India, Israel to focus on R&D for hi-tech arms

Delhi Concerned Over High Cost of Ship Missiles

India plans to further expand its strategic ties with Israel through more R&D projects to develop hi-tech weapon systems, as also clinch several deals in the pipeline, but has expressed concern over the exorbitant costs involved in deploying a jointly-developed surface-to-air missile system on frontline Indian warships.

Sources said this came through in the 12th meeting of the high-powered joint working group between the two countries, co-chaired by defence secretary G Mohan Kumar and director general of Israeli defence ministry Major General Udi Adam (retd), which was held in New Delhi on July 13.

Though there has been no official word on the JWG meeting, sources said defence minister Manohar Parrikar has red-flagged the “high costs” involved in production of the medium-range surface-to-air missile (MR-SAM) systems called Barak-8 by Israel.

First, there was a huge delay by DRDO-Israel Aerospace Industries (IAI) joint venture to develop and test the MR-SAM systems, which are to be produced in bulk by defence PSU Bharat Dynamics Ltd (BDL). Now, the projected costs in deploying them have also raised eyebrows.

As earlier reported by TOI, while the naval MR-SAM project was sanctioned by the Cabinet Committee on Security in December 2005 at an initial cost of Rs 2,606 crore, the IAF one for nine squadrons worth Rs 10,076 crore was cleared in February 2009. While the naval system was tested for the first time in November 2014, the IAF one was tested thrice earlier this month.

With an over 70-km interception range against enemy aircraft, drones and missiles, the naval MR-SAM has already been fitted on the three new Kolkata-class destroyers. But each MR-SAM system is now projected to cost around Rs 1,200 crore for the 12 under construction warships in Indian shipyards, including aircraft carrier INS Vikrant, four guided-missile destroyers and seven stealth frigates.“Consequently, the orders are on hold as of now. A review to cut costs is in progress” said a defence ministry source.

This has also led to the estimated Rs 14,000-crore Army project to acquire these MRSAMs, which come with missiles, launchers, surveillance and threat tracking radars, and fire control systems, to be kept in abeyance till now.

The JWG also discussed probable joint R&D projects in fields like high-endurance UAVs (unmanned aerial vehicles), micro-satellite surveillance systems, armoured vehicles and different types of missiles and precision-guided munitions, said sources.

Then, there are several big-ticket deals in the pipeline. These include two more Israeli Phalcon AWACS (airborne warning and control systems), which are to be mounted on Russian IL-76 military aircraft, and four more Aerostat radars.

The IAF is also on course to acquire 164 laser-designation pods or ‘Litening-4’ for fighter jets like Sukhoi-30MKIs and Jaguars as well as 250 advanced ‘Spice’ precision stand-off bombs capable of taking out fortified enemy underground command centres.

The Army, in turn, is looking to acquire the Israeli third-generation Spike antitank guided missile systems, with an initial 321 launchers and 8,356 missiles, which too is making slow progress due to the high costs involved. The force is likely to go in for an initial two regiments of the Israeli Spyder quick-reaction SAM systems to defend its forward units for enemy air strikes.

Source : The Times of India (Delhi)

Strapped but Wiser ENSURING CASH FOR R&D COs, SMALL FIRMS - MoD Looking at Rs 30kcr Defence Venture Funds

Foreign companies to be allowed to invest in VCFs as part of offset obligations

A Rs 30,000-crore corpus for venture capital funds (VCFs) for defence production by foreign companies -that's the big idea the government is working on.

A ministry of defence (MoD) concept note, which ET has reviewed, proposes that foreign defence companies that have sold equipment to India can invest in VCFs as part of their offset obligations (at least 30% of the contract value must be invested back in India).

Foreign companies can invest up to 25% of their offset obligations in such funds. But the capital won't be repatriable, only dividends will be. Such VCFs will be cleared by the defence ministry. They will have to register with the Securities & Exchange Board of India, as all other funds do. The government sees a `30,000-crore potential for such VCFs. Investment, the note says, will be in companies undertaking defence research and in medium, small & micro enterprises (MSMEs).MSMEs are typically part of the supply chain for larger projects.

“It is expected that in a span of the next five years, the fund will be of the size of `30,000 crore,” another note on the defence offset fund drawn up by the MSME ministry says.

“This (the idea for a VCF) is to enable MSMEs to access funds in order to receive technology and contribute to the growth of Indian defence manufacturing and exports, hitherto perceived to be constrained by lack of access to funds,” the MoD note reads. Ankur Gupta, vice-president of EY India, told ET: “The proclivity of foreign vendors to utilise this proposed avenue could depend upon the lock-in period, guaranteed rate of return, if any, and safety of the principal.”

There have been at least two efforts in the past year to set up a defence-focussed VCF, but neither received MoD clearance. Senior officials told ET the government has been in consultations with funds such as Blackstone and Sequoia to understand global best practices.

The fund is the latest in a series of efforts by MoD to make offset obligations easier to meet. Fines of over $35 million have been imposed on foreign vendors over the past few years. Foreign companies have invested just half of the $1.3 billion investment obligation they had under offset clauses.

Source – The Economic Times (Delhi)

Army hunts for lethal assault rifle, junks DRDO's Excalibur

Wants `Higher Kill Probability' With Effective Range of 500 Mn

Army has launched a fresh hunt for a new-generation assault rifle all over again. Rejecting the 5.56 x 45 mm calibre Excalibur rifle offered by the DRDO-Ordnance Factory Board combine, the force has now decided to go in for a 7.62 x 51 mm gun with “higher kill probability and stopping power“.

In the race to acquire high-end weapon systems from submarines and fighters to howitzers and helicopters, basic weaponry and protective gear for ordinary foot-soldiers often do not get the requisite attention and push by the brass.

But the Army says it means business this time, shrugging aside failed attempts to acquire new rifles over the last decade.

The RFI (request for information) for the new 7.62 mm assault rifles is going to be issued soon to eliit responses from around the globe. “The GSQRs (general staff qualitative requirements) or technical parameters for the rifles will then be formulated before the actual tender is floated to invite bids,“ said a source.

It was in April that the Army commanders' conference first discussed whether the force required a 7.62 mm rifle that “killed“ or a 5.56 mm rifle that “incapacitated“ enemy soldiers, as was then reported by TOI.

“The decision has now been taken to go for 7.62 x 51 mm rifles with a higher kill probability and accuracy at an enhanced effective range of 500-metre,“ said the source.

The military wisdom till now was that the 5.56 mm rifle was better for conventional war because it generally injured an enemy soldier, tying down at least two of his colleagues to carry him in the battlefield. Conversely , the 7.62 mm rifle was better for counter-insurgency since terrorists had to be killed at the first instance, eliminating the risk of “suicide bombing“.

Soldiers largely use the 7.62 mm AK-47 rifles for counter-insurgency operations in Kashmir and the northeast, even though the infantry is saddled with the indigenous glitch-prone 5.56 mm INSAS (Indian small arms system) rifles.

The fully-automatic Excalibur, which fires 5.56 x 45 mm ammunition, is a much-improved version of INSAS rifle that entered service in 1994-1995. But the Army now wants 7.62 mm rifles for greater lethality.

The Army's overambitious experiment to induct rifles with interchangeable barrels, with a 5.56 x 45 mm primary barrel for conventional warfare and a 7.62 x 39 mm secondary one for counter-terrorism, miserably flopped last year.

As was first reported by TOI in May last year, the proposed mega project was junked since the rifles on offer by armament firms like Colt (US), Beretta (Italy), Ceska (Czech) and Israel Weapon Industries were not found cost-effective or suitable after extensive trials.

Under the project, 65,000 rifles were to be directly acquired from the selected vendor to equip the 120 infantry battalions deployed on the western and eastern fronts.The OFB was to then subsequently manufacture over 1,13,000 such rifles after getting transfer of technology from the foreign company.