Defence Manufacturing Current Affairs

SAAB, Adani Group announce collaboration for defence manufacturing

Swedish defence and security company SAAB and Indian conglomerate Adani Group have announced collaboration in defence manufacturing entailing billions of dollars of investment.

The partnership was announced mainly for design, development and production of single engine Gripen fighter jets under ‘Make in India’ if they win government contract to equip Indian Air Force (IAF) with new jets. They will compete with collaboration of US aircraft major Lockheed Martin and Tata Advanced Systems Limited (TASL) which are planning to manufacture F-16 fighter aircrafts in India.

Key Facts

The $12 billion Adani Group has interests in energy, real estate, logistics and fast-moving consumer goods (FMCGs), among others. It has no presence in the defence sector and nor does have experience in manufacturing space either.

SAAB is manufacturer of Gripen, a single-engine multi-role fighter aircraft featuring state-of-the-art technology, including advanced data links and sensors.

Background

IAF is expected to begin process for procuring 100 plus single engine fighter jets to replace ageing fleet of Russian Mig-21s and Mig-27s in service. The procurement will be under recently promulgated Strategic Partnership (SP) model of Defence Procurement Procedure (DPP). The deal is estimated to be worth over Rs. 60,000 crore.

Under this deal, first 18 aircraft will be brought to India in a flyaway mode and rest will be manufactured in India by Indian private company with technology transfer from foreign manufacturer. Only two aircrafts are available in global market to meet IAF’s requirement criteria viz, F-16 and Gripen.

Need for new aircrafts

The IAF needs minimum strength of 42 fighter squadrons to dominate and tackle two-front collusive threat simultaneously from China and Pakistan. Currently, IAF has 32 fighter squadrons. Further due to retirement of old aircraft, numbers will further go down by 2021. By then, 11 squadrons of Mig-21 and Mig-27, which are 35 to 45 years old, will be retiring from service. So to mitigate the shortfall, IAF is procuring new advance single engine fighter aircrafts.

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Lockheed and Tata sign Pact to make F-16 Planes in India 

 

Lockheed Martin and India’s Tata Advanced Systems have signed a pact to produce F-16 fighter planes in India. The two companies have announced their agreement at the Paris Airshow.

Lockheed Martin’s move to forge a joint venture with Tata is aimed at winning billions of dollars worth order from the Indian military.

Lockheed Martin is one of the largest aerospace, defense, security, and advanced technologies  companies having worldwide interests. It is headquartered in Maryland. The company was formed after the merger of Lockheed Corporation and Martin Marietta in 1995.

Background

India’s airforce is in requirement of hundreds of aircraft inorder ro replace its soviet-era aircrafts. But Prime Minister Narendra Modi’s Make-in-India initiative require the foreign suppliers to forge partnership with a local partner to make planes and build a domestic industrial base in India. This is aimed at cutting outright imports.

But Make-in-India initiative appears to be in conflict with President Donald Trump’s America First campaign under which Trump wants the companies to invest in the United States and create jobs instead of establishing factories abroad. To allay these concerns, both the companies have said that moving the production base to India would still retain jobs in the United States.

Establishing a production base in India for the manufacture of F-16 will create new manufacturing jobs in India and is expected to position Indian industry at the centre of the most extensive fighter aircraft supply ecosystem in the world,

Sweden’s Saab is the other contender to supply aircraft to the Indian Air Force. The company has offered to make its Gripen fighter in India. However, it is yet to announce a local partner In India. Gripen fighters are pitched as a modern alternative to the F-16s.

US and India have built a close defence relationship in recent years. US along with Russia and Israel has emerged as a top three arms supplier to India. F-16s are flown by air forces by 26 countries around the world. In addition, Lockheed Martin is offering model Block 70 which is the most modern of all F-16s.

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