May. 12, 2013 By VIVEK RAGHUVANSHI – Defense News
NEW DELHI — India’s Ministry of Defence has floated a competition for gun/missile systems for the Army. And in a first for the MoD, it is asking domestic companies to participate along with overseas firms.
The domestic defense companies that have been invited to participate in the US $1.6 billion tender have not produced the full gun/missile system, and only by teaming with overseas defense majors would these companies be able to fulfill the demand, private-sector executives here said.
An MoD official said the private companies that have been given the tender already have demonstrated their ability to integrate heavy weapon systems, including Akash missile systems and Pinaka multibarrel rocket launchers.
Defense analysts said the step will lead to more tie-ups between overseas firms and Indian companies.
“This will encourage foreign companies to have genuine collaborations with Indian companies and will lead to more intense partnerships,” said retired Indian Army Col. K.V. Kuber, with New Delhi-based Sugosha Consultancy Services.
“This is the way forward to develop the Indian industry. The type of industrial participation ensuing from offsets is not a very strong arrangement and is limited to the appetite of the foreign [original equipment manufacturers] at whose mercy the Indian partners live on,” Kuber said.
An executive with the Federation of Indian Chambers of Commerce and Industry said the big-ticket offer to domestic defense companies will enable the Indian industry to chalk out its long-term strategy as it competes in future large defense projects.
The competition for the purchase of five regiments —104 systems — of gun/missile systems would replace aging Russian-made Kvadrat systems in the Indian Army.
The domestic companies that received the tender include state-owned Bharat Electronics, Larsen & Toubro (L&T), Tata Power SED, Punj Lloyd, Bharat Forge and ICOMM. No executive from any of the companies would say whether they have the system or how they will produce it.
Rahul Chaudhry, CEO of Tata Power SED, said his company is negotiating with a Western defense company, which he would not identify.
Mukesh Bhargava, head of the international defense and aerospace business of L&T, said it is also in the process of teaming up with overseas defense companies but refused to elaborate.
The foreign competitors receiving the tender are Rosoboronexport of Russia, Bumar of Poland, General Dynamics of the US, Thales of France, Doosan Group of South Korea, Israel Aerospace Industries and Elta of Israel.
The Indian Army wants to procure 4,928 missiles and 172,260 rounds of ammunition under full maintenance technology transfer.
The selected vendor will have to transfer technology for maintenance and lifetime support of the Self-Propelled Air Defence Gun Missile System, along with the missiles and gun ammunition, to state-owned Bharat Dynamics. The maintenance of the guns and ammunition will be done by the state-owned Ordnance Factories Board.
An executive with one of the defense companies competing said it will ask the government to make changes so that the selected vendor will be authorized to carry out the maintenance work.
The MoD official said the government wants the Indian private-sector companies to participate even in production and maintenance of the systems but declined to say if it will allow domestic companies to carry out the maintenance work.
The proposed weapon system would be a mix of guns and missiles mounted on one or separate high-mobility vehicles. The tender requires that the gun and the missile should be able to engage aerial targets with and without the use of a fire-control radar. The gun should have a range of 2,500 meters and the missile should have a range of six kilometers. The radar should be capable of 360 degrees surveillance, target detection, acquisition and tracking.