Under that category, only domestic companies or their joint venture with overseas companies will be allowed to compete, provided 50 percent of the system’s components are indigenous.
While the move fits with a new policy designed to encourage domestic production, defense analysts and serving military officers are apprehensive about whether domestic sources will be able to meet the weapon requirements.
The Defence Ministry has sent a request for information (RFI) to domestic defense companies, including private sector Tata Power SED, Larsen & Toubro, Punj Lloyd, Bharat Forge, and state-owned Ordnance Factory Board (OFB) and Bharat Earth Movers, seeking information about their willingness and ability to compete for the tender, worth US $1.7 billion.
Global tenders for the guns attempted in 2007 and 2009 were canceled because of single-vendor situations: Rosoboronexport in 2009 and Rheinmetall in partnership with OFB in 2007.
Both tenders sought to procure 428 air defense guns, and required transfer of technology to OFB.
Several defense analysts fault the procurement process for the failed attempts to buy the air defense guns.
“The story is all too familiar even in this case; lack of foresight, poor planning, inadequate homework and no accountability in the MoD as well as the armed forces has led to the crisis in modernization of air defense in the Indian Army. There is limited appreciation of potential vendors who can qualify and their ability to subscribe to the tenders,” said Rahul Bhonsle, retired Indian Army brigadier general and defense analyst.
Rajinder Bhatia, CEO of private sector major Bharat Forge, cites the blacklisting of overseas defense firms as the larger issue.
“It is not the problem with the acquisition system but due to the fact that the best technology for this gun is owned by Rheinmetall Air Defense and a very large number of countries are using that technology. Rheinmetall Air Defense is, however, banned from business in India. And hence the problem.”
The domestic defense companies will need to tie up with overseas defense firms to manufacture the guns because none of the domestic firms has experience in selling the weapons, an MoD official said.
An Indian Army official said he is not sure if the domestic companies will be able to forge tie ups with overseas firms.
“We are already behind scheduled in buying several priority purchase for the defense forces, and we need to buy from the overseas market immediately and later rely on the domestic sector,” the official added.
Amit Cowshish, retired MoD official and defense analyst, favors giving a push to the domestic industry.
“The Indian industry does not have the capability and experience to make all the systems that the armed forces need, but if that is the deciding factor we will have to continue to buy from foreign sources. If we want to promote Indian industry, such measures are unavoidable. The ball is now in the court of the Indian industry, which must rise to the challenge by getting into tie-ups with the foreign original equipment manufacturer, investing in research and development and creating capacities within the country
“When procured, the air defense guns will be employed for providing air defense to selected locations in plains, deserts and mountain terrain and should be capable of being towed by an in-service gun-towing vehicle.”
The Army requires guns of a caliber greater than 30mm, and capable of engaging air targets day and night using fire control radars as well as electro-optical fire control systems independently.
The Indian Army has about 1,200 L-70 guns bought in the 1960s from Sweden.