Export of Brahmos Missile to Philippines
1) Last month in January 2022 the Brahmos Aerospace Private Ltd. (BAPL) concluded contract with Philippines to supply 3 batteries of sea version Brahmos supersonic cruise missile over USD 374 million. It is a Government to Government deal. The biggest such export deal concluded by any Defence Production entity in India since Independence.
2) BAPL is a JV of DRDO & NPOM of Russia, the first such organization in the Defence Sector. The shareholding pattern of BAPL enabled it to be categorized as a Private entity. This character of BAPL has provided it required Autonomy, Flexibility and Professionalism as compared to its Peers in Government owned or Govt. associated sectors. Most important BAPL is epitome of synergy of working together of Indian and Russian Technocrats.
3) The two owners of BAPL brought their respective expertise to this JV. The Indian side contributed with its rich experience as result of successes in IGMDP, Space & Atomic Energy Sectors, while the Russian side contributed with its formidable and the worlds best know how in Missile area. Over and above the motivation and commitment of the Founders and various Stakeholders of Brahmos Orgn made things happen. Least to say the strong support BAPL got from all the Govts. till date.
4) Way back in 2002 I had the privilege of being associated in facilitating formation of BAPL in MOD during my stint as Dir responsible for Tri Service Coordination. Therefore I too had small role & contribution in estabilishing BAPL for which I feel proud.
5) The remarkable features of Brahmos like high cruise speed, payload carrying capacity, maneuverability, multiplatform operations (sea, air land), high reliability etc had been recognized by all concerned. All this has prompted several nations to consider this missile.
6) Though various Nations evinced keen interest in Brahmos since its initial days it took time for the export deal to fructify. It is well known fact that any Defence deal esp of such high values either for import or export take lot of time. This is because of large number of issues and strategic considerations involved for such critical weapon. However this time we succeeded in clinching the deal and signed contract with Philippines.
7) What this export order means for our Defence production eco system
i) First and foremost it is massive boost in our confidence that we too can do it.
ii) The realization by the defence production eco – system that they can now look at other Armed Forces as their customers thereby diversifying their customer base, which is essential characteristics of any maturing defence production eco system.
iii) In the process of meeting requirements of other Armed forces, we learn quite a lot which ultimately help widen our knowledge about their operating considerations etc, All this will be invaluable input for further product development and improvement. In this regards it is worth highlighting that we have supplied OPVs and other sea borne assets to various countries. This has helped us improve our capabilities in Marine assets design, construction, upgradation etc based on which today we are able to build our own Aircraft Career, Nuclear Subs etc
iv) It goes without saying that there will be earning of revenue, boosting of employment etc.
v) With this export push our Defence production entities will be propelled to invest in R&D, product improvement etc in order to keep abreast of their Global competitors. This will in long run put our defence production entities at par with their Global counterparts.
vi) This deal will reinforce our learning curve in Defence export. Thus enabling us understand how to crack a Defence export Deal. Provide insight into process of converting a ‘lead’ into a ‘concrete deal’. Exports in defence is a new area being pushed by the Govt. which is a very welcome move. Every export case is unique due to issues and considerations specific to the case. Therefore one has to learn the hard way only in dealing with Defence exports.
8) Any defence deal has strategic connotations besides its commercial considerations. This deal is no different. Being the best of its class Brahmos will surely give edge to Philippines to defend its territory. Further we will be able to send appropriate message to China. Another gain will be increase of our influence in the Region of South East Asia. Defence Production has been weak link in our aspirations to emerge as a Major Power to be reckon with. Being a major weapon exporter will over come this handicap.
9) Though our achievements in Missile, Nuclear and Space sectors are notable and recognized internationally this deal will give real taste of our capabilities to other nations. It is truly said that proof of the pudding lies in its eating.
10) Some Learnings from this Defence deal are :-
i) Of all the factors and conditions which played role in success of this deal I am of the opinion that the overall structure of the organization is most critical factor. Thus we must have more Defence production entities with similar governance structure which will provide it due flexibility, autonomy, dynamism and professionalism without any unnecessary interference by Govt bodies. It is worth mentioning that Indo Russian Rifles Pvt Ltd (IRRPL) a JV of Kalashnikov ( Russia) and OFB (India) created in early 2019 is another example of Indo Russian weapon development and production collaboration. It will manufacture state of the art AK-203 assault rifle. However IRRPL is slow to pick up and much is yet to be seen in its output .
ii) Need to have dedicated professional body to guide and steer defence exports. This body may have defence technologists, appropriate bureaucrats, users ( armed forces), diplomats, marketing experts , Industry reps etc. Besides the Govt should throw its weight behind in the process of negotiating major defence exports.
iii) Our experience of running programs like Operation flood, Metro Rail network etc has indicated that commitment and mission oriented approach are major factors for success of these Programs besides the Charismatic Personalities leading these Missions. The personality who led these initiatives were like Homi Bhabha for Nuclear, Kalam for Missiles, Kurien for Op flood, Sridharan for Metro Rail system, Dr Sivathanu Pillai for Brahmos. Etc . These dedicated and empowered individuals made all the difference in their respective projects. Therefore in our mission for Defence Production, Defence Exports etc we may identify such enlightened professionals and put them at the helm of affairs in that mission and empower them appropriately. Further they must be given required autonomy and flexibility etc while bureaucracy be restricted to supporting role only.
iv) It should not happen that our efforts to increase Defence exports see some long gap. Therefore it is prudent to keep ready pipeline of such big deals with one following the other. Strike iron while hot. This continuity is essential for World to see Indian Defence Sector come of age.
v) Present composition of our defence exports orders is of small and medium value orders. In order to be well recognised defence exporter the ticket size of the deals must be high say above USD 250 Million may be USD half a billion.
vi) Next big opportunity for a similar deal is for Tejas LCA. Royal Malaysian Airforce (RMAF) has shown some interest in it. Currently Tejas has been taken to Singapore Air Show wherein several participants are there. Tejas will be on display besides it will show its capabilities too in flight, exercises etc. Tejas LCA fulfills all major requirements of RMAF LCA and prices are also competitive.
We have to aggressively work for this deal which is having stiff competition from LCAs of China, European and other Countries. Our pitch for this case has to be focused and supported actively by concerned wings of the Government of India namely MEA, DDP, Air Force, DRDO, Min of Finance, Min of Commerce etc. It must not be left alone for HAL being the producer. Government may consider forming cohesive group from amongst its officials as well as non-officials (to give insights into issues outside Govt domains) to steer the pitch for this deal. We may also consider linking this sale with our trade and other considerations vis-à-vis Malaysia. It goes without saying that same may be taken up in our bilateral engagements at the top most levels (includes both Political and Official). This pitch has to be taken up in all seriousness and not halfheartedly and certainly be not left alone to officials. The learnings of Brahmos deal must be appropriately applied here.
If Tejas deal comes thru then it will not only be big boost in International recognition of our Defence Production capabilities but a big strategic win as it will position our Aerospace capabilities in a very solid position (already Indian aerospace components producing competencies have been appreciated by Major Aerospace Companies like Lockheed, Boeing etc).It will go long way in creating positive perception about India produced weapons and its engineering prowess.
vii) BAPL is an ideal example of absorption of TOT brought in by its Partners namely DRDO and NPOM. The knowledge gained thus was leveraged to improve the product and keep it ahead of its peers in this fast changing landscape of technological advancements including advent of new age technologies of AI, ML, VR etc. The think factory SAPI draws its inspiration from same.
Budget 22-23 :- New Initiatives to strengthen/boost our Defence Production Capabilities.
In order to boost our domestic Defence Production capabilities various measures etc are announced regularly on and off the Budget period. Several steps like Positive and Negative lists etc have been taken to give much required fillip to local industry.
Budget 22-23 provides for two additional measures viz reserving 68% of Capital Procurement Budget for local industry and opening Defence R&D for domestic Industry, Start-ups and academia by earmarking 25% of Defence R&D budget for same in collaboration with DRDO thru SPV.
In the MoD Demand for Grants Demand No21 (Capital Outlay on Def Services), adding the relevant Central sector schemes/Projects indicates that total Capital acquisition for Army , AirForce and Navy is Rs 1,23,121 Cr in BE 22-23 up from Rs 1,11,811 Cr in BE 21-22. Thus there is increase of Rs 18,872 Cr worth orders for local Industry as per BE 22-23 over what was available to local industry as per BE 21-22 ( ie 58% of Capital Acq Budget). It is certainly going to motivate large number of MSMEs to work hard to get these orders. These items could be in form of finished weapons or increased percentage of local sourcing etc. This move in Budget 22-23 will impel the Services, DPSUs and Pvt Sector to indigenise fast to comply with this provision. It will definitely give push to local production capabilities.
A word of caution- Defence Production is a slow moving sector as it takes time to create infrastructure to manufacture, establish production lines, prove the product etc. Therefore it will require concerted efforts of all the stakeholders ie User, Producer etc .
Further the indigenisation of particular part or weapon may not go long way as whenever the specific weapon is phased out or there is no ( or reduced) requirement (even temporarily) or there are design changes introduced, the local Industry will be left in lurch in the first go if it is not able to adapt to changes(which is quite tough for MSME as it requires resources etc).
In view of foregoing it is important we find ways to offset the negative impact on the MSMEs in case orders deplete in due course. This move will go long way to retain the MSMEs which have been developed for Defence Production as these are valuable assets in our Def Prodn eco system.
It is here we in SAPI have emphasised to go for comprehensive development of our own conceptualised, designed, developed and proven products. This will provide flexibility to the designers and developers to hand hold the industry to change to newer products in case design upgradations are done or some newer versions are made. ( SAPI will be focussing on this aspect in greater details in its webinars etc in due course ).
The other initiative is earmarking of 25% Def R&D budget for outside DRDO organisations (including Pvt Sector, Academia etc). The guidelines and details of the scheme are not available yet on the website. The extracts of FMs speech are reproduced as below-
“ Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with DRDO and other organisations through SPV model. “.
As this is a new initiative without any precedents in Defence Sector (this collaborative method of R&D is in place in ISRO for very long and has given effective results. It is one of the factor which has contributed to overall success of ISRO ) we have to do lot of ground work to get on board appropriate Organisation to collaborate with DRDO and form SPV. Prima facie we forsee it as a good move and welcome same.
Any innovation is saddled with risk. Therefore issue of ROI on the investment made for innovation/R&D should be appropriately considered. Risk must be factored.
SAPI has been promoting absorption of TOT obtained from Foreign OEMs. Once the TOT absorption process is complete or nearing completion, the concerned Entity ( be it a Pvt sector or Public Sector ) may start working on upgrading the original system or planning for Next Gen of the original eqpt etc. In this effort the collaborative R&D with DRDO will be very supportive and will develop synergy of vast pool of Def R&D Knowledge and resources with the experience and Knowledge gathered from ToT. Also this initiative will facilitate development of R&D core competencies outside DRDO thus enlarging the resource pool for Def R&D. In US Private Sector ( including Academia etc) is hugely involved in R&D. This initiative provides us ray of hope to broaden Def R&D base besides adding variety to it. We are quite optimistic on it.
We await detailed guidelines for this scheme to so it clears our queries on IP ownership, funding pattern etc .
Provisions for Border Management in Budget 22-23.
Budget is an annual exercise for which we eagerly look for as it sets the roadmap at least for one year. Our long wait was over with the Budget announcements on 1st Feb 2022. Though several key announcements were made we will restrict to the provisions made for strengthening Border Security.
It is the first time that few major but specific interventions were announced besides the routine budgetary support provided for regularly for Border Management.
While in the MHA Demand for Grants Capital outlay for Border Infra & Management increased from BE of Rs 1921Cr (RE Rs 2386 Cr) in 21-22 to BE of Rs 2517 Cr in 22-23, in the MOD Demand for Grants Gross Budgetory Support for BRDB works increased from BE of Rs 2500 Cr (RE Rs 3500 Cr) in 21-22 to Rs 3500 Cr in 22-23.
The BRDB mainly caters to Indo China Border while MHA caters to all the Borders including Coastal Security. The increase in the BE for Border Infrastructure is mainly on account of Organisations fully utilising the BE of 21-22.
However there is need to hasten the Infra creation especially on ICB and IMB. Time has come to expand the quantum of works taken up by these organisations even it is a one time measure and adopt Fast Track Measures (akin to fast Track Weapon Procurements ) to plan, appraise, approve & execute these projects. We must keep in mind that we cannot afford the luxury of wasting even a single day in Border Infra creation.
Notwithstanding the abovementioned announcements what really caught our attention were two new major schemes provided for in the budget viz Parvatmala and Vibrant Villages. It is a very welcome move. Large number of villages especially those in close vicinity to Zero line have missed out to winds of development seen in the Towns etc prompting villagers to migrate to Towns which are usually away from zero line thus we see reverse migration or Thinning of Population from the border, which makes area near zero line as no man land thus making it vulnerable. This is especially seen on ICB. This is an avoidable situation. The empty villages on un-demarcated border may draw attention of PLA Patrols which have tendency to trespass and creep into our areas. Besides these villagers are our eyes and ears and act as frontline to keep our Forces (Army and ITBP) posted with movements of the PLA Patrols.
Parvatmala though a small initiatve ( 60 Km Ropeway to inaccessible places) will provide much needed connectivity to such remote areas. The Vibrant Villages scheme will provide basic facilities like Schools, Health Infra, Housing, Power, Drinking water, Sanitation etc in a very targeted manner to these villages. With their needs taken care of, hope the villagers will not be considering the option of moving to hinterland where the life is more convenient than in these Zero line villages. These initiatives will provide a multiplier effect to over all Border Security.
Therefore these Schemes if implemented effectively and in its true spirit it may go long way in strengthening the Border Management.
Comments of SAPI on the article published in Trak.in titled ‘This Indian Company Has Made Indian Coasts Impenetrable With NavIC Based Satellite Surveillance System’
Coastal Security is an integral part of Comprehensive Border Management Strategy. Fishermen are the weakest link in the entire Coastal Security architecture. Its due to very long and widely dispersed Coastline of 7500 km with 1382 big and small islands involving 13 States and 3 UTs. Besides guarding Territorial waters of 12 nm and contiguous zone beyond it. Then there is International Maritime Boundary Line (IMBL) which is adjoining neighbouring countries. All this makes the task of Coastal Security complicated.
There has been requirement felt all throughout to have some transponder which is satellite controlled for ensuring connectivity over the horizon and track the vessels. For large vessels (above 20 mt.) there is already provision as per International Conventions to have tracking system on board, however issue is with sub 20 mt. boats. Various countries have adopted various approaches to monitor smaller boats. Govt has been trying to evolve an appropriate design of Automatic Identification System (AIS) transponder which is effective in tracking all types of boats near coast as well as high seas. Several attempts have been made to come up with appropriate transponder design but have not been so successful.
I would like to mention about another usage of such Transponder. It can used in warning boats while it is approaching IMBL as crossing same may put the fishermen at risk of being arrested by other country’s security for unauthorised entry in their territorial waters. These incidents cause diplomatic crisis and give rise to avoidable issues at national level.
The Navic satellite based VTS is a welcome step in this direction. As TN has very close IMBL with Srilanka the incidents of fishermen crossing to other side are frequent (sometimes causing diplomatic crisis). Hope VTS is an effective way to control the movement.
Dept of Border Management under MHA is tasked with the mandate of Coastal Security. MHA operates Coastal Security Scheme (CSS) to support various states. The Phase 1 of the scheme is long over while Phase 2 is also on verge of completion. The Phase 3 is yet to take off. In CSS I &II there has been provision to extend targeted support to states for Capital ( infrastructure, boats, equipments etc) as well as recurring expenditure ( fuel, training etc). Besides CSS is a platform for interaction of all the stakeholders which promotes synergy as all of them meet periodically in review. As the article highlights that there is not much support forthcoming for VTS from the Coastal states I feel that CSS can consider VTS feasibility etc and if acceptable within its guidelines it can support this innovation.
Our comments on the 'Wire' article:--'By boasting about indigenising nuts and bolts MoD again misses forest for trees '
Link of the article is:- https://thewire.in/government/defence-ministry-indigenisation-atmanorbharta-nuts-bolts
The author very rightly raises a pertinent point that by focussing on such items we are missing the point ie developing comprehensive capability to manufacture weapon system. We as a nation lack this specialisation and acquiring same will go long way to cut our perinnial dependence on Imports of Weapons. Besides this specialisation adds to our National Capabilities.
Therefore there is necessity to develop skill and facilities for complete weapon design involving conceptualisation, designing, developing prototype, conduct trial and prove the weapon system. This process will enable us to get experience in systems design just like India has emerged as power house of electronic systems design . Design capability is the surest way to quickly get insights in the comprehensive system design . The designers alongwith producers should formulate reliable , efficient and cost competitive supply chain considering the domestic & global sources. This process will provide opportunity to MSME etc to come forward to develop and produce components which are the best in class. The competition with global peers will bring out the best in the domestic Industry. On the contrary if domestic industry is protected then its quite likely that its products will not be benchmarked against the best. Yes Govt if it desires may consider some preference to domestic products in comparison with global ones. However outrightly ruling out global products may not be wise. Here it is worthwhile to mention how the domestic Ambassador and Fiat car did not make any substantive improvement for long as they did not face competition with their global peers.
Further the existing policy of indigenising individual component may not lead us anywhere except that it will provide some orders to the industry which will depend on flow of orders from the Armed Forces. However if Armed Forces require any new type of weapon then this policy may not be of much relevance. Say if you indigenise all the components of any imported equipment then what is the next step. Do we have a roadmap for same. How will the knowledge gained in indigenising components will help in coming up with next generation weapon? Therefore there is urgent necessity to focus on acquiring capacity for comprehensive system design.
The ToTs are the best method to catch up with deficit in Technologies especially in the fields of manufacturing. We import large number of Arms & Ammunition as we do not have capability to make same.Therefore if we obtain the Tech then we can make the item ourselves. As there is continuous improvement in products happening the tech also needs to be upgraded. Therefore its a continuous process. Thus whatever tech we get from principals abroad it has to be assimilated then only we can build on it further.
How to absorb and institutionalise the Tech transferred to us. We at SAPI are looking for some ideas on the issue of How, why etc of ToT.
All ToTs cost something, further as IP issues are usually linked to Tech transfer there could be provision of royalty also OR some fee.
There is need to build on the knowledge gained from assimilating the ToT based on our own requirements. This further development of Tech is the crux and is possible in several ways. We at SAPI exhort our viewers to come forward to deliberate on broad possibilities of same.
Created By Akshay Kharade At Widespread Solutions