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Indigenous development of the defence industry is very important and foreign technology, knowhow and finance would enhance the opportunities not only for meeting India's needs, but provide scope for the country to become export hub in decades ahead
A fortnight ago, French Foreign Minister, Laurent Fabius, who was also a former Prime Minister of France, visited India and witnessed the launch of an Indian rocket carrying a French Satellite SPOT 7 into orbit, in Sriharikota. It may be recalled that the Indian Space Research Organization (ISRO)'s launch was perfect in all respects.
During his visit, he met the External Affairs Minister Sushma Swaraj and also called on Prime Minister Narendra Modi to convey invitation extended by French President, Francois Hollande, for Modi to visit France. This is most likely before the end of the year.
However, no mention has been made abut the serious interest that France has shown to clinch the $20 billion deal to sell India 126 Rafale figher aircrafts. In 2012, India chose the Rafale over three other aircrafts, including the Eurofighter, Typhoon, manufactured by Airbus Group NV, which was previously known as European Aeronautic Defence and Space Company.
Currently the Indian Air Force (IAF) has 34 squardons, whereas its operational needs are estimated at 44 squardons.
If this order goes through to Dassault Aviation, the French aircraft maker will have to plough back 50% of the contracted value into India and in partnership with HAL for co-production. Hindustan Aeronautics Ltd (HAL) has been designated as the key agency for implementation of the transfer technology and production. Dassault and HAL, it appears, have "reached" an agreement a month ago on how to organise the Rafale production in India.
For sometime now, the question of foreign direct investment (FDI) in defence has been discussed at great length. While the Defence Ministry wants FDI capped at 49% from 26% earlier, the Industry departments had planned to allow upto 100%. The Department of Industrial Policy and Promotion (DIPP), on the other hand, has been arguing that no foreign investor will transfer technology without majority control over the Indian venture.
Therefore, it is time now, that a blue print for the defence industry is urgently needed, as there are too many government agencies and departments involved that do not seem to have common approach to this important issue. Indigenous development of the industry is very important and foreign technology, knowhow and finance would enhance the opportunities not only for meeting India's needs, but provide scope for India to become the hub for export in the decades ahead.
In the meanwhile, there have been other developments involving HALand Bangalore becoming the aviation industry centre in the country. In December, the Aeroengine Research & Development Centre of HAL began the quest for Request for Information (RFI) to invite global bids through request for proposal (RFP) to find partners to develop an engine for a passenger plane, with a 70-90 seater capacity for civilian aircrafts. Already, in response, 11 bidders have shown interest and the aircraft would be expected to roll out by 2022. At the moment, the cost of developing the engine is estimated anything between Rs4,000 crore and Rs8,000 crore. If everything goes as planned, according to T Suvarna Raju, director of design and development, HAL, in the initial period as many as 400 aircrafts could be produced.
In a separate development, there are also other plans in store for HAL airport at Bangalore. Ananth Kumar, Union Minister for Chemicals and Fertilisers, during a recent visit to the city reported to have stated that the Centre was considering to transform HAL airport to a Maintenance Repair and Overhauling (MRO) hub, very similar to the system practiced in Singapore where engineers repair components, test major internal mechanisms and calibrate flight control during checks. These activities are known as "C" checks for which aircrafts are sent to Singapore or US at great cost.
If such a centre was established at HAL airport, it could service 300 aircrafts annually, create employment opportunity and help in the development of industries in the area. Karnataka state CM Siddaramaiah has shown keen interest and has expressed willingness to assist every way possible.
All these activities would help to make Bangalore the aerospace capital of India, in the long run.
In so far as the French deal for Rafale fighter aircrafts is concerned, it is possible that this may become a reality when PM Modi visits France before the end of this year.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)