India may be the world’s 2nd largest arms importer, but its defence market is a difficult domain to achieve a breakthrough. Airbus SE has not won a single defence order in India in the last half a century. That zero order book record for Airbus defence business stands even today, as India’s highest defence procurement body decided to go in for six “used” Airbus aircraft from its national civilian carrier for the air force’s airborne surveillance system, instead of buying brand new planes, which was the original plan.
According to a Ministry of Defence statement, the Defence Acquisition Council (DAC), chaired by Minister of Defence Rajnath Singh, approved a proposal of the IAF to buy Airborne Early Warning and Control Systems (AEW&CS). The AEW&CS to be procured will be Defence Research and Development Organisation (DRDO) designed and developed, but the aircraft on which it would be mounted will be the used aircraft from the Air India fleet, according to defence ministry officials with direct knowledge of the matter. As such the Air India is getting sold off due to its high debt, which took a great hit on its profitability. The officials said the air force will be looking at acquiring six AEW&CS and the programme could cost Rs 11,000 (approx. $1.5 billion).
The AEW&CS will add to the existing capabilities of the IAF for airborne surveillance and be a force multiplier, as the ‘eye in the sky’ to keep track of military movements across the border, deep inside India’s arch rivals Pakistan and China.
This is not the first time India has decided to bank on used aircraft from Air India for its military requirement. India had in 2018 decided to retrofit two Boeing 777-300 ER aircraft, bought by Air India, to become part of the fleet of aircraft for VIP travel. The two aircraft were earlier this year delivered to India by Boeing Co.
Airbus is also currently expecting an order for its C295 transport aircraft from the IAF for 56 and from the Indian Coast Guard for six, totaling 62. The C295 is to replace the existing Avro aircraft fleet of the air force, but the contract is stuck after completion of negotiations for the last two years now. Airbus had tied up with the Tata Group to bid for this tender, in which it was the only vendor left when the time came for identifying the eligible vendors during the tendering process. A single vendor situation rendered the Avro replacement tender a non-starter and it required special permission from the Indian defence minister, the final financial authority, to go ahead with the procurement process from that stage.
Airbus had been selected previously in tenders to supply its A330 MRTT for the IAF’s mid-air refueller requirement and the Light Utility Helicopters tender too to supply its Eurocopter AS550 Fennec. But, both the procurement projects got shelved at the last minute on more than one occasion.
Now, the buzz in the South Block corridors is that the mid-air refuellers could be acquired by the IAF, through the ‘Lease category’ in the Defence Acquisition Procedure 2020 that came into force from Oct. 1 this year. Incidentally, the DAC meeting held today was the first since the DAP-2020 was adopted by the Ministry of Defence.
A total of Rs 28,000 crore (approximately US$ 2.8 Billion) worth of procurement proposals were accorded the Acceptance of Necessity (AoN) at today’s DAC meeting. Among those was the decision to expand the scope of the procurement plan of the Indian Navy for Next Generation Offshore Patrol Vessels (NOPVs). This decision to increase the number of NOPVs to be built for the navy from the earlier five to now 11 comes against the backdrop of the Modi government’s decision earlier this year to cancel an order for five NOPVs with the now defunct Pipavav Offshore and Defence Engineering Limited. The navy will soon issue a new tender for the 11 NOPVs and the race for that contract could see Larsen and Toubro from the Indian private sector competing with at least three state-run shipyards that have the capabilities and the capacities to build this class of warship.
The DAC also decided to accord AoN for the navy to buy surveillance drones for ship-borne operations from the global market, and this could be rotary wing unmanned aerial vehicles (UAVs) operated off the helo-deck. The navy’s search for a rotary wing UAV is at least a decade old now. The original plan was to have at least two squadrons of UAVs to be controlled from ships, to increase the range of surveillance. The contenders for this tender, whenever it comes out, could be the American Northrop Grumman‘s MQ-8 Firescout, European Airbus Defence and Space‘s TANAN, and Swedish SAAB AB‘s Skeldar. The Indian Navy currently operates two squadrons of land – operated surveillance UAVs of Israeli origin in Searcher II and Heron, apart from two MQ-9B Sea Guardian pre-production variant leased from American firm General Atomics. After the Iran skirmish the usefulness of drones has increased tremendously in naval strategy.
The latest DAC decisions came as a huge boost for the Indian aerospace and the defence sector, as seven of the eight items on the agenda were for acquisition proposals under the procurement category of ‘Indigenously Designed Developed and Manufactured‘ (IDDM) items. The decisions include Indo-Russian joint venture BrahMos (Brahmaputra and Moscow river union) missiles – 38 of them – for the latest set of frigates and destroyers that the navy will be inducting over the next few years, including the Project 15B destroyers and the Project 17A frigates. BrahMos missiles are being made in India and enquiries have been made by Vietnam, Philippines and even Myanmar and Indonesia for their defence needs.
The DAC also gave its AoN nod for a proposal to buy Modular Bridges for the Indian Army, again from the domestic industry. “The first set of AoN accorded (under DAP-2020) were in the highest categorisation of Buy Indian IDDM. Six of the seven proposals, that is worth Rs 27,000 crore of the Rs 28,000 crore for which AoNs were granted, will be sourced from the Indian industry to give a boost to the ‘Make in India‘ and the ‘Atmanirbhar Bharat‘ initiatives of the government,” the MoD statement said.
Indian prowess in basic research R & D for it defence research has now become a top priority and Indian defence sector is aiming to export over 35,000 crore worth of military hardware in the world arms supply chain. Ammunitions are being standardised and they are being manufactured in India such that it is not blackmailed by the foreign suppliers. Army is being made trimmer and it is removing many non-useful units like military farms, cavalry unit, closure of small unit canteens, merging of army mess and making the army aware of cyber warfare, cyber defence, cyber repulsion and may be even an army of robots in future.