Automatic Grenade Launcher

• Missiles Including Launcher

• Smoke Grenade Launcher

• Fire Control System

• Gun Control System

• Surveillance Devices

• Armour Protection

• Passive Protection

• CBRN Protection

• Fire Protection System

• Engine

• Transmission

• Track

• Amphibious Capability

• Obstacles Crossing

Technology transferSome of the salient points, which are to be clearly specified in the MoU between DA and Technology Partner are:

• Technology Partner needs to provide all required technical and commercial information for preparation of the response to the EOI and during all the phases of the program.

• Technology Partner will support DA in the pre-development phase with techno-commercial information and submitting the response of the EOI and subsequent clarifications to MoD, and to secure the award of FICV development phase and subsequent serial production phase contracts.

• In the event DA is short-listed for the development and serial production phase. Technologies to be provided by the Technology Partner, will be licensed and/or transferred in support of contracts awarded by the Indian Government to DA through OFB, acting as prime contractor, in accordance with the following:

• Licenses for Commercial Development

• Licenses for Series Production

• Licenses for Continuing Engineering Support

• Licenses for Product Improvement (including exploitation and upgrade)

• Indigenization is one of the important requirements of the program; therefore, parties must agree to collaborate to achieve the respective indigenization targets for the Development Phase and Serial Production Phase. Minimum 30% indigenous content on cost basis (excluding taxes, duties and other statutory obligations) is mandatory for the developed prototype of FICV. However, with 30% indigenous content, there is insufficient incentive to indigenize, which should be the primary objective in a “Make” project. The companies are also waiting for the new DPP draft recommendations to be finalized, which has recommended a minimum 40% indigenous content as compared to the 30% indigenous content in DPP-2008.

• The ownership of any intellectual property generated from any Joint Development will be mutually agreed upon and may be transferable to MoD, if required for the Program.

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6 | Eye on Defence

Technology PartnersThe EoI holders are reaching out to some of the OEMs for strategic/sub-system technology partners for FICV development. While the DAs are free to tie up with any foreign vendor for the program, they are looking for more information on the issues of design, technology, transfer route and financial viability of the options. Some of the technology segment, players and likely route for transfer of technology are:

Sub systemLikely key technology

partnerLikely route Remarks

Engine Power Pack Cummins, MTU Navistar/ BAE, Textron, KEDB, Doosan

Critical technology: licensed manufacture

• Some of the OEMs are integrators of complete platform in addition to sub system OEMs for example General Dynamics, BAE, Krauss-MaffeiWegmann (Germany), AM General etc.

• The DA need to submit an MoU signed with technology provider to unambiguously support the claim of Rights/License for each Core technology and Critical Technology.

• Technology partner to provide

• Right/License for commercial development

• Right/License for Series Production

• Right/license for Continuing Engineering support

• Right/license for Product Improvement (including exploitation and up gradation)

• Technology provider can sign MoUs with multiple Indian companies.

Final Drive/ Transmission

Allison, Caterpillar, Navistar/ BAE

Critical technology: Develop/acquire/license

Suspension/ Tracks Allison, Navistar/ BAE Critical technology: Develop/acquire/license

Weapon System Rhinemetal, Orbital ATK, BAE, Elbit, LM, KMW

Critical technology: Acquire/develop/ license

Ammunition Orbital ATK, Nexter Critical technology: acquire/develop/ license

Missile Javelin, MBDA, Spike Critical technology: acquire/develop/license

FCS Rhinemetal, Kongsberg, Elbit, Rafael, BEL/ Pvt Sector

Indigenously developed

Sighting Systems Rhinemetal, TATA, Rafael, Cartsam/ Elbit

Source with MToT

BFMS Rhinemetal, Saab, Rafael, BEL/ Pvt Sector

Indigenously developed

IFF Thales, Saab, Elbit, Rafael Indigenous development

Communication Elbit, Saab Indigenously developed

Passive (ERA) and Active Protection

Dastan, BAE, Elbit, DRDO License/indigenous

System Architecture & Engineering

DA Indigenous development

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Emerging groupingThe project by itself is not an insurmountable technological challenge; but there remain lacunae in the evaluation methodology. The industry is sceptical about the criteria as it appears to favour the large companies with enormous installed capacities, rather than lean organizations oriented toward high-tech innovation.

Role of DRDODRDO has developed certain technologies for “Abhay”, which could be utilized or further refined by the contenders. DRDO may facilitate transfer of technologies for the private sector in becoming a systems developer from being the supplier of components and subsystems for the weapon systems and the strategic arsenal. DRDO is likely to be the agency for technology evaluation in the project and hence, cannot be a partner.

Down-selecting competitors for DPRBased on the restrictive conditions in the EoI citing DPP-2008 and clarification, it appears only OFB and a couple of older players in the defence sector are likely to qualify. Consequently, three scenarios are envisaged:

• The OFB becomes one of the two down-selected vendors, based upon OFBs prior experience and the fact that they already have existing infrastructure. A second DA will be selected from the private sector, based on evaluation criteria, installed capacities, engineering capability and tie-ups.

• Two private sector companies get selected and the OFB carries out its own FICV type development, based upon its own funding, etc. Interestingly as part of its FICV submission, the OFB in the past did not request ANY funding for FICV, since it is also government funded. It stated, that it had the requisite funding available. Note, this also means that in scenario 1) above, if the OFB was against a private sector company, the private sector will be the only one funding privately the 20% contribution, which adds to the case that the OFB will not be one of the selected two.

• Two private sector companies get selected and the OFB is nominated as the weapons and armament partner. This is more likely to happen, as none of the private sector organizations have industrial licences for production of armament and ammunitions products to date.

ConclusionThe contribution of the Indian industry in acquiring, developing and indigenizing critical technologies will be one of the key criteria in assessment of various proposals. Since there is no restriction on foreign/Indian technology provider for tie ups with more than one vendor/Consortium, the responses will have common technology partners. The DAs are likely to be shortlisted based on the evaluation criteria and their weightage. The criteria and its evaluation methodology are likely to have different interpretation and may be questioned in time to come, since there are few dichotomies in the assessment criteria.

One of the key resolving issues is going to be the product IPR, as the EoI requires that in case of technology developed by funding through MoD, the rights over the IPR would belong to the MoD, Government of India. However, in case of ToT coming from OEM, through Indian DAs, there will be reluctance to give exclusive IPR rights. One of the ways out could be a joint ownership for the IPR for this program.

References:• “Empanelment Of DPSUs/OFB/Indian Industry/

Consortia For Project Futuristic Infantry Combat Vehicle (FICV)”, MoD website, http://mod.nic.in/writereaddata/Empanelment-FICV.pdf, accessed on 7 December 2015

• “EoI issued for FICV”, SIPRI website, http://www.defproac.com/?p=2408, accessed on 7 December 2015

• Companies Annual Reports

• “MoD extends deadline for FICV program”, Indian Defence News, 16 September 2015, http://www.indiandefensenews.in/2015/09/mod-extends-deadline-for-ficv-program.html

• “After 5-year delay, tender issued in Rs 50,000-cr Future Infantry Combat Vehicle project”, Business Standard, 16 July 2015, http://www.business-standard.com/article/economy-policy/after-5-year-delay-tender-issued-in-rs-50-000-cr-future-infantry-combat-vehicle-project-115071601515_1.html

8 | Eye on Defence

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Recently the Indian Government has taken several measures to boost industrial manufacturing and promote viable Indian Defence Industrial Base (DIB). Past policy framework in defence production had domestic market orientation and it had its own repercussions, with the cost and quality taking a back seat due to operations in a non-competitive environment. Currently, the Indian defence industry is at an inflexion point with emerging ecosystem in defence manufacturing in India. The defence industry, beside addressing national security concerns, is a subset of “Make in India” — the national manufacturing policy-mosaic. “Make in India” is not just a sound economic option but a strategic imperative in promoting India as a global hub of manufacturing, particularly in the strategic sectors, one of which is defence. As of now, the domestic defence industry lacks critical technologies, manufacturing ecosystems for integration of large platforms, supply chain and MRO capabilities.

The global defence industry provides business opportunities worth more than INR58, 500 billion (US$900 billion) a year, but has been on a relatively stagnant growth path lately. The Indian market, although a fraction of the global business, is fast growing, and highly import dependent with procurement budget growing at an annual growth rate of more than 12%. The Indian defence requirements are more than INR16,250 billion (US$250 billion) in the next 10 years. The euphoria over the industry growth is attracting foreign OEMs as well the domestic private sector to enter the market. With a large defence market in India, the industry is likely to head toward optimization of costs as well as improved production efficiency. A vibrant competitive DIB will enable utilization as well as consolidation of the national manufacturing base; the existing capability of the Indian private industry, fostering a constructive, long-term partnership with government and private industries to minimize dependence on foreign vendors. A growing DIB must necessarily include the private industry, large, medium and small scale enterprises, which will enable utilization as well as consolidation of the national manufacturing base in areas such as shipbuilding, engineering and metallurgy, automotive, electronics, avionics, telecommunication, etc.

However, for the growth to be sustainable in the long run, the industry needs to integrate itself with the global supply chain. The global market is highly regulated with entry barriers and challenges and it is important to understand nuances of the global defence supply chain.

Lessons from developed industryWe need to acknowledge our industry capabilities and must

Integrating Indian defence industry with global supply chain

realize that we have not reached a stage where we can develop all our defence requirements in-house. The Indian defence industry is at a nascent stage and the present-day developed defence industries have passed through the same stage and overcome similar problems of what we see in India. The recent expert committee report (based on DPP 2013) has recommended studying the foreign models for the purpose where the system has been in vogue for quite some time. The lessons from foreign models and their journey could be guidance for us, to build a robust DIB in India.

Currently, there are several constraints relating to regulatory regimes, taxation and most importantly a lack of understanding of the production models followed across the world for defence and aerospace products. Till the 1960s, the industries in the US were under government control; however, after 1960, majority of the industries were privatized resulting in control of operations with the private players. The privatization brought increased accountability, which applies both to employees and products. Similar were the steps taken by most of the European countries in restructuring their industry. The governments of the day in countries with developed defence industries adopted the “hands off” approach during the transition and some of the means adopted by private sectors were vertical integration, mergers and acquisitions, thrust for exports, international joint ventures and diversification.

Public sectors have significant infrastructure and wherewithal but remain unutilized. They should be modernized and shared/handed over to more capable private industries to prepare a ground for a defence industrial base. India needs to restructure its public sector, since they are commercially lower in tune with the modern technology than by trade unions. Therefore, the Government should look for certain measures with a futuristic political will.

Forge strategic partnershipDomestic production was also encouraged through the Government’s support to strategic industries and its import-substitution drive. The technology transfer today invariably happens through public sector entities. As a result, these entities quite often get overburdened vis-a-vis their existing capacity constraints. Even otherwise, there is a need to create a capacity for absorbing technology in the private sector due to their agility, innovation and modern management practices through the government’s support to strategic industries and its import-substitution drive. The “expert committee report” has recommended

10 | Eye on Defence

three models for the Indian set up — Strategic Partnership, Developmental Partnership and Competitive Partnership to be based on “strategic needs, quality criticality and cost competitiveness”. Strategic partnership endeavors to create long-term capacity in the private sector, over and above the capacity and infrastructure that exists in public sector units. It is proposed that a “Task Force” be created for selection of “Strategic Partners” in the following six segments, which are of strategic significance and will form the core of the nation’s fighting strength for self-reliance:

• Airplanes (Fighter and Transport) and helicopters and their major systems

• Warships of stated displacements and submarines and their major systems

• Armored fighting vehicles and their major systems/weapons

• Complex weapons, which rely on guidance systems, to achieve precision hits, which may include anti-ship, air defence, air-to-air, air-to-surface, anti-submarine, land attack

• Command, control, communication and computers, intelligence, surveillance, target acquisition and reconnaissance (C4ISTR), and

• Critical materials (titanium alloys, aluminium alloys, carbon composites, nickel/cobalt alloys etc.)

The strategic partnership visualizes selective identification of a few big private players and nurturing them through preferential treatment, which would entail co-opting them for “Buy and Make” and “Government-to-Government” procurement programs.

Increase in FDIThe Government has tweaked the FDI regulations in the defence manufacturing sector recently as follows:

• The Government has allowed foreign investment up to 49% under the automatic route, earlier it was under the Government approval route.

• Investments of more than 49% will now be cleared by the FIPB instead of the Cabinet Committee on Security.

• Foreign venture capital investors (FVCI) and foreign venture capital firms can also invest up to 49% as compared to 24% earlier.

• In case of “state-of-the-art” and “cutting-edge technology” ventures under the single-brand route, sourcing norms have been relaxed.

• In case of infusion of fresh foreign investment within the permitted automatic route level, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, Government approval will be required.

• Till now, the FDI proposals involving a total foreign equity inflow up to INR30 billion (US$ 460 million) could be considered by the FIPB, while proposals above INR30 billion (US$ 460 million) will require consideration by the Cabinet Committee on Economic Affairs (CCEA). Now, “to achieve faster approvals on most of the proposals”, the FIPB will consider proposals up to INR50 billion.

Total FDI inflow from April, 2000 to June, 2015 has been INR12, 938 billion (US$235 billion), whereas in defence it has so far been restricted to mere INR300-400 million (US$5–6 million) with approx. INR5 billion in pipeline. The FDI liberalisation measures, i.e., simplification of procedures for foreign investments, putting more sectors on the automatic route, introducing fundability between FDI and FII, which have a single reference document for all FDI related guidelines are steps that will further boost investor confidence.

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FVCI and FIIs investments under the automatic route has been permitted which is bit risky, since by nature these are inherently short-term, opaque and speculative, and unlike FDI, their stake in the Indian defence industry, which needs a longer and more strategic investment could be counterproductive. In fact we need to go in for a “strategic stake”, i.e., at least 51% in FDI through OEMs in a joint venture company. This may not help the foreign investor in acquiring a decisive say in the management as the applicant

Amount of FDI Inflows (April 2000–June 2015)

Years Amount (INR billion)

Cumulative Total FDI 12,938 (US$235 billion)

Cumulative Total FDI in Defence

0.32 (US$5 million)

Amount of FDI Inflows (In %) - 2000-2015

FDI in Defence (Break-Up from 2000-2015)

Years Amount (US$ million)

2001–09 0.0474

2010–11 0

2011–12 3.488

2012–13 0.442

2013–14 0.960

2014–15 0.080

Total 5.02

Total FDI ($235.24Bn)

FDI-Defence Sector ($0.005Bn) 0.002134%

Source: http://dipp.nic.in/English/default.aspx

company seeking permission for FDI up to 49% has to be an Indian company owned and controlled by resident Indian citizens.

Tax structureHistorically, in India the public sector not only gets nominated but gets all the financial benefits, whereas, the private sector is given no such incentives and is therefore, denied a level playing field. No substantial incentives or exemptions have been granted specifically for the Indian defence industry unless they are OEMs. The current taxation structure does not encourage foreign OEMs to set up final assembly and integration facilities in India if the end customer is a domestic entity (Government or non-Government) in the aerospace and defence sector. If the goods are manufactured/integrated in India by an Indian entity and directly delivered to the MoD in India — the duty impact becomes costlier by 38% as compared to direct import from foreign OEM, if the production facility is located in a Domestic Tariff Area. However, if the Indian entity exports the equipment/platform to the OEM or a third party abroad, various exemptions in taxes and duties become admissible. Under the “Buy Global ” category or under the “Buy and Make with ToT” or even under “Buy and Make (Indian)” category the Indian entity imports parts/components/assemblies/equipment from the established global supply chain, supplements it with indigenous procurement from indigenous manufacturers and suppliers. Moreover, it undertakes final assembly of sub systems and systems, installation, integration, testing for direct delivery to the MoD from a facility located in India. However, in this production model the OEM or the Indian partner needs to bear Excise Duty, VAT, CST etc., on procuring goods from the local industry and customs duty on imported equipment, since the imported kits/systems do not physically leave the country.

The most beneficial option to encourage manufacturing in India of defence goods is to grant “Deemed Export” benefit and accord status of “Deemed Export” under the Central Sales Tax Act for supplies of defence goods manufactured in India and supplied to MoD/ DRDO/OFB/Armed Forces. This will increase national capability to undertake complex manufacturing, system integration and product/platform testing. The industry associations have been requesting for a level-playing field between DPSUs/OFBs/Foreign OEMs with regard to supplies to the MoD. The first relief sought was to provide the same indirect tax exemptions for the private sector as applicable to DPSUs/OFBs and their sub-contractors for supplies to the Ministry of Defence (MoD). The second relief sought was to offer the same direct tax exemptions, benefits and incentives as applicable to the infrastructure sector.

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The R&D spendAt the national level DRDO is responsible for all R&D activities, whereas they should be only doing the hi-tech and strategic R&D activities such as DARPA of the US. Despite the push by the MoD in the direction of indigenization/self-reliance, since last two to three decades, the budget allocation toward R&D has not increased comparatively. For example China allocates approximately 20% (2% of GDP), the US allocates 14%–16 % (3.8% of GDP) on R&D, Russia allocates 11%–12% of defence budget (4.1% of GDP), whereas India spends merely 5%–6% (1.7% of GDP). Defence budget in these countries are much higher than India. To draw a parallel, the total number of scientists engaged in defence R&D in India has been much lower than those in a single facility abroad devoted to a single area, e.g., submarine or aircraft R&D.

One of the committees has recently recommended that the Indian Production Agencies (IPAs) participating in the “Make” schemes may be given tax incentives by way of categorizing their share of 20% in the development cost as expenditure on R&D and that 300% weighted tax deduction of such development cost should be considered against 200% given by the Department of Science and Technology. Manufacturing requires product-technology and product-engineering; hence, the need to focus on industry-driven local R&D.

Collaboration with foreign OEMsA vibrant competitive defence industrial base will enable utilization and consolidation of existing capabilities in fostering a constructive, long-term partnership with global OEM to be part of global supply chain and augment the role

of Indian private sector companies to develop capabilities and capacities through JV and partnerships. There is a need to build a tier-ized defence industry structure as system integrators and sub-system developers for in-country capability inclusive of SMEs, with each tier contributing to the value chain.

System integrators/OEMs will need to create a viable supply chain. Indian companies will need to evolve models that rest on a triad of technology, applications and production, in a manner that engages with DRDO, DPSUs and other private players to be successful. Structural shift likely in India, to be in line with global model, where the integrator does ~20% of value add and relies on suppliers.

Dual use technological capabilities The private sector ventures, which are involved in dual use technological capabilities should be identified and explored for defence use. This will not only reduce the development timelines but give such industries sustained business and will be able to see through the product for their entire life cycle.

Industrial participation policyThe manufacture of arms and ammunition is currently confined to the Department of Defence Production. Even after liberalization of the Indian economy and removal of licensing regime for major industries, the private sector is not allowed in this sector. However, recently the MHA has come out with the draft Arms Act Amendment Bill,

Source: www.defproac.com

Source: Q-Tech Synergy

R&D expenditure in percentage

Desired capabilities as per global model

25

20%

16%

5%

11%

China US India Russia

20

15

10

5

0

OEMs/Integrators

Brand & Time-to-setDesignProduct Proving & TestingIntegration & Supply ChainSustainment & UpgradeAbility to FinanceProduct & Supply ChainDesignProduct Proving & TestingTechnology AdoptionCost LeadershipDesignProduct Proving/ TestingCostLeadership

Tier I/ Tier IISuppliers

Tier IIIComponent

Manufacturers/ suppliers

Supp

ly Ch

ain

13Eye on Defence |

2015, wherein the private industries will be allowed to manufacture and proof test small arms and ammunition including the ones being used by military, once it is passed by the parliament.

Streamlining defence procurementCurrently, our DPP is complicated and needs clarity. The overall procurement procedure is very exhaustive and the timelines projected needs to be cut down drastically. Recently, various committees have worked to simplify the DPP and hopefully the new edition after suitable amendments to ease acquisition process will be brought by the MoD by early 2016.

Focus on education As a nation we are lacking in this field as our education system is hardly oriented toward product engineering and research. Shortage of a skilled workforce is a serious challenge to the growth of the Indian aerospace and defence industry. We need to improve our training and education infrastructure with a pragmatic policy to build an industry-academia ecosystem to tap the huge employment potential in the industry. A meagre 2% of Indian population is vocationally skilled, in comparison to the ratio of 75% in Germany, 96% in Korea, 80% in Japan and 68% in the UK as shown in the figure. The Government and private industries have to start tailor-made education system for defence engineering and research.

ExportsThis is an important component of the defence industry and indeed, the entire economy. Currently, India ranks 28th in the arms exporters list based on the volume of

arms transferred. Furthermore, in the past, India’s defence exports have ranged between 1.5% and 2.4% of the total production, with an import: export ratio of 194:1 as compared to 1.3:1 in the case of Israel, 8.8:1 in the case of South Korea and 19.7:1 in the case of Singapore. The average share of Indian arms exports in the total world’s arms exports pie stands to a measly 0.8%. Therefore, the numbers for our export of defence equipment is negligible as shown in the figure.

The Government of India has recently taken some actions to fuel the growth in exports. These are:

• EUC for the export of components and parts has been done away with and certifications are needed only from the immediate buyer and not the ultimate user.

• A definite time line of two to four weeks has been mandated for the issuance of NOC.

• Sectors such as armored equipment, engines, sensor systems, weapon control systems, countermeasure equipment, engines, underwater detection devices and military software has been opened up for easy exports.

• The list of military stores has been finalized.

• Defence Exports Strategy outlining various steps to be taken, has been formulated and is put up in the public domain.

India can become a part of global supply chain and even an export hub for defence equipment, but will require the right infrastructure, the right attitude and the right execution on the ground.

Source: www.defproac.com

Source: PIB Press Release

Skilled population : world wide

Indian defence export vs imports

India Germany Korea Japan UK

2%

75%

96%80%

68%

Import

2010-11 2011-12 2012-13 2013-14 2014-15

Export

2.06

% of

Impo

rts

Am

ount

in IN

R cr

ores

1.82

% of

Impo

rts

1.47

% of

Impo

rts

1.80

% of

Impo

rts

2.29

% of

Impo

rts

14 | Eye on Defence

ConclusionThe Government has taken certain measures in the recent past to boost industrial development, manufacturing and promote viable Indian defence industrial base. The marginal improvement in World Bank report on “Ease of Doing Business” indicates the beginning of efforts toward improvement but a lot more needs to be done. With the measures taken so far, the Indian defence industry is at an inflexion point with the emerging ecosystem in defence manufacturing in India. A single significant lesson from developed defence industries is the adoption of “hands off” approach by the Government, i.e., minimum government intervention and that too for facilitation purposes only. This has not only been relevant for defence industry, but for all sector industrial production. The key will be government facilitation of growing interest among Indian and foreign players to ensure that interests are translated into investments. Public private partnership (PPP) is a time-tested concept of using the Government’s capacity to absorb risk and bringing in private sector investments and dynamism to reach a stated goal. What needs to be done is to implement industry friendly measures and pro-investment steps with a well-directed mindset.

References:• “Committee of Experts for Amendment to DPP-

2013 Including formulation of policy framework,” MoD website, http://www.mod.nic.in/writereaddata/Reportddp.pdf, accessed between 1 to 7 December 2015

• Department of Industrial Policy and Promotion, http://dipp.nic.in/English/default.aspx, accessed between 1 to 7 December 2015

• Press Information Bureau, Government of India

• “Defence Manufacturing,” Make in India website, http://www.makeinindia.com/sector/defence-manufacturing, accessed 5 December 2015

15Eye on Defence |

16 | Eye on Defence

Request for Information (September–November 2015)

Date of issue RFP detail/equipment Response date Issued by Remarks

27 Nov 2015 Underground Datacentre 11 Jan 2016 Directorate of AFNET For IAF

10 Nov 2015 High Frequency Sets; Qty: Approx. 100/200/300

11 Jan 2016 DTE Of Plans For IAF

10 Nov 2015 Multi-Purpose Vessel (04 X MPVs); Qty: 04 Nos.

9 Dec 2015 Directorate of Ship Production

For IN

10 Nov 2015 300 Ton Sullage Barges; Qty: 04 Nos.

9 Dec 2015 Directorate of Ship Production

For IN

3 Nov 2015 Small Arms Fire Detection System

15 Dec 2015 DTE Of Plans For IAF

29 Oct 2015 Boeing 737-800 Simulator Training

24 Nov 2015 IHQ MOD Navy For IN

23 Oct 2015 EoI for Night Vision Weapon Sight (Thermal) for 5.56 mm INSAS LMG

DGBSF For BSF

20 Oct 2015 EoI for Electronic Shooting Range

5 Nov 2015 DG BSF For BSF

20 Oct 2015 EoI for Outdoor Reflex Shooting Range

5 Nov 2015 DG BSF For BSF

15 Oct 2015 Development and Fabrication of Multicopter and Fixed Wing Micro UAV

5 Nov 2015 HQ Northern Comd (EME)

For IA

13 Oct 2015 High Capacity Radio Relay (HCRR) Minimum 8/34 MBPS RR

09 Dec 2015 DTE Gen of Signals For IA

1 Oct 2015 Multi Spectral Camouflage Net (MSCN)

5 Oct 2015 Combat Engineers Directorate/ Comb Engrs-6

For IA

28 Sep 2015 Armoured Vehicles, approximate; Qty: 50-60 Nos.

28 Oct 2015 DTE Of Plans For IAF

16 Sep 2015 Integrated EW Suite For Mi-17 V5

15 Dec 2015 DASR (EW) For IAF

10 Sep 2015 Aluminized Fire Proximity Suit; Qty: 1000+ Nos.

5 Oct 2015 Directorate of NBCD For IN

17Eye on Defence |

Request for proposal (September–November 2015)


26 Nov 2015 Indigenous Pechora Combat Simulator

17 Dec 2015 South Western Air Command

For IAF

26 Nov 2015 Air Rifle .177 CAL 15 Dec 2015 Commandant AOC Centre

For IA

23 Nov 2015 Infrared Vision System 29 Dec 2015 The Director, DRDO Hyderabad

Issued by DRDO

23 Nov 2015 Design and constructions of ships barges yard crafts pontoons floating marine structures at Visakhapatnam

29 Dec 2015 Directorate of Procurement

For IN

20 Nov 2015 Booster Cartridges for IGLA Weapon System; Qty 500 Nos.

6 Jan 2016 DTE OF GWM For IAF

20 Nov 2015 LWI Helmets Mask Oxygen and Cord Connector with Amplifier

21 Jan 2016 Director of Procurement

For IAF

19 Nov 2015 LWI Helmet- Kiran Aircraft, size 3 & 4; Qty: 05 each

2 Dec 2015 Air Force Station Tambaram

For IAF

19 Nov 2015 Wireless Spy Camera with Transmission System; Qty-06 Nos.

30 Dec 2015 NSG, Mehram Nagar For NSG

18 Nov 2015 Cartridge SA 7.62MM 51MM Nato for 7.62 MM Galil Sniper Rifle; Qty: 1,80,631

10 Feb 2016 MGO PPO For IA

18 Nov 2015 Purchase of .177 Air Rifle and .177 Air Pistol; Qty:02 each

10 Dec 2015 JAK RIF For IA

17 Nov 2015 Propellant for 7.62 MM Ammunition

22 Dec 2015 Ordnance Factory Varangaon,

Issued by OFB

17 Nov 2015 Propellant for 5.56 MM Ball Ammunition

22 Dec 2015 Ordnance Factory Varangaon

Issued by OFB

13 Nov 2015 Explosive Detector; Qty: 5 Nos.

8 Dec 2015 Proc DTE, ITBP For ITBP

18 | Eye on Defence

Request for proposal (September–November 2015) (cont’d.)


12 Nov 2015 Invitation of Quotations for Procurement of Hazardous Duty Life Jackets (HDLJ)

31 Dec 2015 DTE Of Procurement C Wing

For IN

10 Nov 2015 Precision Multifunction calibrator

26 Nov 2015 ARDE Issued by DRDO

9 Nov 2015 Development of Central Unit of Coastal Surveillance Radar (CSR)

16 Nov 2015 ERDE Issued by DRDO

9 Nov 2015 Navigation System For Unmanned Vehicles in Unchartered Terrain

31 Dec 2015 Research & Development Establishment

Issued by DRDO

9 Nov 2015 Propeller for An-32 Aircraft

28 Jan 2015 Directorate of Procurement

For IAF

9 Nov 2015 125mm FSAPDS Ammunition Receiver Gauges (Secondary)


7 Nov 2015 Paratrooper Jump Helmet; Qty 170 Nos.

14 Nov 2015 Army Airborne Training School

For IA

6 Nov 2015 Cartridge ML.2-INCH Mortar or Bomb Thrower Empty/L Designer; Qty 3,80,000 Nos.

27 Nov 2015 Ordnance Factory, Badmal

For OFB

6 Nov 2015 Supply, Installation & Commissioning of Advanced 3D Terrain Visualization System

15 Dec 2015 DTRL Issued by DRDO

5 Nov 2015 Rope Polypropylene 3 Dec 2015 Material Organization, Ghatkopar

For IN

3 Nov 2015 Aircraft Recognition Training System Simulator

27 Nov 2015 Air Officer Commanding

For IAF

3 Nov 2015 NBC Radiological Suit (Permeable Suit)

8 Dec 2015 Director, BSF Academy

For BSF

2 Nov 2015 Programmable Laser Designated Target Simulator


19Eye on Defence |


29 Oct 2015 Oxygen Mask; Qty: 200 Nos.

16 Nov 2015 AOC, Air Force Station

For IAF

28 Oct 2015 Detail Design of Turbo Jet Engine for UCAV

10 Nov 2015 Research Centre Imarat

Issued by DRDO

28 Oct 2015 Fabrication of ABG Electronic Time Fuze


27 Oct 2015 High Explosive Substitute (HES) to Density 1.72 to 1.75 gms/cc having pourability at 70 to 75 degree C


27 Oct 2015 Pouches for Ammunition and Grenades made of disruptive pattern nylon 6 6 material; Qty: 2096 Nos.

1 Dec 2015 CoBRA Sector, CRPF For CRPF

27 Oct 2015 Full face Mask; Qty: 6,800 Nos.

20 Nov 2015 The Commandant & MD

For IA

26 Oct 2015 Access control System 16 Nov 2015 Project Officer, 3 Grenadiers

For IA

24 Oct 2015 LWI Helmet S-2 (ZSH-3M); Qty: 06 No.

4 Nov 2015 Air Force Station For IAF

20 Oct 2015 Laser Range Finder 3 Nov 2015 Laser Science & Technology Centre

Issued by DRDO

16 Oct 2015 Supply and Installation of Four Wheel Driving Simulator

3 Nov 2015 Air Officer Commanding

For IAF

16 Oct 2015 40mm LV Ammunition for SIG 5640/M-203 PI UBGL and UBGL Gauges

12 Nov 2015 --- For NSG

13 Oct 2015 Polycarbonate Helmet; Qty: 1127 Nos.

1 Dec 2015 DIGP GC CRPF Kootah

For CRPF

13 Oct 2015 Thermal Imaging Equipment; Qty: 03 Nos.

6 Nov 2015 Base Commander 8 FBSU

For IAF

13 Oct 2015 Deep Search Mine/Metal Detector (DSMD); Qty: 55 Nos.

5 Nov 2015 Directorate General, Tibetan Border Police

For ITBP

12 Oct 2015 Portable Radar Simulator 4 Nov 2015 Research Centre Imarat

Issued by DRDO


20 | Eye on Defence


9 Oct 2015 Automatic Inflatabal Life Jacket (MAF Wests)

12 Nov 2015 HQ Southern Command

For IA

8 Oct 2015 Helmet Mounted Aviator NI Vision Goggles; Qty: 16 Nos.

30 Oct 2015 HQ Northern Command

For IA

5 Oct 2015 Manufacturing And Supply Of Ground Launcher

19 Oct 2015 DRDL Issued by DRDO

5 Oct 2015 64,48,458 Qty of Cartridge SA 7.62mm Ap/Incendiary (With B-32 Bullet), Rimmed Ammunition For Gun Machine 7.62mm(PKT) Mounted On T-72 Tank

31 Dec 2015 DDG PPO For IA

5 Oct 2015 Cartridge SA 7.62mm Sniper Rimmed for Sniper Rifle Dragnov; Qty: 31,03,588


5 Oct 2015 Cartridge SA 7.62mm ( With Steel Core Bullet), Rimmed Ammunition For Gun Machine (Gm) 7.62mm (PKT) Mounted On T-72 Tank; Qty: 1,00,69,996 Nos.


5 Oct 2015 Cartridge SA 7.62mm Tracer With T-46 Bullet, Rimmed Ammunition for Gun Machine (Gm) 7.62mm PKT Mounted On T-72 Tank; Qty: 57,53,567 Nos.


03-Oct-2015 Shooting Simulator for 10m with Display and Analysis Unit Trigger and Grip Sensor and spares for .22 Free Pistol Morini

13 Oct 2015 Army Marksmanship Unit

For IA

1 Oct 2015 Coalescer Catridge; Qty: 26 Nos. and Separator Catridge Type M; Qty: 20 Nos.

5 Oct 2015 Air Force Station Maharajpur

For IAF


21Eye on Defence |


1 Oct 2015 Istat ABG Cartridges 20 Oct 2015 Defence Institute of Physiology & Allied Sciences

Issued by DRDO

29 Sep 2015 Qualified Airborne RF System Type I –II

21 Oct 2015 Centre For Air Borne System

Issued by DRDO

29 Sep 2015 Passive Night Vision Monocular; Qty: 400 Nos.

10 Nov 2015 Provisioning Directorate (Procurement Cell)

For BSF

26 Sep 2015 Design, Manufacture, Supply, Erection & Commissioning of Lead Swaging Press for A-7 ammunition; Qty: 01 No.

24 Nov 2015 Ordnance Factory Varangaon

Issued by OFB

26 Sep 2015 Design, Manufacture, Supply, Erection & Commissioning of Lead Swaging Press for 5.56 mm ammunition; Qty: 04

24 Nov 2015 Ordnance Factory, Varangaon

Issued by OFB

25 Sep 2015 NBCD Items 1 Oct 2015 Coast Guard Region, North West

For ICG

24 Sep 2015 FUZE, Rocket Aircraft 68 MM Type A-HE; Qty: 5000

5 Nov 2015 Ordnance Factory Chanda

Issued by OFB

24 Sep 2015 Biometric Access Control System; Qty: 72 Nos.

2 Nov 2015 Directorate of Administration

For IN

24 Sep 2015 Interoperability Radio; Qty: 5 Nos.

29 Oct 2015 Chief Signal Officer For IA

24 Sep 2015 LWI Helmet CTK/CTH Heptrs. Size1-40 & Size 2-30

29 Oct 2015 Directorate of Procurement

For IAF

24 Sep 2015 Mask Oxygen for Hawk Aircrews; Qty: 75 Nos.

29 Oct 2015 Directorate of Procurement

For IAF

23 Sep 2015 Life Jacket; Qty: 1200 Nos.

13 Oct 2015 Eastern Command (Ord)

For IA

23 Sep 2015 Simulator Hardware for Ground Trainings; Qty: 02 Nos.

8 Dec 2015 Software Development Institute AF

For IAF

21 Sep 2015 Mine Detector With Radar Technology

16 Oct 2015 GOC-in-C, HQ Northern Command

For IA


22 | Eye on Defence


21 Sep 2015 Biometric 17 Oct 2015 HQ 39 Mountain Division

For IA

19 Sep 2015 MINI UAVs; Qty: 49 Nos. 19 Oct 2015 HQ Northern Command (EME)

For IA

18 Sep 2015 CCTV Surveillance System; Qty: Approx 5 Nos.

30 Sep 2015 AF Stn Begumpet Bowenpally (PO)

For IAF

18 Sep 2015 Development and Manufacture of Composite Radome for Airborne Surveillance Systems AWACS (I)

7 Oct 2015 Centre For Air Borne System

Issued by DRDO

17 Sep 2015 Quadcopter (Day and Night); Qty: 100 Nos.

14 Oct 2015 TPC HQ Northern Command (EME)

For IA

17 Sep 2015 Quadcopter (Day); Qty: 100 Nos.

14 Oct 2015 TPC HQ Northern Command (EME)

For IA

17 Sep 2015 FUZE T-90 For Shell 122MM Howitzer Ammunition; Qty: 1501 Nos.

15 Dec 2015 MGO PPO Army Headquarter

For IA

17 Sep 2015 FUZE RGM-2 for Shell 122MM Howitzer Ammunition; Qty: 7690 Nos.

15 Dec 2015 MGO PPO Army Headquarter

For IA

16 Sep 2015 Integrated Surveillance Grid and Access Control Solution

7 Oct 2015 HQ Dakshin Bharat Area Island Ground

For IA

14 Sep 2015 Bullet Proof Jackets with flotation capability and Ballistic helmets, Qty: 408 Each

16 Oct 2015 Coast Guard Headquarters

For ICG


23Eye on Defence |

List of Industrial Licenses (ILs) filed for September–October 2015

Application no. and date

Name of the applicant Item of manufacture

108 30/10/2015

M/s CDET Explosive Industries Pvt. Ltd.

Ammonium Perchlorate

107 20/10/2015

M/s Oshocorp Global Private Limited. Camouflage Nets, Camouflage Sniper Suit, Multi

106 19/10/2015

M/s Asawara Earthtech Private Limited

Class 2.0 Explosives (Slurry / Emulsion Explosives/ Bulk FME)

105 19/10/2015

M/s Rolta Meprolight Private Limited. Manufacture of MEPRO 21,MEPRO MOR, MEPRO MX3, MEPRO M5, MEPRO GLS etc.

104 15/10/2015

M/s Continental Defence Solutions Pvt. Ltd.

Repair, maintenance, refurbishment, overhaul, life extension-all types of air and ground missiles and their systems.

103 15/10/2015

M/s Premier Explosives Ltd. Trinitrotoluene(TNT)

102 15/10/2015

M/s Premier Explosives Ltd. HMX & RDX and compounds

101 13/10/2015

M/s Kalyani Strategic Systems Ltd. Weapons other than small arms to include artillery guns, Howitzers, Mortors, MBRL, air defence guns.

100 08/10/2015

M/s Hampson Industries Pvt. Ltd. Machined parts of Turbojet, aero engines, aero structure tanks, missiles

99 23/09/2015

M/s IDL Explosives Limited Bulk non-explosives emulsion matrix

98 23/09/2015


97 23/09/2015


96 23/09/2015

M/s TAL Manufacturing Solutions Limited

Other parts of aeroplanes

95 22/09/2015

M/s Blastec (India) Private Limited Site mix bulk emulsion explosives

94 22/09/2015

M/s Blastec (India) Private Limited Site mix bulk emulsion explosives

93 16/09/2015

M/s SMPP Pvt. Ltd Ammunition for tanks and artillery guns

92 16/09/2015

M/s Solar Industries India Limited Site mix bulk emulsion explosives

91 16/09/2015


24 | Eye on Defence

List of Industrial Licenses (ILs) filed for September–October 2015 (cont’d.)



90 16/09/2015


89 16/09/2015

M/s Solar Industries India Limited Sit mix bulk emulsion explosives

88 16/09/2015


87 16/09/2015

M/s Solar Industries India Limited Sit mix bulk emulsion explosives

86 16/09/2015

M/s Solar Industries India Limited. Site mix bulk emulsion explosives

85 16/09/2015

M/s Solar Industries India Limited. Site mix bulk emulsion explosives

84 07/09/2015

M/s Oxera Precision Tech Pvt. Ltd. Aerospace parts

83 01/09/2015

M/s Blue Stampings & Forgings Ltd. Sating and arming devices, fuzes, sensors and initiation devices.

82 01/09/2015

M/s Vinyas Innovative Technologies Pvt. Ltd.

Assembly and testing of microwave modules

25Eye on Defence |



29/07/2015 65/SIA/IL/2015


Weapon and ammunition, armored vehicle upgrade

23/06/2015 60/SIA/IL/2015


Ammunition and fuze, air defence guns, loitering missile systems

23/06/2015 61/SIA/IL/2015

Ananth Technologies Ltd. Night vision sights

18/06/2015 54/SIA/IL/2015

M/s Reliance SED Ltd. Manufacture of all models/kinds of night vision devices, sensors, navigation systems and surveillance equipment

18/06/2015 55/SIA/IL/2015

M/s Reliance Naval Systems Limited Manufacture of air independent propulsion (AIP) systems for marine application

18/06/2015 56/SIA/IL/2015

M/s Reliance Naval Systems Limited Manufacture of hull penetrators and connectors, electro mechanical/hydraulic devices, motors, shafts, propulsion systems and valves etc.

18/06/2015 57/SIA/IL/2015

M/s Reliance Unmanned Systems Ltd. Manufacture of unmanned aerial vehicles

18/06/2015 58/SIA/IL/2015

M/s Reliance Naval Systems Limited Maintenance, repair, overhaul and upgrade of all types of naval vessels

15/06/2015 46/SIA/IL/2015

M/s Comint Systems And Solutions Private Ltd.

Surveillance and security automation systems

15/06/2015 47/SIA/IL/2015

M/s Reliance Helicopters Limited

15/06/2015 48/SIA/IL/2015

M/s Reliance Propulsion Systems Limited

15/06/2015 49/SIA/IL/2015 And

17/06/2015 59/SIA/IL/2015

M/s Reliance Aero structure Limited Design, development, assembly and manufacture of aircraft and its spare parts. MRO and upgrade of helicopter and aircraft

15/06/2015 50/SIA/IL/2015

M/s Reliance Land Systems Limited Manufacture of all terrain combat vehicles (ATCV) for armed forces

15/06/2015 52/SIA/IL/2015

M/s Reliance Defence Technologies Pvt Ltd

Manufacture of simulators of air, land and naval platforms

09/06/2015 44/SIA/IL/2015

M/s Reliance Defence Technologies Pvt Ltd

Design, development and production of Missiles

14/05/2015 40/SIA/IL/2015

M.s Naistoco India Pvt. Ltd. Heavy weapons, anti-material rifles, sniper rifles, man portable rifles, anti-tank rifles etc.

Cases approved in the 5th Licensing Committee Meeting (6 November 2015)

26 | Eye on Defence



30/04/2015 36/SIA/IL/2015

M/s Avantel Limited Design, development and manufacture of radio communication systems covering HF, VHF, UHF etc.

27/04/2015 33/SIA/IL/2015

M/s DCX Cable Assemblies Pvt. Ltd. Submodules for communication equipment; microwave components and modules for radar etc.

27/04/2015 35/SIA/IL/2015

M/s OIS Advanced Technology Pvt. Ltd.

Vertical take-off and landing tactical unmanned aerial system (VTOL Tactical UAS), night vision devices etc.

16/04/2015 32/SIA/IL/2015

M/s Shan Arms Industries Pvt. Ltd. Ammunition of medium and high calibre

10/04/2015 31/SIA/IL/2015

M/s Ideal Industrial Explosives Ltd SMS/ SME Explosives

12/03/2015 23/SIA/IL/2015

M/s OIS Advanced technology Pvt. Ltd.

Artillery Guns (155MM X 52 calibers), Air defence guns systems etc.

22/01/2015 04/SIA/IL/2015

M/s Continental Defence Solutions Pvt. Ltd

Weapons and ammunition, artillery (mounted gun system)

26/12/2014 328/SIA/IL/2014

M/s Beejasan Explotech Pvt. Ltd Detonating Fuse, PETN cast Booster, Detonators (all types), NHN, Slurry, Bulk Emulsion explosive, ANFO

21/10/2014 DIL:33(2014)

M/s Economic Explosives Ltd. Amendment in existing IL for change of product name from “filling of munitions 40 MM and above” to “Filling and Assembly of Munitions”

19/08/2014 297/SIA/IL/2014

M/s Comavia Systems Technology Pvt. Ltd.

Military avionics systems for use on board fighter aircraft etc.

23/07/2014 296/SIA/IL/204

M/s Ideal Industrial Explosives Ltd Composite solid explosive (HMX) and Pyrodevices, propellants, High Melting

27/11/2013 69/SIA/IL/2013

M/s Ideal Detonators Pvt. Ltd Detonators (ordinary and non-electric) Electric instantaneous and delays shock tube and cord relay

13/08/2010 54/SIA/IL/2010

M/s Premier Explosives Site mixed explosives

12/11/2009 49/SIA/IL/2009

M/s C DET Explosives Industries Pvt. Ltd.

Bulk explosives, cartridges explosives

15/10/2009 43/SIA/IL/2009

M/s C DET Explosives Industries Pvt. Ltd.

Pentaerythritol, Tetra Nitrate, detonating Fuse

Cases approved in the 5th Licensing Committee Meeting (6 November 2015) (cont’d.)

27Eye on Defence |

Name of entity Project details Value*

Defense Acquisitions Council (DAC) and Indian Air Force (IAF)

• ► DAC approved a proposal to upgrade its Ilyushin tactical transport fleet with new engines and avionics (worth INR42.5 billion) to extend the fleet’s service life by 20 years.

• ► The upgrade will be provided to 17 IL-76 transport aircraft, three Israeli Phalcon AWACS and six IL-78 refuellers.

• ► The DAC also cleared an INR18 billion for digitization of 25 firing units of Pechora surface-to-air missile system.

INR60.5 billion

DAC and Indian Army

• ► DAC approved acquisition of 149 BMP-II infantry combat vehicles for INR9.2 billion.

• ► It also cleared for two Pinaka Multi Barrel Rocket Launcher (MBRL), manufactured by Tata and L&T, for INR33 billion.

INR42.2 billion

DAC and Indian Navy

• ► For the Indian Navy, DAC approved four multi-purpose vessels worth INR28 billion.

• ► Apart from the multi-purpose vessels, DAC also granted Acceptance of Necessity (AoN) for purchase of two deep-submergence rescue vehicles (DSRVs) worth INR15 billion.

INR43 billion

Ministry of Defence (MoD) and Pipistrel

• ► The MoD signed a contract with a Slovenian firm, Pipistrel, for purchasing 194 micro-light aircraft (Virus FW-80).

• ► These aircraft will be operated by the IAF (72), Indian Navy (12), and the National Cadet Corps (110).

INR1 billion

L&T • ► The Indian Army has signed a deal with L&T (in partnership with Samsung) for 100 self-propelled artillery guns.

• ► The production of the artillery guns will commence by June 2016.

INR50 billion

Bharat Electronics Ltd. (BEL)

• ► The IAF has signed a deal with BEL for the extension of its program of integrating all civil and defence radars across the country.

• ► The aim of the program is to ensure any intrusion by a hostile aircraft, helicopter, drone or micro light can be detected and tackled as soon as it takes place.

INR80 billion

Boeing • ► The Cabinet Committee on Security (CCS) cleared the proposal to buy 22 Apache attack helicopters and 15 Chinook heavy-lift choppers.

• ► The deal was pending since 2013. It was approved by the DAC in 2014 but clearance from the finance ministry was pending.

INR162.5 billion

New projects/investments/contracts

*The values of the deals have been converted to Indian Rupees using the conversion rate1US$ = INR65.Sources:1. “Ministry of defence clears military projects worth over Rs 12,000 crore,” The Economic Times, 29 October 2015, via Q-tech Synergy Newsletter2. “Ministry of defence clears military projects worth over Rs 12,000 crore,” The Times of India, 29 October 2015, via Factiva3. “MoD clears military projects worth over $1.8 bn for the Armed Forces,” Defence News India, 29 October 2015, via Q-tech Synergy Newsletter4. “India signs Rs 105.5 crore contract for micro light aircraft with Slovenian company Pipestrel,” India News, 13 October 2015, via Q-tech Synergy

Newsletter5. “Make in India: L&T outguns global rivals to bag Rs 5,000-crore Indian Army deal,” The Economic Times, 30 September 2015, via Q-tech Synergy

Newsletter 6. “Government clears Rs 8000 crore IAF’s Integrated Air Command & Control System,” The Economic Times, 23 September 2015, via Q-tech

Synergy Newsletter7. “CCS approves to buy Apache and Chinook helicopters,” Indian Express, 23 September 2015, via Q-tech Synergy Newsletter

28 | Eye on Defence

Name of the entities

Nature of transaction Value

Tata Advanced Systems Ltd. (TASL) and Boeing

• ► TASL and Boeing have announced a JV to manufacture aero structures for the AH-64 Apache helicopter.

• ► The JV will also focus on collaborating on integrated systems development opportunities in India.

NA

Reliance Defence Ltd. and Emirates Defence Industries Company (EDIC)

• ► Reliance and EDIC have signed a strategic pact to jointly explore the opportunity to manufacture and build capabilities in defense vehicles, aviation and associated areas, defense equipment and armament manufacturing, MRO of military equipment and platforms.

NA

Lumax Auto Technologies Ltd. and SIPAL S.p.A

• ► Lumax Auto has entered a 51:49 JV with SIPAL, which is expected to become operational in 2017.

• ► The JV will focus on all type of integrated logistic support engineering related to the aerospace, defense and automotive sectors.

NA

Bharat Dynamics and Electronics Corporation of India Ltd.

• ► Both the companies have signed a MoU to collaborate in the development of missile electronics and weapon support systems for major defense projects.

NA

JVs and alliances

Sources:1. “Boeing and Tata Announce Aerospace Joint Venture in India,” Boeing website, 9 November 2015, via Q-tech Synergy Newsletter2. “Reliance Defence in pact with Emirati company,” New Kerala, 28 September 2015, via Q-tech Synergy Newsletter3. “Lumax forms JV to foray into Aerospace & Defence sector,” Dion, 26 November 2015, via Factiva4. “BDL signs MoU with ECIL,” United News of India, 21 September 2015, via Factiva

29Eye on Defence |29 | Eye on Defence

Country-level deals and initiatives

Country Nature of transaction Additional details

Russia • ► The Indian Navy has signed an INR50 billion contract with Russia to upgrade four of its kilo-class submarines.

• ► The upgrade by the Russian shipbuilder Zvezdochka, will increase the service period of underwater vessels to 35 years.

• ► Under this project, the refit of one submarine, INS Sindhukesari (will be started in June 2016), will be performed in Russia, while the remaining three will undergo renovation in India, under the “Make in India” initiative.

Russia • ► Defense Minister of India, Manohar Parrikar, has signed a military-technical cooperation agreement with the Russian defense minister Sergei Shoigu.

• ► The agreement focuses on strengthening efforts for major contracts expected to be signed during Prime Minister Narendra Modi’s visit to Russia in December.

• ► The major deals include multi-billion dollar deal for the new generation Russian S-400 Triumph anti-ballistic missile system and a possible leasing of a nuclear submarine.

Russia • ► The Russian enterprise Uralvagonzavod inked a deal with India for shipping of spare components for T-72 tanks.

• ► The deal was signed at the Russia Arms Expo -2015 arms exhibition.

Germany • ► India and Germany have signed a Memorandum of Understanding (MoU) on Security Cooperation.

• ► The MoU proposes to intensify the cooperation in countering terrorism in all its form, including recruitment and financing. It also covers areas of border protection, aviation security, cybercrime, illegal migration and counterfeit currency.

• ► The Minister of State for Home Affairs Shri Kiren Rijiju and the visiting German Parliamentary State Secretary at the Ministry of Interior, Dr. Gunter Krings signed the MoU.

Indonesia • ► India and Indonesia have agreed to increase cooperation in counter-terrorism and defense.

• ► The issues were discussed during Indian Vice President Hamid Ansari’s visit to Indonesia.

• ► Other agreements in the field of renewable energy and culture were also signed during the visit.

The US • ► The US has established a special cell, India Rapid Reaction Cell (IRRC), to increase military cooperation with India especially to accelerate the process of co-development and co-production of hi-tech military equipment.

• ► The purpose of the cell is to work under all the initiatives ongoing under India-US Defense Trade and Technology Initiative (DTTI).

The US • ► India and the US started discussion to jointly develop a next generation aircraft carrier.

• ► An Indian delegation also visited the US Navy’s aircraft carrier facility in Virginia and received briefs on US Navy management of aircraft carrier programmes.

30 | Eye on Defence

Sources: 1. “Navy signs Rs 5,000 crore pact with Russian shipbuilder Zvezdochka for Kilo class submarine refit,” The Economic Times, 17 October 2015, via

Q-tech Synergy Newsletter2. “Ahead of Modi-Putin meet, Parrikar discusses Triumf missile system, chopper deals with Russia,” The Economic Times, 2 November 2015, via

Q-tech Synergy Newsletter3. “India, Russian Federation: RUSSIA, INDIA inks deal to ship spare components of T-72 tanks,” Cyprus Mail, 16 September 2015, via Factiva.4. “India-Germany’s pact for Security Cooperation”, Press Information Bureau, 5 October 2015, via Q-tech Synergy Newsletter5. “India, Indonesia sign two MoUs; to expand defence cooperation,” The Economic Times, 2 November 2015, via Q-tech Synergy Newsletter6. “Pentagon creates first ever special cell to speed up defence ties with India,” The Economic Times, 15 September 2015, via Q-tech Synergy

Newsletter7. “India, US discuss plans to develop next-generation aircraft carrier,” The Economic Times, 16 September 2015, via Q-tech Synergy Newsletter8. “India, Malaysia to deepen defence ties, set up Su 30 forum,” The Economic Times, 24 November 2015, via Factiva.

Country-level deals and initiatives (cont’d.)

Country Nature of transaction Additional details

Malaysia • ► India and Malaysia have agreed to set up a forum for Su-30, to exchange information on training, maintenance and technical support of the fleet.

• ► Both the countries have also decided to upgrade joint military exercises.

31Eye on Defence |

32 | Eye on Defence

Industry buzz

India successfully test fires Prithvi II missileIndia has successfully test fired nuclear capable surface-to-surface Prithvi-II missile from the Integrated Test Range (ITR) Chandipur, off Odisha coast. Prithivi-II is capable of carrying both conventional and nuclear payloads. The missile has a strike range of 250–350 km and is capable of carrying a 500–1,000 kg load and is designed in such a way that it can carry both solid and liquid fuels. The missile uses advanced inertial guidance system with maneuvering trajectory for striking its target.

(Source: “Defence boost: Nuclear capable surface-to-surface Prithvi II missile test-fired successfully,” Deccan Chronicle, 27 November, via Factiva)

Brahmos supersonic cruise missile tested successfullyThe Army successfully test fired its 300 km range Brahmos supersonic land attack cruise missile. The missile was test launched in Pokharan, Rajasthan by a Mobile Autonomous Launcher (MAL), and met all the objectives of the mission. The missile has a speed of 2.8 Mach, and is capable of being launched from land, sea, sub-sea and air against sea and land targets.

(Source: “Indian Army successfully test-fires Brahmos land attack missile,” The Economic Times, 7 November 2015, via Q-tech Synergy Newsletter)

Army receives two indigenously manufactured L70 guns The Indian Army received two L70 electro optical guns, developed and manufactured by Bharat Electronics (BEL). BEL had won the INR5.75 billion order for the L70 gun upgrade in a global open tender issued by the Indian Army. BEL, in partnership with the Ordnance Factory Board (OFB), will deliver 200 such guns to the army by 2018. The guns are equipped with electrical servo drives, electro optical fire control system and video tracking.

(Source: “Indian Army receives 2 BEL-made L70 upgrade guns,” One India, 9 November 2015, via Q-tech Synergy Newsletter)

Several tier-II defense companies will set up base in IndiaMany international defense components suppliers are moving to set up base in India. The Foreign Investment Promotion Board (FIPB) has received several proposals from smaller firms manufacturing defense-related products. The Government has also worked out the defense offset policy and is expected to be announced by the year-end.

(Source: Boost for defence: Foreign ancillary firms plan to set up base

in India,” The Economic Times, 2 November 2015, via Q-tech Synergy Newsletter)

Government relaxed FDI regulations in defense sectorThe Government has further relaxed FDI regulations in the defense manufacturing sector. Some of the main changes include, FDI of 49% under the automatic route from the government approval route, investment will be cleared by FIPB rather than the Cabinet Committee on Security (CCS). In case of state-of-the-art and cutting-edge technology ventures under the single-brand route, sourcing norms have been relaxed and Foreign Venture Capital Investors (FVCI) and foreign venture capital firms can also invest up to 49% as compared to 24% earlier.

(Source: “Subject: Review of Foreign Direct Investment (FDI) policy on various sectors,” DIPP, 10 November 2015, via Q-tech Synergy Newsletter)

India is likely to import Japanese aircraft for sea patrollingJapan and India were expected to finalize the deal for exporting Japan-made amphibious aircraft during Japanese Prime Minister Shinzo Abe’s visit to India from 11 to 13 December. The US-2 amphibious aircraft can take off and land at sea even in bad weather and has a flight range of more than 4,500 km. India is considering exporting the aircraft to enhance its sea patrol capability.

(Source: “India likely to ink pact to import Japan-made war plane,” BBC International, 29 November 2015, via Factiva)

After successful test fire in Israel, BARAK-8 is to be test-fired in IndiaIsraeli military has successfully tested BARAK-8, a long-range surface-to-air-missile co-developed by IAI and DRDO, from a navy ship. It intercepted an enemy target registering 100% success. The missile will now be test fired from India’s new class of stealth destroyers under P15-A, INS Kolkata and INS Kochi. INS Kolkata will fire the missile from the ship in December followed by another flight of the missile from INS Kochi in March-April 2016.

(Source: “All set for long-range missile launch from ship”, The Hindu, 29 November 2015, via Factiva)

Three A&D parks proposed around HyderabadThe Telengana State Government has proposed three new A&D manufacturing and R&D parks near Hyderabad at an investment of INR25 billion during 2015–19. The State Government is expected to come out with a sector-specific policy to make Telangana a hub of aerospace and

33Eye on Defence |

defense where all activities, including R&D, manufacturing, incubation, will be provided at one place. Another 500 acre Adibalta aerospace park in Hyderabad is now fully functional.

(Source: “Three more aerospace, defence parks proposed around Hyderabad,” The Hans India, 28 November 2015, via Factiva)

India test-fires anti-tank guided missile developed by Bharat Dynamics Ltd. (BDL)Amogha-1, an indigenously-developed second generation, Anti-Tank Guided Missile (ATGM) with a range of 2.8 km, was successfully test-fired at Babina Army Range, Uttar Pradesh. This is the first missile developed by BDL. The test flights, without any deviation for its designed path profile, have hit the target and all design parameters have been met.

(Source: “Anti-tank guided missile test-fired,” The Hindu, 16 September 2015, via Factiva)

India set to produce light military choppersIndia is set to start local manufacturing of light military choppers to meet the large and urgent requirements of military choppers. India’s requirement for light choppers is in excess of 800 with the older Cheetah/Chetak fleet moving towards the end of its service life. Another major contract for approximately 200 light choppers for a domestic firm (in partnership with a foreign player) is likely to be out soon.

(Source: “India to have three lines of light military choppers under ‘Make in India’,” The Economic Times, 13 October 2015, via Q-tech Synergy Newsletter)

Naval gears is likely to be procured only from domestic firmsThe MoD has drawn up a list of warship systems and equipment that it will only acquire from the domestic industry. Equipment has been divided into Float, Move and Fight categories. The Float category includes aircraft lifts, composite superstructures and paints for hull. The Move category includes gas turbines, main propulsion diesel engines, marine gearboxes, propellers, air independent propulsion, steam generation equipment and canned motor pumps.

(Source: “India Restricts Naval Gear Acquisition to Domestic Firms,” Defense News, 3 October 2015, via Q-tech Synergy Newsletter)

MoD is likely to revise Defense Procurement Procedure (DPP) to boost domestic productionThe Government will soon come out with a revised DPP to bolster efforts under the “Make in India” campaign. A committee of experts was set up to look into all aspects of DPP and suggest a policy frame-work for the “Make in India”

campaign in defense manufacturing. The committee has proposed various amendments to the DPP, which will be included in the next revision.

(Source: “Revised DPP soon to boost ‘desi’ defence manufacturing: IAF official,” The Economic Times, 15 November 2015, via Q-tech Synergy Newsletter)

Indian Navy commissions INS Kochi and INS AstradhariniThe Indian Navy (IN) has commissioned its first indigenously designed and built torpedo launch and recovery vessel INS Astradharini and the indigenously designed and constructed Project 15A (Kolkata-class) guided missile destroyer INS Kochi. INS Kochi has a combined Gas and Gas (COGAG) propulsion system, comprising four powerful reversible gas turbines and can attain speeds in excess of 30 knots while INS Astradharini can operate at high sea states and has a large deck area with torpedo launchers for deploying and recovering various kinds of torpedoes during the trials and can go up to 15 knots.

(Source: “IN commissioned torpedo launch & recovery vessel INS Astradharini,” IBN Live, 6 October 2015, via Q-tech Synergy Newsletter)

Government likely to order 100 Tejas aircraft by year-endHAL, DRDO, and IAF have consented to procure 100 Light Combat Aircraft (LCA) Tejas after discussion on the issues during a meeting. The manufacturers, DRDO and HAL, will address all the 43 issues with the aircraft without major changes in its design. The final designs will be complete by 2017 and the modified aircraft could enter production beginning 2019. The deal size is expected to be INR2 trillion, biggest ever defense order by India.

(Source: “Govt to order 100 Tejas aircrafts for IAF,” Business Today, 1 December 2015, via Factiva)

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34 | Eye on Defence

Why choose Team EY?

Unique Team Experience Offset Structuring Industrial Connects End to End Solutions

• Team member was a part of the team that wrote the Indian Defence Offset policy in 2006.

• Team member founded the DOFA.

• Team member has written a complete book on Offsets with the CII.

• Offset Structuring worth US$ 3.7 Bn executed successfully.

• Total experience of 66 man years in the Armed Forces.

• MoD experience of 14 man years.

• Team has members from the Auto practice-India’s only proven manufacturing competence

• We have offices in Bangalore; Pune Hyderabad & Chennai where these manufacturing and IT capabilities reside

• Industrial License Application

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Unparalleled Support & Advantage for OEM’s & Indian Companies

35Eye on Defence |

36 | Eye on Defence

Services offering – Tax & Regulatory

Contract negotiation stage

Post contract signing support

Other Compliance

and AdvisoryPre bid stage1 2 3 4

► Review the clauses of RFP in order to highlight the clauses/terms from a tax & regulatory perspective.

► Suggest alternative approaches where necessary

► Advising on tax issues Association of Persons ('AOP') exposure under the consortium model and suggesting adequate safeguards.

► Identification of a suitable business model.

► Formulate appropriate tax positions

► Back End advise on tax and regulatory clauses in the bid negotiation with the objective of optimizing the tax & regulatory implications.

► Responding to queries pertaining to any tax or regulatory issues which may arise during the discussion stage

► Assistance in set up of the agreed upon business model.

► Advise on subcontracting/ local purchase arrangements from tax and commercial perspective

► Formulate appropriate tax positions

► Plan for advance ruling for upfront certainty/ clarity

Serv

ices

Off

erin

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eve

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eContracting Process

► Corporate tax and indirect tax compliance

► Accounting services► Background check

(Fraud investigation) on viability of the chosen Indian Offset Partners (IOP’s)

► Foreign Investment Promotion Board (FIPB) & Industrial License (IL) application and clarifications for IOPs

Impo

rtan

ce ► Develop certainty with respect to impact and incidence of direct and indirect taxes in India

► Establishment of a tax efficient and regulatory compliant structure in India

► Compliance with ever evolving tax and regulatory regime in India

► Upfront identification of tax and regulatory implications under the RFP

Services offering - Defence Offset

Bid Stage Contract negotiation stage

Post contract signing support

Pre bid stage

1 2 3 4

Offset process► Help evolve an

understanding of the offset process and stakeholders

Indian offset partners(IOPs)► Identification of IOPs (M&A

/ JV / Licensed Manufacture / Sourcing)

► Clarification from DIPP/FIPB/MoD regarding their regulatory status

Support services► Industrial Licensing for

IOPs► IOPs financing► Joint venture structuring

Offset Proposal► Identification of methods

of offset discharge► Structuring/vetting of

Technical and commercial offset proposals

► Support in answering the queries of the MoD

Indian offset partners(IOPs)► Structuring contractual

arrangements with IOPs ► Valuation of offset

attributable► Financial & Background

due diligence of IOPs

► Continuous support through on call advisory

► Support in preparation of appropriate responses to MoD queries

► Identification of stand by IOPs in case of removal of existing ones

► Any other support as maybe required.

Serv

ices

off

erin

gSu

ppor

t at

ever

y st

age

Contracting process

► Support in compiling documentation required for offset discharge

► Support in preparation of quarterly / half yearly reports on fulfillment of offset obligations.

Impo

rtan

ce

► To ensure a suitable Technical and commercial offset plan that should find favour with the TOEC and the CNC.

► Support in getting the technical offset proposal approved in time so that it does not obstruct main contract signing

► Continued support for offset execution to avoid penalties and loss of faith with the MoD

► Evolve understanding of offset process amongst the core team for optimal planning

► Identification of eligible and viable IOPs who can sustain through the duration of the offset program

► Planning for submission► Identifying the right

partners and methodologies

► Getting the documents right for submission

► Building the right offset program

► Getting the optimum economic value for offsets

► Documentation of offset execution

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