Is indigenisation just a slogan? - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Tuesday 21 January 2014

Is indigenisation just a slogan?

by Ajai Shukla
Business Standard, 21st Jan 14

The coming week will see an important battle in the struggle to transform India from the world’s largest arms importer into a country that produces a respectable modicum of the weaponry it needs. The battle will be fought in the Defence Acquisition Council, the apex decision making body of the ministry of defence, which will decide whether to scupper the development of an indigenous basic trainer aircraft (BTA) by Hindustan Aeronautics Ltd (HAL) by paying Swiss aerospace company, Pilatus, to build 106 BTAs in India.

The Indian Air Force (IAF), which has always backed import, howsoever expensive, over the painstaking process of development, is squeezing the MoD to give Pilatus the contract. HAL, with a record of time and cost overruns, but with a new confidence stemming from the successful Tejas fighter and proven helicopters like the Dhruv, insists that it can easily build a BTA. HAL rightly points out that 75 basic trainer aircraft --- the PC-7 Mark II --- have been contracted from Pilatus as the IAF had wanted; but the defence ministry had also ruled that the remaining 106, needed to make up the IAF’s overall requirement, should be developed and built in India. To this end, HAL has committed close to Rs 200 crore of its own money in designing the Hindustan Turbo Trainer–40 (HTT-40).

In turning its face on this agreement, the IAF has cunningly played the “national security” card, declaring that India’s security depends on basic training, to hell with indigenisation. In a paper sent to the defence ministry on November 4, the IAF has said that it did not trust HAL to develop a trainer. This even though the Bangalore-headquartered company has played a major role in building the Tejas fourth generation fighter.

For the ministry, the options are clear. On one side is the logic of inducting trainer aircraft quickly to allow enough pilots to be trained. Opposing this is the urgent need for indigenisation; and the economic rationale of obtaining much cheaper maintenance, overhaul and spares all through the 30-40 year service life of an indigenous aircraft, compared to expensive overseas vendors. These life-cycle costs add up to four to five times the procurement cost of an aircraft. There is also the growing understanding that building indigenous aircraft will create an aerospace industry eco-system across the country, providing production volumes, jobs and expertise in high-tech manufacture.

The IAF’s fundamental logic is that HAL’s record of delays renders it unsuitable to be entrusted with a development programme. Aerospace enthusiasts know that delay is the only certainty while developing aircraft. Every major on-going fighter project has been marked by years of delay --- the F-35 Joint Strike Fighter in the US; the Eurofighter and the French Rafale that the IAF is buying. When even mature aerospace industries face chronic delays, it is short sighted to pillory India’s underfunded aerospace establishment for having taken three decades to learn what its foreign counterparts have assimilated in a century of government nurturing. The Tejas fighter is a tale of delay only to the thoughtless; in fact, it represents an admirable technological leapfrog.

The second major worry for the MoD should be the snake oil economics that the IAF backs its case with. Arguing that the Pilatus trainer is cheaper than the HTT-40, the IAF (speaking apparently for Pilatus) has quoted Rs 4,520 crore for 106 PC-7 Mark II trainers, i.e. Rs 42.64 crore per aircraft. In reaching this figure the IAF has strangely omitted the cost of ground equipment (Rs 452 crore); spares (Rs 678 crore); cost of ToT (Rs 252 crore); cost of manufacturing infrastructure (Rs 385 crore), simulator (Rs 218 crore); role equipment (Rs 226 crore) and transportation (Rs 63 crore). This takes the bill to Rs 6,925 crore, which comes to over Rs 65 crore per PC-7 Mark II. This is much higher than the HTT-40.

Moreover, the HTT-40 is being designed, developed and built in India, while the PC-7 Mark II is merely being assembled. The IAF proposal states that 10 of the 106 Pilatus trainers would be imported fully built; 28 in semi-knocked down (SKD) kits; and 68 completely knocked down (CKD). The IAF has proposed that one of its maintenance units, 5 Base Repair Depot in Sulur, Tamil Nadu, will assemble these kits into aircraft. Assembly imparts zero aerospace knowhow, and is a mere façade of indigenisation. For this, Pilatus would be paid Rs 2,405 crore. It would be cheaper to just buy the PC-7 Mark II fully built rather than pay so much for a fig leaf.

Finally, in passing this hare-brained proposal the MoD would risk serious trouble with audit and vigilance agencies. The BTA tender was for purchasing 75 fully built aircraft, not for building them in India under ToT. Vendors who lost out to Pilatus could legitimately contend that they would have won had ToT been a part of the tender. Already, Korean Aerospace Industry had contested the award of the contract to Pilatus. Moreover, the Defence Procurement Policy of 2013 (DPP-2013) explicitly prefers indigenous development to buying from overseas or building in India with ToT. If it chooses to ignore this crucial policy directive, the MoD would have proven that indigenisation remains a slogan.


  1. First break the requirement in two categories..citing urgency...then change SQRs to suit some one specific..then go for the blood of the indigenous project and ultimately ask for the entire lot from abroad....its become a regular trick of the armed forces....PC7 is a glaring example of sure Mr Browne must be smiling all the way to Switzerland now...

  2. How can 5 BRD assemble ready made kits which only need joining the wings and attaching landing gear...what a way to misguide...
    and which air force in the world does this....the chief himself had said he needs 80 aircraft immediately to meet his requirement of trg 240 plus why this desperation now....

  3. I have seen the status of HTT 40....and as i know close to 2000 drawings have been generated..a 1000 plus parts fabricated and the jigs are ready....why this step motherly treatment to HAL and the HTT 40....they do deserve an opportunity....The new IAF chief hopefully would be sensible..but alas even that disappoints...

  4. This war between the IAF and HAL is gonna set the indian defence sector at least a decade back...the air force is hell bent on destroying it MMRCA. Avro replacement , HTT 40.,FGFA or even the MTA...
    Why coz they didnt get Mattapan as their head and got a stupid can IAF get in destroying the home grown aerospace giant....guess when the IAF honeymoon with its new found grlfrnds will would have lost its faithful wife...HAL..

  5. Does it make sense for the IAF to operate two different basic trainers? That would seriously compromise training quality and increase complexity in inventory management. Besides, the reason the IAF went in for Pilatus in the first place was the disastrous record of the HAL-built trainer being used earlier.

  6. Point taken but HAL hasn't even been able to fully satisfy IAF in the LCA programme leave alone a trainer aircraft.Even its IJT programme is yet to get IOC whereas Pilatus MKII is a proven world class trainer.This would save us time to impart valuable skills to pilots.

  7. If the IAF was trying to compare the flyaway cost of Pilatus with the flyaway cost of the HTT-40, then it was a completely appropriate to quote the cost without the support equipment, etc.

    Let HAL quote the complete cost of acquisition and total cost of ownership for the HTT-40. Then compare that with the PC-7.

  8. We need to think beyond HAL here. HAL needs to be in the picture as the owner but a different structure can be evolved aligned to NACG-like thoughts and risk of delays can be brought down. I have said it time and again, if AEC could do it why can't the model be replicated in other spheres?!!

  9. HAL may be at fault for not delivering its projects in time as well as not being ableto maintain the highest standard of quality in the manufacture of spares. But the IAF is also not clean. Its time our defence forces are compelled to but only indigenous items. On the same vien, our indigenous defence industry be allowed to partner with whomsoever they want so that they become capable of manufacturing the items required by the defence forces.

  10. since lives of young cadets are involved a proven certified aircraft is a must.The airforce earliar used Iskara and kiran and it was not a good expierance .The trainers are required in large nos and very high sortie rates .The HAL aircraft is not even built ,certified and tested .With its work orders to the brim
    HAL MAY or may not deliver .Hence it makes sense to buy the swiss PC-7 and not delay the pilots training and confidence levels .

  11. Dear Col Shukla,As IAF cunningly played national security card, You also cunningly said that BTT will be designed,developed and manufactured by HAL.Please specify 1. who will supply the turboprop engine, engine fuel delivery system,propeller,ejection seat etc? 2.How much aerospace technology wii HAL gain by fabricating the basic trainer airframe, mission avionics and by assembling other imported vital components? 3.HAl required 30 years to make HAL TEJAS mk1 which is 1 year to go to FOC. It is 17 years running to develop HJT-36, but still it has some basic design flaws like assymetry og airframe and so nowhere near FOC. How many year will HAL take to develop HTT-40? Are you want to advise IAF to train pilots with just 75 basic trainers for those years? 4. Are you sure that the other contenders i.e.KAI would not increase cost for follow on orders if selected?.....

  12. When I was growing up in late 70s / 80s elders used to say that before independence, everything was imported, even cloth needles were made in the UK.

    Then the elders eyes used to fill up with pride and then they used to say.." Now we make all machinery, even aircraft in India." Can this generation ever say that to our kids?

    It is a very sad state of affairs that the IAF is addicted to the cocaine of imports. True strength comes cannot come from borrowed arms. Let us extend this thinking and disband the IAF, get some phirangi mercenaries to fly to protect India.

    The fact is that IAF and Army have seen the rapid economic progress of the country as a green light to spend the $$$ that the nation was earning. The Navy always taunted as the cinderella service, has come out as the outlier here. May be cinderella does have 2 ugly sisters.

    This BRD / IAF smoke and mirrors is shameful. We are not talking about frontline fighters here - so the question of undermining security does not arise. Give HAL /DRDO 3yrs.. FOC in 3 yrs or IAF is free to buy these child toys from the open market. Incase IAF goes to the market, 10-15 such basic aircraft will be off the shelf within no time, and rest 50-60 within next 1 yr.

  13. "The Tejas fighter is a tale of delay only to the thoughtless; in fact, it represents an admirable technological leapfrog."

    Well said!

  14. HAL needs to get its act on LUH first. That has highest opeartional.requirements
    HTT can wait, let IAF manage with 75 Pilatus. Whomhas asked them so many 2 seater SU-30 super heavy fighters.

  15. 1 bird is hand is better than a herd in the bush !! Pilatus is flying today, proven and safe. IAF cannot wait for a proposed aircraft that isnt even yet in prototype stage. Our young pilots deserve a SAFE aircraft now. Not 10 years from now.

  16. IN this article, the HTT-40 BTA from HAL seems completely indigenous, which it isn't. one sure gets this impression by overlooking the basic details. On the HTT-40 BTT that was displayed at Aero India 2013, all the AMLCD-based cockpit displays & instrumentation were from ELBIT Systems, while HAL officials confirmed that the engine & gearbox will be from Pratt & Whitney Canada, propellers will come from Hamilton Standard, & several other accessories & hydraulic components & ejection seats will be outsourced from Italian & other European OEMs. Consequently, HAL will build only the airframe, tricycle undercarriage, comms radios, standby AHRS & altimeter, accounting for less than 40% of indigenous content. By proposing something preposterous—that the IAF operate a mixed fleet of PC-7 Mk2 & HTT-40 BTT—what HAL is saying is that a person, for his own daily commuting reqmts, purchase two different models of sedans (like a TATA Nano & a Maruti/Suzuki Swift) & use one of them for the first fortnight of every month & the other sedan for the remainder of the month! That’s how convoluted HAL’s argument is from both financial & operational angles. In this day & age when financial resources are precious & scarce for military force-modernisation, no one in their right mind will support HAL’s POV regarding the HTT-40. And that’s also the reason why the MoD has refused to consider imported solutions for the IA’s/IAF’s combined reqmt for LUH/RSH & is instead to wait it out for the HAL-developed LUH to emerge.

  17. Indeginisation and IAF... as seriously supported by IAF as Pakistan Supports Peace and Normaly in Jammu and Kashmir

  18. IMHO, I think the Air Force, perhaps even the other services and civil aviation giants must open up and reconsider on this one.

    1. This is not a Combat Aircraft, so the level of complex electronics and sensors is much less than that of Fighters.

    2. Engine, another chink in the India's defence manufacturing armor. Fortunately this aircraft does not require a Turbofan or Turbo Jet engine. All it needs is a Turboprop engine which are relatively much simpler to design and integrate to an aircraft.

    3. Weapons, while the option of weaponization is available in the PC 7 Pilatus (such as the A-29 Super Tucano used by Afghan Air Force), its not necessary. Makes the Induction process shorter and less complications for HAL.

    Although, maybe the army should be interested in a weaponized platform for a CAS Platform. The army may be happy to fund the weapons program.

    4. I dont know if the navy would be interested to buy some, but if the Army and the AF place a larger order its cost would be reduced. We may also be able to sell the aircraft to Nepal and Bhutan and who knows even offer a cheaper alternative to the Afghan Air force.

    5. Civil Trainer ? Its basic after all, is it not.

    If the HAL can develop a more complex Sitara IJT on time, then why not a simple Turboprop aircraft of WW 2 concept. Tata or L&T can manufacture commercially.

  19. Retd Lt Gen H S Panag in his tweet mentioned that reason for imports is due to inefficient DRDO and IOFs. No other reason. Can not design & produce reliable weapon systems.
    Dhruv still has some problems but has done well. Tejas yet to be proven.Indigenous with an imported engine?


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