US Deputy Defense Secretary had assured that the US aims to take the Indo-US defence relationship to the next level and help India raise the indigenisation of its defence systems.

Just before embarking on his visit to Japan, Prime Minister Narendra Modi has signaled another boost to indigenisation. The earlier decision to manufacture medium-level military transport aircraft in India has now been reinforced by the decision of manufacturing light utility helicopters (LUH) also in India instead of importing them. As per media reports, the global tender earlier issued for import of 197 LUH from abroad has been cancelled. This would give a further boost to the defence manufacturing industry.

However, at the moment it is not clear whether the Hindustan Aeronatics Limited (HAL) is permitted to go for joint venture (JV) for the LUH. HAL has been kept away from the medium-level military transport aircraft to be manufactured in India. The global tender for LUH was valued at Rs. 3,000 crore and had been issued in 2008 under the UPA Government but the selection process was embroiled in allegations of corruption and technical deviations. Significantly, such tender for LUH has been cancelled for the third time that will lead to further delay in replacing the ageing LUH fleets of the Indian Army and the Air Force. As per one media report, this move of manufacturing the LUH in India could result in generating business worth Rs. 40,000 crore, which would also include making up voids of the Army and the Air Force and also as replacement of some 197 Cheetah and Chetak helicopters in the Alouette category.

As per media reports, the Union Home Ministry is understood to have cleared a proposal from the Tata Group to produce helicopters in India. However, in replacing the Cheetah and Chetak helicopters, the size of the helipad required will need to be kept in mind. The current Dhruv (ALH) helicopter that too was envisaged to replace the Cheetah and Chetak helicopters has not been able to do so fully because it needs a helipad of larger dimensions and because of this cannot land at some of the forward posts, especially in high altitudes, on the Saltoro Range in the Siachen Glacier area.

The mood of indigenisation appears to be catching on with Tata, Reliance and Mahindra all taking steps to open military hardware production facilities in the country. It is estimated that it will take at least five years for the LUH production to start by the Tata Group. Therefore, the Army and Air Force will be expected to wait that much. But this may be ambitious considering that the Tata Group has little expertise in helicopter manufacture, will require time to set up the necessary infrastructure, acquire skilled personnel, plus it depends on how soon the JV can be established and which foreign firm can be roped in considering that the FDI upper limit remains at 49 per cent. Speed and quality will be definite requirements to fructify the Prime Minister’s dream to make India an export destination for defence equipment. The government has also cleared the purchase of integrated anti-submarine suits for 11 frontline warships. The instrument which is now being developed by the Defence Research and Development Organisation (DRDO) is likely to cost the exchequer some Rs. 1,770 crore. With the best GDP growth in the last two-and-a-half years, the government has surely given the signal for indigenisation at the right time. All this boost to industrialisation will not only boost the GDP growth further but also create the much needed employment considering that we have some 4.68 crore of our population unemployed, bulk of which are youth.

It is well known that India is one of the biggest importers of defence equipment and nearly two percent of the country’s GDP is spent on defence imports. The decision to make the LUH will give Indian firms assured orders and provided incentive for investing in R&D. Other projects include: acceptance of necessity for 118 Arjun Mark-II main battle tanks, with 89 upgrades at a cost of Rs. 6,600 crore; 40 self-propelled catapult gun systems on Arjun chasis at a cost of Rs. 820 crore; opening of commercial bids of European NH-90 helicopter (linked to Finmeccanica) and US Sikrosky-708 helicopter in race to supply 16 naval multi-role helicopters at a cost of Rs. 1,800 crore; midlife upgrade and life extension of four Kilo or Sindhughosh class (Russian) submarines and 2xHDW or Shiskumar class (German) submarines at a cost of Rs. 4,800 crore, and; dedicated army communication and mobile system for three Corps along the Sino-Indian border.

Concurrent to signaling boosting indigenisation, the government has also cleared the purchase of 15 x Chinook and 22 x Apache helicopters from the US at an estimated cost of Rs. 15,000 crore. This is a smart calibrated move that signals strengthening of the Indo-US strategic partnership further as a prelude to Prime Minister Modi’s visit to the US and his scheduled meeting with President Barack Obama. It may be recalled that the US-India Defence Technology and Trade Initiative (DTTI) was launched last September at New Delhi and the US Deputy Defense Secretary had assured that the US aims to take the Indo-US defence relationship to the next level and help India raise the indigenisation of its defence systems.