An IDC Report


New Delhi, 20 February 2002

DEFEXPO 2002 at Pragati Maidan with 16000 sq meters spread with weaponry and systems and CII beaming for doing a good job, got off to a flying start in New Delhi with foreign defence companies showing top of the line wares and delegations doing the rounds in excellent Delhi weather .The Indian defence companies were there in strength to show that India's home grown self reliance route with Russian help is about to take off, for missiles and ship building at least . This can happen in other fields also. IDC can state with confidence that if India's Services cooperate with the 8 Defence PSUs, 39 Ordnance Factories and Private firms like TATAs, Mahindras and L & T and the DRDO and get more cohesion and synergy, Indian Defence Industry can blossom because the smaller players are doing their bit and this is evident at the show. Money is not the problem so read on.

Yet this cooperation is the more difficult. This was evident at the show. The body language and the way the uniformed Officers went about at the show without offering suggestions or insights of what ails them or what they would like was evident and when a reporter asked Defence Minister George Fernandes at the Press Conference what was the status of the 66 AJT HAWK DEAL and why it was delayed as Rs 13,000 Crores ($3 billion) lie unspent from the Budget, the answers which are important are quoted below verbatim:

  • On AJT: “AJT is where it was. Too many people are getting involved in the deal and there are too many interests who are deciding what is needed for the Armed Forces”. (IDC can speculate that persons more senior or more powerful than the Defence Minister are being referred to and IDC is still analysing whether it was just a flippant statement or has deeper meaning. In any case AJTs appear stalled and BAe are there in full strength as are the Czech who have offered the L 159B.)

  • On unspent Budget: “The unspent amounts will be spent on agreements in the pipeline. The figure is not correct but some money will remain unspent”. (IDC analysis is that as much as Rs 5000 crores could remain unspent and it will help improve Yashwant Sinha's fiscal deficit figures. MOD has not been able to order the Gorshkov, AJTs, 155mm Howitzers, VIP Transport aircraft and has delayed or frozen a few programmes.)

George Fernandes flagged off the five-day international defence exhibition with a pledge to slash New Delhi's dependence on military powers and turn the ailing domestic defence sector into a money-spinning industry. Around 236 firms from 25 countries are at the exhibition. Israel has sent a large delegation from its private industry like Tadiran and IAI state-run firms, is the most impressive and expected to press New Delhi to buy the 155 Gun from SOLTAM The ATMOS was on display and three Phalcon early-warning aircraft of the type which Israel was previously prevented from supplying to China following strong US objections –– and Air to Air missile as they already have deals worth $2 billion sewed up.

The main Highlights were the DHANUSH which is the Prithvi well displayed and for the first time and DRDO revealed how Larsen and Tubro helped make the Stabilisation platform in the deck cut on the OPV and the missile took off from INS Subhadra (P 51) with the Larsen's stabilisation platform. Media says another test is timed with DEFEXPO. L and T also showed off the Triple Tube Launcher better than the imported Italian one and we can vouch for it.

BRAHMOS missile was there in full model to show that Indian DRDO Labs have done wonders with the missile by providing on board computers and the Guidance and by 2003 these fantastic missiles will be available to the three Armed Forces made in India. WOW.

Mahindras showed off the Bolero with ELTA’s EL/M 2129 Surveillance Radar on top and the Army must be kicking itself for not buying this sort of mobility and using man packs. IDC now understands why the Army needs 38 more battalions of Rashtriya Rifles when what they really need is some technology.

The world's top arms makers were at the opening ceremeony even if they had come only as visitors enroute to Asian Aero Space 2002 at Singapore They all renewed their offer of hardware to India as George Fernandes at his press conference pledged to turn the country into a production base for modern defence equipment for overseas sales.

Defence producers from Britain, France, Israel, Russia and South Africa and the new entrants Singapore, USA and Poland, offering wares from submarines to aircraft carriers, and artillery units. This time around the Buzzwords are to forge manufacturing partnerships.

(PS -  IDC can offer 30 high quality photos of the DEFEXPO with full publication rights for $100 including courier charges.)

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