eye on defence july 2016

Contents title

Contents subjects

Dear readers,

In our continued effort to provide an in-depth analysis of the defense industry, this edition of Eye on Defense covers those segments of defense manufacturing, which are sub-systems to enhanced platforms or equipment.

Our first article focuses on ammunition required for pistols, hand guns, artillery and rocket launchers. From a market perspective the article throws light on growth of the ammunition market, which is directly related to the number of weapon systems produced each year. The existing market has been classified according to the type of weapon and size of ammunition required for each of these weaponries with a view on the cost structure of typical ammunition. In the current set-up the ordnance factories are unable to meet the ammunition requirements of military forces providing a window of opportunity to the private sector for active participation in this market, which hitherto has been limited.

Our second article focuses on one of the crucial sub-systems of any transmission system hydraulic systems. The market for hydraulic systems is relatively low in India due to its niche technology and equipment-focused product development. In this issue we have provided an overview of the overall hydraulic market and then broken it down up to the defense industry. In addition, there is a point of view on the growth drivers and the main application of hydraulics across the three military forces. We have also mapped the supplier landscape, enlisting key hydraulic players in India, what products they manufacture and key partnerships with foreign players specific to the defense segment.

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 1

Ammunition production 2 in India

Hydraulic sub-systems and 10 their defense applications

Request for Information 17 (March 2016–May 2016)

Request for Proposal 19 (March 2016–May 2016)

List of Industrial 23 Licenses (ILs) filed for March 2016 – April 2016

New projects/investments/ 26 contracts

JVs and alliances 27

Industry buzz 32

Eye on Defence

July 2016

2 | Eye on Defence 3Eye on Defence |

Ammunition is an important part of operational logistics, designed for one time use, with conflicting requirements. These have to function under adverse operating environmental conditions to counter/engage the enemy in battlefield where the man and machine are stressed the most and only the best survives. These are high energy material and thereby, inherently unstable and prone to deterioration/decomposition even under normal storage conditions. The designed shelf life is given according to the life of the subsystem, which has the lowest shelf life under normal conditions of storage. However, the operational exposure of ammunition products varies and hence, functional life may be different. Some basic issues specific to ammunition are:

• Ammunition contains high-energy material and is designed to be as lethal as possible during its use and as safe as any other equipment during its handling.

Ammunition production in India

Target, allotment of funds and supplies by OFBThe annual production plan of OFs is based on targets mutually agreed with indentors, i.e., Army, Navy, Air Force, Central and State Police etc. OFB also receives long-term demands of various ammunition items from the Army, Navy and Air Force. The OFB interacts on regular basis with the user, to match their annual requirements. The production program for ammunition, weapons and vehicles, material and components as well as armored vehicles are fixed for one year and generally there has been a shortfall of more than 34% in meeting such targets.

OFB has been falling short of agreed target by 30%–35% yoy to fill in the demand.

• It is designed for optimum performance during assigned life and needs to be manufactured and stored under controlled conditions.

• The system mostly comprises a combination of electronic, mechanical, chemical or structural sub systems, which cannot be fully tested in the integrated forms without partial or full destruction.

• The functioning of ammunition consists of irreversible reactions or a process. Therefore, all sub-systems need to be tested independently before integration. .

• The deterioration of ammunition during storage has considerable economic as well as catastrophic consequences. The ageing ammunition assets can turn into liability if not properly taken care of. Hence, the exceptions during each stage must be predicted, detected, identified, and mitigated to prevent unacceptable risk involving safety and performance.

Product segment and shareThe generic classification of ammunition is by calibre or end use as shown in the table below.

Ammunition type and end use Examples Remarks

Small calibre

Below the standard 25 mm mainly for Infantry and Para Military Forces

• Includes 5.56 mm NATO standard, 7.62 mm for Rifle LMG, MMG,

• 9mm carbine and pistol

• 12.7mm AA, HMG and ammunition, 23mm aircraft gun

• Artillery and Tank ammunition contributes around 30% each of the market share and air defense and small arms ammunitions share is around 20% each.

• Army, accounts for around 75% of the Ordnance Factory Board (OFB) issue of products on a year-to-year basis.

Medium calibre

Calibre 25-40 mm mainly air defense ammunition

• 30mm ammunition BMP-2K (HE/T, AP/T, HE/I); Ghasha and Aden ammunition,

• 40mm L70 AA gun and HET and TPT ammunition

Large calibre

40 mm and above mainly tank and artillery ammunition

• 105mm light field gun and ammunition gun HE, HESH, smoke and illuminating

• 130mm HE and 155mm HE, smoke, illuminating and ERFB version

• 125mm HE, HEAT and FSAPDS ammunition

Ammunition type and end use Examples Remarks

Mortar and Rocket Launcher ammunition

• 51mm, 81mm and 120mm mortars and HE, smoke, illuminating

• 84mm Rocket Launcher ammunition (TPT, HE, HEAT and illuminating)

Dominance by the government sectorThe manufacture and production of ammunition in India is fully controlled by the Government of India and is regulated under a licensing system established by the Arms Acts (1959) and Arms Rules (1962). Sections 5 and 7 of the Arms Act (1959) and Article 20 of Arms Rules (1962) prohibit the manufacture, transfer and repair of any arms and ammunition without a license. Through the licensing mechanism, the Government of India regulates categories and types of arms and ammunition, which may be manufactured and the transactions, which may be carried out in their respect.

OFs under the aegis of Director General Ordnance Factories (DGOF) are engaged in the manufacture of most categories of ammunition. The Ammunition and Explosives (A&E) Division in OFB, through its ordnance factories, produce a wide range of conventional ammunition such as small arms ammunition all calibres, artillery shells, mortar bombs, fuses, cartridges, charges, initiators, primers and pyrotechnic signal smoke. The ammunition and explosive division is the biggest in value additions to ordnance factories. The group has two sub-groups of factories, the one which supplies high energy chemicals and the other which does the filling and integration of ammunition. The chemical group of factories are part of the A&E Division and work as feeder factories, which provide high explosives (TNT, RDX and their compositions), propellants (SB, DB, TB, rocket propellants and composite/liquid propellants), initiatories and pyrotechnics, to the respective filling factories. For sustaining the production activities in A&E group of factories, various raw materials, input material (semi-finished stores), as well as finished products are procured / supplied through trade (indigenous/import), or through OF production facilities.

Some of the ammunition has 100% restriction on training mainly due to non-availability.


The assessed competitiveness of OFB is given below:

• Small calibre: OFB’s prices are not competitive in this segment. Ammunition for 5.56mm, 7.62mm and 9mm calibre are available at lower prices internationally.

• Medium calibre: OFB enjoys a cost advantage for medium calibre ammunition. Stores such as 30mm Aden ammunition and 40mm L-70 ammunition are cheaper than prevalent international prices. L-70 40 mm HE ammunition is being sold in bulk in south-east Asia.

Year Target accepted under roll on indent

BE projected by OFB

Actual allotment by ministry

OFB supply value

Percentage of BE to target

Percentage of supplies to target

Percentage of slippage {(Col.2- Col.5)/ Col.2}X 100

(In INR billion)

2009-10 43 27 28 27 64 64 36

2010-11 51 36 37 37 69 72 28

2011-12 56 39 41 37 69 66 34

2012-13 58 38 39 37 64 63 37

(Source: DGOS letter dated 30 Sept 2013 as reported in CAG report No 19 of 2015)

The value of production of OFs for supply to defense and non-defense sectors during the last 5 years according to MoD annual report is as shown in diagram. The projection of various sub segments beyond 2012-13 has been projected based on previous trend.

The ammunition production is around 30% of total turnover; the ammunition production of OFB for the year ending 2015–16 was around INR40 billion, which meets the 60%–70% requirement of defense services and para military requirement. Normal ammunition annual import is around INR12.5–15 billion. Some missiles are being made by Bharat Dynamics and Brahmos to the tunes of around INR7.5–10 billion and some low-end pyro and training ammunition is being supplied by the private sector.

Sourcing cost element and competitivenessThe OFB sources around 30%–35% of its total purchases in the form of raw material, components and sub-systems through indigenous sources from the private sector. On an average, PSUs, material within OFB and ex-import contributes to 6%, 34% and 6%, respectively. The value addition by OFB in ammunition production is around 24%.

Type of components and their materials used for each ammunition and their percentage cost distribution depends on type of ammunition. However, the cost break-up from small arms ammunition is indicative of cost elements and their share.

OFB Value of production* Approx. value of ammunition Approx. value of weapon, vehicle & misc.

Amount in INR billion

2011-12 124 37 87

2012-13 120 37 83

2013-14 111 35 76

2014-15 114 36 78

2015-16 131 40 91

OFB Value of Production & Its Sub CategoryAmount in INR Billion

200

150

100

50

02011-12 2012-13 2013-14 2014-15 2015-16

Approx. value of ammunitionApprox. value weapon, vehicle & misc.

Ammunition Procurement Source

Import20-25%

PSU+OFB75%-80%

PSU+O FBImportSource: Complied by Q-Tech synergy

Input Material OFB34%

Value Addition24%

Ex Govt Sector6%

Pvt Sector30%

Ex Import6%

OFB - Total Issue vs Import Break-up

Source CAG report 2015 on Amn

Small Arms Ammunition Elemental Production Cost

Packing12%

Hardware - Cartridge case- Bullet- Primer cup- Anvil71%

Explosive- Propellant- Filling17%

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• Large calibre: OFB is also cost effective in large calibre ammunition. Prices of 81mm and 120mm mortar ammunitions are comparable, while prices of 84mm, 105mm and 106mm are comparatively less than the market price.

Reasons for non-indigenizationWhile mapping for inadequate indigenous capability in ammunition production and why have these not been indigenized or sufficiently achieved following trends have been observed. Currently the OFB does not enjoy the requisite flexibility (as DPSU) for Transfer of Technology (ToT) tie up. The OFB has only been in a recipient role in design and development. The technology transfer is generally in the nature of a follow up of an acquisition process. In most cases the major factors are:

• Inadequate transfer and absorption of technology

• Poor quality of indigenously manufactured parts

• Lack of economic order quantities resulting in high production cost

• Lack of coordination between production agencies

Private sector in ammunition productionChanges to the defense policy are allowing private or publically listed Indian companies to enter this sector. The MoD aims to increase indigenous capability and other competitors may be forming a JV with Indian companies. With the opening of the defense industry, several private sector companies have applied for licenses to manufacture armament products. For decades, only a handful of private Indian companies have been permitted to make shell casings and parts for various ammunition, which were then sent on to the OFB for completion. In the recent past, the private industry has shown a keen interest in the opportunities on offer and many large industries have shown an inclination to assume the role of system integrators by investing in R&D and infrastructure and develop capabilities in defense production.

The private sector is primarily engaged in the manufacture of some categories of ammunition for civil use, pyrotechnic and energetic. From being suppliers of raw material, components and sub-systems, private sector companies

are becoming partners in the manufacture of complete advanced equipment and systems. With the opening of the defense industry to the private sector, some of the industries had applied and received a letter of intent for small arms and ammunition; however, the case did not progress as Ministry of Home Affairs (MHA) was unable to issue the licenses. A draft Arms Act-2015 was put in the open domain in mid-2015 for comments from all sections of stakeholders, wherein private industries will be allowed to manufacture and proof test arms and ammunition of all kind including the ones being used by military. It was mentioned that within a short period this act is likely to be promulgated. The same is yet to be formalized and hence, the issue of IL for manufacture of ammunition is also in flux. The authority for licensing in this category is MHA and not DIPP and provisions exist for both fresh applicants and entities that are already holding licenses. Although in a recent move by the government, FDI limit for defence has been made applicable to manufacturing of small arms and ammunition covered under Arms Act 1959. This opens new door of opportunity for the private sector.

The large standing army that the countries maintain when compared to other elements of armed forces and the constant procurement of large quantities of ammunition on a regular basis for conflicts and training alike is the main market driver. Although this market is considered self-sustaining as nations continually procure and replenish their aging stock on a continual basis and do provide training for its troops to maintain readiness levels, there are nonetheless certain factors such as regional conflicts, defence spending modernisation etc. which have a considerable impact on this market.

With an annual production capacity of ammunition of all types, the OFs are unable to meet even the annual replacement requirement of the military, not counting other civil requirements including police forces. In addition there is a potential of indigenizing ammunition, which is currently being imported. Hence, there is scope and opportunity for the private sector to come in to fill the gap just to meet the domestic demand.

References• “Defence ministry to ask pvt players to produce

specialist ammunition,” The Indian Express, 3 September 2015, via Factiva

• “Report No. 19 of 2015 - Union Government

(Defence Services) Army and Ordnance Factories (Performance Audit of Ammunition Management in Army),” Comptroller and Auditor General of India website, http://www.cag.gov.in/content/report-no-19-2015-union-government-defence-services-army-and-ordnance-factories-performance, accessed 15 June 2016

• “Ordnance Factories Board,” Wikipedia, https://en.wikipedia.org/wiki/Ordnance_Factories_Board, accessed 15 June 2016

• Indian Ordnance Factories website

• “Manufacture of small arms and ammunition in private sector,” Defence Pro-Ac website, http://www.defproac.com/?p=2482, accessed 10 June 2016

• Annual report 2014-15, Ministry of Defence website, http://mod.nic.in/writereaddata/AR1415.pdf, accessed 12 June 2016

• Annual report 2015-16, Ministry of Defence website, http://mod.nic.in/writereaddata/Annual2016.pdf, accessed 12 June 2016

7Eye on Defence |


Market segmentation for hydraulic systems

Categories

Industrial hydraulics Mobile hydraulics

• Machine tools

• Plastics

• Steel plants

• Material handling

• Others (windmills/civil aerospace/ energy/civil engineering, marine, ship lift and transfer systems, offshore applications etc.)

• Earth moving and construction machinery: drilling rigs, industrial/ agricultural tractors

• Mining

• Defense: transmission, rudder control, which are used in aero planes, rockets and spaceships, pumps on naval vessels

• Material handling equipment: cover general areas such as rail equipment, road building and, commercial vehicles, industrial tractors defense platforms etc.

It is estimated that around 58% of this market is in the mobile segment and the rest is industrial market.

Indian Hydraulic Market Segmentation-By Application

Mobile Hydraulics58%

Industrial Hydraulic 42%

Hydraulic sub-systems and their defence applications

Hydraulics and pneumatics are sources of fluid power derived from the motion and pressure of a fluid, such as water or air. A hydraulic system consists of the hydraulic fluid plus three major mechanical components, “pressure generator” or hydraulic pump, the hydraulically powered “motor” which powers the component concerned and the system “plumbing” which contains and channels the fluid throughout as required. No other medium combines the same degree of positivity, accuracy, and flexibility, maintaining the ability to transmit maximum power in minimal bulk and weight. Equipment that use hydraulic fluids include excavators and backhoes, hydraulic brakes, power steering systems, transmissions, garbage trucks, aircraft flight control systems, lifts, and industrial machinery.

Overview of Indian hydraulic industryThe Indian hydraulic industry started in the early sixties, primarily with an objective of import substitution of some of the hydraulic products being used by the industry in various applications including defense. Since most of the Indian industries have been set up based upon the variety of technological sources, the range of their specifications is very wide. Hydraulic cylinder, the main entity in the sub segment market in India has been growing significantly due to the rise in construction activities, in the transportation, mining, residential, commercial, and energy industries. A cylinder barrel, piston, piston rod, rod gland, cushions, seals, and a cylinder base are the components of a hydraulic cylinder. As more government and private players are investing in infrastructure, there is increased demand for construction equipment, including specialized hydraulic cylinders; however, fluctuating demand among end-users is impeding market growth. Pneumatic cylinders are also gaining prominence, since they use less power and require less maintenance than hydraulic cylinders.

While there has been a continued overall growth in the hydraulic products business due to large variety of specialized products to meet specific individual applications, volume growth in individual products has been very low. With low volumes and high development costs with respect to tooling, casting and forging, the industry has not been able to adopt modern production methods. Current production technology in use is largely dictated by production volumes, quality requirements and costs. Since the Indian industry has to manufacture a large variety of products with low volumes, the industry is not able to use the modern high production lines. Most of the

manufacturers, with exception to some (who have installed dedicated SPMs and CNC machines for the manufacture of components), are currently using general purpose machines with special tooling and some special purpose machines for specialized metal-cutting operations. Although the industry has shown a reasonable growth over the years, it is still far away from the volumes, which is likely to lead to adopting modern production methods. Moreover, the limited demand is being shared by more than 20 firms (few major) resulting in uneconomical volumes for most of them. It is unlikely that the situation will change drastically in the coming decade due to variety of factors mentioned above.

Broadly, the hydraulic products from the application angle are classified as Mobile Hydraulics and Industrial Hydraulics:


Hydraulics sub-systems in defense platformsThe major components or elements that make up a hydraulic system, generally comprises of — pumps, actuators, valves, accessories and storage unit and these can be further sub divided into various categories. In defense these are an indispensable part and are widely used on variety of platforms such as naval vessels (pumps/actuators); guns (actuators) and armored/specialized vehicles.

Hydraulics sub-systems in defense platforms

Land systems

• Recoil systems for guns

• Elevation and traversing mechanisms for guns including the power pack

• Hydro-pneumatic suspensions for armored vehicles

• Missile systems and launchers, radar systems

• All support vehicles to include cranes, light recovery vehicles, heavy recovery vehicles, armored recovery vehicles

• All kind of dozers, bridge layer tanks, tank transporters, txn system to include shock absorbers, gun control systems armored fighting vehicles, artillery and air defense guns

Naval Systems

• Ocean going vessels, fishing boats

• Missile systems — supersonic missile system, ballistic missiles

• Radars and sonars

• Ventilation drive for landing crafts

• Hydraulic powered rotors

• Ship building

• Amphibious floating bridge and ferry system

• Pumps

• HP air and ac compressors

• Torpedo tube launchers

• AC and reference plants

• Stabilizer system

• Gas turbine and gas turbine generator

• Steering gear

• Motors and power systems

• Electronic warfare systems

• Weapons — all gun control, gun fire control system, close in weapons, super rapid gun mount

• Anti-submarine warfare fire control system (ASW FCS)

Aero Systems

• Doors and hatchways

• Shock absorption systems

• Bomb bay doors

• Gun turrets

• Auto pilot

• Control surfaces, e.g., elevators, flaps, spoilers, etc.

• Transmission and rudder control, which are used in aero planes, rockets and spaceships.

• Landing gears

• Fuel systems

• Air conditioning

• Dive, landing, speed and flap brakes

• Landing gears, wing flaps, etc.

Demand patternThe industrial applications involve equipment used in water management and recycling, and pulp and paper industries. Hydraulic cylinders are used in mobile and industrial applications such as earthmoving, material handling, and agriculture machinery. The demand pattern of Industrial and Mobile Hydraulics is as shown in diagram below.

Industrial Hydraulics Subdivision

Machine Tools 16%

Plastic Industry 12%

Steel Plants 36%

Material Handling 12%

Others 24%

Mobile Hydraulics Segments

Mining 31%

Defense 8%

Earth Moving & Construction 61%

Defense market

Indian Hydraulic System Market Defence Share 2012-2025 (IN $ Million)

1214

1676

Industrial Hydraulics Mobile Hydraulics Defence Share

15

32

65

134

191139

397

288

809

691

2012-13 2016-17 2024-252020-21

Source: Open Sources & Projections by Q-Tech Synergy

Defense is a sub-segment of the mobile hydraulic segment and is estimated to have a share of 8%–10%. The country is looking to procure weaponries/equipment worth INR10,720 billion (US$160 billion) in next ten years for its defense services modernization program undertaken by the three armed forces. The requirement of hydraulics such as valves, cylinders, accumulators, pumps etc., in the defense sector is growing rapidly due to the rapid utilization growth in upgrades due to products with miniature pneumatics, process valves, servo drives, hydraulic power steering with new controls, sophisticated PLC and microprocessor controls. The Indian market size for the hydraulic market components was around INR22–24 billion (US$330–350) million in 2012 and growing at the rate of ~20%–25% on year-on-year basis for the last three years and would continue to do so for the next few years. Expected growth in 2015 is approximately INR38–40 billion (US$570–600) million at a CAGR of around 20% while the projected growth in 2016 is anticipated to be around INR46–49 billion (US$685–725 million) and the share of the mobile segment is likely to be about INR26–27billion (US$395–400 million), with defense requirement estimated to be about INR2–3 billion (US$30–35 million) in 2016–17 growing at a CAGR of around 20%–25%. Considering the various modernization program undertaken by the Indian Defense Services (Refer Fig.), it is to be seen that the major requirement will be from the Indian Army followed by the Indian Navy and then the Indian Air Force.


It is difficult to lay down the percentage of hydraulics used in defense platforms, since it varies from platform to platform. The number and types of hydraulic systems on-board an equipment/platform depends upon its size and type of propulsion. In gun systems the requirements are different as compared to naval vessels or aircraft, which make more use of hydraulic systems. Even in naval ships the requirement of hydraulic system differs depending upon the tonnage. For instance in a typical naval vessel that has a tonnage of less than 3,000 tons, there are anywhere between 100–400 motors and approximately 30–150 pumps of all types. For a vessel that has a tonnage in excess of 3,000 tons, there are approximately 400–1,500 motors. The aircraft carrier is the largest variety in this type and is driven by up to eight boilers. The number of pumps could range from 120–450.

However, the same can be estimated by taking annual requirement and capital procurement (not considering the revenue procurement). The capital budget for the year 2016–17 is INR938 billion (US$14 billion) and estimations depict that India will be spending around INR2 billion (US$32 million) on hydraulics for defense equipment and consequently the share of hydraulics comes to around 0.5%–1% of the total capital budget. Therefore, considering the on-going and future programs, the estimated defense requirement of hydraulics accounts for 0.5%–1%.

Key players and their main offeringsThe market is very fragmented, comprising of both large and small niche players. Currently, there are four to five major players dominating the market, which include PSU BEML, Wipro Infrastructure, Dantal, UT Ltd. and Oscar.

• Wipro is the leader in the single/double/triple acting cylinder segment for mobile hydraulics tubes manufacturer and the only private player to export hydraulics for civil aerospace platforms.

• Hyva leads in the telescopic cylinder segment.

• Bosch was founded in 1886 and is headquartered in Stuttgart, Germany. It supplies technology and services to its clients through its subsidiaries worldwide. The group recorded revenue of INR4,355 billion (US$65.05 billion) in FY14.

• Dantal Hydraulics was established in 1990 and is headquartered in Gurgaon, India. It offers a variety of

Furthermore, almost all major manufacturers of hydraulic equipment have collaboration with foreign companies. few companies, like Polyhydron, Oscar and Dantal are manufacturing products indigenously. There has been very little attempt to develop indigenous technology for these products, although barring few items, all other equipment have been indigenized. Activities are more in the form of development of existing products, product modifications, product applications to suit specific customer’s requirements and not in the area of new products development. The companies in the sector being small to medium in size, will focus more on on product development and re-engineering than pure research work. Some of the other companies into hydraulics manufacturing and their tie-ups are discussed in the table given:

Bosch3%

Wipro45%

Mobile Segment - Market Share

Oscar5%

Veljan8%

Dantal21%

Hyva16%

Others2%

Vendors landscape

Company Product manufactured Collaboration (If any)

BEML Pumps, motors, cylinders and valves ---

WIPRO Ltd., Bangalore Cylinders CESA, Spain

Bosch (G.L. Rexroth Industries Ltd.), Bangalore

Pumps, motors, valves, cylinders, power packs Mannesraann Rexroth, Germany

Hagglunds Denison Ltd., Hyderabad Pumps, valves, motors, power packs Originally with Abex Denison, the US, now taken over by Hagglunds Denlson

Larsen & Toubro Ltd. (Earth Moving Machinery & Hydraulic Division), Bangalore

Pumps, motors, cylinders POCLAIN Hydraulics S A, France; SAUER Sundstrands, SA

Dynamatics Ltd., Bangalore Gear pumps, mobile valves, power packs DOWTY, U.K

Escorts Herion Ltd., Faridabad Valves, power packs Herion Werke KG, Germany

Oscar Pvt. Ltd., Calcutta Hydraulic cylinders Indigenous Development

SAI India Ltd., Bangalore Motors SAI Spa., Italy

Vickers Systems International Ltd., Mumbai

Pumps, motors, valves, cylinders, power packs, steering unit, accessories

Vickers Inc., USA

Yuken India Ltd., Bangalore Pumps, motors, valves, cylinders, power packs, accessories

Yuken Kogyo Ltd., Japan

Source: http://www.dsir.gov.in/reports/techreps/tsr147.pdf

products such as hydraulic cylinders, hydraulic systems, aircraft hydraulic service trolleys, car parking systems, and AC/DC mini power packs.

• Veljan Denison was established in 1974 and is headquartered in Hyderabad, India. It provides pumps, motors, valves, and custom-built power systems/manifold blocks.

• Oscar provides high performance hydraulic cylinders for steel mill application, construction equipment, heavy earth-moving equipment and allied fluid power applications. It is closely associated with DRDO as a developmental agency from the concept stage to product realization.

Taking into account the various on-going modernization drives of the defense forces, which is likely to continue for more than a decade, the hydraulics market presents significant growth potential over the next decade providing ample and lucrative opportunities to suppliers.

As a major and vital industry connected with the capital equipment industry, there is no national level research and development and technology coordinating institution. A national fluid power technology center with industry participation requires to be created, which can work toward developing future technologies, provide test facilities and co-ordinate efforts in the area of standardization and performance certification of the products of the industry.

Castings for hydraulic components are of high grade and precision, and require mechanized molding machines, electric furnace and elaborate quality control equipment. Manufacturers of hydraulic components always had problem in establishing a source, which can meet their requirements of castings. Since the castings required for

Way forwardhydraulic components are of small size, foundries do not get attracted toward developing the same. Basic manufacturing technology is available but foundries require mechanized equipment for molding and for preparation of elaborate testing facilities. Investment required for creating such facilities could not be justified for the returns. Hydraulic components manufacturers continue to face high castings rejections ranging from 10% to sometime up to 50%. If Indian companies could develop castings in quality as required by the hydraulic component manufacturers, there is a good scope for export of these castings in large volumes to their parent companies. There is a need for technology input to such foundries and incentives to foundries, which should import foundry equipment and export high grade castings for hydraulic components.

14 | Eye on Defence 15Eye on Defence |14 | Eye on Defence

References• “Executive Summary – Hydraulic components and

systems,” Department of Scientific and Industrial Research website, http://www.dsir.gov.in/reports/techreps/tsr147.pdf, accessed 11 January 2005

• “Hydraulic cylinder market India,” Slide Share, http://www.slideshare.net/RajniRanjan1/hydraulic-cylinder-market-india-rajni-ranjan, accessed 12 June 2016

• “Hydraulic systems,” NPTEL website, http://nptel.

Date of Issue

RFI Details Response Date

Issued By Remarks

26-May-16 Mini UAV 15-Jun-16 MG Arty For IA

13-May-16 QR for Ground Penetrating Radar (Hand Held) --- DG BSF For BSF

05-May-16 EoI for Long Rang Reconnaissance and Observation System (LORROS)

--- DG BSF For BSF

02-May-16 Checking and Testing Vehicle for Missile Firing Circuit of T-90 Tank

30-Jun-16 EME Dte For IA

21-Apr-16 Night Sight Thermal Imager for Rifle AK-47 09-May-16 DG of Weapons and Equipment (WE-8/9)

For IA

21-Apr-16 Night Image Intensifier for Rifle AK-47 09-May-16 DG of Weapons and (WE-8/9) For IA

21-Apr-16 Corner Shot Weapon System for Under Barrel Grenade Launcher

18-May-16 DGRR For IA

21-Apr-16 Corner Shot Weapon System for Pistol 18-May-16 DGRR For IA

12-Apr-16 Free Fall Simulator (Vertical Wind Tunnel) 12-May-16 Dte of Ops For IAF

04-Apr-16 Expression of Interest for Transfer of Technology of Bullet Proof Jacket

29-Apr-16 Defense Materials Research & Development Establishment

Issued By DRDO

04-Apr-16 Construction & Delivery of Four 250 Men Ferry Craft

03-May-16 Directorate of Ship Production

For IN

30-Mar-16 70 MM Rockets 30-Jun-16 Dte Of Plans For IAF

22-Mar-16 QR for Mini All Terrain Vehicles (ATV) DIG Transport For BSF

21-Mar-16 EoI for Indigenous Development of DC Insulation Measuring Instrument for Submarines

15-Apr-16 Dte of Indigenization For IN

18-Mar-16 Naval Airfield Integrated Security System 20-May-16 Directorate of Naval Air Staff For IN

15-Mar-16 ATGM Upgrade of BMP-2/2K 15-Apr-16 DGMF For IA

15-Mar-16 Mobility Upgrade of BMP-2/2K 30-Apr-16 DGMF For IA

15-Mar-16 Multi station ship handling simulator 30-Apr-16 Directorate of Information Tech

For IN

08-Mar-16 EoI for Transfer of Technology of Bullet Proof Jacket

22-Mar-16 Defense Materials Research & Development Establishment

Issued By DRDO

04-Mar-16 QR for Out Door Reflex Shooting Range --- Dy Inspector General (Trg) For BSF

04-Mar-16 QR for Electronic Shooting Range --- Dy Inspector General (Trg) For BSF

02-Mar-16 Armament Upgrade of BMP-2/2K to Include Sighting and Fire Control System

15-Apr-16 DGMF For IA

ac.in/courses/112103174/pdf/mod5.pdf, accessed 11 December 2013

• “Introduction to Hydraulics and Pneumatics,” NPTEL website, www.npt el.ac.in/courses/112106175/Module%201/Lecture%201.pdf, 26 November 2013

Request for Information (March 2016–May 2016)


Request for Proposal (March 2016–May 2016)

Date of Issue

RFP Detail/Equipment Response Date

Issued By Remarks

07-May-16 Carrier Ammn 17A for 81mm ILLG MKII 18-May-16 Ordnance Factory, Dehu Road

Issued By OFB

06-May-16 FUZE Percn. DA NO.162 MK-8 (M-2) Brass With Cap Empty

02-Jun-16 Ordnance Factory Chanda Issued By OFB

06-May-16 FUZE Percn. DA NO. 117 MK-20 Empty Body 02-Jun-16 Ordnance Factory Chanda Issued By OFB

06-May-16 LWI Helmet Size 1 and 2 Microphone Dynamic and Oxygen Mask Mic Lead for Jaguar Aircrew

26-May-16 DTE of Proc Air HQ Vayubhawan

For IAF

06-May-16 Held GPS 07-Jun-16 Chief Logistic Officer For BSF

05-May-16 Helicopter Satellite Tracking System with Accessories; Qty: 08 Nos.

05-Jul-16 HQ CAC For IAF

04-May-16 Adjustable Boroscope (Arty/Armd Guns) Qty: 40 Nos. 24-Jun-16 EME Dte For IA

04-May-16 Advance Target Systems for existing indoor shooting Range Qty-06 and, 02 Nos Horizontal Moving Target

09-Jun-16 GC Provisioning HQ NSG Provisioning

For NSG

02-May-16 Chromatising Plant: Qty: 1 No. 14-Jun-16 OF Ambajhari Issued By OFB

02-May-16 Missile Loading Gear Assemble Set 12-May-16 Office of the COMCOS For IN

29-Apr-16 OOW-ROR Simulator With Accessories for INA Ezhimala 19-May-16 INA EZHIMALA For IN

29-Apr-16 Six Lane Automated Target Operating System for Indian Naval Academy Ezhimala Under Two Bid System

19-May-16 Indian Naval Academy Ezhimala

For IN

28-Apr-16 Explosive Detection Kit; Qty: 05 Nos. 19-May-16 Comdt SS BN For ITBP

28-Apr-16 8x8 Vehicle (BEML Tatra ER(L)) 09-May-16 ERDE Issued By DRDO

27-Apr-16 Simulator Development for communication Links 16-May-16 Advanced System Laboratory

Issued By DRDO

27-Apr-16 Realization, Supply and Installation of Early Warning & Advance Response Network System (e-WARN)

31-May-16 Research & Development Establishment

Issued By DRDO

27-Apr-16 Surveillance system for Transducer Test Facilities 08-Jun-16 Naval Physical Oceanographic Laboratory

Issued By DRDO

27-Apr-16 Foldable Butt for Rifle 5.56MM INSAS(Steel Compt) Considering of Butt Frame Assy

09-May-16 RIFLE FACTORY ISHAPORE

Issued By OFB

26-Apr-16 Paddle Boats, INS Kadamba, Karwar, Qty: 08 Nos. 12-May-16 The Commanding Officer, INS Kadamba

For IN

26-Apr-16 Bomb Disposal Detection and Surveillance equipment 25-May-16 Directorate General SSB For SSB

21-Apr-16 Under Water Breathing Kit; Qty: 17 Nos. 03-Jun-16 Directorate General of EME, MGO’s Branch

For IA

21-Apr-16 Under Water Breathing Kit; Qty: 17 Nos. 03-Jun-16 Directorate General of EME, MGO’s Branch

For IA

21-Apr-16 i-stat abg cartridge cg; Qty: 08 box 10-May-16 Defense Institute of Physiology & Allied Sciences

Issued By DRDO

20-Apr-16 FSAPDS Shot Insitu Molding with Rubber; Qty: 450 Nos. 12-May-16 ARDE Issued By DRDO

19-Apr-16 Bullet Resistant Jackets Standard Size 1500 Nos. and Large Size 1500 Nos. All B.R. Jackets are required with 360 degree protection and BFS 44mm

04-Jul-16 MHA For SSB

18-Apr-16 Life Jacket; Qty: 1301 Nos. and Life Buoy; Qty: 109 Nos. 18-May-16 MHA For BSF

18-Apr-16 Towing System for Advanced Towed Artillery Gun System 03-May-16 VRDE Issued By DRDO

Date of Issue

RFP Detail/Equipment Response Date

Issued By Remarks

17-Apr-16 Supply, Erection & Commissioning of Automatic Primer Filling Plant for 5.56 mm Ammunition; Qty: 01 No.

14-Jun-16 Ordnance Factory, Varangaon

Issued By OFB

14-Apr-16 Various Types of Fuses 20-Apr-16 Controller of Proc. Material Org. Naval Store

For IN

14-Apr-16 Steel Wire Ropes Assorted Sizes 26-May-16 Controller of Proc. Material Org. Naval Store

For IN

13-Apr-16 Simulated Animation Training Package 26-Apr-16 Ekm Submarine Training For Vpn

For IN

12-Apr-16 Mask Face Extreme cold weather; Qty: 6560 Nos. 02-May-16 DIG (Proc) For ITBP

12-Apr-16 Integrated Access Control Systems 29-Apr-16 Research Centre Imarat Issued By DRDO

12-Apr-16 Global Positioning System 19-Apr-16 Controller of Proc. Material Org. Naval Store

For IN

11-Apr-16 Vertical Take-Off Landing (VTOL) UAV System 05-May-16 Centre for High Energy Systems and Sciences

Issued By DRDO

11-Apr-16 Laser Safety Googles 05-May-16 Centre for High Energy Systems and Sciences

Issued By DRDO

11-Apr-16 Fuse B-15(F)(IMP) DRG NO.3-024045-3 09-May-16 Ordnance Factory Chanda For OFB

11-Apr-16 Inspection Barges; Qty: 12 Nos. 09-May-16 Directorate of Information Tech

For IN

08-Apr-16 EC Dinghies; Qty: 69 Nos. 26-May-16 Directorate of Procurement

For IN

04-Apr-16 Long Range IR Missile Simulator 28-Apr-16 DARE Issued By DRDO

04-Apr-16 ENG ASSY TATRA T-815 (6x6); Qty: 40 Nos. 18-May-16 MGO PPO For IA

02-Apr-16 Satellite Data Simulator, DRDO 20-Apr-16 Research Centre Imarat Issued By DRDO

01-Apr-16 IGLA Launching Mechanism; Qty: 80 30-Jun-16 Directorate of GWM For IAF

31-Mar-16 Concealable Body Armor; Qty: 340 Nos. 05-May-16 MHA For NSG

25-Mar-16 Low Draught Power Boats; Qty 04 Nos. 15-Apr-16 Training Office Ins Chilka, Odisha

For IN

23-Mar-16 Technological Solution for Comprehensive Integrated Border Management System

20-May-16 Provisioning Directorate (Procurement Cell)

For BSF

21-Mar-16 DSMD (Deep Search Mine/Metal Detector); Qty: 55 Nos.

12-Apr-16 DIG (Proc) For ITBP

18-Mar-16 CBRN products and technologies for Detection, Protection, Decontamination, Medical Management and Test Facilities

18-Apr-16 Defense Research & Development Establishment

Issued By DRDO

15-Mar-16 Grenades 30 MM HE for AGL; Qty: 2,00,421 Nos. 11-May-16 Commandant (Proc) For BSF

14-Mar-16 Supply and up gradation of land based Integrated Bridge System

18-Apr-16 Directorate of Electrical Engg

For IN

11-Mar-16 Fuse K3M HE; Qty: 226 sets 12-Apr-16 Ammunition Factory Khadki

Issued By OFB

09-Mar-16 Radio Communication Service Monitor, qty:02 Nos. 07-Apr-16 SLO(PROV) For IAF

08-Mar-16 CBRN Equipment for 16 Lines 31-May-16 Air HQ (PB) For IAF

08-Mar-16 Hand Held GPS for Fighters Transport and Helicopters and Ground Based Units, Qty: 2318

21-Apr-16 Air HQ (VB) For IAF

19Eye on Defence |

List of Industrial Licenses (ILs) filed for March 2016 – April 2016

Application no. and date

Name of the applicant Item of manufacture

2508-03-2016

M/s Premier Explosives Lt Site mixed explosives

2608-03-2016

M/s Gulf Oil Corporation Limited Industrial Explosives Slurry Nitrate mixture

2708-03-2016

M/s Beezaasan Explotech Pvt. Ltd. Class 2.0 Explosives (Slurry / Emulsion Explosives/B)

2808-03-2016

M/s Sasan Power Limited Manufacture of explosives

2908-03-2016

M/s Defence Land Systems - India Limited Unmanned Land/Aerial/Water Vehicles, Remotely Piloted Vehicles or Equipment for Defense

30 08-03-2016

M/s Zetatek Industries Limited Environmental Testing Equipment and Chambers

31 15-03-2016

M/s Orissa Explosives Slurry Explosives Emulsion and Bulk Explosives

32 18-03-2016

M/s Ideal Industrial Explosives Limited Manufacturing of S.M.S/S.M.E Explosives

33 22-03-2016

M/s Merlinhawk Aerospace Pvt. Ltd. Elektrone Power Pack

34 22-03-2016

M/s Defence Land Systems – India Limited All types of Directed Energy Weapon (DEW) Systems, related countermeasure equipment and test mode

35 22-03-2016

M/s Defence Land Systems – India Limited All types of communication equipment frequency

36 22-03-2016

M/s Gulf Oil Corporation Limited Industrial explosives

37 30-03-2016

M/s Force Motors Limited Armored fighting vehicle & service spare parts, thereof

38 07-04-2016

M/s IDL Explosives Ltd. Industrial Explosives Including Bulk Non Explosives emulsion Matrix.

39 13-04-2016

M/s Dinex India Pvt. Ltd Launcher

40 19-04-2016

Ideal Detonators Pvt. Ltd Cast Booster

4121-04-2016

M/s Exploshaktichemicals Private Limited Ammonium Perchlorate

4221-04-2016

M/s Walchandnagar Industries Limited Body armor or protective garments of level III such as jackets/vests, patka

4326-04-2016

M/s Ideal Detonators Pvt. Ltd. Manufacturing of Slurry/ Emulsion Explosives

4427-04-2016

M/s Bharat Explochem Pvt. Ltd. Nitroglycerine and Nitric/ Glycol esters

4527-04-2016

M/s Aerospace Technologies Pvt. Ltd. Metal working service activities

18 | Eye on Defence


Cases Approved In the 2nd Licensing Committee Meeting (2016 Series) Held On 06 May 2016S. No. Name Of The Applicant Application No. & Date

1. M/S Dyna Flow Technologies India Pvt. Ltd. 320/SIA/IL/2014DT: 11.11.2014

2. M/S JSW Projects Ltd. 07/SIA/IL/2015DT: 04/02/2015

3. M/S VEM Technologies Ltd. 29/SIA/IL/2015DT: 09/04/2015

4. M/S VEM Technologies Pvt. Ltd 66/SIA/IL/2015 DT: 30/07/2015

74/SIA/IL/2015 DT: 19/08/2015 81/SIA/IL/2015 DT: 31/08/2015

5. M/S Gulf Oil Corporation Limited 76/SIA/IL/2015 DT: 20/08/2015

6. M/S Blue Stampings & Forgings Ltd. 83/SIA/IL/2015DT: 01/09/2015

7. M/S Kalyani Strategic Systems Limited 101/SIA/IL/2015DT: 13/10/2015

8. M/S N.N. Detonators Pvt. Ltd. 63/SIA/IL/2015 DT: 02/07/2015

9. M/S Deccan Explotech Pvt. Ltd. DIL: 35 (2014)DT: 28/10/2014

10. Gulf Oil Corporation Limited 75/SIA/IL/2015DT: 20/08/2015

11. Sri Vishnu Explosives Pvt. Ltd. DIL: 31 (2011)DT: 16/12/2011

Name of entity Project details Value*

Defence Acquisitions Council (DAC) and Indian Navy

• DAC has approved purchase of weapons and sensors package for the seven new stealth frigates of the Indian Navy.

• The frigates will be equipped with long-range surface-to-air missile (LR-SAM) systems, jointly developed by Defence Research and Development Organisation (DRDO) and Israeli Aerospace Industries.

INR130 billion

DAC and Indian Air Force (IAF) • ►DAC has granted Acceptance of Necessity (AoN) for purchase of 244 air-defense guns, capable of shooting down small radar cross section targets such as drones, missiles and low flying objects, for the IAF.

• ►The air-defense guns will be acquired under the “Buy and Make” category.

~INR72 billion

Cabinet Committee on Security (CCS) and Indian Army

• ► CCS cleared the following four deals for the Indian Army:

• ► Acquisition of 65,000 new-generation 84mm rockets (worth INR12 billion)

• ► 4,000 hand-held thermal imagers with laser-range finders (INR14 billion)

• ► 5,000 Milan-2T anti-tank guided missiles (INR20 billion)

• ► 30 indigenous “Swati” weapon-locating radars (INR 20 billion).

INR66 billion

Ashok Leyland • Ashok Leyland won contracts to supply 450 units of Field Artillery Tractor (FAT) 6x6 and Super Stallion vehicles to the Indian Army. It was also awarded a contract for 825 units of 4x4 ambulance to Indian defense forces.

INR8 billion

LONGBOW LLC and IAF

►

• ►LONGBOW LLC, a JV of Lockheed Martin and Northrop Grumman, has been awarded a contract to supply 12 fire-control radar systems (FCRs) and spares to IAF.

• The FCRs will be used to improve all-weather targeting capability on the Apache helicopters.

~INR7.8 billion

New projects / investments / contracts


Tata Power SED and Border Security Force (BSF)

►

►

• Tata Power SED has received an order for 40 hand-held thermal imagers (HHTIs) from BSF.

• The contract also includes an option of acquiring 400 more HHTIs at the same price, according to the BSF requirements.

• Tata is also bidding for a bigger contract of 4,000 HHTIs for the Indian Army.

INR200 million

Reliance Defence

►

• ► Reliance Defence has received 16 new industrial licenses (IL) taking its total number of ILs to 27.

• The new ILs are allotted for manufacturing of equipment ranging from small arms, heavy weapons, armored vehicles, explosives, electronic warfare systems, missiles, UAVs and directed energy weapon systems, laser systems for target destruction and C4I systems for all defense platforms.

NA

*The values of the deals have been converted to Indian Rupees. 1US$ = INR67

Sources:1. “MoD gives nod to 7 stealth frigates worth Rs 13,000 crore,” The Times of India, 12 March 2016, via Factiva

2. “Procurement of 244 guns for Air Force approved,” The Hindu, 11 March 2016, via Q-tech Synergy Newsletter

3. “Big boost: Army to get ammo worth Rs 15,000 cr,” The Times of India, 19 March 2016, via Factiva

4. “Ashok Leyland wins defence contracts worth Rs 800 crore,” The Times of India, 1 April 2016, via Factiva

5. “Lockheed, Northrop land $116.7 million deal with Indian military,” Aswat Masriya, 3 May 2016, via Factiva

6. “Tata Power SED wins order for supply of night vision to BSF,” The Times of India, 2 May 2016, via Q-tech Synergy Newsletter

7. “Reliance Defence receives 16 new industrial licenses for equipment manufacture,” Business Standard, 5 May 2016, via Q-tech Synergy Newsletter

Name of the entities Nature of transaction Value

Reliance Defence Ltd. and Rafael Advanced Defense Systems Ltd.

• Reliance Defence Ltd. and Israeli defense manufacturer Rafael Advanced Defense Systems Ltd. have signed a cooperation agreement to focus on the production, development and supply of air defense systems, air-to-air missiles and surveillance balloons. ►

• The tie-up aims to win future deals worth US$10 billion from the Indian armed forces.

INR690 billion

Reliance Defence Ltd., SC Ukroboronprom, SE Antonov, and SE SpetsTechnoExport

• ►Reliance Defence entered contracts with three Ukrainian defense players SC Ukroboronprom, SE Antonov, and SE Spets Techno Export.

• Reliance Defence and SC Ukroboronprom will work jointly for several projects in aircraft building and aviation overhaul, modernization of armored vehicles, maintenance of marine machines and supply of UAVs.

• With SE Antonov, Reliance Defence will work for tenders of HAL and production of passenger and cargo aircraft.

• Reliance Defence and SE SpetsTechnoExport, will jointly develop infantry fighting vehicles for the Indian Army.

NA

Adani Aero Defence, Alpha Design Technologies and Elbit Systems

• ►Adani Aero Defence, Alpha Design Technologies and Elbit Systems (Israel) have entered a JV to offer UAVs to the Indian defense forces.

• The JV will focus on production of Hermes 450 and Hermes 900 UAVs to the Indian armed forces.

NA

Bharat Electronics Ltd. (BEL) and Thales

• ►BEL and Thales have entered a 74:26 JV, BEL-Thales Systems Limited (BTSL), for production of PHAROS, a fire control radar for both gun and missile systems.

NA

Ashok Leyland Defence Systems (ADLS) and Lockheed Martin

• ► ALDS has entered an agreement with US-based Lockheed Martin, to jointly develop light specialist vehicles and light armored multi-purpose defense vehicles for the Indian armed forces.

NA

JVs and alliances


Tata Power SED and Saab • ►Tata Power SED has entered a strategic collaboration with Swedish defense company, Saab, for joint manufacturing of self-protection systems for land-based platforms.

• The partnership involves transfer of technology from Saab to Tata Power SED.

NA

Bharat Electronics Ltd (BEL) and Rosoboroneexport (Russia)

• ►BEL and Rosoboroneexport signed an MoU to co-operate for the joint development of various sub-systems of major defense projects under the offset clause of the Defence Procurement Procedure (DPP).

NA

OIS Advanced Technology (OIS-AT) and SAMP (France)

• ►OIS-AT and France-based SAMP have entered a JV to manufacture advanced penetrator bombs in India.

• The JV will also focus on development of customized defense equipment for India.

• Penetrator bombs are specialized weapons used with precision by Air Forces to be able to penetrate hardened enclosures.

NA

Sources:1. “Rafael signs $10b deal with Indian defense firm. Israeli, Indian companies to cooperate on air defense systems”, The Jerusalem Post, 30 March 2016, via Factiva

2. “Reliance Defence inks pact with 3 Ukrainian firms”, Business Line, 30 April 2016, via Factiva

3. “Adani ties up with Elbit, Alpha for unmanned aircraft systems”, Live Mint, 21 March 2016, via Factiva

4. “Thales and BTSL partner to jointly develop PHAROS fire control radar”, Market Line, 4 May 2016, via Factiva

5. “Ashok Leyland partners Lockheed Martin for army combat vehicles”, India Infoline News Service, 23 March 2016, via Factiva

6. “Saab and Tata Power SED in JV”, Vayu Aerospace & Defence Review, 1 June 2016, via Factiva

7. “OIS-AT and SAMP in JV”, Vayu Aerospace & Defence Review, 1 June 2016, via Factiva

Country Nature of transaction Additional details

Japan and the US

• ►India, Japan and the US successfully conducted the 20th edition of their annual naval exercise, Malabar-16. The objective of the exercise was to increase interoperability amongst the three navies.

• INS Satpura, INS Sahyadri, INS Shakti and INS Kirch from the Indian Navy participated in the exercise.

• The Japanese Navy was represented by JS Hyuga, a helicopter carrier with SH 60 K integral helicopters and Long Range Maritime Patrol aircraft.

• The US Navy was represented by ships from CTF 70 of the US Navy’s 7th fleet.

Oman • ►India and Oman signed four MoUs and a protocol on defense cooperation during the two day visit of Indian Defense Minister Manohar Parrikar to Oman.

• ► The MoUs included defense co-operation, marine crime prevention, and other maritime issues.

• ► A protocol was signed between the IAF and Royal Air Force of Oman about flight safety information exchange of military aircraft.

Vietnam • India and Vietnam have identified major categories for defense cooperation, which includes upgrade of thermal sights, shipbuilding programs, missile systems from India and software defined radios from Vietnam.►

• ► India is also planning to export advanced cruise missile system including BrahMos supersonic missile to Vietnam.

The US • ►India and the US have agreed in principle to share military logistics, primarily to counter the growing maritime assertiveness of China in the South China Sea. The agreement terms are likely to be penned by end of June 2016.

• ► India and the US are also expected to conclude an agreement on exchanging information on commercial shipping and aircraft carrier technology.

Russia • India and Russia have signed an agreement for deliveries of five S-400 air defense systems.

• ► The S-400 is Russia’s next-generation air defense system, carrying three different types of missiles capable of destroying aerial targets at short-to-extremely long range.

Country-level deals and initiatives

Sources:1. “Malabar 2016: Indian Navy, US Navy & Japan’s JMSDF hold exercise to boost ties,” The Financial Express, 10 June 2016, via Factiva

2. “Parrikar sees investment potential in Vietnam,” The Times of India, 15 June 2016, via Factiva.

3. “India, Oman sign 4 agreements on defence cooperation,” United News of India, 22 May 2016, via Factiva

4. “India, U.S. reach preliminary agreement on sharing military logistics amid China challenge,” Reuters, 13 April 2016, via Q-tech Synergy Newsletter

5. “Russia, India Sign Agreement on S-400 Defense Systems Deliveries – Official,” Sputnik News, 27 April 2016, via Q-tech Synergy Newsletter


IAF prepares 10-year modernization planThe IAF has prepared a 10-year modernization plan highlighting the technologies and services that it will focus on. The plan also includes a list of 174 parts required by the IAF by 2026. The plan will be shared with private sector players to give them clarity on the requirements of IAF. However, only 10%–15% of the total allocated budget of INR25,000 billion are expected to be procured from domestic private players.

(Source: “Indian Air Force prepares 10-year modernisation plan,” The Economic Times, 18 April 2016, via Q-tech Synergy Newsletter)

BrahMos successfully test fired by IAFIAF successfully test fired supersonic cruise missile BrahMos against a land-based target from a defense base in the western sector at Pokhran. The missile will now undergo an air launch test from a fighter aircraft. It is the fastest anti-ship cruise missile in the world and can attain speeds up to Mach 2.8.

(Source: “IAF successfully test-fires BrahMos from Pokhran,” The Indian Express, 31 May 2016, via Factiva)

Indigenous Smart Anti-Airfield Weapon (SAAW) tested successfully India’s Smart Anti-Airfield Weapon (SAAW), jointly developed by DRDO and IAF was successfully test launched from a Jaguar aircraft by the Aircraft Systems Testing Establishment (ASTE) in Bengaluru. The weapon is scheduled for another test in Jaisalmer with Su-30 aircraft for multiple weapon trails. India is the first country in the world to develop such Smart Diameter Bombs (SDB).(Source: “India's first fully indigenized anti-airfield weapon tested,” The Times of India, 23 May 2016, via Q-tech Synergy Newsletter)

Super-sonic interceptor missile test fired successfullyThe DRDO successfully test fired its super-sonic interceptor missile off the Odisha coast of the Bay of Bengal. The interceptor missile was engaged against a naval version of Prithvi missile launched from a ship anchored inside Bay of Bengal. The successful test of the interceptor is an important step for India to have a multi-layer ballistic missile defense system.

(Source: “India successfully tests supersonic interceptor missile capable of destroying enemy missiles”, The Indian Express, 15 May 2016, via Q-tech Synergy Newsletter)

Indian Navy launches integrated underwater harbor defense and surveillance system (UHDSS) and mine warfare data center (MWDC)The Indian Navy has launched its state-of-the-art harbor defense systems, the IUHDSS and MWDC, to enhance its surveillance capability and response to security threats at the naval dockyard in Visakhapatnam. The IUHDSS is a multi-sensor system capable of detecting, identifying, tracking and generating warnings for all types of surface and underwater threats. The MWDC facility will serve as the nodal center for maintaining an underwater information database of harbors along the Indian East coast.

(Source: “Indian Navy launches underwater vigil system in Visakhapatnam,” The Business Standard, 12 May 2016, via Q-tech Synergy Newsletter)

Scorpene class submarine, Kalvari, undergoes sea trialsIndia’s first scorpene class submarine Kalvari, is undergoing sea trails. The submarine have already completed several preliminary tests on the propulsion system, auxiliary

Industry buzz

equipment and systems, navigation aids, communication equipment and steering gear. During the next few months, the submarine will undergo a few new trials such as surface trials, diving trials, weapon trials, noise trials etc.

(Source: “First India-built Scorpene class submarine 'Kalvari' undergoes sea trials,” Domain B, 3 May 2016, via Factiva)

Water Jet Fast Attack Craft (WJFAC), INS Tarmugli joins the Indian NavyIndia’s first Follow-on Water Jet Fast Attack Craft (WJFAC), INS Tramugli, joined the Indian Navy. The 320-ton ship, built indigenously by Garden Reach Shipbuilders and Engineers Ltd (GRSE), can achieve speeds in excess of 30 knots and will be deployed for coastal patrol and surveillance operations along the East Coast of India. The ship is capable of operating in shallow waters at high speeds and is equipped with enhanced fire power.

(Source: “INS Tarmugli Joins the Indian Navy,” Press Information Bureau, 23 May 2016, via Factiva)

Department of Industrial Policy and Promotion (DIPP) launched new intellectual property rights (IPR) policyDIPP launched the new IPR policy with an objective to increase IPR outreach, speed up approvals, enhance commercialization, and enforce norms. The DIPP aims to reduce the average time for clearing pending IPR applications to 18 months from five to seven years, and the time for registering trademarks from 13 months to 1 month by 2017. The focus areas of the new IPR policy include awareness campaign on IP generation and administration and implementation of IP-related laws.

(Source: “Register trademarks in just one month,” Business Standard, 14 May 2016, via Q-tech Synergy Newsletter)

MoD releases Defence Procurement Policy (DPP) 2016Indian Defense Minister, Manohar Parrikar, announced the clearance of the DPP-2016 that will replace the current DPP-2013. One chapter of strategic partners in the policy is still under considerations and will be finalized by end of June. The key changes in the DPP-2016 include a new procurement class, Indian Designed, Developed and Manufactured (IDDM) as the most preferred category for buying defense equipment.

(Source: “New defence procurement policy cleared,” Business Standard, 6 February 2016, via Q-tech Synergy Newsletter)

Government of India (GoI) changes FDI norms for 100% FDI in defense sectorThe GoI changed its FDI norms for up to 100% foreign direct investment (FDI) in the defense sector. Earlier also the foreign players were allowed to invest more than 49% through the approval route; however, according to the new norms, the condition of access to “state-of-art” technology for FDI of more than 49% is changed to companies with modern technology can invest for more than 49% in the defense sector.

(Source: “Govt relaxes FDI norms, allows 100% in aviation, greenfield pharma,” Business Standard, 20 June 2016, via Factiva)

India likely to start exporting indigenous Light Combat Helicopter (LCH)India is likely to start exporting light combat helicopters (LCH) developed by the HAL. As a platform, the LCH has passed all requirements and has a viable platform. Two countries including Vietnam have expressed interest in the LCH. The LCH is designed to provide air support to land forces and to counter enemy armored vehicles, including in mountainous terrains.


(Source: “India May Start Exporting Domestically-Built Combat Helicopters in Near Future – Company,” Sputnik News Service, 15 April 2016, via Factiva)

HAL tests its indigenously developed trainer aircraft HAL’s basic trainer aircraft, the Hindustan Turbo Trainer-40 (HTT-40), made its maiden flight, after completing its ground run phases in May 2016. The aircraft will be used for the first stage training for all flying cadets of the IAF, Indian Army and the Indian Navy. The IAF have already ordered 70 aircraft for its training needs.

(Source: “HAL’s indigenous trainer aircraft makes first flight,” Press Trust of India, 31 May 2016, via Factiva)

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1st Floor, Prestige EmeraldNo.4, Madras Bank RoadLavelle Road JunctionBengaluru-560 001 IndiaTel: +91 80 6727 5000Fax: +91 80 2222 4112

Chandigarh1st FloorSCO: 166-167Sector 9-C, Madhya MargChandigarh-160 009Tel: +91 172 671 7800Fax: +91 172 671 7888

ChennaiTidel Park6th & 7th FloorA Block (Module 601,701-702)No.4, Rajiv Gandhi SalaiTaramaniChennai-600113Tel: +91 44 6654 8100Fax: +91 44 2254 0120

Delhi NCRGolf View CorporateTower – BSector 42, Sector RoadGurgaon–122 002Tel: +91 124 464 4000Fax: +91 124 464 4050

3rd & 6th Floor, Worldmark-1IGI Airport Hospitality DistrictAerocity New Delhi-110037, IndiaTel: +91 11 6671 8000 Fax +91 11 6671 9999

4th & 5th Floor, Plot No 2BTower 2, Sector 126NOIDA-201 304Gautam Budh Nagar, U.P. IndiaTel: +91 120 671 7000Fax: +91 120 671 7171

HyderabadOval Office,18, iLabs CentreHitech City, MadhapurHyderabad - 500081Tel: +91 40 6736 2000Fax: +91 40 6736 2200

Kochi9th Floor “ABAD Nucleus”NH-49, Maradu POKochi - 682 304Tel: +91 484 304 4000Fax: +91 484 270 5393

Kolkata22, Camac Street3rd Floor, Block C”Kolkata-700 016Tel: +91 33 6615 3400Fax: +91 33 6615 3750

Mumbai14th Floor, The Ruby29 Senapati Bapat Marg, Dadar (west)Mumbai-400 028, IndiaTel: +91 22 6192 0000Fax: +91 22 6192 1000

5th Floor Block B-2Nirlon Knowledge ParkOff. Western Express Highway Goregaon (E)Mumbai-400 063, IndiaTel: +91 22 6192 0000Fax: +91 22 6192 3000

PuneC—401, 4th floor, Panchshil Tech ParkYerwada (Near Don Bosco School)Pune-411 006Tel: +91 20 6603 6000Fax: +91 20 6601 5900

EY — your trusted advisor for aerospace and defence projectsEY ranked as the #1 professional services brand in India for the third time in a row* in the Global Brand Survey conducted by Kantar.

In India, EY with its dedicated team of aerospace and defence (A&D) professionals, functional capabilities and globally experienced talent, enables its international clients to successfully enter, operate and succeed in the Indian market.

For further details, please contact: Sailesh Rao, Leader Defence Advisory | [email protected]

What makes us different?

Select experience Services

• Dedicated A&D teams with specialization in packaging business advisory with regulatory advisory

• Team members involved in prestigious projects such as:

• Drafting the Defence Procurement Procedures and founding the Defence Offset Facilitation Agency

• Setting up an A&D manufacturing facility at Mahindra aero-structures

• Total experience of 66 man years in the armed forces; MoD administrative experience of 14 man years

• Offset structuring worth US$ 3.7

executed successfully

• Experience with foreign clients include large US, European and South Asian multinationals; strong capabilities in offset program and supply chain structuring and vendor

• Capabilities in market entry strategies for renowned Indian clients and a host of MSMEs

• Strong connects with Indian companies across manufacturing and services sector

• Project methodology driven by primary information and deep sectoral competencies

• Eye on Defence — India’s largest circulated and read A&D quarterly

• Joint research with CII on opportunities with DPSUs and in offsets and on enhancing the participation of MSMEs in India with CII

• Invited speaker at prestigious A&D conventions; US-India HTCG, Aero India, Singapore Airshow and GOCA

• Contribution to policy recommendations at industry bodies such as AMCHAM, USIBC, CII, FICCI etc.

• One of our team members was a part of the 10—member committee to suggest changes to the DPP 2013.

• One of our team members had provided input to the Indian Defense Offset policy in 2006.

• EY prepared a research paper for the DRDO on enhancing the participation of the private sector in Defence R&D.

• EY prepared a white paper for DOMW (DDP) to analyze the effects of the abeyance order on services as valid offset discharge.

Team of sector experts Multiple engagements in the sector

Thought leaders in the sector MoD policy advisory experience

Offset related services• • Regulatory compliance• Finalization of offer

Mergers and acquisitions• Asset & capital allocation advisory• Buy-side M&A advisory• Sell-side M&A advisory• Capital markets lead advisory services

Business advisory• • • New market investment strategy• Strategic portfolio services

Regulatory advisory• Export licensing• Industrial licensing• FIPB application

Taxation• Specialized defence project taxes optimization • Business tax • Indirect tax• International tax• Transaction tax

This announcement appears as a matter of record only.






Large Indian Infrastructure GroupBusiness advisory

Entry strategy in A&D

US Strategic Electronics OEMLitigation services

Advisory services

Tax compliance

US Jet Engine ManufacturerOffset advisory

Business advisory

Tax advisory

Transfer pricing

US Aerospace Systems OEMTax advisory

Tax compliance

Transfer pricing

Transaction tax services

Risk advisory services

Indian DPSU Shipyard Business advisory

Formulation of business plan

and implementation procedure

Swiss Aircraft ManufacturerOffset advisory

Business advisory

Tax advisory

*Ranked as #1 brand in India for three consecutive editions of the biennial Global Brand Survey 2015 (Kantar), 2013 (TNS), 2011 (TNS)

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Disclaimer: The information contained herein does not constitute an offer to sell or a solicitation of an offer or a recommendation to purchase securities under the securities laws of any jurisdiction, including the United States Securities Act of 1933, as amended, or any US state securities laws, or a solicitation to enter into any other transaction. Any securities transactions with a US-based buyer will be effected through Ernst & Young Corporate Finance (Canada) Inc., a US registered broker-dealer that is part of a global network with Ernst & Young LLP in accordance with Rule 15a-6 under the United States Securities Exchange Act of 1934, as amended.

eye on defence july 2016

Government & Nonprofit