A slowdown in reforms in India over the past five years–and a virtual pause in procurement–may be about to change following renewed optimism and confidence as the new government shows, for the moment at least, that it is serious. As hectic activity takes place in the ministries of commerce, finance and defense, increasing manufacturing, exports and foreign direct investment (FDI) are focus areas of the new regime.
Indian MRCA competition
Foreign companies can now own 49 percent of Indian defense companies, following a change announced as part of the country’s budget statement on July 10. The budget was presented by Finance and Defense Minister Arun Jaitley, a member of the newly elected government. It includes an allocation of $38.17 billion for defense, a gain of 12.44 percent. Some $15.76 billion of this (up from $13.15 billion last year) is capital expenditure, used primarily for procurement.
A lack of decision-making on large Indian defense procurement deals in the past two years is expected to end with the swearing-in of the new government headed by Prime Minister Narendra Modi. Changes in procurement and offset policies are also expected.
The Indian government last week stalled completion of several major military equipment deals until at least the end of the current financial year on March 31. “We have no money,” said defense minister A. K. Antony at the Defexpo show in New Dehli on Thursday.
Dassault Aviation received a development contract from the French Ministry of Defense for a further upgrade of the Rafale combat aircraft. Designated “F3 R”, the upgrade consists mainly of integration of the MBDA Meteor BVRAAM; the laser-homing version of the Sagem AASM air-ground weapon; and the new Thales PDL-NG laser designator pod. There will also be some improvements to the Rafale’s avionics and defensive systems.
With national elections looming in India, speculation is growing that contracts for the long-delayed Medium Multi-Role Combat Aircraft (MMRCA), as well as the Multi Role Tanker Transport (MRTT), could soon be signed.
Brazil has chosen the Saab Gripen E as its new fighter aircraft, after years of indecision. Defense Minister Celso Amorim and Brazilian air force commander Bg. Juniti Saito announced their preference for the Swedish jet over the Boeing F/A-18E/F Super Hornet and Dassault Rafale after authorization from President Dilma Rousseff. Previous attempts to decide the FX-2 competition failed at the political level.
The Indian Air Force (IAF) has expressed concern that major aviation-related defense procurements will be delayed following the sudden death of Arun Kumar Bal, Ministry of Defense chief negotiator for air acquisitions. “It will take around three months for his replacement. This is a setback for anything the IAF is acquiring,” Air Chief Marshal NAK Browne told AIN.
Russia’s Tactical Missile Corporation is negotiating with Dassault Aviation for the possible use of its missiles on the Rafale combat jets that have been selected by the Indian Air Force (IAF). The corporation, whose Russian acronym is TRV, told journalists attending last week’s Maks air show in Moscow that the Indian air force has large stocks of Russian air-launched weapons, which drives its interest in adapting them to the French warplane.
A target for criticism over delays in projects in the past, India’s largest defense manufacturer, government-owned Hindustan Aeronautics Ltd. (HAL) is undergoing a transformation of its human resource through training and innovative programs. This is focusing on two urgent requirements–the overdue Light Combat Aircraft (LCA); and the Intermediate Jet Trainer (IJT).
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