An IDC Report


New Delhi, 16 June 2005

The 46th Paris Air Show 2005, one of the largest and the most impressive international exhibitions of defense and civil aircraft and spacecraft, began from June 13 to 19 in Le Bourget, a suburb of Paris. This year India is there with the Air Chief and a Plans team. They are in demand for the 126 fighters and other planes India is buying. There are also new rules now for big suppliers and they will have to invest 30% of their contract in offsets.

The bureaucrats will have a hey day all over again. Offsets are to be on a case to case basis and the Armed Forces should say that war should also be on offset basis. In free economies to bring in rules like these is harakiri as the Japanese would say but this is India! First no Agents so people on top made money now off sets. The French will look to grease Indians for the Mirage 2000-5 and RosboronExport State Corporation, will push for the MIG 29M2 and new fifth generation fighters and transport planes and helos. RosboronExport is the organizer of the Russian exposition and unites under its auspices more than 40 enterprises of defense industries with 250 items. The Indian civil aviation team and private airlines are also here buying Air Buses and Boeings. Americans don’t know how to look after Indians but will push the F-16s in their own Iraqi way.

Among the leading world exporters of military aircraft Russia maintains a solid position. Their share of aviation export and space services contributes over 60% of total volume of RosboronExport supplies, which in 2004 reached the all-time high figure of $5.12 billion. Their offset, transfer of technology, license production and maintenance programmes are also becoming more competitive. Russian services in the space field are meeting the ever-growing demand in the international market. The delivery of the last batch of state-of-the-art multifunctional Su-30MKI aircraft to the Indian Air Force was successfully completed in November 2004 within the terms of the contract. The unique feature of the project was that Russia performed export supplies of on-board avionics produced in cooperation with Indian, French, South African and Israeli companies including 2 Indian FCS Computers. Malaysia is their next customer.

Scope and geography of Russian aircraft supplies are also growing considerably. Recent signing-up of a contract for supply of Mil-family helicopters to Venezuela, commencement of supplies of helicopters to Czech Republic and implementation of the contract for helicopter supplies to Malaysia serve as an example to that. Cooperation between Russian aircraft building enterprises and European partners (SAGEM, THALES, MBDA, SNECMA, and BAe Systems) has recently become more active. There are certain developments in Russian–French defense and technological cooperation. In particular, joint efforts are undertaken in order to promote MiG-AT trainer with SNECMA engines to the third world nations’ markets. This year saw commencement of joint development with SAGEM of the LINS-2000 laser inertial navigation system.

The Russian exhibition pavilion displays exhaustive information about the whole number of export models of the Sukhoi family aircrafts and primarily about Su-27SKM 4+ generation multifunctional fighter, which China has, whose full-scale live specimen is  being demonstrated at the exhibition. This aircraft boasts high manoeuvrability, the best flight performance in the world and provides engagement of the whole range of aerial, ground and sea targets by high-tech guided weapons. One can also become familiar with performance characteristics of Su-30MK multifunctional fighter, Su-32 fighter-bomber, Su-39 attack aircraft fitted with Kopye radar system, Su-47 experimental aircraft with forward-swept wing, Su-33 shipborne fighter, etc. The MiG-AT combat trainer and MiG-29 fighter and the full-size sample of specialized combat simulator (STBP-29) and the MiG-31E fighter-interceptor will also be of special interest for Air Force representatives of certain foreign nations. Yak-130 combat trainer has a prominent place at the Russian stand. Being a dual-purpose aircraft, it can be used as a trainer and a light strike aircraft as well. The Russians also have a whole range of helicopters on display.

Late News.

As mentioned earlier it will be mandatory from now on, for all foreign arms companies winning contracts worth more than Rs 300 crore (Rs 3 billion) to necessarily invest 30% of the amount in the country as direct offsets. This is a major change carried out in the defence capital procurement procedure manual released by defence minister Pranab Mukherjee in New Delhi. Now, under the new procedure, foreign arms majors will also have to sign an integrity pact to ensure that no "unfair and unethical" means are employed in winning the deals. The revised manual has also broad based the qualitative requirements and inserted a standard contract document to make for speedy procurement. Releasing the revised manual, the defence minister said, "We want to leverage our high purchasing power to help the domestic defence industry". But the good news is the defence minister asserted that this year’s capital outlay expenditure of more than Rs 34,000 crore (Rs 340 billion) would be fully utilised. "We may have to ask for supplementary grants under this head as we want to speed up modernisation," Mr Mukherjee said. This means the politicians will gain and the military should get what they need and the Navy needs a submarine contract soonest and some second hand ships. The US has them and INVINCIBLE is available.

Mr. Mukherjee said decision makers in the ministry and service headquarters had been given a definite period for armament acquisitions. On the integrity pact, which also would have to be signed by foreign arms suppliers, he said this was the new emerging trend in the global arms market and under it both the suppliers as well as purchasers would have to sign before negotiations were opened for any deals. The revised procurement manual also sets out joint qualitative requirements for the purchase of weapon systems common to the three services.

The minister said the manual had been prepared incorporating suggestions by central vigilance commission, CAG, manufacturers and users. The minister said the procurement manual might be further revised once the second part recommendations of the Kelkar Committee are received. No doubt these will be made to suit the bureaucrats and politicians.

Air chief S P Tyagi would spend a week in  France where he would witness the Paris Air Show and meet the IAF personnel participating in the Indo-French exercise 'Garuda-II', as Su 30s and an IL 78 are there. Tyagi would hold a meeting with his French counterpart and would visit the Istres air base, where the IAF contingent is participating in the military exercise with Sukhoi-30 aircraft. At the famed air show at Le Bourget which is one of the well-known global expositions of aircraft, aero engines and other aviation related equipment of both civil and military use, the Air chief's visit would attract considerable attention as the IAF has already issued the Request for Intent (RFI) for the acquisition of 126 fighter aircraft. Major aviation firms, which could respond to the RFI, like Dassault (France), SAAB (Sweden), Lockheed Martin (USA), Boeing (USA), RAC MiG (Russia) and several others, are participating in the air show.

Meanwhile, the public sector Hindustan Aeronautics Limited is showcasing its multi-role Intermediate Jet Trainer HJT-36 at the Paris Air Show. The HAL is looking forward to offer the aircraft to the armed forces the world over. This is the first time that HJT-36 is being displayed at a major international air show. Besides a static display, the HJT-36 would also participate in the flight display at the air show and would be flown by HAL's chief test pilot, an IAF veteran, Sqn Ldr (Retd) Baldev Singh. We saw the plane fly at Aero India and it was a beauty. The aircraft, which has already been the cynosure of eyes through its exhilarating display at Bangalore's Aero India 2005, is planned to replace the Kirans which are currently used for stage-II training of pilots. HJT-36 can be used for general flying, navigational formation, cloud flying, tactical and night operations, basic air-to-air weapon aiming and air-to-ground weaponry. It can fly at a maximum speed of 750 kms per hour with an altitude ceiling of 9000 feet. The aircraft prototype, which has already completed 140 sorties last month for flight evaluation, is planned to get operational clearance by 2007

The UK aerospace industry and civil industries and the aircraft manufacturers were out in force at the Paris Air Show 2005. The UK Pavilion contains 111 companies and seven regional trade associations promoting their skills and expertise to a global audience. A large number of UK based companies are exhibiting and will receive the active support of UK Government agencies, UK Trade & Investment and the Defence Export Services Organisation (DESO). Dr Sally Howes, Director General, Society of British Aerospace Companies (SBAC), said, “Paris is the premier aerospace event of this year and UK industry is well represented. The UK companies are being supported by regional trade associations and national agencies, to ensure that the UK continues to win business world-wide. Regional trade associations are making a tremendous contribution to the global success of UK companies. Their work to promote skills, innovation and productivity are helping to ensure that all companies, particularly SMEs, have a stake in an increasingly competitive global industry.'

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