Multiple defence deals with Israel

There is tangible progress towards formalising a number of defence deals with Israel worth $3 billion before Prime Minister Narendra Modi visits Tel Aviv this year. The pacts include the acquisition of 164 laser-designation pods or Litening-4 for IAF fighters plus 250 advanced Spice precision stand-off bombs.

Some headway has been made over the stalled negotiations for an initial Rs 3,200-crore contract for 321 Spike anti-tank guided missile (ATGM) systems and 8,356 missiles. “There was a major difference (of opinion) in the ATGM project cost between the Israeli commercial bid and the much-lower price benchmarking done by the MoD. Over 20 contract negotiation committee meetings have been held till now... the effort now is to close the gap,” said a source. The Army desperately needs third-generation ATGMs, with a strike range of over 2.5-km and fire-and-forget capabilities, to equip all its 382 infantry battalions and 44 mechanised infantry units.

In October 2014, the Modi government had selected the Israeli Spike ATGM over the US Javelin missile system, but the actual contract has not been progressed. The project involves an initial off-the-shelf induction, followed by large-scale indigenous manufacture by Bharat Dynamics Ltd (BDL) to equip the Indian Army. The proposed MR-SAM project between DRDO and Israeli Aerospace Industries (IAI) too, “will be massive.”

Private Sector to manufacture ammunition

On recommendation of the Committee on Strategic Partnership, the Government is likely to clear the manufacture of 7 types of ammunition for procurement from the private sector. This includes main gun ammunition for T-72 MBTs, FH-77 howitzers, grade BM-21 multi-barrel rockets as also electronic fuses.

The Ordinance Factory Board (OFB) have been unable to meet the requirements, and the Government’s step is consequential to the armed forces ‘warning’ that half the 170 types of ammunition held by the Army would not last beyond 10 days of intense war fighting.

BAE Systems select Mahindra as M777 partner

BAE Systems has down-selected Mahindra as its business partner for the proposed in-country Assembly, Integration & Test (AIT) facility for the M777 Ultra Lightweight Howitzer. India and the United States have been in discussions for a Foreign Military Sale (FMS) of 145 M777A2 howitzers for the Indian Army. In 2015, BAE Systems developed and submitted a US Governmentsupported proposal offering a higher degree of indigenisation on the M777 weapon system, including a commitment to establish AIT capabilities in India in partnership with a domestic company.

The selection follows a detailed assessment of Mahindra’s ability to fulfil the requirements and provide value to the M777 India programme and in the future, grow its capability as a strategic partner for BAE Systems in India. Dr Joe Senftle, Vice President & General Manager, Weapon Systems, BAE Systems stated, “As a founding partner of defence manufacturing in India, BAE Systems is pleased to partner with Mahindra on our offer to develop an AIT facility in India. The facility is a fundamental part of the M777 production line. A domestic AIT facility will enable the Indian Army to access maintenance, spares and support for the M777 locally. We will continue to support the two Governments to progress to contract agreement so that we may begin the process of ‘Make in India’ for M777.”

Israeli-Indian JV for small arms in private sector

Punj Lloyd Ltd has established a 51:49 joint venture with Israel Weapon Industries (IWI) to produce firearms in India. IWI has already supplied weapons such as the Tavor assault rifle and Uzi submachine gun to security forces in India, and is an established player in the field. The JV will initially manufacture components for export to Israel, where they will be finished and assembled. The second phase will see complete guns made in India to meet domestic demand.

Manufacturing of small arms in India is presently only undertaken by public sector firms, even though the Cabinet had agreed in 2001 to allow private companies to also enter this area. Punj Llyod, L&T and Bharat Forge were among the first companies to be granted firearm manufacturing licences by the DIPP in 2001-02. Production, however, never began because the Home Ministry did