Eye on Defence April 2018

Contents title
Contents subjects
Dear readers,
This edition of the Eye on Defence provides insights into two important RFIs
issued by the Indian Navy to address its helicopter requirements, features of the
draft policy for Civil Remotely Piloted Aircraft Systems (RPAS) and an analysis
of the recently announced defence budget by the Government of India.
The Indian Navy, with its aging fleet of helicopters, is in an immediate need of new platforms
to address its immediate requirement of naval helicopters, which will be used for search and
rescue, surveillance and anti-submarine operations. Our first article focuses on the two RFIs by
the Indian Navy — 111 units of Naval Utility Helicopter (NUH) and 123 units of Naval Multi-Role
Helicopter (NMRH). We have provided insights into the requirements mentioned in the RFIs
from a technical capabilities point of view and the platforms that the contending OEMs are
willing to offer. Our article provides a holistic overview of the program and clearly identifies the
value proposition brought in by each OEM.
Our second article focuses on the draft regulations on the civil use of RPAS, which was
announced by the Director General of Civil Aviation (DGCA) in November last year. Though the
draft policy was supposed to be finalized by January of this year, there is no update on it yet.
We have detailed the broad contours of the draft policy and also compared this policy with an
equivalent policy in the US.
In our third article, we have analyzed the FY18-19 defence budget announced on 01 February
2018. The announcements made were majorly focused on the ambitious Make in India initiative
by the Government. The expenditure allocation for the defence sector has seen an increase of
7.66% from last year. Announcements regarding two defence industrial corridors and a more
industry-friendly Defence Production Policy 2018 were key highlights in the budget.
Among the regular sections, we have industrial license applicants, RFIs/RFPs released, new
projects and investments, joint ventures and alliances, country-level deals and the latest buzz in
the industry.
I hope you find this issue useful. It has been our constant endeavor to make this publication
increasingly relevant to you, and we will appreciate your comments and suggestions in this
regard.
K. Ganesh Raj
Partner and Leader
Contents
Introduction 1
The Indian Navy’s rotary
growth plans 2
Policy on UAVs: A luxury
gradually becoming a
necessity 12
Union defence budget
update (2018-19) 18
Request for information
(January 2018–
March 2018 YTD) 23
Request for proposal
(January 2018–
March 2018 YTD) 25
List of industrial licences (ILs)
filed (November 2017–
February 2018) 29
New projects/investments/
contracts 30
JVs and alliances 32
Country-level deals and
initiatives 34
Industry buzz 36
Global industry buzz 39
Analysis of M&A trends 42
Eye on Defence
April 2018

2 | Eye on Defence
The Indian
Navy’s rotary
growth plans
Today, the Indian Navy is at a juncture where its growing
prowess requires modernization. Any surface warship in
today’s Navy should have the capability to host at least
one helicopter if not more. The steady accretion in the
Indian Navy’s surface fleet therefore naturally also means
that there is a need to augment the number of ship-borne
helicopters in its inventory. Besides, the Indian Navy has
ever-expanding roles and responsibilities, which translate
into requirements for greater rotary capability. To that
end, the Navy has been looking to bring in new utility and
multirole helicopters in order to both replace legacy units
as well as increase the overall number of such machines
under its ambit while simultaneously introducing new
technology.

3Eye on Defence |
In view of the above, the Indian Government launched a global competition for the procurement of 111 Naval
Utility Helicopters (NUH) and 123 Naval Multi-Role Helicopters (NMRH) in August last year, to address the
immediate requirement of naval helicopters, which will be used for search and rescue, surveillance and anti-
submarine operations. The Government intends to execute both these projects under the evolving Strategic
Partnership Policy.
The Indian Navy’s rotary growth plans
NUH
The Indian Navy, in 2012, first launched a US$1 billion global tender for the purchase of 56 light NUH to be
acquired by 2016 to replace the aging Chetak. The tender was issued to AgustaWestland, Bell Helicopter,
Sikorsky, Boeing, Eurocopter and Kamov. However, within a short span of two years, the tender was canceled
in August 2014 due to various challenges. Owing to the shortage faced by the Indian Navy in replacing its
aging fleet of Chetak helicopters for the frontline frigates and offshore patrol vessels and in unison with the
ongoing momentum, the Government released an RFI to procure 111 NUH in August 2017. As a part of this
program, the Government also intends to procure two flight simulators, ofne maintenance simulator and
infrastructure including transfer of technology (ToT), associated shore support, performance-based logistics
(PBL), training, documentation and spares package along with contemporary state-of-the-art equipment,
weapons and sensors, all under the SP policy.1
Specification of NUH
The The contours of the approved scheme of NUH is a combination of roles of anti-submarine warfare and
light-attack missions. This initiative will provide a kind of force multiplier capabilities to not just the frontline
warships but also the medium and minor war vessels through shore-based flights.
The twin-engine helicopter will be flown by two pilots and have wheeled landing gear and blade-fold
capabilities. The Indian MoD plans for the NUH to be indigenously built, with 40% indigenous content. The
Indian Navy requires OEMs to offer NUH that can operate in adverse weather day/night conditions for SAR
and conduct casualty evacuation and logistics and communication roles with under slung cargo. Other tasks
include limited electronic-intelligence gathering, ASW with a light torpedo or depth charge, dynamic response
119
280
Current helicopter ﬂeet New helicopter procurements
Growth in the military helicopter units of the Indian Navy
Current helicopter ﬂeet New helicopter procurements

4 | Eye on Defence
during aid to civil authorities, and anti-piracy and anti-terrorism missions with small arms. The
Indian Navy wants to operate NUH from small-deck of frigates and offshore patrol vessels, as well
as from aircraft carriers. The foreign OEMs will indicate the basic design (base model) of a proven
helicopter based on which the current design will be proposed along with the names of the customer
navies or coastguard to whom the same or similar helicopter has been contracted. The NUH is to be
capable of deploying at least one lightweight ASW torpedo or two depth charges, with the ability to
mount 12.7mm machine guns or rocket launchers on either side.
The MoD-Indian Navy combination is now expected to issue the formal RFP to Indian OEMs for the
first 16 helicopters to be imported in a flyaway condition, with the balance 95 to be manufactured in
India by an Indian manufacturer in partnership with the selected global (foreign) OEM. The DAC, on
31 October 2017, has accorded the “Acceptance of Necessity” for the 111 NUH and the approval
for this program was valued at US$3.5 billion. The RFP for the NUH is expected to be issued by mid-
2018. Going by the stipulated provisions of the Defence Procurement Procedure, it could take two
years or more before the main contract is signed.
The likely OEMs to participate in the tender are Airbus Helicopters and Sikorsky Helicopters. Bell
Helicopter and Russian Helicopters could also offer their own products.
Airbus
Airbus is most likely to offer its AS565 MBe
Panther. The AS565 MBe Panther multi-mission
helicopter, a new variant of the AS565 MB Panther
light helicopter, is intended for use by navies and
coast guards in a wide range of naval warfare and
maritime security tasks. The helicopter’s mission
capabilities include anti-submarine warfare, anti-
surface unit warfare, maritime surveillance, search
and rescue, patrol, counter-terrorism, counter-
piracy, vertical replenishment, medical evacuation,
casualty evacuation and special operations missions.
The helicopter features a glass cockpit with pilot, co-pilot seats and four-point shoulder harnesses.
Two jettisonable pilot and co-pilot doors with tinted windows are also provided. The Panther is
powered by two Safran Arriel 2N turboshaft engines. If Airbus wins the contract, Helicopter Engines
MRO Private Limited (HE-MRO) will have an opportunity to provide maintenance and full authority
digital engine control (FADEC) services to the Safran engines, which will also help in indigenizing the
NUH program and will be in line with the Make in India initiative.2

5Eye on Defence |
Sikorsky
The Sikorsky Aircraft Corporation intends to offer its medium-
sized twin-engine multi-purpose helicopter, S-76B. The
S-76B is mostly in operation with civil operators for executive
passenger transport (VIP), emergency medical services (EMS),
search and rescue (SAR) and offshore passenger and material
transportation. It is a development of the S-76A with a
modified airframe and new engines of Pratt & Whitney.3
Bell Helicopter
Bell is most likely to offer the Bell 429 helicopter. The Bell
429 is a twin-engine light helicopter designed, developed
and manufactured by Bell Helicopter and Korea Aerospace
Industries, based on the Bell 427. The helicopter is ideally
used for executive/VIP transport, oil and gas, helicopter air
ambulance and law enforcement missions. The aircraft is
specially targeted toward corporate and emergency medical
services. It can accommodate up to eight persons or 10
persons in a high-density configuration.4
Russian Helicopters
India is one of the major operators of Russian-made helicopters. Currently, there are more than 400
helicopters in operation, which is almost 10% of the Russian Helicopters’ global fleet outside Russia. While
there is no visibility on the platform that will be offered by Russia, the Ka-226T light helicopter could be a
likely option, given the ongoing joint Indo-Russian project as part of the Make in India initiative. The Ka-226T
is powered by Arrius 2G1 engines by Safran HE while the maintenance and FADEC services are provided by
HE-MRO, its JV with HAL in India.

6 | Eye on Defence
NMRH
In its most recent bid to buy multi-role helicopters, the Indian Navy has moved a proposal worth INR12,000
crore to buy 24 choppers, which would be deployed for anti-submarine warfare as well as operations by
Marine Commando (MARCOS) Special Forces. However, besides this requirement, the Indian Navy has an
additional requirement for naval multi-role helicopters. In 2015, this requirement, which was initially intended
to be bought from foreign vendors, was re-categorized as “Buy & Make (Indian)”. This was aimed at promoting
the Indian industry in the aviation sector to tie up with global majors for technology transfer and joint venture
arrangements for production of the aircraft indigenously. However, owing to red tape issues in the MoD, the
tender release was delayed and there is an immediate requirement to replace the aging Westland Sea King
anti-submarine warfare helicopters in the wake of their poor condition.5
To address this problem, the Government of India released a global RFI for the procurement of 123 NMRH in
August 2017, to be executed under the SP model. Along with the choppers, the Government also intends to
purchase spare engines, three flight simulators, one maintenance simulator and infrastructure including ToT,
10-year performance-based logistics, associated shore support, ESP, training, documentation and spares
package along with contemporary state-of-the-art equipment, weapons and sensors.6
Specification of NMRH
The helicopters would be procured in two variants: multi-role and special operations. The multi-role chopper is
intended to perform anti-submarine warfare, anti-surface warfare, electronic intelligence, search and rescue
and casualty-evacuation operations.
The special operations chopper variant will perform troop carriage, combat search and rescue, maritime
interdiction, limited casualty evacuation (CASEVAC), humanitarian assistance and disaster relief (HADR) and
logistics and communication duties. It is a twin-engine helicopter with wheeled landing gear and dual flying
controls and blade fold capability; it weighs less than 12.5 tons. The helicopter should be capable of operating
from ships and ashore. Toward maritime surveillance and targeting capability, sensors and weapons to meet
the envisaged role would be required to be integrated with the helicopters. The helicopter must be capable
of night missions, including hovering over the sea in night conditions. The RFI also states the requirement for
two types of anti-ship missiles: long-range fire and forget missile with a 70 km range and short-range missile
with a range of 25 km. In line with the Make in India initiative, the RFI asks vendors to maximize the indigenous
content (IC) of the NMRH. The Indian Navy has stipulated that the IC should not be less than 40%.
The likely OEMs to participate in the tender are Sikorsky Helicopters, Airbus Helicopters and NHIndustries.
AgustaWestland and Mitsubishi could also be the likely contenders.7

7Eye on Defence |
Sikorsky Helicopters
Sikorsky Helicopters will most likely offer its MH-60R. The MH-
60R “Romeo” is an anti-submarine and anti-surface warfare
multi-mission helicopter. The MH-60R is deployed globally with
the US Navy fleet and a growing number of allied international
navies. The MH-60R, manufactured by Sikorsky Aircraft Corp
and equipped with advanced mission systems and sensors
by Lockheed Martin Mission Systems and Training (MST), is
capable of detecting and prosecuting modern submarines in
littoral and open ocean scenarios. In addition, it is capable of
conducting standalone or joint anti-surface warfare missions
with other Romeo or MH-60S “Sierra” aircraft. Secondary
missions include electronic support measures, search and rescue, vertical replenishment and medical
evacuation.8
Airbus Helicopters
Airbus intends to offer H225M, earlier called Eurocopter
EC725 Caracal. It is a long-range tactical transport military
helicopter developed from the Eurocopter AS532 Cougar for
military use. It is a twin-engine aircraft and can carry up to 29
seated troops along with two crew, depending on customer
configuration. The helicopter is marketed for troop transport,
casualty evacuation, and combat search and rescue duties,
and is similar to the civilian EC225. The EC225 is powered by
two Makila 2A1 engines by Safran while its Indian venture with
HAL, HE-MRO, provides maintenance services in line with the
Make in India initiative. 9
NHIndustries
The NHIndustries NH90 is a medium-sized, twin-engine,
multi-role military helicopter. It was developed in response
to NATO requirements for a battlefield helicopter that was
capable of being operated in naval environments. The NH90
was developed and is manufactured by NHIndustries, a
collaborative company owned by Airbus Helicopters, Leonardo
(formerly AgustaWestland) and Fokker Aerostructures. There
are two main variants — the Tactical Transport Helicopter
(TTH) for army use and the navalized NATO Frigate Helicopter
(NFH). The NH90 is powered by two Safran RTM322 engines.
If NHIndustries wins the contract, Helicopter Engines MRO
Private Limited will have an opportunity to provide maintenance and FADEC services to Safran Helicopter
Engines, which will also help in indigenizing the NMRH program and will be in line with the Make in India
initiative.10

The other likely contenders such as AgustaWestland and Mitsubishi are likely to offer AW1010 and H-60
helicopters respectively.11
Considering the SP policy under which these two projects will be executed, the likely Indian contenders who
will partner with the foreign OEMs in manufacturing are Mahindra Aerospace, Tata Advanced Systems Limited,
Reliance Defence and Engineering, L&T and Bharat Forge Limited.
Conclusion
The NUH and NMRH tender is one of the biggest global tenders for helicopters. The Indian Navy’s aircraft fleet
is facing an acute shortage of helicopters, and now is the time to bring the 230 helicopters on-board. The
NUH and NMRH, unlike other procurements, are “critical operational necessities.” Helicopters in India were,
till now, manufactured solely by HAL. The SP policy is a reform for the sector in the right direction, in that
it creates a level playing field for the private sector and gives an impetus to the desire of increasing defence
production in the country. While it cannot be denied that the private sector of the country has no experience in
manufacturing helicopters, their association with foreign OEMs will ensure that the implementation is steered
in the intended direction.
Time and cost overruns and Ministry-industry red-tape issues are not unusual in Indian military procurements.
Any delay in implementing the project will put the Indian Navy at the receiving end, considering the impending
threat from neighboring nations
We will need to wait and see how the program unfolds!
8 | Eye on Defence

9Eye on Defence |
Sources
1) Naval Aviation: Thumbs up for the Rotary Wing - Indian Navy – SP’s Naval Forces- 17 November 2017 – Factiva
2) https://www.naval-technology.com/projects/as565-mbe-panther-multi-role-helicopter
3) http://www.flugzeuginfo.net/acdata_php/acdata_s76b_en.php
4) http://www.airrecognition.com/index.php/world-air-force-military-equipment-aircraft-/north-america/united-states-air-force/
united-states-american-us-air-force-usaf-helicopter-technical-data-sheet-specifications-intelligence-description-information-
identification-pictures-photos-images-video-/718-bell-429-twin-engine-light-helicopter-technical-data-sheet-specifications-
intelligence-description-information-identification-pictures-photos-images-video-united-states-american-us-usaf-air-force-aviation-
aerospace-defence-industry-military-technology.html
5) https://www.pressreader.com/india/sps-navalforces/20150710/281487865175179
6) https://www.indiatoday.in/mail-today/story/indian-navy-multi-role-chopper-purchase-1104113-2017-12-10
7) https://thediplomat.com/2017/10/india-moves-forward-with-purchase-of-111-helicopters-for-navy/ https://www.livefistdefence.
com/2017/08/indian-navy-flips-switch-on-chopper-battle-royale.html
8) http://www.mh-60.com/mh-60r/
9) https://en.wikipedia.org/wiki/Eurocopter_EC725
10) https://en.wikipedia.org/wiki/NHIndustries_NH90
11) https://www.livefistdefence.com/2017/08/indian-navy-flips-switch-on-chopper-battle-royale.html

11Eye on Defence |
1. I plan to enter a new defence segment? Is the
market size large enough?
2. Will this acquisition be a good fit in my existing
business portfolio?
3. Am I fulfilling all the defence regulations
stipulated by the MoD?
4. What are the offset regulations and how can
I carry out offset banking today for my future
defence projects?
5. How will GST impact my current and future
operations?
Reach out to us at
eyaerospace.defenceIndia@in.ey.com
Right questions that
could lead to right
business solutions

12 | Eye on Defence
Policy on
UAVs: A luxury
gradually
becoming a
necessity
The Director General of Civil Aviation (DGCA) released
a draft policy on the requirements for operation of Civil
Remotely Piloted Aircraft System (RPAS) in November
2017. It was expected to be finalized after around two
months of consultations. Although there is no update on
it yet, the intent of the Government is clear — to put in
place a regulatory framework in order to encourage the
commercial use of drones in areas as diverse as industrial
monitoring to disaster management.

13Eye on Defence |
Main features of the draft policy on RPAs
The categorization of civil RPAs has been done in accordance with maximum take-off weight (MTOW):
Category MTOW
Nano Less than or equal to 250 grams
Micro Greater than 250 grams and less than or equal to 2 kg
Mini Greater than 2 kg and less than or equal to 25 kg
Small Greater than 25kg and less than or equal to 150 kg
Large Greater than 150 kg
The draft policy highlights the application process for civil RPA operations whereby the DGCA is the approving
authority for issuance of Unique Identification Number (UIN), Unmanned Aircraft Operator Permit (UAOP) and/
or import clearances.
UIN is an identification separating each RPA’s identity.
The process for obtaining a UIN
The identification plate is inscribed with the UIN, RFID tag and SIM and affixed to the RPA.
RPAs in the nano category with an intent to fly up to 50 feet above ground level (AGL) and those owned and
operated by Government security agencies do not require a UIN.
UAOP is a non-transferable permit by the DGCA to operate UAS within the specified limits.
Filled up application
form and required
documentation with
requisite feed to
be submitted
to DGCA
UIN issued by DGCA
in two days subject
to complete
documentation
DGFT to provide
licence for importing
RPAs based on
DGCA's import
clearanceApplication for
import/acquisition of
RPA to DGCA along
with a copy of the
security
clearances
Policy on UAVs: A luxury gradually becoming a necessity

The process to obtain a UAOP for all civil RPA operators is as follows
The validity of UAOP is for a five-year period from the date of issue with renewal subject to fresh security
clearance from MHA.
Nano RPAs operating below 50 feet AGL and micro RPAs operating below 200 feet AGL, flying in uncontrolled
airspace and clear of prohibited areas, are exempt from requiring a UAOP along with RPAs owned and
operated by government security agencies
The operational and mandatory equipment requirements for each
category of drone are summarized as under
Item/Category Nano RPA Micro RPA
Mini, small and large
RPA
Model aircraft
(MTOW <2Kg)
Height allowed AGL 50 feet 200 feet
200 feet (Restrictive
beyond that)
200 feet
Only day operations
and within line of sight
Flight plan to be filed
Air Defence Clearance
and Flight Information
Centre approvals
ID plate
RFID/SIM card slot
GPS
Return to home
capability
Anti-collision light
Required Not required
Duly ﬁlled application
with requisite
documentation and fees
to be submitted DGCA
at least 7 days prior
to actual conduct
of operations
DGCA to issue UAOP
with a copy to MHA,
BCAS, IAF, ATS provider
and district
administration

15Eye on Defence |
The draft policy also specifically highlights the no-fly zones for the RPAs, among which the more specific ones
include:
• Within an area of 5 km from the aerodrome reference point of operational airports
• Within 50 km from the international border along the LoC, LAC and Actual Ground Position Line (AGPL)
• Beyond 500 m into the sea from coast line provided the location on the ground station is on a fixed platform
over land
• Within 5 km from Vijay Chowk in Delhi
• Within 500 m from the perimeter of strategic locations as notified by MHA
• Within 500 m from the perimeter of military installations or facilities
The draft policy is expected to be formalized soon. Once approved, it would provide the existing players a
momentum to further their scope of activities. It would, however, be a boost to the segment if a few basic
points, including the ones below, are considered while formulating the final policy.
Broadening the classification
The current draft policy enumerates an MTOW-based classification where the micro category comprises UAVs
weighing up to 2 kg and the mini category consists of UAVs weighing up to 25 kg. Categories beginning from
mini UAVs are required to meet all operational and mandatory equipment requirements. Given that a 2 kg
payload is on the lesser side, it would benefit to have another category between the micro and mini categories
so as to broaden the scope of activities and also to save on the restrictive mandatory requirements with
respect to the classifications.
AGL restrictions
A limit of 400 feet AGL is a more practical threshold than the current 200 feet levels. A 60-meter ceiling level
is a bare minimum and might restrict the applications for the UAVs. This would then also be in line with the
policies of other countries like the US, which has a 400 feet AGL threshold.
Online portal
An online portal for applications and approvals would make the process more efficient and transparent,
thereby generating more interest and encouraging more usage.
1
2
3

16 | Eye on Defence
Analysis of India’s draft policy for civil RPAs with an equivalent
policy in the US for small UAS
The US Federal Aviation Administration (FAA) on its part published its final operational rules for the
commercial use of small drones weighing under 55 pounds. The following is a comparison of the salient
features of India’s draft policy with the policies existing in a couple of other countries on a few parameters:
India’s RPA policy US’s small UAS policy
Applicability for
now
• All RPAs • Only small drones weighing under 55
pounds (including attached systems,
payload and cargo)
Categorization • Based on MTOW • Based on MTOW
Security or
safety aspect
• DGCA should be informed prior to any
sale or disposing of the RPA or in case of
any damage
• Licence holder is required to cancel
registration through the FAA’s online
registration system in case of sale, loss
or transfer of UAS
Training
requirement for
remote pilots
• Minimum age requirement — 18 years
• Practical training with a proportion of
simulated flight training
• No-fly zone awareness
• Safe recovery mechanisms
• Not applicable for nano and micro
category RPAs
• Minimum age requirement — 16 years
• Remote pilot airman certificate with a
small UAS rating or under the direct
supervision of a person who holds a
certificate
Requirements
for operation of
RPA*
• Nano and micro RPA operative up to 50
feet and 200 feet respectively above
ground level exempted from filing
flight plan and obtaining Air Defence
Clearance
• Only during daylight (between sunrise
and sunset)
• All RPA operations to be day operations
and within visual line of sight only.
• Minimum ground visibility of 5 km
• No RPA shall be flown from a mobile
platform
• RPA shall not discharge or drop objects
unless specially cleared via UAOP
• Only nano RPA exempt from informing
local police authority prior to
commencing operations
• No specifications yet on the speed of the
RPA
• Maximum altitude of 400 feet above
ground level or higher (only if it remains
within 400 feet of a structure)
• Operations in Class G airspace
allowed without any air traffic control
permissions
• Day light only operations/civil twilight
(30 minutes before sunrise and 20
minutes after sunset)
• Within the visual line of sight only of
the remote pilot in command/visual
observer
• Minimum weather visibility of 3 miles
from the control station
• No operation from a moving vehicle
unless the operations are over a
sparsely populated area
• Not faster than 100 miles per hour

17Eye on Defence |
Enforcement
action
• Cancellation of UAOP if the performance
is no longer acceptable or if there is a
breach of compliance that may attract
penalties
• FAA may impose civil sanctions in
instances of fraud and falsification for
matters within its jurisdiction
*The DGCA has mentioned that operations of RPAs beyond the conditions specified per the draft policy may be authorized
by the DGCA or government agencies on a case-to-case basis. Similarly, FAA has mentioned that most of the restrictions on
operations of UAS are waivable if the applicant demonstrates that his or her operation can safely be conducted under the
terms of a certificate of waiver.
India’s policy on RPAs is yet to be finalized. A formal policy would surely result in heightened interest in the
UAV segment, which would in turn result in more innovations in technology and possibly relaxations in the
existing draft policy’s operational requirements. An ecosystem in the UAV segment is the need of the hour,
especially in the defence domain. The importance of UAVs in the Indian defence market is further reiterated
by the fact that by 2027, Indian Armed Forces expect a 1:1 ratio between manned and unmanned platforms.
Some estimates refer to a procurement plan for 5,000 UAVs worth ~US$3billion over the next 10 years,
including high altitude long endurance UAVs (HALE), medium altitude long endurance UAVs (MALE), vertical
take-off and landing UAVs (VTOL), tactical UAVs, mini and micro UAVs.
It is about time the UAVs started going up, up and away. A green signal from the Government in terms of a
final policy could just be the catalyst to push this segment out of its shell.
(For more details on the UAV market and its scope in India, please refer our article on UAV in the October 2016
edition of the Eye on Defence)
Sources
1) https://beebom.com/new-drone-policy-india-2018/
2) https://techcrunch.com/2016/06/21/here-are-the-faas-rules-for-commerical-drone-usage/
3) https://www.faa.gov/uas/media/Part_107_Summary.pdf
4) https://www.faa.gov/uas/faqs/
5) https://www.drdo.gov.in/drdo/pub/npc/2017/february/din-27Feb2017.pdf

18 | Eye on Defence
Union defence
budget update
(2018-19)
The defence union budget 2018-19 has been accounted
under four demand for grants (same as last year):
Demand No. 19 – Ministry of Defence (Miscellaneous);
Demand No. 20 – Defence Services (Revenue); Demand
No. 21 – Capital outlay for defence services; and Demand
No. 22 – Defence Pensions

19Eye on Defence |
Union defence budget update (2018-19)
The defence union budget 2018-19 has been accounted under four demand for grants (same as last year):
Demand No. 19 – Ministry of Defence (Miscellaneous); Demand No. 20 – Defence Services (Revenue); Demand
No. 21 – Capital outlay for defence services; and Demand No. 22 – Defence Pensions
The total defence budget (excluding the defence pensions) accounts for US$46.26 billion (INR295,511 crore)
and the Government’s allocation has increased by 8.61% as compared to the budget estimate (BE) of 2017-
18 and by 6.71% when compared to the revised estimate (RE) of 2017-18. All three forces have shown a
moderate increase in their capital budget from last year.
Budget comparison with other countries
15177
61
422263
603
Saudi Arabia
Russia
Germany
Israel
India
US
China
Defence budget of some key countries (US$ billion)
100
Total defence budget Revenue defence budget Capital defence budget
INR295,512 cr INR195,948 cr INR99,564 cr
Indian Air Force
Indian Navy
Indian Army
Revenue budget:
INR28,821 cr
Capital budget:
INR35,755cr
Capital budget:
INR20,848cr
Capital budget:
INR26,688cr
Revenue budget:
INR19,571cr
Revenue budget:
INR128,077cr
16.2%
Increase from
BE 2017-18
6.6%
Increase from
BE 2017-18
7.8%
Increase from
BE 2017-18
6%
Increase from
BE 2017-18
5.8%
Increase from
BE 2017-18
5.8%
Increase from
BE 2017-18

20 | Eye on Defence
India’s defence budget has seen a moderate increase of 7%—8% from last year, which is not only less than the
industry expectations but also fails to match up to the defence spending of other top nations. Although India’s
budget is slightly ahead of Russia’s, it is substantially less than China’s, whose focus is also on modernization
and expansion of its military base. The US, which has been leading the defence budget spend for many years,
spends 10 times more on its defence budget as compared to India.
Defence as a % of GDP
The current defence budget works out to be around 1.58% of the projected GDP for the financial year 2018-
19, which is being seen as the lowest such figure since the 1962 war with China. Although this figure has
been steadily declining in percentage terms because of the country’s healthy economic growth, the industry
believes that to safeguard our defence interest, this figure should be over 2.5%.
How much is the total capital budget – INR99,564 crore or
INR93,982 crore?
As per a press release, the MoD has granted INR99,564 crore as the capital outlay for the year 2018-19.
Capital outlay as best understood by the industry is the financial access with the three armed services to
procure their choice of military equipment for the upcoming year. A closer examination, however, reveals that
capital budget is a component of two segments: Demand grant no. 21 (Capital Outlay) and a component of
Demand grant no. 19 (Miscellaneous). This demand number 19 consists of revenue and capital outlay for the
following services: Secretariat-General Services, Administration of Justice, Customs, Police, Public Works,
Defence Services-Army, Housing, North Eastern Areas, Industries, Roads and bridges, and Grants-in-aid
to state governments. There is a total of INR5,463 crore assigned within the capital outlay of this demand
number and included within the overall capital budget.
(Note: Union defence budget 2017-18 did not have the “Miscellaneous” capital defence budget component
included in the overall capital budget.)
0.00
0.50
1.00
1.50
2.00
2.50
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Defence spending as a % of GDP
China Pakistan India

21Eye on Defence |
What is the buying power of the MoD for 2018-19?
When a defence contract is signed, the payment schedule is always on an installment basis. Therefore, when
the MoD signs a contract, it pays an upfront amount of ~15% of the contract value and then continues to pay
the vendor over a designated period of time in smaller installments. These installments are generally termed
as “committed liabilities.” What this means is that in a certain financial year, the MoD continues to pay those
vendors who had signed a contract in the past (approximate time period of 5-10 years).
For this year’s capital budget, if we assume that all committed liabilities will continue as is from the last
year, then the actual buying power is only the incremental INR7,494 crore (difference of INR93,982 crore
and INR86,488 crore). This is a very limited amount of capital that resides within the MoD to carry on their
endeavor of modernization and more importantly to replace their aging fleet across services.
As far as the major programs at hand are concerned, which are at the RFI stage for 2-3 years now, the process
to move them ahead into the RFP/technical evaluation/field evaluation stages does not require capital in hand.
Even if the MoD intends to procure some or any of these programs, it should move at a good pace this year, so
that procurements can happen over the next 2-3 years.
Large programs Category Procurement stage
Multi-role carrier-based
fighter (MRCBF)
Under Strategic Partnership (SP)
policy
RFI issued
Fighter aircraft Under SP policy
Single-engine deal scrapped; new
RFI awaited (as on 5th April 2018)
NUH Under SP policy RFI issued
NMRH Under SP policy RFI issued
P-75I Submarines Under SP policy RFI issued
Future Ready Combat
Vehicle (FRCV)
Under SP policy RFI issued
Futuristic Infantry Combat
Vehicle (FICV)
Make program RFI awaited
MoD’s defence focus this year: Infrastructure,
border surveillance and regional diplomacy
The defence budget has allocated INR3,175 crore for the capital outlay on roads and bridges. Finance
Ministry Arun Jaitley in his budget speech mentioned that infrastructure for connectivity in border areas is
being developed. This is part of India’s defences in these remote areas. “Rohtang tunnel has been completed
to provide all-weather connectivity to the Ladakh region. The contract for construction of Zojila Pass tunnel
of more than 14 km is progressing well,” he said. More importantly, the process of construction of a tunnel
under Sela Pass will be initiated this year. The construction of the tunnel under Sela Pass, which is located near
Tawang, talks about the priority being given for the defence of the North East and access to such points, which
are critical for defence.

22 | Eye on Defence
Tawang is an important strategic location for the Indian Army. It was a primary location where the 1962
India-China war was fought. From Tawang, the LAC in Bum La Pass is not far. Reaching Tawang by road is an
arduous journey through bad road connectivity. The Sela tunnel will reduce the road distance to Tawang and
will ensure that the stretch from Bomdila to Tawang remains open throughout the year.
Border surveillance is another initiative that the MoD will be focusing upon this year by procuring smart
surveillance systems (and reasonably cheaper than major military equipment) around the land borders of
north and coastal borders across the peninsular region. Amid the continuing cross-border firing and infiltration
from Pakistan, India has been forced to ponder upon how to ensure foolproof security along the international
border by using sophisticated technology, viz., drones and electro-optical sensors.
Building strong ties with the neighborhood is something that has been a key policy initiative of this
Government. Recently, there was a three-member team that visited Bhutan to meet with the senior officials
to discuss steps to prevent a Doklam-like situation in future (a 72-day stand-off between Indian and Chinese
troops at Doklam, Bhutan).
Late last year, India and Singapore signed the India-Singapore Bilateral Agreement for naval cooperation
during the second Defence Minister’s Dialogue held in Delhi between the two countries. The naval agreement
will enable increased cooperation in maritime security, joint exercises, temporary deployments from each
other’s naval facilities and mutual logistics support. This is the first such agreement that India has signed
with a regional maritime neighbor and will serve to increase the operational radius of the Indian Navy in the
maritime domain proximate to Singapore and the same option will be available to the Singapore Navy in the
Bay of Bengal area.
Simultaneously, India military continues its efforts to hold joint military exercises especially with Navy in the
peninsular region. This March, the Indian Navy held its 10th biennial naval exercise at the Andaman and
Nicobar Islands. The exercise, named as “Milan,” hosted naval forces from 16 nations including Australia,
Kenya, Cambodia, Singapore, New Zealand and Oman.
Capital budget concerns
Despite having a strong intention to develop the defence ecosystem in India, the MoD’s allocation of funds to
capital procurements has recently been brought out by the Indian Army. In a recent Parliamentary Standing
Committee report from March 2018, the Army has highlighted the concerning areas in the defence budget
whereby the capital budget is not even sufficient to cater to the committed liabilities, let alone further new
procurements, and the marginal increase in the capital budget only barely accounts for inflation. The Indian
Army has gone to the extent of mentioning that given the current defence budget, it leaves them no choice
but to reprioritize to either reduce requirements of security of military installations or to proceed slowly on
a few other acquisitions. The Army and the Indian Air Force (IAF) have reportedly submitted a priority list
with the MoD whereby fighter aircraft are at the top of the pecking order followed by the S-400 air defence
systems.
Sources:
1) http://www.indiabudget.gov.in/dg.asp?pageid=2
2) http://pib.nic.in/AllRelease.aspx?MenuId=3
3) https://data.worldbank.org/indicator/ms.mil.xpnd.gd.zs?end=2016&start=2007
4) https://idsa.in/issuebrief/defence-budget-2018-19-controlling-manpower-cost-lkbehera-020218
5) http://ajaishukla.blogspot.in/2018/03/army-vice-chief-criticises-insufficient.html
6) https://www.livefistdefence.com/2018/03/death-by-budget-is-this-the-indian-armys-angriest-report-to-government.html

23Eye on Defence |
Request for information (January 2018– March
2018 YTD)
Issue date Details Response date
09 Mar 2018
Electronic Flight Bags along with its associated spares, software
and data for IAF
17 April 2018
08 Mar 2018
Accord of AoN for Land Based Training Facility (LBTF) for
Integrated Platform Management System for IN
28 Mar 2018
05 Mar 2018 Containerised Small Arms Firing Range (CSAFR) for IN 30 Apr 2018
28 Feb 2018
Indigenous Development of Submarine Battery Type-II (Pre-Bid
Meeting on 6-April-2018), Directorate of Indigenisation Integrated
04 May 2018
27 Feb 2018 EoI for technology (TOT) for 250 kg pre-fragmented Bomb, DRDO 25 Apr 2018
27 Feb 2018 EoI for technology (TOT) for 500 kg general purpose bomb, DRDO 25 Apr 2018
23 Feb 2018 Assault Rifle, Qty: 5.5 lakh (Approx.) for Armed Forces 28 Mar 2018
23 Feb 2018
Sniper Rifle, Qty: 6,000, with ammunition (8.6 mm), Qty:
10,000,000 rounds (Buy 50% rounds and make 50% rounds) for
Indian Armed Forces
28 Mar 2018
19 Feb 2018
EoI is invited from reputed firms to take up manufacture and supply
of Track-Frame Assembly, BEML
6 Mar 2018
19 Feb 2018
EoI for power plant For 155 mm FH gun as per scope of work and
bill of material, OFB
6 Mar 2018
16 Feb 2018
EoI is invited from reputed firms having required expertise and
facilities for manufacturing of 1500 hp engine components
required for Engine Division, BEML Ltd., Mysore
15 Mar 2018
16 Feb 2018 Draft QRs and trial directives for HHTI (un-cooled version), BSF ----
15 Feb 2018
EoI for identification of Indian partner for the manufacture of ALH
(Dhruv) civil helicopter under ToT from HAL
6 Apr 2018
13 Feb 2018
Roof trough type splinter proof for shelter for field defences 1A,
for IA
08 Mar 2018
12 Feb 2018
Avalanche victim detector as part of special clothing and
mountaineering equipment, for Indian Army (IA)
09 Mar 2018
12 Feb 2018 Ascender as part of mountaineering equipment, for IA 09 Mar 2018
12 Feb 2018 Descender as part of mountaineering equipment, for IA 09 Mar 2018

24 | Eye on Defence
12 Feb 2018
Ice axe and shovel as part of special clothing and mountaineering
equipment, for IA
09 Mar 2018
12 Feb 2018
Karabiner P type as part of special clothing and mountaineering
equipment, for IA
09 Mar 2018
12 Feb 2018
Rock piton as part of Special clothing and mountaineering
equipment, for IA
09 Mar 2018
12 Feb 2018
Spare glasses for goggles as part of special clothing and
mountaineering equipment, for IA
09 Mar 2018
12 Feb 2018
Supply and installation of magazine firefighting system, for Indian
Navy (IN)
05 Mar 2018
25 Jan 2018
Six flight refueller aircraft (FRA) along with its associated
equipment for IAF
30 Mar 2018
24 Jan 2018
EOI for selection of a partner for collaboration agreement for
production and supply of light machine gun (7.62 x 51 mm), Small
Arms Factory, Kanpur
20 Feb 2018
19 Jan 2018 EoI for shortwave infrared (SWIR) optics, DRDO 26 Feb 2018
19 Jan 2018 EoI for combined day cum LRF receiver optics, DRDO 26 Feb 2018
19 Jan 2018 Construction and delivery of eight MCA barges for IN 9 Feb 2018
15 Jan 2018
EoI for rear view camera and GPS-based navigation systems to be
fitted in a vehicle produced by Vehicle Factory Jabalpur
15 Feb 2018
15 Jan 2018 Draft QRs - Infantry weapon effect simulator system, BSF ----
15 Jan 2018 Draft QRs - GPS, BSF ----
13 Jan 2018
EOI for dual reflector based CATR (1-40Ghz), HILS facility including
flight motion simulator (FMS) and target motion simulator, DRDO
21 Feb 2018
11 Jan 2018 Chemical agent monitor (CAM) for IA 19 Feb 2018
11 Jan 2018 Automatic chemical agent detector and alarm (ACADA), for IA 19 Feb 2018
4 Jan 2018
EoI for collaboration for co-production/co-development/ToT of
5.56mm close quarter battle (CQB) carbine, DDP, OFB
6 Mar 2018
8 Jan 2018 QRs - Through wall radar (3D), BSF ----
8 Jan 2018
QRs - PTZ (35x140MM) D/N all-weather cameras system with
wireless transmission system, BSF
----
5 Jan 2018 EOI for indigenisation of resistor for Mi-17 V5 helicopter, for IAF 30 Jan 2018

25Eye on Defence |
5 Jan 2018
EoI For power plant (engine) for 155 mm FH gun to part
no.1156261 as per scope of work and bill of material, DDP, OFB
30 Jan 2018
5 Jan 2018 EoI for ship installed radiac system, for IN 26 Jan 2018
5 Jan 2018 QRs of field search light (FSL), BSF ---
5 Jan 2018 QRs of digital night vision goggles - standard/basic version, BSF --
5 Jan 2018
QRs of digital night vision goggles – Communications interface/
advance version, BSF
---
4 Jan 2018
EOI for development and installation of containerized shooting
range, for IAF
5 Feb 2018
1 Jan 2018
Construction of six next-generation offshore patrol vessels
(NGOPVs), for IN
19 Feb 2018
8 Nov 2017
future ready combat vehicle for Indian Army (Corrigendum - New
acceptance of receipt of response date is 31 March 2018)
31 Mar 2018
Request for proposal (January 2018– March 2018
YTD)
Issue date Details Response date
09 Mar 2018 Creation of Firing Range Automatic Scoring System (FRASS) for IA 16 Mar 2018
08 Mar 2018 Detector Explosive Ordnance (Fibre Optic Survellance Set) for IN 05 Apr 2018
08 Mar 2018 Helicopter Satellite Tracking System for IAF 27 Mar 2018
07 Mar 2018
Electroplating Plant (Semi-automatic porous Chromium Plating Plant
with Fume scrubbing system), OFB
19 Apr 2018
07 Mar 2018
Assault rifles (7.62 x39 mm ) Fixed butt, Qty 10994 Nos and Folded
butt, Qty-3665 Nos, BSF
24 Apr 2018
07 Mar 2018 HHTI Binocular (Un-Cooled) Long Range Version, Qty-175 Nos. BSF 19 Apr 2018
06 Mar 2018 Hand Held GPS (Airborne Use) for IAF 27 Mar 2018
05 Mar 2018
Fuze Proximity A-1 For Shell 105 Artillery Gun Ammunition, Qty:
45,242 Nos. for IA
03 Apr 2018
3 Mar 2018 Goggles GS MK II, Qty: 1993, for IA 9 Mar 2018
3 Mar 2018 Signals equipment, for IA 8 Mar 2018

26 | Eye on Defence
1 Mar 2018 Quadcopter with thermal imaging camera for IN 22 Mar 2018
1 Mar 2018 Goggles flying, Qty: 33, for IAF 12 Mar 2018
1 Mar 2018
Integrated surveillance system (2 MP fixed camera, 2 MP ip, 20 x IR,
PTZ dome camera, VF camera (IR bullet network camera 2.0 MP), 8
ch network video recorder, dragon search light, network switch for
NVR, VMS software with CPU, 01 TB HDD, 40 inch LED, point-to-
point antenna) for IA
8 Mar 2018
28 Feb 2018
Four in number of A244s drill and practice torpedo and its
accessories, for IN
22 Mar 2018
28 Feb 2018 Bullet-proof jacket and helmet, Mazagon Dock Shipbuilders Limited 21 Mar 2018
23 Feb 2018 UHF programmable tele command transmitters, DRDO 20 Mar 2018
23 Feb 2018
Mask oxygen Km-35 size-2 And 3 and Lwi helmet Zsh-7apn size-2,
for IAF
8 Mar 2018
23 Feb 2018 Hand gloves and goggle protective, for IAF 28 Feb 2018
22 Feb 2018 Hand held explosive detector (HHED), Qty: 10, for IA 16 Mar 2018
22 Feb 2018 8MB Radio, Qty: 50, and 34MB Radio, Qty: 24, Assam Rifle 14 Mar 2018
22 Feb 2018
Ammunition protective composition no. 05, Qty: 166.000 kg + 50%,
under option clause, OFB
13 Mar 2018
22 Feb 2018 Radio sets hand held, Qty:18, for IA 27 Feb 2018
17 Feb 2018 Well detonator ITX 245 mine AP1B DR, Qty: 87,922, OFB 15 Mar 2018
16 Feb 2018
Thermal weapon sight for 5.56 mm INSAS Rifle,AK Series Rifle,,X-
95, Qty: 36, NSG
27 Mar 2018
16 Feb 2018 Round 120 MM FSAPDS MKI and MKII, DRDO 21 Mar 2018
16 Feb 2018 Advanced weapon boresight system (AWBS), Qty: 2, DRDO 22 Feb 2018
15 Feb 2018 Indoor shooting complex, for IA 24 Feb 2018
14 Feb 2018
Rear sight cursor as per attached drawing, Qty: 337, Small Arms
Factory, Kalpi
20 Feb 2018
14 Feb 2018
Sight Rear for MAG 7.62 MM, as per drawing, Qty: 447, Small Arms
Factory, Kalpi
20 Feb 2018

27Eye on Defence |
13 Feb 2018
40 mm MGL HEDP (Qty: 454,090) HEAP and SMK RP (Qty: 194,610
each) ammunition, for IA
28 Mar 2018
13 Feb 2018 NVG compatible portable helipad lights, Qty: 24, for IAF 21 Feb 2018
12 Feb 2018
2 man tactical kayak - It should be capable of sustaining the weight
of 2 combat divers with full battle load, i.e., 200 kg. (Qty: 02) , for IA
27 Feb 2018
12 Feb 2018 Fly catcher, Qty: 04, for IA 19 Feb 2018
9 Feb 2018 Tri-band dual axis tracking antenna system with accessories, DRDO 13 Mar 2018
26 Jan 2018 Day binocular for Air Force Station Nathatop, Qty: 20. 15 Feb 2018
25 Jan 2018
Global tender notice for the procurement of high precision
rheometer machine and accessories, DRDO
26 Feb 2018
25 Jan 2018 COTS I band radar for Indian Navy (IN) 21 Feb 2018
24 Jan 2018 Quad rotor UAV for 5 kg payload weight, DRDO 14 Feb 2018
19 Jan 2018
Items for the training of IAG sniper team PW div, the Infantry School,
Mhow
28 Feb 2018
19 Jan 2018
Electronic items and training aids for Army Centre for
Electromagnetics, Mhow
27 Feb 2018
19 Jan 2018
Bullet-proof jacket with floatation capability for yard, Qty: 211,317,
for Garden Reach Builders & Engineers Ltd.
27 Jan 2018
18 Jan 2018 Thermal night vision monocular for IAF 9 Feb 2018
18 Jan 2018 Bomb basket, Qty: 05, ITBP 8 Feb 2018
17 Jan 2018 Binocular Eyepiece for DNS for T-90 Tank, DRDO 12 Feb 2018
17 Jan 2018 Binocular Prismatic, Qty: 08, for IAF 23 Jan 2018
17 Jan 2018
Goggles protective field type, Qty: 100 pairs - medium and large
each, for IAF
23 Jan 2018
16 Jan 2018 Medium bullet proof vehicle (MBPV), Qty: 141, for CRPF 14 Feb 2018
16 Jan 2018
Rear sight cursor for MAG 7.62 mm, Qty: 337, for Small Arms
Factory, Kanpur
13 Feb 2018

28 | Eye on Defence
11 Jan 2018 Eight-lane firing range automatic scoring system, for IA 5 Feb 2018
10 Jan 2018
A communication system for command center (CSC) and
communication system for the launcher (CSL), DRDO
6 Feb 2018
8 Jan 2018
Repair and Overhaul of 05 RD-33 Series-III aero engines for MIG-29
AC, for IAF
20 Feb 2018
5 Jan 2018 Overhaul of the aero engine of SU-30 MKI aircraft, Qty: 30 nos 27 Feb 2018
5 Jan 2018 Protective combat gloves for Garud, Qty: 25 22 Jan 2018
4 Jan 2018 Mine detector with radar technology, Qty:70 24 Jan 2018
3 Jan 2018 Ballistic goggles, Qty: 1,400 30 Jan 2018
3 Jan 2018 Manpack high band jammer for small foot columns, Qty:150 24 Jan 2018
1 Jan 2018 Multifunctional NBC combat boot, DRDO 13 Feb 2018
25-27 Mar 2017
Eight ammunition to be produced by Indian industry – 2nd pre-bid
meeting to be held on 26 Feb 2018.
12 Apr 2018
25-27 Mar 2017
Ammunition manufactured by Indian industry. Bid submission date
of 6 RFPs extended to 12 Feb 2018
25 Mar 2017
Electronic FUZE for arty gun systems, Qty: 600,000 [Detailed
Amended RFP] for IA
12 Feb 2018
25 Mar 2017
BMCS low zone and high zone, Qty: 100,000 [detailed amended
RFP] for IA
12 Feb 2018
1 Jan 2017 Draft QRs and TD of underwater remote operated vehicle ----
1 Jan 2017 QRs of hand held search light (HHSL) -----
1 Jan 2017
QRs of passive night telescopic sight for 5.56 mm INSAS rifle and
LMG
----

29Eye on Defence |
Request for information (October 2017–December 2017 YTD)
List of industrial licences (ILs) filed (November
2017 – February 2018)
Application No.
and Date
Name of Applicant Item of Manufacture
2
19/01/2018
M/s Ideal Detonators Private Ltd High Melting Explosives (HMX)
1
05/01/2018
M/s Data Patterns (India) Pvt Ltd
Design and Development manufacture of
EW systems
36
29/12/2017
CM/s AKS Expo Chem Pvt. Ltd. SME (slurry/emulsion)
35
15/12/2017
M/s Barracuda Camouflage Pvt. Ltd.
Advanced multispectral ultraweight
camouflage nets/products
34
15/12/2017
M/s IDL Explosives Ltd. Non-explosives bulk emulsion matric
33
15/12/2017
M/s Airef Engineers Pvt. Ltd.
Construction of metallic or nonmetallic
materials, designed for ballistic protection
for military systems
32
07/12/2017
M/s Regenesis Industries Pvt. Ltd. Slurry/Emulsion explosives
31
07/12/2017
M/s Ideal Industrial Explosives Ltd. Manufacturing of SME/SMS explosives
30
07/12/2017
M/s Ideal Industrial Explosives Ltd. Manufacturing of S.M.S/S.M/E Explosives
29
07/12/2017
M/s VEM Technologies Pvt. Ltd.
Design and manufacturing of hard and soft
decoys

30 | Eye on Defence
New projects/investments/contracts
Name of entity Project details Value*
Defence
Acquisition
Council (DAC),
the Indian Army
and IAF
• The DAC has approved capital acquisition proposals
worth INR159 billion. The proposals include the
procurement of light machine guns through the fast-
track procedure at an estimated cost of INR18.2 billion,
purchase of 5,719 sniper rifles for the Indian Army
and the IAF at an estimated cost of INR9.8 billion, and
procurement of 742,000 assault rifles to be made
by the Ordnance Factory Board (OFB) and the private
industry at an estimated cost of INR122.8 billion.
• It has also approved additional capital acquisition
proposals worth INR18.5 billion, which primarily
include the procurement of infantry combat vehicles
worth INR11 billion and the procurement of one survey
training vehicle (STV), whose construction will be
undertaken by Indian shipyards at an estimated cost of
INR6 billion.
INR177.5 billion
Indian Navy and
Boeing
• The Indian Navy signed a 10-year contract with US-
based Boeing for construction of a 60,000 sq. ft.
training facility for its P-8I warfare aircraft at the naval
air station INS Rajali, Tamil Nadu, by March 2021.
• As part of the contract, Boeing will also commission a
dedicated maintenance simulator at the Naval Institute
of Aeronautical Technology (NIAT), Kochi.
INR19.5 billion
Ministry of
Defence (MoD)
• The MoD proposed two defence industrial corridors in
the country to promote domestic production and boost
investment in both public and private sectors.
• The corridors are expected to generate 250,000 new
employment opportunities and bring investments
amounting to INR200 billion.
• The first corridor will be between Chennai and Tamil
Nadu, connecting Kattupalli port, Chennai, Tiruchi,
Coimbatore, Hosur and Bengaluru.
• The second corridor will be in Uttar Pradesh, connecting
Agra, Aligarh, Lucknow, Kanpur, Jhansi and Chitrakoot.
NA

31Eye on Defence |
Request for information (October 2017–December 2017 YTD)
Hindustan
Aeronautics Ltd.
(HAL) and the
IAF
• The IAF has issued HAL a tender for 83 Tejas light
combat aircraft (LCA), the production of which is
planned from 2019-20.
• The Government of India has approved another
investment of INR14 billion to fast-track the production
from the existing 8 LCAs to 16 per annum.
NA
*The deal values have been converted to Indian rupees using the exchange rate of US$1 = INR65.
Sources
1) “Jaitley proposes 2 defence industrial corridors,” Business Line, 1 February 2018, via Factiva
2) “UP Defence Corridor: No point in blind imports, says Nirmala,” Press Trust of India, 22 February 2018, via Factiva
3) “Defence Ministry fast-tracks purchase of Light Machine Guns and sniper rifles for soldiers,” Indian Express, 14 February 2018,
via Factiva
4) “Defence council clears order of combat vehicles worth Rs 1,850 cr,” Economic Times, 20 February 2018, via Factiva
5) “Boeing to set up P-8I anti-sub aircraft training unit in TN,” The Hindu, 6 February 2018, via Factiva
6) “Air Force issues request for proposal to HAL for 83 Tejas aircraft,” The Hindu, 20 December 2017, via Factiva
7) “India Allocates $217 Million to Double Yearly Production of LCA Fighter Jets,” The Herald, 5 January 2018, via Factiva

32 | Eye on Defence
JVs and alliances
Name of the entities Nature of transaction Value
Vidarbha Defence
Industrial Hub
Pvt. Ltd. and Tata
Technologies Limited
• Vidarbha Defence Industrial Hub Pvt. Ltd. and Tata
Technologies Limited have signed a Memorandum of
Understanding (MoU) for setting up Nirman, a not-for-
profit common facilitation center for the aerospace and
defence sector in Maharashtra.
• The MoU will promote Maharashtra as an aerospace and
defence manufacturing and export hub and develop the
state as a defence R&D, innovation and testing center.
INR2.2 billion
Dassault Systèmes
and Andhra
Pradesh State
Skill Development
Corporation
(APSSDC)
• Dassault Systèmes and APSSDC have signed an MoU
to set up a 3DEXPERIENCE center to enhance the
employability of the talented workforce in the state.
• Dassault Systèmes is expected to bring its experience
and industry knowledge in setting up the center by
providing real and virtual demonstrations of modern-day
engineering and manufacturing.
NA
Boeing Corporation
and Tata Advanced
Systems
• Tata Boeing Aerospace, a JV between Boeing
Corporation and the Tata Group firm Tata Advanced
Systems (TASL) set up in 2015, has inaugurated an
assembly line in Hyderabad that will be the exclusive
source of future AH-64 Apache fuselages.
• The assembly line is expected to start producing
fuselage sections in 2018.
NA
Reliance
Aerostructure and
Thales India
• Reliance Aerostructure and Thales India have received
approval from the Competition Commission of India (CCI)
to form a 51:49 JV Thales Reliance Defence Systems,
aimed at setting up a supply chain for radars and
electronic warfare sensors in India.
• Reliance Aerostructure and Thales India have received
approval from the Competition Commission of India (CCI)
to form a 51:49 JV Thales Reliance Defence Systems,
aimed at setting up a supply chain for radars and
electronic warfare sensors in India.
• The JV is expected to develop skills and activity in the
SEZ of Mihan-Nagpur, together with an Indian supply
chain to manufacture microwave technologies and high-
performance airborne electronics.
NA

33Eye on Defence |
Request for proposal (October 2017–December 2017 YTD)
Sources
1) “Maharashtra signs MoU for aerospace and defence ,” The Asian Age, 21 February 2018, via Factiva
2) “Dassault Systèmes, APSSDC sign MoU to set up 3DEXPERIENCE Center,” MarketLine, 22 January 2018,
via Factiva
3) “Tata, Boeing inaugurate Hyderabad AH-64 fuselage line,” Flight International, 5 March 2018, via Factiva
4) “Reliance Aerostructure-Thales joint venture gets CCI nod,” Economic Times, 13 February 2018, via Factiva

34 | Eye on Defence
Country-level deals and initiatives
Country Nature of transaction Additional details
Oman
• During the Indian Prime Minister
Narendra Modi’s visit To Muscat, Oman,
an MoU was signed between the defence
ministries of the two countries in terms
of services and the use of the dry-dock
for maintenance on the provision of
facilities for the visit of Indian military
vessels to Duqm port.
• Another MoU was signed between
India’s Institute for Defence Studies and
Analyses and Oman’s National Defence
College on academic and scholarly
cooperation between the two countries.
• The MoU is expected to enable the two
countries to strengthen their maritime
security in the Gulf and the Indian Ocean
regions and is a part of India’s maritime
strategy to counter Chinese influence and
activities in the region.
• The Duqm port is expected to act as India’s
entry point to its neighbourhood in West
Asia and Eastern Africa.
• The two countries have also agreed to
hold joint exercises by defence forces,
train navy, air force and army officials,
ensure cooperation in coastal defence and
participate in defence exhibitions.
UAE
• India and the UAE signed an MoU to
establish cooperation in the identified
fields of defence manufacturing
and technology, including studies,
research, development, innovation and
cooperation between public and private
sector institutions of the two countries,
during the Indian Prime Minister
Narendra Modi’s visit to the UAE.
• Both the countries have decided to
cooperate in areas of armaments, defence
industries and ToT.
Russia
• India has begun final contract
negotiations with Russia for the INR390
billion acquisition of five advanced S-400
Triumf air defence missile systems,
which can detect, track and destroy
hostile strategic bombers, stealth
fighters, spy planes, missiles and drones
at a range of up to 400 km and altitude
of 30 km. The deal is expected to be
closed in FY19.
• The overall cost of Russian arms
deliveries to India has exceeded US$65
billion over the years of cooperation, and
the current book of orders tops US$4
billion.
• India and Russia are also planning to
finalize the terms of conditions of a JV
to manufacture Ka-226T light utility
helicopters for the Indian Armed Forces
1Q18.
• Russian-Indian military-technical
cooperation is constantly developing and
evolving from the seller-buyer format to
the joint design and production of advanced
weapon systems.

35Eye on Defence |
Request for proposal (October 2017–December 2017 YTD)
Malaysia
• India and Malaysia have agreed to hold
joint air exercises, specifically on tactical
deployment of Sukhoi aircraft, during
a bilateral meeting between Malaysian
Prime Minister Datuk Seri Najib Tun
Razak and Indian Prime Minister
Narendra Modi.
• Both the countries also expect to increase
cooperation between their navies,
particularly in submarine warfare.
Israel
• During the India visit of the Prime
Minister of Israel, Benjamin Netanyahu,
the Indian Prime Minister Narendra Modi
invited Israeli defence firms to partner
with Indian firms for manufacturing
defence products in the country.
• India also announced the purchase of
131 surface-to-air Barak missiles from
Israel for INR4.55 billion, following Israeli
Prime Minister’s India visit.
• The INR325 billion Spike anti-tank missile
deal has been put back in track by the
Indian Government. In January 2018, India
had canceled the deal for 8,000 Spike
missiles with Rafael Advanced Defence
Systems.
The US
• During the India visit of the Chief of the
US Air Force, General David L. Goldfein,
the air forces of India and the US agreed
to ramp up their operational cooperation
to complement the strategic interests
of the two countries in the Indo-Pacific
region.
• Further, a quadrilateral coalition among the
US, India, Japan and Australia is expected
to enable deeper cooperation between the
Indian and American air forces as well as
restrict China’s influence in the Indo-Pacific
region.
Sources
1) “India gets access to strategic Oman port for military use, Chabahar-Gwadar in sight,” The Indian Express, 13 February 2018, via
Factiva
2) “India, Oman sign key pact to bolster defence cooperation,” Mint Asia, 16 February 2018, via Factiva
3) “India, UAE expand defence ties, maritime cooperation,” Business Line, 25 January 2018, https://www.thehindubusinessline.
com/economy/india-uae-expand-defence-ties-maritime-cooperation/article9501631.ece, accessed 28 February 2018
4) “Military and Technical Co-operation; India orders over $4 bln worth of Russian weapons – Rosoboronexport,” Interfax: Russia &
CIS Military Daily, 29 January 2018, via Factiva
5) “India begins talks with Russia for Rs 39,000 cr Triumf missile shield deal,” The Times of India, 23 January 2018, via Factiva
6) “Russia, India to finalize helicopter joint venture,” Russia’s Defense and Technologies Newswire, 12 January 2018, via Factiva
7) “MALAYSIA, INDIA SEEK TO BOOST DEFENCE COOPERATION,” Bernama: The Malaysian National News Agency, 26 January
2018, via Factiva
8) “India revives missile deal,” IIND, 19 January 2018, via Factiva
9) “Modi invites Israeli investment in defence sector,” SP’s Naval Forces, 15 January 2018, via Factiva
10) “India to buy 131 Israeli Barak missiles for USD 70m,” French Collection, 3 January 2018, via Factiva
11) “Indian, US air forces to expand cooperation to combat challenges in Indo-Pacific: US Air Force chief Goldfein,” The Botswana
Gazette, 5 February 2018, via Factiva

36 | Eye on Defence
Industry buzz
IAF to upgrade Jaguar planes
The IAF plans to upgrade the capabilities of its Jaguar deep penetration strike aircraft deployed in Jamnagar,
Gorakhpur and Ambala for approximately INR50 billion. The IAF would re-engine around 100 of its Jaguar
planes by equipping them with new engines at the Honeywell power plants. The new engines are expected to
provide almost 1.5 times the power the existing engines provide to the aircraft.
(Source: “Fresh IAF push to stuck Jaguar upgrade project,” Mail Today, 1 January 2018, via Factiva)
IAF tests “Mobileye” System for helicopters
The IAF’s Flight Test Squadron tested a new capability for its helicopters aimed at providing early notification
of possible helicopter collisions. The capability is based on a “Mobileye” application installed in a system
utilized by every IAF aircraft and is expected to be integrated into the IAF Helicopter Division as part of a
system update.
(Source: “IAF Tests “Mobileye” System for Helicopters,” Israel defense, 5 March 2018, via Factiva)
IAF aims to fast-track fighter jet deal
IAF plans to fast-track the acquisition procedure for acquiring more than 100 combat aircraft in a deal worth
INR1.25 trillion. It aims at aircraft procurement through a government-to-government (G2G) deal to avoid
further time delays, in view of the phasing out of its MiG- 21s.
(Source; “IAF wants fighter jet deal fast- tracked,” Mail Today, 24 February 2018, via Factiva)
India test-fires its longest-range intercontinental missile, Agni-V
India successfully tested its Agni-V missile from an island in India’s eastern coast in the Bay of Bengal, as part
of its efforts to build a nuclear deterrent against Pakistan and China. The Agni-V is an advanced version of the
indigenously built Agni, or Fire, series, part of a program that started in the 1980s.
(Source: “India test-fires missile amid perceived threats from China, Pakistan,” Reuters News, 18 January 2018, via Factiva)
The Indian Navy upgrades six of its oldest submarines
The delay in induction of India’s new class of attack submarines has forced the Indian Navy to upgrade six of
its oldest submarines under the Major Refit and Life Certification (MRLC) program. Four Sindhughosh-class
and two Shishumar-class submarines are to be engaged in life extension and refit programs, at a cost of INR10
billion per boat. The service life of a submarine typically varies between 25 and 30 years.
(Source: “Indian Navy’s Six Oldest Submarines Undergoing Major Refit Process,” The Guardian, 9 February 2018, via Factiva)
India Navy launches Scorpene-class submarine
The Indian Navy launched Karanj, the third Project 75 Scorpene-class submarine built by Mazagon Dock
Shipbuilders (MDL), under a technology transfer partnership with Naval Group. The 2,000-ton conventional-
propulsion submarine has been designed and developed for missions including surface vessel warfare, anti-
submarine warfare, long-range strikes, special operations and intelligence gathering. The MDL team is now
expected to undertake the completion before Karanj sets sail for sea trials.
(Source: “India launches Scorpene-class sub,” The Botswana Gazette, 12 February 2018, via Factiva)

37Eye on Defence |
Industry buzz
The Indian Coast Guard ship “Vajra” gets decommissioned at Paradip
The Indian Coast Guard ship “Vajra,” which rendered three decades of service in maritime security, was
decommissioned at a ceremony in Paradip. Built by Mazagon Dock. Vajra was commissioned on 22 December
1988 and was inducted into the Paradip Coast Guard on 11 April 2013. The ship sailed for 52,966 hours in
the sea and covered a total distance of 524,299 nautical miles.
(Source: “‘Vajra’ decommissioned in Paradip,” Press Trust of India, 21 February 2018, via Factiva)
GoI fast-tracks the light transport plane Saras
The GoI plans to fast-track the revived light transport plane Saras toward production and begin the feasibility
study for a 70-seater regional transport aircraft RTA-70. Indian defence public sector unit (DPSU) HAL will
first produce the improved 19-seater Saras plane for the IAF, which has offered to buy 15 of them.
(Source: “Light plane Saras to be fast-tracked,” The Hindu, 22 February 2018, via Factiva)
Andhra Pradesh assures support to Airbus Defence and Space
Andhra Pradesh Chief Minister, N. Chandrababu Naidu, assured Airbus of support and facilities to Airbus
Defence and Space in the state during a meeting with Airbus Defence and Space CEO Dirk Hoke. Airbus is in
the process of developing the transport aircraft C-295 in India through a joint venture with Tata airbus.
(Source: “Andhra CM assures support to Airbus Defence and Space CEO,” Asian News International, 25 January 2018, via Factiva)
Uttar Pradesh invites aerospace and defence investment during the
UP Investors’ Summit
Uttar Pradesh Chief Minister, Yogi Adityanath, appealed to industries and companies in the aerospace and
defence sectors to invest in the state during the UP Investors’ Summit held in Mumbai. He assured that
the state would follow a zero-tolerance policy toward crime, which will support better investments. The
Government is also looking at encouraging private sector participation to develop new airports.
(Source: “Uttar Pradesh invites aerospace, defence investment,” The Asian Age, 23 December 2017, via Factiva)
India releases a list of foreign defence firms indicted for corruption
The MoD has published a comprehensive list of firms that have either been blacklisted or business with whom
has been put on hold due to their involvement in corruption charges in defence procurement, including those
belonging to Israel, Italy, Switzerland, Russia, Britain and domestic entities dealing in defence. According to
the document, six firms — namely, Singapore Technologies Kinetics Ltd, Israel Military Industries, TS Kisan &
Co, R K Machine Tools, RAD Systems and Corporation Defence — will not be able to take part in any defence
procurement process initiated by the MoD for future orders.
(Source: “India Releases Blacklist of Foreign Defense Firms Indicted for Corruption,” Sputnik News Service, 20 February 2018, via
Factiva)
Bharat Dynamics gets SEBI’s approval to float IPO
Bharat Dynamics has received approval from markets regulator Securities and Exchange Board of India (SEBI)
to raise funds through an initial public offering (IPO) to achieve the benefits of listing the equity shares on
stock exchanges. The company has proposed to raise an estimated fund of INR10 billion.
(Source: “Bharat Dynamics gets SEBI’s nod to float IPO,” Accord Fintech, 22 February 2018, via Factiva)

38 | Eye on Defence
HAL conducts the first flight of Hawk-i
HAL has conducted the first flight of Hawk-I, which is equipped with indigenous Real Time Operating System
(RTOS) developed by the defence enterprise. The RTOS is the system software, which provides a standard run-
time environment for increased complexity of modern avionics software. Currently, avionics systems in India
are developed using commercial RTOS procured from foreign suppliers. The import of technology is expensive
and renders limited flexibility in incorporating new features and adaptation to new hardware platforms.
(Source: “HAL conducts maiden flight of Hawk-I,” Governance Now, 15 February 2018, via Factiva)
HAL’s chopper plant in Gubbi gets environmental clearance
HAL obtained environmental clearance for its proposed helicopter complex in Tumakuru’s Gubbi taluk, two
years after the Indian Prime Minister Narendra Modi laid its foundation stone. The new complex will be initially
targeted at production of the LUH, and the company estimates optimization of initial production of the three-
tonne LUH (up to 50 helicopters annually).
(Source: “HAL’s chopper plant in Gubbi gets environmental clearance,” The Times of India - Bangalore Edition, 11 February 2018, via
Factiva)
HAL conducts trial for its LCH in Jaisalmer
HAL tested its LCH at the Pokhran Field Firing Range, Jaisalmer, supervised by the DRDO, IAF and HAL
scientists. The 5.8 ton LCH is designed to provide fire support to the Indian Army at mountainous deployment
areas on the northern borders, which can be as high as 6,000 meters. It has an operational ceiling limit of
6,000-6,500 meters.
(Source: “Light combat helicopter trial at Pokhran,” The Times of India, 23 January 2018, via Factiva)

39Eye on Defence |
Global industry buzz
A&D developments in foreign countries
The US DoD releases
the 2018 National
Defence Strategy
(NDS)
• The US DoD released the 2018 National Defence Strategy (NDS) in January
2018. It highlighted three primary areas: building a more lethal force,
strengthening alliances and attracting new partners, and a bringing about a
reformation of the DoD for greater performance and affordability.
• The NDS identified a number of threats to the US such as North Korea, Iran,
ISIS, Hezbollah and Al-Qaeda but focused more on threats from China and
Russia.
• The US military is expected to focus on Asia Pacific and Europe as the priority
regions while containing chaos in the Middle East. In addition, the military would
build on its readiness and modernize key capabilities for future conflicts while
working closely with allies and partners around the world.
The US DoD plans to
build low-yield nuclear
weapons and explore
artificial intelligence
and machine learning
techniques in military
• The Defence Advanced Research Projects Agency (DARPA) has selected
Raytheon BBN Technologies for its Causal Exploration of Complex Operational
Environments program. Under the program, Raytheon will explore artificial
intelligence and machine learning techniques to develop tools that might enable
military planners to understand how cultural and other factors combine to cause
conflicts.
• The US DoD is planning to build two new nuclear weapons to keep up with the
modernizing arsenals of Russia and China. One of the proposed weapons is
a “low-yield” nuclear weapon for the Trident missile, a powerful submarine-
launched ballistic missile designed to destroy entire countries.
Singapore launches
the Aerospace Industry
Transformation Map
(ITM)
• The Government of Singapore is set to add 1,000 new jobs in the aerospace
sector by 2020 as part of the newly launched Aerospace ITM initiative. The ITM
is also expected to add a manufacturing value of US$3 billion in the aerospace
sector and aims to encourage companies to invest in new equipment and
automation to build advanced facilities across the country.
• It will primarily focus on pursuing operational excellence, supporting innovation
in emerging technologies, equipping Singaporeans with relevant skills, and
strengthening bonds with industry associations and unions.
Australia aims to
become one of the
world’s top 10 defence
exporters
• Australian military equipment manufacturers have increased their stake in
global arms exports by offering government-backed loans to companies seeking
finance to export military equipment, as part of an A$3.8 billion (US$3.1 billion)
package to become one of the world’s top 10 defence exporters.
• The Australian MoD opened the production facility of Electro Optic Systems
(EOS) in Canberra, acting as a defence products development center as well as a
production support facility for current contracts.
• The new facility positions EOS for significant future growth, with export
production capacity at the facility set to reach US$20 million a month by 2020.

40 | Eye on Defence
Major updates from US-based defence contractors
The A&D industry is
witnessing increased
partnerships and M&A
activities
• Boeing and Adient formed a 49.99:50.01 JV, named Adient Aerospace, for
providing designing, production and sale of the armchairs for air carriers and
companies operating in the airplanes leasing sector. The headquarters of the
new company will be located in Kaiserslautern, Germany.
• Aerion and Lockheed Martin have announced an MoU to explore the feasibility
of joint development of the world’s first supersonic business jet, the Aerion AS2.
• Rockwell Collins and CAE entered into a collaborative agreement to develop
integrated live, virtual, constructive (LVC) training solutions during the
Interservice/Industry Training, Simulation and Education Conference (I/ITSEC).
Boeing wins major
contracts globally
• Boeing received an order worth US$11 billion from Dublin-based Avolon for 55
Boeing 737 MAX 8 aircraft and 20 of the higher-capacity Boeing 737 MAX 10,
with options for 20 additional MAX 8s.
• The company secured additional contracts worth US$8.3 billion from Royal
Air Maroc (RAM) (US$1.1 billion), Qatar’s Air Force (US$6.2 billion) and
Kazakhstan’s airline companies (US$1 billion).
A&D companies
awarded large defence
contracts by the US
DoD
• Lockheed Martin was awarded a US$7 billion contact from the US Air Force for
F-22 Raptor sustainment. The company was also awarded a contract by the US
Missile Defence Agency (MDA) to manufacture additional Lot 10 Terminal High
Altitude Area Defense (THAAD) interceptors and provide associated production
support, increasing the initial contract value from US$827 million to US$1.3
billion.
• General Dynamics Land Systems Inc. was awarded a US$2.6 billion US defence
contract for upgrading M1A1 configured Abrams vehicles and M1A1 vehicles.
• Raytheon won a contract worth US$2.3 billion to provide software engineering
services to support Phased Array Tracking Radar Intercept on Target (PATRIOT)
missile defence systems stationed abroad by the US DoD. Pratt & Whitney
received an eight-year, US$6.7 billion indefinite-delivery/indefinite-quantity
contract to sustain F119 aircraft engines for the US Air Force by December
2025.
• Boeing was awarded a US$1.2 billion a contract for the manufacture and
delivery of 10 P-8A aircraft, seven for the US Navy and three for the UK.
The company was also awarded a US$6.6 billion modification to a previously
awarded contract for the extension of the Ground-based Midcourse US Defense
development and sustainment.

41Eye on Defence |
Sources
1) “China and Russia are the focus of the US’ first new National Defense Strategy in a decade,” Business Insider, 20 January
2018, https://www.businessinsider.in/China-and-Russia-are-the-focus-of-the-US-first-new-National-Defense-Strategy-in-a-
decade/articleshow/62575680.cms, accessed 8 February 2018
2) “US DEPARTMENT OF DEFENSE RELEASES VIDEO OF A UFO ROTATING IN MID-AIR FOR THE VERY FIRST TIME,” Collective
Evolution, 17 December 2017, http://www.collective-evolution.com/2017/12/17/us-department-of-defense-releases-video-of-
a-ufo-rotating-in-mid-air-for-the-very-first-time/, accessed 8 February 2018
3) “How to read the 2018 National Defense Strategy,” Brookings, 21 January 2018, https://www.brookings.edu/blog/order-
from-chaos/2018/01/21/how-to-read-the-2018-national-defense-strategy/, accessed 8 February 2018
4) “President Donald J. Trump Announces a National Security Strategy to Advance America’s Interests,” Whitehouse.gov, 18
December 2017, https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-announces-national-security-
strategy-advance-americas-interests/, accessed 21 February 2018
5) “5 things to know about Trump’s national security strategy,” CNN Politics, 18 December 2017, https://edition.cnn.
com/2017/12/18/politics/5-things-to-know-about-trumps-national-security-strategy/index.html, accessed 21 February 2018
6) “Singapore to create 1,000 new aerospace jobs by 2020,” MarketLine News and Comment, 19 January 2018, via Factiva
7) “Defence industry minster Pyne opens ‘Electro Optic Systems’ new production facility in Canberra,” Australian Government
News, 30 January 2018, via Factiva
8) “Raytheon Wins $2.3Bln to Support PATRIOT Anti-Missile System – Pentagon,” Sputnik News Service, 31 January 2018, via
Factiva
9) “Boeing awarded $115.2M U.S. Navy contract modification,” Theflyonthewall.com, 9 January 2018, via Factiva
10) “Boeing wins $1.1bn order from RAM for four Dreamliners,” Qatar Tribune, 3 January 2018, via Factiva
11) “Boeing wins $6.2bn contract for Qatar`s F-15,” The Botswana Gazette, 26 December 2017, via Factiva
12) “Boeing wins $1.23 billion U.S. Navy contract –Pentagon,” Reuters News, 22 December 2017, via Factiva
13) “Boeing awarded $6.56B U.S. Department of Defense contract modification,” Theflyonthewall.com, 31 January 2018, via
Factiva
14) “Kazakhstan’s airlines sign agreements worth over $1B with Boeing,” TRTRAN, 31 January 2018, via Factiva
15) “Boeing/Adient formed JV,” AKMENG, 18 January 2018, via Factiva
16) “Lockheed Martin receives $7B for F-22 sustainment,” The Ghanaian Times, 25 December 2017, via Factiva
17) “United States : Rockwell Collins and CAE join forces to develop integrated Live, Virtual, Constructive training solutions,”
Agency Tunis Afrique Press, 28 November 2017, via Factiva
18) “Aerion, Lockheed Martin to develop supersonic business jet,” Airline Industry Information, 21 December 2017, via Factiva

42 | Eye on Defence
Analysis of M&A trends
A&D highlights –2018 highlights
Deals
• Q1 2018 largest deal to date: the US$9.5 billion General Dynamics paid to acquire CSRA Inc.
A&D highlights –2017 highlights
Deals
• Q4 2017 deal value was down 48% compared to Q4 2016, US$5.8 billion versus US$11.1 billion.
• Q4 2017 saw one mega deal: US$5.4 billion paid by Thales to acquire Gemalto.
• 2017: the top 5 transactions accounted for 94% of the total transaction value.
• In 2017, Thales made two noteworthy deals in the digital/big data space. In Q2, it acquired California-
based Guavus Inc., a real-time big data analytics company, for US$215 million and in Q4, Thales acquired
Netherlands-based Gemalto NV, a digital security company, for US$5.4 billion.
$30,643
$11,481
$8,710
$15,625
$56,655
$17,619
$50,280
$9,771
223
228
208
242
223
185
200
14
0
10,000
20,000
30,000
40,000
50,000
60,000
50
100
150
200
250
300
2011 2012 2013 2014 2015 2016 2018
A&D Value (U$m) A&D deals
A&D deals(2011-2018*)
A&D quarterly view (2011- 2018*)
0
10
20
30
40
50
60
70
80
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Q111
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
Q213
Q313
Q413
Q114
Q214
Q314
Q414
Q115
Q215
Q315
Q415
Q116
Q216
Q316
Q416
Q117
Q217
Q317
Q417
Q118
#ofDeals
Dealvalue(US$m)
A&D Value (US$M) A&D deals
*01 January 2011—31 March 2018

43Eye on Defence |
For more information , please contact:
K. Ganesh Raj
Partner and Leader
Aerospace and Defence Practice
Ernst & Young Pvt. Ltd.
Tel: + 91 120 671 7110
Email: ganesh.raj@in.ey.com
Amit Dugar
Senior Consultant
Business Tax Advisory
Aerospace & Defence
Ernst & Young Pvt. Ltd
Mob: +91 9705813268
Email: amit.dugar@in.ey.com

44 | Eye on Defence
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