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Saturday, 21 February 2015

From Today's Papers - 21 Feb 2015

Coast Guard finds DIG’s reply ‘unsatisfactory’, orders probe
New Delhi, February 20
The Coast Guard today ordered a “board of inquiry” against its North West Region Chief of Staff DIG BK Loshali after finding his reply “unsatisfactory” to a show-cause notice on his remarks that he had ordered blowing up of a Pakistani boat.

On Tuesday, Loshali had contradicted government’s claim that the crew on an intruding Pakistani boat had set it ablaze. Defence Minister Manohar Parrikar, the Ministry and the Coast Guard had maintained that when the boat was chased by Coast Guard ships four men on board had set it ablaze.

“DIG BK Loshali was served a show-cause notice on February 18. The reply to the notice has been received and is found to be unsatisfactory. Therefore, in accordance with the extant procedures a board of inquiry has been ordered to investigate the details and establish the facts,” the Coast Guard said in a release. — PTI
Visitors miss the ‘Suryakiran’ show
Shubhadeep Choudhury

Tribune News Service

Bengaluru, February 20
It was nearly four years ago when the IAF’s aerobatics team ‘Suryakiran’ was disbanded, but its thrilling aerobatics display is still being missed by many.

When the British military hardware manufacturer, BAE Systems, revealed that they had commenced contract negotiations with HAL on a potential order to supply products and services for the manufacture of 20 Hawk aircraft to fulfil the Air Force’s requirement for its prestigious aerobatic team, it came as a music to the ears of all those missing the presence of the ‘Suryakiran’ team at the aero show underway here.

“It is not the same without the Suryakiran”, says Raghavendra Maralihalli, a scientist with a Bengaluru-based aerospace organisation. His sentiment is echoed by many others. “One does miss them (the Suryakiran team)”, remarked AK Gupta, a retired military officer who is in employment with a Bengaluru-based defence equipment import and design company.

This is only the second time that the Suryakiran team is not performing in an Aero India, the biennial air show being held in Bengaluru since 1996. The aerobatic display team of the IAF consisted of nine Kiran MK II jets and had the distinction of being one of three aerobatic display teams in the world using so many planes. Their counterparts from other countries use fewer aircraft.

While a number of aerobatic display teams, including the IAF’s helicopter display team “Sarang”, are performing in the present edition of the air show there is no flying display this time round by a team using fighter jets. Suryakiran, perhaps, is being missed all the more because of the sheer absence of any other team like them.

“The Suryakiran jets released colours of the Indian flags and created with the help of smoke patterns such as heart, arrow and apple. And they used to come close and then fly in different directions – it was spectacular”, an Aero India veteran said.

The Suryakiran team, based in Bidar in Karnataka, was disbanded in 2011 as the IAF required the planes for training of rookie pilots.
The seven homegrown firms fighting over India’s $620 billion defence market
From first timers such as motorcycle maker Hero Group to established players such as the Tata’s, India’s private firms now wants a slice of the country’s defence sector pie.

Much of that has to do with prime minister Narendra Modi’s plans to transform India—from its current position as the world’s largest importer of military equipment—into a manufacturing powerhouse as the country’s defence spending is expected to swell to $620 billion (Rs38 lakh crore) by 2022.

And with foreign direct investment in the defence industry revised to 49%, the Indian private sector is also scouting for foreign partners with $130 billion of military contracts up for grabs in the next few years.

These seven firms are emerging as the frontrunners, as India finally looks to build it domestic defence manufacturing prowess.
Tata Group

The Tata’s have partnered with India’s armed forces for over half a century. And after building everything from army vehicles to missile components in group companies like Tata Motors and Tata Advanced Systems, the conglomerate is now out looking for new partners to execute new projects.

In September 2014, Tata Power SED tied up with Honeywell International to build defence navigators. A month later, Tata Advanced Systems announced a partnership with Airbus to build 56 aircrafts for the Indian Air Force.

Tata group companies in defence and aerospace businesses currently have an order book of Rs10,000 crore ($1.6 billion).
Mahindra Group

The group’s ride in the automotive sector began with a license to assemble the Willys jeep, a rugged vehicle that became a legend of sorts during the Second World War. That later turned into a long-term relationship with the Indian army as a supplier of trucks, armoured vehicles and other equipment.

The group has now created two verticals under the defence divisions to focus on land defence and naval defence. Last year, the $16.5 billion group opened a new underwater systems and naval applications manufacturing facility in Pune, which will produce torpedo launchers and radars.

It is reportedly also in the fray to buy Gujarat-based Pipavav Defence and Offshore Engineering Company, among the country’s biggest private sector shipyards that builds vessels for the Indian navy.
Hero Group

After starting out as a manufacturer of bicycle components and becoming the world’s largest two wheeler company, the Hero group is making big plans for the defence industry.

On Feb. 18, the Munjal family—promoters of the $5 billion Hero group—sold a 4% stake in the company for Rs1,870 crore ($300 million) to reportedly raise money for investing in the defence sector. Some of that money might go towards purchasing Pipavav Defence; it is competing with the Mahindra Group to buy the shipyard.
Reliance Anil Dhirubhai Ambani Group

Formed out of the division of the Reliance group founded by Dhirubhai Ambani, the $28 billion conglomerate—with interests in power and telecom—announced its foray into the defence sector on Feb. 12. It plans to set up a defence smart city to import components, systems and subsystems and later export finished products.

The company has also set up a subsidiary, Reliance Defence and Aerospace, which will bid for 387 Army reconnaissance and surveillance helicopters and 100 Naval utility helicopters, together valued at Rs25,000 crore ($4 billion).
Reliance Industries

Reliance Industries—India’s largest private firm, promoted by the country’s richest man Mukesh Ambani—is present in all the critical sectors of the Indian economy. After establishing interests in everything from petroleum, retail, natural gas, telecom and media to healthcare and pharmaceuticals, Reliance has been attempted to make inroads into defence for a while.

In 2012, it partnered with Boeing to help build P8I naval reconnaissance aircraft for the Indian Navy. A year later, Reliance also signed a deal to supply components for Dassault aviation, which plans to build medium multi role combat aircrafts (MMRCA) for the Indian Air Force. But that landmark $20 billion MMCRA deal is still hanging fire.
Bharat Forge

The $2.5 billion Kalyani Group, of which Bharat Forge is the flagship company, announced a partnership with Israel’s Rafael on Feb. 19. The 51:49 joint venture, where Kalyani will hold majority stake, will make Spike anti-tank guided missiles for the Indian armed forces.

Earlier this year, the company also announced its plan to set up a Rs600 crore ($100 million) defence manufacturing facility in Gujarat, and is in talks with the Indian army to test its ultra light gun and artillery guns. The group’s relationship with India’s armed forced started in the 1980’s but was strengthened when it was roped in to build shells on for the Bofors gun on an emergency basis during the Kargil conflict in 1999.
Hinduja Group

The $25 billion London-based Hinduja group, makers of Ashok Leyland buses and trucks, has had an eventful relationship with India’s defence sector. In 1991, three promoters of the company were accused of corruption in the Bofors arms deal scandal.

That chequered history notwithstanding, it has already committed $10 billion of investments in India across sectors and last year partnered with Larsen & Toubro for the mounted guns artillery program of the Indian navy. In 2008, the group also set up Ashok Leyland Defence Systems, which manufactures armoured vehicles for the armed forces.
Airbus Helicopters in talks with Indian cos for defence JV
Airbus Helicopters is scouting for partners in India to produce copters for the armed forces. The subsidiary of Airbus Group is in talks with Indian private and public sector companies to manufacture reconnaissance, surveillance and naval utility choppers. They are looking at either a joint venture or a consortium to bid for orders from Indian Army and Indian Navy, the company has reported.

“We are in talks with companies including Tata Group, Reliance Industries, Mahindra and defence PSUs such as Hindustan Aeronautics Limited (HAL) to form a joint venture,” Rainer Farid, the vice president of sales and customer relations for Airbus Helicopters in India told Business Standard. Farid said the company had been in talks with Indian companies since October 2014 after the army and navy floated request for information (RFI).

The Indian army plans to acquire about 300 helicopters equipped for reconnaissance and surveillance, while the navy needs 100 utility helicopters. Airbus Helicopters wants to introduce its single-engine, light-utility AS550 Fennec helicopter to the army and its mid-size AS565Panther to the navy.

Farid told Business Standard that the RFI required of the company to form a joint venture with Indian companies to bid for the deals. “We expect some kind of a partnership to take shape by end of this year.”

Initially, the partnership is aimed only at production of choppers for the defence forces. Airbus could consider an entry into the civilian market at a later stage. Currently Bengaluru-based HAL is the only company that manufactures helicopters in India. HAL is in the process of setting up a Greenfield facility at Tumakuru in Karnataka to manufacture light utility helicopters. It has acquired 610 acres for the purpose.

HAL has been a supplier of aircraft doors for Airbus and has completed 25 years of the supply contract. The company is also seeking additional orders from Airbus, HAL Chairman T Suvarna Raju has said. The increase in limit of foreign direct investment in defence from 26 percent to 49 percent is drawing companies such as Airbus to sound the Indian market out. Any possible deal could benefit both parties.
Yaalon’s Visit And The India-Israel Defence Relationship – Analysis
Israel’s Defence Minister Moshe Yaalon is currently visiting India. He is scheduled to inaugurate the Israeli Pavilion at the biennial Aero India 2015 defence and aerospace exhibition at Bengaluru and also meet his Indian counterpart Manohar Parrikar. Yaalon’s visit assumes significance given that this will be the first time that an Israeli Defence Minister is visiting India since formal diplomatic ties were established in January 1992.

Many Israeli cabinet ministers have visited India, including, among others, those holding the Finance, Interior, Tourism, and Agriculture portfolios. Given the robust defence interaction and defence trade between the two countries, the absence of a defence ministerial visit for so long was, however, an oddity. India is estimated to have purchased over $10 billion worth of defence equipment from Israel. One of the few instances of the government indicating the financial volume of the defence trade was in May 2007 when the then Defence Minister A.K. Antony informed the Rajya Sabha that ‘defence purchases’ from Israel during the period 2002-2007 totalled more than $5 billion.

Among big ticket items procured include the 2004 deal for three Phalcon Airborne Warning and Control Aircraft (AWACS) worth over $1.1 billion. Other niche technological equipment purchases have included unmanned aerial vehicles (UAVs), aerostat surveillance radars for the Indian Air Force (IAF), Galil sniper rifles and Tavor assault rifles, Barak anti-missile defence systems mounted on frontline warships and underwater surveillance systems for the Indian Navy (IN).

In addition, India and Israel are engaged in jointly developing long-range surface-to-air missiles (LRSAM) for the IN and medium-range SAM (MRSAM) for the IAF. Both projects are gaining traction and are set for completion in the 2015-16 timeframe. They have also jointly marketed the Dhruv advanced light helicopter (ALH). During Yaalon’s visit, reports note that contracts could be inked for additional AWACS aircraft and aerostat radars worth over $1.5 billion. It is worth noting that the Rajya Sabha was informed in May 2010 that additional AWACS would be procured in the 12th (2012-17), 13th and 14th five year plan periods.

Apart from defence procurement and joint development of weapons systems, there is robust institutional interaction between the armed forces and national security establishments of the two countries. Since 2001, as many as seven chiefs of defence forces from each side have visited the other country for consultations and to enhance mutual understanding. Then Chief of Army Staff General Bikram Singh was the latest to visit in March 2014 from the Indian side, while the Chief of the Ground Forces of the Israel Defence Force (IDF) visited in November 2013.

Service-to-service staff talks are a regular feature of these interactions. Port visits by IN warships are an integral part of defence diplomacy. The Joint Working Group (JWG) on defence cooperation has been active since 2002. A Sub-Working Group (SWG) on Defence Procurement, Production and Development (DPPD) is also functional, as are the JWG on counter-terrorism and dialogue on non-proliferation issues. Given the above robust interactions, the fact that no Indian defence minister has ever visited Israel seems even more glaring. Brajesh Misra was the last National Security Advisor (NSA) to have visited Israel in September 1999. Israeli NSAs have been more frequent visitors, accounting for seven such visits by six NSAs since 2001. Joseph Cohen was the latest NSA to have visited in October 2014.

The highest political level interaction in India was the visit of Prime Minister Ariel Sharon in September 2003 at the invitation of the then Prime Minister Atal Bihari Vajpayee. Prime Minister Narendra Modi’s brief interaction with Israeli Prime Minister Benjamin Netanyahu in September 2014 on the side-lines of the UN General Assembly (UNGA) in New York was only the second such interaction between the heads of government since 1992. Both leaders committed to take the defence relationship further, along with expanding cooperation in other fields like cyber security, water management, agriculture and solid waste management. It is pertinent to note that this interaction came close on the heels of Israeli military action ‘Operation Protective Edge’ during July-August 2014 that led to the death of over 2000 Palestinians.

In the aftermath of Modi’s meeting with his Israeli counterpart, Home Minister Rajnath Singh visited Israel in November 2014. During his meeting with Netanyahu, Singh emphasized the importance of ‘capacity-building and training’ in the arena of homeland security, on which both sides had initialled an agreement. It is pertinent to note that while the Minister’s visit was the first such visit after the visit of the then Home Minister L.K. Advani in June 2000, two Israeli Interior Ministers visited India in November 2007 and November 2011.

The lack of such high-level political engagement between the two countries has been a sore point, especially from the Israeli side. At the joint press conference during former Foreign Minister S.M. Krishna’s January 2012 visit to Israel on the occasion of the 20th anniversary of the establishment of diplomatic ties, Foreign Minister Avigdor Lieberman expressed the hope that such visits would be more frequent. Krishna’s visit itself occurred nearly 12 years after the July 2000 visit of former Foreign Minister Jaswant Singh.

What accounts for the limited high-level political contacts between India and Israel for such an extended period of time? For one, both countries have time and again reiterated that they would not want to ‘advertise’ their close cooperation in the critical defence sphere. A common feature across different governments on the Indian side has been the stress on non-disclosure with regard to this cooperation. For instance, the then NDA Defence Minister George Fernandes informed the Rajya Sabha in November 2001 that it was “not in the interest of national security” to give details about India-Israel defence cooperation. The same argument was repeated many times by UPA Defence Minister Antony, for instance in August 2007 in the Rajya Sabha.

The other contributing factor was the need to be cognizant of the reaction of domestic constituencies ideologically opposed to the strengthening of India-Israel defence ties. It is pertinent to note that the most vociferous opposition to the India–Israel defence relationship has been from the communist parties as well as from regional parties like the Samajwadi Party (SP). It should be emphasized though that the low levels of ‘high-level’ political contacts during the decade of UPA rule did not, however, impinge negatively on the growth trajectory of India-Israel defence cooperation.

The BJP, on the other hand, has been more open to engaging with Israel at the highest political levels as happened during its tenure in power from 1998 to 2004. A similar dynamic is evident during its current term in power, as Modi’s and Singh’s interactions with Netanyahu demonstrate. The BJP has always been a votary of stronger ties between India and Israel and its leaders have time and again (especially while in the opposition) expressed appreciation of the Israeli government’s muscular anti-terrorism and national security policies. The Modi government came to office professing to follow a more muscular stance on national security issues. It has further affirmed that the defence procurement processes would be expedited to cater for the pressing modernization and upgrade requirements of the armed forces. These dynamics are therefore likely to translate into greater political and defence engagement with Israel, a country identified by the MOD as one of India’s ‘main defence partners’.

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