L&T GETS ORDER TO BUILD LIGHT TANK PROTOTYPE FOR SINO-INDIA BORDER: REPORT

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The Ministry of Defence’s (MoD’s) top council for capital procurement, the Defence Acquisition Council (DAC), has approved an Acceptance of Necessity (AoN), or in-principle agreement, for seven light tank regiments, each with 45 tanks.

According to Business Standard, the AoN needs L&T, the MoD’s development partner, to create one regiment of light tanks, while the MoD obtains the remaining six regiments through the “Make” approach.

The shell of the light tank, co-developed by DRDO and L&T, would house an 800 horsepower (HP) engine designed for high altitudes. The engine will be supplied by MTU, a Rolls-Royce subsidiary in Germany.

A 105-millimetre gun turret will be mounted on this hull, according to the report, which was purchased ready-built from Belgian business, John Cockerill.

Zorawar is a light tank that was created in India. There are 500 Type-15 light tanks in China. China, unlike India, has already manufactured and continues to produce them. Light tanks are ideal for the two countries’ shared border area. In particular, the Ladakh sector, Uttarakhand, Tawang, and Arunachal Pradesh.

Light tanks are well-suited to deliver enough firepower and performance in high-altitude environments. This is the second reason why New Delhi may aim to boost the number of Zorawar light tanks available for purchase.

According to the source, the situation is so tense that New Delhi may not only accept a direct offer to buy Zorawar, but also establish a second production line to expand output. According to the source, private sector companies can also be used.

We’ve all heard of the Zorawar LT, so let us tell you a little bit more about it. This will give you an idea of what India is capable of purchasing. The tank is currently in the works. It is New Delhi’s ambition to begin serial production in 2024. However, this is still debatable.

The tank has a three-man crew, indicating the influence of Soviet design. This most likely means that the filling of tank shells in the weapon system will be automatic, as is the Russian tank’s operating philosophy.

To meet the Indian Ministry of Defence’s criteria, a tank must weigh 25 tonnes. It is expected that the Indian Zorawar LT will be powered by a specially created tank fuel rather than normal tank gasoline. This is not a unique demand of the army, but rather a requirement due to the tank’s operation at high elevations. Because of the heights, the tank will be designed differently and will differ from the ordinary tanks we are used with.

India would most likely seek a long-term cooperation with the tank manufacturer. The plan is to build more battle armoured platforms around its chassis. This will be critical for the entire Indian cost-cutting idea. However, money aside, it is far easier to maintain several platforms built on top of a single modular platform.

AIMING HIGH AND ARMING THE WORLD

A series of government initiatives helped boost the country’s defence exports from Rs 1,521 crore in 2016-17 to Rs 15,920 crore in 2022-23.

C B Ananthakrishnan, chairman and managing director of Hindustan Aeronautics Limited, provided two pieces of news about the home-grown combat fighter hours after a TEJAS pierced the Bangalore sky during Aero-India 2023. One, after reaching the final shortlist, it was eliminated from consideration for an order from the Royal Malaysian Air Force. Second, foreign buyers’ interest in the TEJAS remains strong – Argentina wants 15 aircraft and Egypt requires 20 to begin with. Other countries that are interested include the United States of America, Australia, Indonesia, and the Philippines.

The BrahMos cruise missile was sold to Manila, the Pinaka rocket and launchers to Yeravan, and the offshore patrol vessel Barracuda to Port Louis. Simulators, night vision devices, lightweight torpedoes, armoured protection vehicles, weapons finding radar, high-frequency radio, and coastal surveillance radar are among the other items exported. Riding high on such sales, India’s defence export increased tenfold in the last seven years to about Rs 16,000 crore in FY23.

According to the Ministry of Defence, India exports military hardware to 85 nations, including Akash air defence missiles and 155 mm advanced towed artillery systems, the beneficiaries of which are unknown. The identities of countries with which contracts have been made, according to Ajay Bhatt, minister of state for defence, cannot be disclosed for strategic reasons.

The rise is undeniably commendable, and India may well be on track to meet the immediate target of Rs 35,000 crore in defence exports (from 1.75 lakh crore in defence manufacturing) by 2025. However, when viewed globally, the figures are insignificant. Jordan ranks 25th among the world’s top 25 arms exporting countries, with 0.2% of the worldwide export market. India is not included on the list.

“Our exports are not even a drop in the ocean at $1.8 billion or $2.0 billion, as the global defence business is worth $630 billion,” said S P Shukla, head of the Society of Indian Defence Manufacturers. “Our Government and Services will have to find suitable means to promote Indian military platforms and weapon systems to all friendly foreign countries.”

Since 2014-15, the government has streamlined defence export procedures and made it plain to defence public sector units and the ordnance factory board (now corporatized) that a portion of their revenue must come from export. The public sector behemoths, which have thrived for years on captive clients, now face the challenge of making their products world-class and cost-competitive if they are to go worldwide.

The actual growth, however, would have to come from the private sector, which started late but is being urged by the Centre not just to “make in India,” but also to “make in India and export to the rest of the world.” The draught Defence Production policy has been amended to become the draught Defence Production and Export Promotion Policy (DPEPP), which is now being reviewed by a group of ministers before being sent to the Cabinet for approval.

“The DPEPP has placed a strong emphasis on developing a robust defence industry that includes the private sector on a level playing field with the public sector in order to address the nation’s targeted growth aspirations,” said Arun Ramchandani, chair of the FICCI Defence Committee and executive vice president and head of L&T Defence.

The road ahead is littered with obstacles such as a lack of R&D and the need for large amounts of finance. However, industry insiders believe that a start has been made and that the government should continue to hold the reins for a while longer. Another strategy to boost exports is to offer components to the worldwide supply chains of armament manufacturers, as Indian companies would build those components anyhow as part of an offset deal if the original equipment manufacturer won an Indian contract.

“Recent policy developments in the space sector have been extremely positive for the industry.” “The goal should be to create at least ten companies with annual revenues of $5 billion USD in these sectors,” Shukla said.

THE MINISTRY OF DEFENCE ISSUES A RFP FOR THE PURCHASE OF 439 LIGHT VEHICLES (ELECTRIC).

Under the Buy (Indian-IDDM) category, the MoD has issued an RFP for the procurement of 439 (Indian Army-415 and Indian Air Force-24) Light Vehicles (Electric) and 35 x Fast Chargers (Indian Army-29 and Indian Air Force-06).

Light Vehicles are permitted for use by formations/units of the Indian Army and Indian Air Force to offer necessary mobility in the country’s topography. The current fleet of Light Vehicles of the IA and IAF is based on Internal Combustion Engine (ICE) technology, which is dependent on fossil fuels and results in carbon emissions and pollution. To stay up with future trends and to support government plans to attain net zero carbon emissions, the Army and Air Force’s vehicle fleets must include electric vehicles with quick charging capabilities.

Under the Buy (Indian-IDDM) category, the MoD has issued an RFP for the procurement of 439 (Indian Army-415 and Indian Air Force-24) Light Vehicles (Electric) and 35 x Fast Chargers (Indian Army-29 and Indian Air Force-06).

TO PROMOTE INDIA’S DEFENCE EXPORTS TO FRIENDLY COUNTRIES, THE GOVT MUST INSTITUTE A FOREIGN MILITARY SALE ENTITY.

According to him, the defence manufacturing sector continues to face high capital costs for investments in modern production facilities.

According to Arun T Ramchandani, chair of the FICCI Defence Committee and Executive Vice President and Head of L&T Defence, while India’s arms exports have increased, the defence manufacturing sector continues to face high capital costs for investments in advanced manufacturing infrastructure.

India’s defence exports increased substantially from Rs 700 Cr in 2015 to Rs 10,700 Cr in 2020 and are now expected to be about Rs 16,000 Cr in 2023.

The government has taken a number of measures to improve defence exports, the most important of which are the simplification of defence export processes, the formation of a separate cell in the Department of Defence Production to coordinate export-related actions, the emphasis on enforcing offset obligations, specific initiatives by the Ministry of External Affairs through embassies in friendly nations, and encouraging increased private sector participation in the sector. To encourage defence exports, the government has also provided certificates for all trial-evaluated equipment and conducted trials for overseas buyers. Furthermore, Indian defence attachés abroad have played an important role in boosting defence exports.

The draught Defence Production Policy (DPP) has been recast as the draught Defence Production and Export Promotion Policy (DPEPP), which has already been reviewed by the Empowered Group of Secretaries and is now being considered by the Empowered Group of Ministers before being presented to the Cabinet for approval. To achieve the nation’s targeted growth ambitions, the DPEPP has placed emphasis on developing a vibrant defence industry that includes the private sector on an equal playing field with the governmental sector.

The public sector (DPSUs, Ordnance factories, and Brahmos Corporation) contributes the majority of exports. Why isn’t the private sector more involved? What challenges does it confront when the private sector enters the defence manufacturing industry?

The private sector has played a major and active part in defence exports by providing aerostructures, light armoured vehicles, armoured protection solutions, and other essential subsystems. With considerable orders for artillery guns, rocket systems, and other larger weapon systems, including auxiliary vessels, it is now playing an increasingly important role in defence exports.

The public sector, which provides air, sea, and land-based combat systems and platforms, has been able to capture a larger share of current exports. With the increased emphasis on indigenisation and the realisation of systems based on indigenous design, as well as improved Public Private Partnership, we anticipate a major increase in private sector defence exports.

The key challenges that the defence manufacturing sector continues to face are high capital costs for investments in advanced manufacturing infrastructure, massive R&D investments, stringent quality requirements, long gestation periods for contract realisation, and a lack of order continuity.

Following significant changes in procurement laws and procedures, the Indian defence manufacturing sector is currently on the verge of a tipping point. A few notable measures include prioritising the acquisition of capital products from domestic sources under the Buy Indian (IDDM) category under the Defence Acquisition Procedure (DAP)-2020.

Capital Acquisitions over the Long Term Integrated Perspective Plan (LTIPP) (2012-27) are expected to provide a Rs.4 Trillion potential for domestic industry between 2022 and 2027. The proposed Defence Capital Acquisitions are worth Rs.15 trillion over the next decade, with the goal of increasing defence indigenisation from 35-40% to 70-75%. Domestic industry will receive 75% of the capital procurement budget (Rs 1 trillion) in 2023-24, up from 68% in 2022-23.

A strong MSME sector, a huge technical staff base, and improved infrastructure and logistics in the country would all be enabling factors for the country to flourish in defence manufacture.

The government has set an export target of Rs 35,000 crore by 2025. Is it feasible? If not, what should the government do next?

Friendly countries are reported to be provided Lines of Credit. According to industry experience, entire systems or platforms are preferentially nominated to DPSUs claiming track record that was previously denied to the private sector through nominations of domestic needs. By including the private sector across the board and awarding them the exports of items already sold to the GoI, the End User would have a greater choice in terms of a competitive offering and develop volumes. The government could also think about making the LoC process under the EXIM bank more user-friendly.

The government should also consider establishing a “Foreign Military Sale” organisation to handle exports to friendly countries. This would benefit the Buyer countries, the Seller, and the Government of India by improving price discovery and risk reduction.

What are the issues that the government must overcome in order for India to become a major hub for defence manufacturing?

The government should maintain its emphasis on self-reliance by focusing on system of systems and platform development under Make 1 (government-funded development programmes), developing capabilities in design and technology development (IP Ownership), moving away from reliance on government-owned organisations for design, development, production, and technology transfer, and developing indigenous defence solutions through maturing Indian industry – supported by the government for development and hand-held by the government.

To help build a strong defence industrial base, the government can offer PLI programmes, capital subsidies for investment in defence technologies and manufacturing facilities, and enhancements to defence testing infrastructure. The availability of highly trained labour, the development of scientific and engineering infrastructure, and the adoption of cultural characteristics with a high quality focus will all help to strengthen the defence manufacturing ecosystem.

To encourage R&D in defence, the government can provide tax breaks, ensure that 25% of government R&D funds go to industry, start-ups, and academia, and provide supporting IP regimes. Setting up a professional Procurement Wing in MoD Acquisition, implementing the QCBS process to enable selection of industry partners based on merits of capabilities and competencies, and ensuring a time-bound acquisition process with accountability for delays can all help to speed up and simplify the acquisition process.

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