IAF Chronicles - A side view of whats going on behind the closed doors in New Delhi

[Kshithij Sharma]

Offsets are GOI money or French money ?
If we pay higher in the deal because of 50 % offsets or transfer of technology to private sector .. Why would GOI pay extra for DRAL ?
It has to gain something if it had done so ..
Remember US offset of Boeing setting up wind tunnel or something ..


I am just quoting 5 billion offsets as an example in MII deal. Not an actual figure.

Offset is the investment made by the Foreign OEM in India. They are investments and yield returns and earnings. In Rafale deal, even the previous partnerships of DCNS etc were considered to be part of offset.

Government is not paying extra for offset. As offset is a form of investment, we are just saying: "We will do business with you but you must also do business with us". Just like India need not spend money to buy Rafale, but instead go for Su30 (as it is 75% part indigenous and 55% by value indigenous), France can either accept Indian terms or not do business.

 

[Aashish]

Parik, have 2 doubts ..

1. What's the plan for forward bases as more & more aircrafts there retire ?
Sukhoi + Rafales until Tejas gets done ?

2. How are we going to recover the offsets spent at DRAL ?
Assuming 25 billion $ deal is made with 50 % offsets , 12.5 billion offsets invested in various projects as technology etc..
Supposing 5 billion $ of offset is spent at mic setup in DRAL , how this amount is going to be recovered by GOI ?
I ve raised this query at PDF, taygibay responded but I couldn't understand his explanation .

Offsets are GOI money or French money ?
If we pay higher in the deal because of 50 % offsets or transfer of technology to private sector .. Why would GOI pay extra for DRAL ?
It has to gain something if it had done so ..
Remember US offset of Boeing setting up wind tunnel or something ..


I am just quoting 5 billion offsets as an example in MII deal. Not an actual figure.

The forward bases primary air defence role will be taken care by nearby places primarily by using MKI and M2K till a new squadron is raised to replace the retired fleet

it does not work like that. The Make India campaign is a different game altogether.The manufacturing program will see the creation of a line and ecosystem. That's very different to the offsets which are basically supplying from existing manufacturing line with spin-off for the purchases.

if you see there is a difference in between the two in a very simple manner

the offset campaign if followed will be towards a creation of a maintenance ecosystem over multiple years. You can even call it M-TOT or Maintenance Terms of Technology. This is where the planes bought off the shelf can get all its re-supplies and repairs in India with all important parts and entities making things in India localised ecosystem. What will not be covered will be a minuscule amount of proprietary tech.

What Make in India envisions is P-TOT or Production Terms of Technology - where the whole plane is produced from parts with entities local in this country. This localisation percentage will increase over time. That's the aircraft manufacturing line or assembling line to begin with.

Dont get confused between the transfer of technology versus terms of technology. (all do, even I did)

We are at present with offsets at M-TOT and will move towards P-TOT.

In each of the cases, there will be a significant amount of contracts and subcontracts with the main assembling unit aka DRAL up for grabs for the local Indian MIC. This is why the monetary value of whatever comes as offsets are basically recycled within our system, Offsets is basically a tool at our own expense to ensure that local industry is not left out completely. As an example without offsets, the M-TOT was not possible in this case.

How government recovers from such offsets is basically by ensuring such companies over time in Indian MIC deliver a set of goods which ensures money is paid to them instead of the original OEM. Thus this is towards the encouragement of local bodies and the cycling. Taxes and critical parts available without crippling effect is the side effect of the same.

Primarily if we had not insisted on M-TOT like say Qatar , we will be doing very minimal things in Base repair depots implying planes are down with almost everything dependent on foreign OEM. of course such a deal would also mean at least the whole deal comprising of 50% offsets will see a significant reduction in overall price to the tune of at least the major percentage of offset amount.

Sadly such a situation would also mean we are dependent on the foreign OEM 100% with no back up plan, no spin off work for other places like Kaveri as an example, or component manufacturing or ocal industry getting any work too.

 

[vstol Jockey]

@Aashish, whats latest on Kaveri engine? Any news?

 

[Milspec]

The forward bases primary air defence role will be taken care by nearby places primarily by using MKI and M2K till a new squadron is raised to replace the retired fleet

it does not work like that. The Make India campaign is a different game altogether.The manufacturing program will see the creation of a line and ecosystem. That's very different to the offsets which are basically supplying from existing manufacturing line with spin-off for the purchases.

if you see there is a difference in between the two in a very simple manner

the offset campaign if followed will be towards a creation of a maintenance ecosystem over multiple years. You can even call it M-TOT or Maintenance Terms of Technology. This is where the planes bought off the shelf can get all its re-supplies and repairs in India with all important parts and entities making things in India localised ecosystem. What will not be covered will be a minuscule amount of proprietary tech.

What Make in India envisions is P-TOT or Production Terms of Technology - where the whole plane is produced from parts with entities local in this country. This localisation percentage will increase over time. That's the aircraft manufacturing line or assembling line to begin with.

Dont get confused between the transfer of technology versus terms of technology. (all do, even I did)

We are at present with offsets at M-TOT and will move towards P-TOT.

In each of the cases, there will be a significant amount of contracts and subcontracts with the main assembling unit aka DRAL up for grabs for the local Indian MIC. This is why the monetary value of whatever comes as offsets are basically recycled within our system, Offsets is basically a tool at our own expense to ensure that local industry is not left out completely. As an example without offsets, the M-TOT was not possible in this case.

How government recovers from such offsets is basically by ensuring such companies over time in Indian MIC deliver a set of goods which ensures money is paid to them instead of the original OEM. Thus this is towards the encouragement of local bodies and the cycling. Taxes and critical parts available without crippling effect is the side effect of the same.

Primarily if we had not insisted on M-TOT like say Qatar , we will be doing very minimal things in Base repair depots implying planes are down with almost everything dependent on foreign OEM. of course such a deal would also mean at least the whole deal comprising of 50% offsets will see a significant reduction in overall price to the tune of at least the major percentage of offset amount.

Sadly such a situation would also mean we are dependent on the foreign OEM 100% with no back up plan, no spin off work for other places like Kaveri as an example, or component manufacturing or ocal industry getting any work too.

On a side note, TOT will never build ecosystem or at-least not what we define as an Aeronautical ecosystem. Hell, with LCA missing 3 out of 4 of its objectives, there is very little scope for an ecosystem on even an Indian system.

There seems to be a severe disconnect on VA/VE in the Procurement wing of the government, without understanding how any manufacturing ecosystem evolves, GoI has been making this claim for decades and falling flat on it's face.

 

[Kshithij Sharma]

How government recovers from such offsets is basically by ensuring such companies over time in Indian MIC deliver a set of goods which ensures money is paid to them instead of the original OEM. Thus this is towards the encouragement of local bodies and the cycling. Taxes and critical parts available without crippling effect is the side effect of the same.

So, India pays for the offset too but the ownership goes to the foreign OEM?

I always thought of offset as capital investment by foreign OEM at their expense to supply maintenance and spare parts for a negotiated price in return for a share in the profits. Thanks for enlightening me.

 

[Kshithij Sharma]

On a side note, TOT will never build ecosystem or at-least not what we define as an Aeronautical ecosystem. Hell, with LCA missing 3 out of 4 of its objectives, there is very little scope for an ecosystem on even an Indian system.

What are the objectives?? What scope do objectives determine?

There seems to be a severe disconnect on VA/VE in the Procurement wing of the government, without understanding how any manufacturing ecosystem evolves, GoI has been making this claim for decades and falling flat on it's face.

Do you think this sentence makes sense? Making claims is different from having intentions. People do lie. How do you know that GoI didnt want to sabotage India under foreign pressure?

Give proper reasoned argument, instead of just ranting against something

 

[Milspec]

What are the objectives?? What scope do objectives determine?

Objectives: Engine, Airframe and control system, Avionics package (MMR Radar), and Munitions.
Engine was disappointment, avionics package is pretty much off the shelf including Radar, rwr, targeting pods, all of the munitions package is imported, there is some hope on astra but still way behind schedule. The one to check is a solid airframe.
coming to your next question
What scope do objectives determine? Its actually the other way around for any NPD project. in your Phase Gate one, given the paradigm of Value Engineering, you establish the scope of the project based on the needs of your customer or potential market or your marketing teams goals. Objectives don't determine the scope of project.

Do you think this sentence makes sense? Making claims is different from having intentions. People do lie. How do you know that GoI didnt want to sabotage India under foreign pressure?

Give proper reasoned argument, instead of just ranting against something

Dear sir,
I wouldn't be writing something if it did not make sense to me. I am not sure what your sabotage theory refers to, i am just pointing to incompetency of the GoI nothing else.

If you need point by point breakdown on what a ToT should involve and how Indian government shoots itself in the foot in its gate reviews let me know and I will give you a phase by phase break down.

P.S. I am not sure about the tone you use in your post, I would highly urge you not to advice others on what to write.

 

[Aashish]

@Aashish, whats latest on Kaveri engine? Any news?

Had requested for a check week beginning itself. Will share once I get.

 

[Kshithij Sharma]

Objectives: Engine, Airframe and control system, Avionics package (MMR Radar), and Munitions.
Engine was disappointment, avionics package is pretty much off the shelf including Radar, rwr, targeting pods, all of the munitions package is imported, there is some hope on astra but still way behind schedule. The one to check is a solid airframe.
coming to your next question
What scope do objectives determine? Its actually the other way around for any NPD project. in your Phase Gate one, given the paradigm of Value Engineering, you establish the scope of the project based on the needs of your customer or potential market or your marketing teams goals. Objectives don't determine the scope of project.



Dear sir,
I wouldn't be writing something if it did not make sense to me. I am not sure what your sabotage theory refers to, i am just pointing to incompetency of the GoI nothing else.

If you need point by point breakdown on what a ToT should involve and how Indian government shoots itself in the foot in its gate reviews let me know and I will give you a phase by phase break down.

P.S. I am not sure about the tone you use in your post, I would highly urge you not to advice others on what to write.

Airframe is solid. Avionics and fly-by-wire is also solid and Indian. Munitions, except for AAM, is Indian. Astra can't be used on Tejas Mk1 as it is overweight by 30-35 kg (It can be used in MK2 as it will be bigger and the hardpoint will shift a few inch away from the edge). Engine is under development with French consultancy and nearing completion. 2018-19 is the deadline. UPA sabotaged Kaveri development under foreign pressure. Funds for test bed, fuel for tests etc were delayed and denied. The delay is a result of that.

PS: You were doing a hit and run. Since this is a forum, not face-to-face, it is difficult to discuss anything if you are not clear. You have to explain somethings on the topic you are speaking. I found your statement to be rhetorical and snide and hence responded. I am only urging you to not make rhetorical or snide statements as that can be confusing.

 

[Milspec]

Airframe is solid. Avionics and fly-by-wire is also solid and Indian. Munitions, except for AAM, is Indian. Astra can't be used on Tejas Mk1 as it is overweight by 30-35 kg (It can be used in MK2 as it will be bigger and the hardpoint will shift a few inch away from the edge). Engine is under development with French consultancy and nearing completion. 2018-19 is the deadline. UPA sabotaged Kaveri development under foreign pressure. Funds for test bed, fuel for tests etc were delayed and denied. The delay is a result of that.

PS: You were doing a hit and run. Since this is a forum, not face-to-face, it is difficult to discuss anything if you are not clear. You have to explain somethings on the topic you are speaking. I found your statement to be rhetorical and snide and hence responded. I am only urging you to not make rhetorical or snide statements as that can be confusing.

Ok, I was nice last time, i won't be going forward. I made a general remark which you think is snide on the other hand you go on accuse Government Of India of sabotaging kaveri Engine. i.e. intentionally making it to not meet required specification and in the same breath you claim French input for completion of the same engine? In other words if there was no sabotage, there would be a deliverable engine, by your UPA sabotage, why would NDA need the french.

as far as snide remark. PROVE SABOTAGE.

 

[Kshithij Sharma]

Ok, I was nice last time, i won't be going forward. I made a general remark which you think is snide on the other hand you go on accuse Government Of India of sabotaging kaveri Engine. i.e. intentionally making it to not meet required specification and in the same breath you claim French input for completion of the same engine? In other words if there was no sabotage, there would be a deliverable engine, by your UPA sabotage, why would NDA need the french.

as far as snide remark. PROVE SABOTAGE.

I will speak of general defence sabotage:
- Tejas in 2014 had only airframe and FBW, nothing else. The same condition was also seen in 2008-9. Why wasn't Tejas flown heavily and tested rigorously to gain feedback etc, even with imported engine. But, India deliberately chose not to.
- Test bed was denied to Kaveri and India had to regularly fly to Russia. The most important aspect of engine development is test bed to regularly check and fine tune.
- The head of Kaveri development was arrested on 2011 on a flimsy charge which appeared more or less targeted.
- Several projects like Scorpene, IAC-1 which was flagged off in NDA-1 time was delayed incessantly.
- Ammunitions were imported, Tatra trucks were imported despite easy availability from Indian alternative.
- No orders were placed between 2012-2014 as stated by Parrikar.
- Arjun Tank sabotaged by changing GSQR.

So on...

PS: You were never nice. No need of such remarks

 

[Grevion]

Chatters on the meeting for LM F-16 by PMO/MOD with IAF

1. The meeting between PMO, MOD and IAF on F16 related discussion took place in a tense environment
2. PMO outlined a plan for a total of 170 odd F-16s which will require in the range of USD 25 Bn.
3. The plan of total numbers is the overall plan inclusive of the envisioned break up of first lot flyaway+ Indian production + follow on
4. The estimated amount pegged is close to over USD 145 Mn per plane for the complete deal
5. The above deal still has additional elements which will require further contracts with Indian entities which will push the price up eventually by another USD 25-30 Mn per plane.
6. It was discussed that since its a separate contract, the same figure is not clubbed in USD 25 Bn figure. otherwise, the overall figure is much closer to USD 29-30 Bn in range.
7. IAF responded saying the whole deal and price is not correct for fleet modernisation aspect
8. IAF said single engine Tejas Mk1A and future variants are envisioned for the planned roles and inclusive of program sunk costs the cost for such a platform with numbers would come down closer in the range of USD 60-65 Mn over time
9. IAF also pointed that if Rafale is considered since there is a considerable Sunk cost of Indian specific customizations, the average price will be cheaper than this F-16 deal average allowing better numbers
10. IAF is confident that for a total outlay of USD 30 Bn, close to 220+ Rafales can come in easily inclusive of MII and more strategic deals which benefits India overall
11. One of the major points IAF pointed was Tejas program role with AMCA route and network-centric warfare aspect coming in Rafale MII and proposal with MOD.
12. PMO insisted that F-16 deal may be better to look at for the time being as it adds to quicker inventory build up and will help IAF in forward bases.
13. IAF at that point clarified that F-16 Block 70 has issues as well and is not suited for the terrain India utilises all over the country
14. IAF said the specific packages built in like PBL, High altitude and anti-corrosion issues in the case of Rafales, will need to be built in the F-16 package escalating the overall USD 30 Bn figure further up.
15. In technical aspects, IAF said the modified Soufa test done had shown issues with hot and cold extreme climates, altitude performance limitations, payload and mission issues in different speed regimes, and a big practical issue of Infra Red heat emission in the engine portion.
16. IAF also said such a powerful bigger engine is also not enough owing to complexities involve for Indian terrain and the plane being overall bulky for the roles envisioned, requiring higher thrust which is now showing up in IR signatures
17. IAF said for the roles planned, the need is for a much lower MTOW and lower thrust engines with improved heat signature management.
18. MOD asked for a way out to then take this to a conclusion of either a buy or a rejection.
19. IAF insisted on a practical test of a block 70 plane in real-world conditions with a visual and technical scrutiny for evaluating versus its positioning and roles wrt IAF fleet fighters
20. IAF also said that this might require some time and hence priority should be for the Rafale deal asap over this platform with an increased focus on funds for the proper MII plan.
21. PMO agreed to both these points and asked MOD to take things forward accordingly.
22. If MOD/PMO does not call a proper block 70 for a practical test, the F-16 deal would be put out for the quiet burial as planned in dragging of timelines.
23. IAF still has a long way to fight but slowly it is fighting its way through for Rafales and Tejas plan
24. LM and USA will be informed about the meeting outcome and some urgent pending purchases will be made to keep the FMS route busy and focus on LM MII program for helo over fighter jets.

@Abingdonboy @halloweene @Hellfire @Parthu @Picdelamirand-oil @Bon Plan @randomradio @Nick @Ankit Kumar @GuardianRED @Ashwin @nair @Milspec @Tarun @halloweene @Ankit Kumar @all others

30 billions for just 170 units.....Good luck to PMO with that figure. It will be a huge blunder on Modi's part. Importing a costly 40 years old airframe over homegrown Tejas and AMCA will be the biggest scam in the history of Independent India bypassing 2G and Coalgate. Congress made a scam out of nothing in Rafales case, I wonder how will Modi explain this purchase to his opposition in the country.

 

[vstol Jockey]

UPA 1 & 2 looted this nation thru corruption and bribes in defence deals. Modi and Doval are selling this nation and that is worst than corruption.

 

[Kshithij Sharma]

UPA 1 & 2 looted this nation thru corruption and bribes in defence deals. Modi and Doval are selling this nation and that is worst than corruption.

When did Modi do it? Give details?

 

[Sathya]

The forward bases primary air defence role will be taken care by nearby places primarily by using MKI and M2K till a new squadron is raised to replace the retired fleet

it does not work like that. The Make India campaign is a different game altogether.The manufacturing program will see the creation of a line and ecosystem. That's very different to the offsets which are basically supplying from existing manufacturing line with spin-off for the purchases.

if you see there is a difference in between the two in a very simple manner

the offset campaign if followed will be towards a creation of a maintenance ecosystem over multiple years. You can even call it M-TOT or Maintenance Terms of Technology. This is where the planes bought off the shelf can get all its re-supplies and repairs in India with all important parts and entities making things in India localised ecosystem. What will not be covered will be a minuscule amount of proprietary tech.

What Make in India envisions is P-TOT or Production Terms of Technology - where the whole plane is produced from parts with entities local in this country. This localisation percentage will increase over time. That's the aircraft manufacturing line or assembling line to begin with.

Dont get confused between the transfer of technology versus terms of technology. (all do, even I did)

We are at present with offsets at M-TOT and will move towards P-TOT.

In each of the cases, there will be a significant amount of contracts and subcontracts with the main assembling unit aka DRAL up for grabs for the local Indian MIC. This is why the monetary value of whatever comes as offsets are basically recycled within our system, Offsets is basically a tool at our own expense to ensure that local industry is not left out completely. As an example without offsets, the M-TOT was not possible in this case.

How government recovers from such offsets is basically by ensuring such companies over time in Indian MIC deliver a set of goods which ensures money is paid to them instead of the original OEM. Thus this is towards the encouragement of local bodies and the cycling. Taxes and critical parts available without crippling effect is the side effect of the same.

Primarily if we had not insisted on M-TOT like say Qatar , we will be doing very minimal things in Base repair depots implying planes are down with almost everything dependent on foreign OEM. of course such a deal would also mean at least the whole deal comprising of 50% offsets will see a significant reduction in overall price to the tune of at least the major percentage of offset amount.

Sadly such a situation would also mean we are dependent on the foreign OEM 100% with no back up plan, no spin off work for other places like Kaveri as an example, or component manufacturing or ocal industry getting any work too.

It's too complicated for me to understand.

Basically what i understand is GOI is planting French seed at DRAL plant and going to buy fruits from DRAL .

I wish some company which has good acedemics , R & D centres & ability to absorb all the chances were given such an help.

Hopefully DRAL prove its worth to the country .. and doesn't waste such a massive effort from GOI.

Can HAL absorb maintainence / production tech form DRAL plant ?
Is it possible ?

 

[Aashish]

Can HAL absorb maintainence / production tech form DRAL plant ?
Is it possible ?

If the said parts and components are common between Rafale and LCA or if DRAL makes Dassault planned components for LCA in DRAL then it's possible. Such components or parts will allow DRAL to become part of the HAL outsourced ecosystem

Generally, every plane makers accept particularly machinery, make, model etc for the tools +machinery used to make plane parts put together. Thus if DRAL becomes part of the LCA ecosystem then fitment of such parts will see minor tools +machinery rejig as well.

But such a case may not be possible for other crafts in HAL kitty unless say an MKI upgrade as well borrows something from these components like Tejas case.

A point of contention -
If you recall the old MMRCA saga there was a particular point fo 2.7x manhours for a HAL produced Rafale. The issue was not just the manpower and manhours required. It was also bcz of the tools and the process followed in HAL versus in Merignac. The tools could have been sourced from the same vendor like Merignac line suppliers but HAL chose to ask for tender and open it up for lowest quote side implying the quality parameters cant be quantified as per the process in Merignac, The same tool and machinery set might require additional qualification tests to know if there is a acceptable median in performance and quality parameters as compared to original production line's end product + minor modifications to cross-validate.

This should help you understand that parts and systems are just one part of the process... many more things go as well inside to make it acceptable.

 

[dadeechi]

30 billions for just 170 units.....Good luck to PMO with that figure. It will be a huge blunder on Modi's part.

It would be a mistake to think Modi is making a blunder. Modi is not making any blunder. Everything is moving as per the plan.

Importing a costly 40 years old airframe over homegrown Tejas and AMCA will be the biggest scam in the history of Independent India bypassing 2G and Coalgate. Congress made a scam out of nothing in Rafales case, I wonder how will Modi explain this purchase to his opposition in the country.

Modi does not need to explain anything. Both IAF & BJP are anti-Russia. The only difference between them is IAF prefers French ones over US ones. Neither the IAF nor BJP are interested in Indian or Russian equipment. IAF would any day pick F-16s over LCA. I expect IAF to strongly come out and defend the decision on F-16s quoting falling numbers should Congress try to politicise the deal like they did in case of RAFALEs. The recently released RFP for Teja MK1A would act their defence too as IAF would claim they have shown the intent for Indian products but HAL could not deliver and hence the need.

 

[dadeechi]

let me put it this way as a way to show both sides of the argument:
8.7 Billion$ for 36 rafale
8 billion $ for 83 LCA Mk1A

36 rafale vs 83 LCA Mk 1A -> which is better?

i personally coudlnt pick any one.. i think we need both. this and the f-16s too.

IAF would pick RAFALEs over LCA MK1A in a heartbeat every time. That is what matters.

 

[STEPHEN COHEN]

It would be a mistake to think Modi is making a blunder. Modi is not making any blunder. Everything is moving as per the plan.



Modi does not need to explain anything. Both IAF & BJP are anti-Russia. The only difference between them is IAF prefers French ones over US ones. Neither the IAF nor BJP are interested in Indian or Russian equipment. IAF would any day pick F-16s over LCA. I expect IAF to strongly come out and defend the decision on F-16s quoting falling numbers should Congress try to politicise the deal like they did in case of RAFALEs. The recently released RFP for Teja MK1A would act their defence too as IAF would claim they have shown the intent for Indian products but HAL could not deliver and hence the need.

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