BAE Pulls Out of Joint Venture With India’s Mahindra

[JanjaWeed]

NEW DELHI — In a setback to joint ventures in India’s defense sector, the U.K.’s BAE Systems and domestic automobile company Mahindra & Mahindra ended their equity partnership, formed in 2009, called Mahindra Defence Systems.

BAE will forgo its share of 26 percent in Mahindra Defence Systems; no details are known on the purchase price of BAE’s share.

While an executive of Mahindra Defence Systems said its acquisition of BAE’s 26 percent stake will not end their relationship, sources in the Indian company said BAE is leaving the joint venture because it has decided the future defense market for its products was not as bright as it had earlier calculated.

In a joint statement, BAE Systems and Mahindra Defence Systems said, “This decision is a reflection of the shareholders’ belief that they can best meet emerging customer requirements and address the opportunities in this dynamic market with a flexible, tailored approach that was not easily facilitated by the structure of the existing joint-venture entity.”

BAE officials referred requests for further information to the statement.

The British company’s 26 percent equity in Mahindra Defence Systems is the maximum under Indian law that a foreign company can invest in a joint venture in India’s defense sector.

BAE invested $5.83 million of the $21.5 million invested in the joint venture.

Headquartered in New Delhi with manufacturing facilities in neighboring Faridabad, Mahindra Defence Systems manufactures specialized military vehicles and is also developing a mine-protected vehicle for use by the Indian Army.

The Army plans to buy more than 5,000 light strike military vehicles over the next five years. Requirements include four-wheel drive, high power-to-weight ratios, travel speeds of 80 kilometers per hour and ability to carry rocket launchers and GPS navigation systems.

Currently, the Army uses about 2,000 Russian BMP-1 and BMP-2 multipurpose armored vehicles.

Mahindra Defence Systems sources said the joint venture was banking on business from the homemade Future Infantry Combat Vehicle project and artillery projects, including 155mm/52-caliber guns, but refused to give details on their assessment on these futuristic projects.

No BAE executive would offer a reason for the pullout beyond what was in the joint statement.

Setback on JV With Israel
In April, Mahindra Defence Systems received a setback when its proposal to forge a joint venture with Israel’s Rafael was denied by India’s Foreign Investment Promotion Board. While no official reason was given, Indian Ministry of Defence (MoD) sources told Defense News the proposal was shot down for security considerations.

Mahindra Defence Systems and Rafael had proposed setting up development and production facilities to make anti-torpedo defense systems in India. Khutub Hai, retired Indian Army brigadier and current CEO of Mahindra Defence Systems, expressed frustration at the rejection of the joint venture.

“Both Mahindra and Rafael are surprised at the decision as both are reputable companies which have extensive engagement with the government of India on projects related to defense and homeland security,” Hai said.

BAE’s decision to pull out of the Mahindra Defence Systems joint venture will create doubts about the Indian defense market, said Nitin Mehta, defense analyst.

An executive of the Federation of Indian Chambers of Commerce and Industry, the lobbying agency for Indian industries, said the pullout is bad news for the private-sector defense market, which is still in its infancy.

BAE Pulls Out of Joint Venture With India’s Mahindra | Defense News | defensenews.com

 

[Screambowl]

very good. Now learn to be self reliant than to wait for others to develop weapons for you. I want it to happen 2-3 more times so that Idiots in ministry of Industry and commerce and department of technology learn a lesson. They will only blabber that we don't have capability or funds. BS

 

[Skull and Bones]

The mantra is to acquire defense firms in overseas market.

 

[sancho]

very good. Now learn to be self reliant

To make you understand what this means for India if we hope for DRDO:


DRDOs IFV

DRDOs Light Tank

DRDOs FICV

BAEs IFV

BAEs Light Tank

BAEs future Light Tank

BAE/Rafael/Mahindras FICV

A big loss for Indian Army, for Mahindra as an Indian company and most importantly for Indias security!!!

 

[Screambowl]

To make you understand what this means for India if we hope for DRDO:




A big loss for Indian Army, for Mahindra as an Indian company and most importantly for Indias security!!!

arre bhai this is what I am saying that we are not able to produce engines, armory, etc etc new designs due to lack of modern Industry. There is no motivation in our industries to develop new weapons. You do not even have test bed facility in India to test kavery for high altitude. You do not want to copy and you do not want to develop, this is not the way things work. If a machinery is brought in India either you take the technology, like laser cutting for steal or high pressure water cutting, copy it and start making new. Even the robotics arms are either brought from Japan or Germany. You cannot make it at home because you do not know how to make and you do not want to copy also.

Atleast make your Industry that capable so that they produce anything latest if they get the design. You also don't want to do that.

 

[sancho]

arre bhai this is what I am saying that we are not able to produce engines, armory, etc etc new designs due to lack of modern Industry. There is no motivation in our industries to develop new weapons. You do not even have test bed facility in India to test kavery for high altitude.

Because we don't need to have anything that others have. Japan send their stealth fighter prototype to France, to test the stealth capability of the airframe, because they don't have such facilities in Japan and they Japanese have one of the most modern industry in the world!
So that has nothing to do with how modern your industry is, infact you can take TATA as an example as well. With highly modern factories, able to produce cabins for Sikorsky or even entire helicopters for Agusta Westland, but they can't develop an own helicopter, and own aircraft, or even an own howitzer at the moment, because they simply lack the knowledge. That is the same case with DRDO, or HAL as well and why it doesn't make a difference if we take Indian government owned companies or privat companies to account, we simply are noth at such a level yet!

Understanding this and getting a realistic view about our capabilities, is the first step to imporove ourself, while we can take advantage of our access to foreign industry and partners. That is the only way for India to improve the forces with highly capable techs, to improve the industry and all this in much lesser time!

 

[Skull and Bones]

@sancho

What happened with the Polish Anders light tank for Indian army?

 

[sancho]

@sancho

What happened with the Polish Anders light tank for Indian army?

Nothing as of now, it was just a proposal, most likely for the requirement of around 300 light tanks and wheeled tank destroyers, but I never heared of an RFP, or trials so far.

 

[Screambowl]

Because we don't need to have anything that others have. Japan send their stealth fighter prototype to France, to test the stealth capability of the airframe, because they don't have such facilities in Japan and they Japanese have one of the most modern industry in the world!

that is a wrong perception. They don't have because they DIDNOT build, India does not have because we CANNOT build.

So that has nothing to do with how modern your industry is, infact you can take TATA as an example as well. With highly modern factories, able to produce cabins for Sikorsky or even entire helicopters for Agusta Westland, but they can't develop an own helicopter, and own aircraft, or even an own howitzer at the moment, because they simply lack the knowledge. That is the same case with DRDO, or HAL as well and why it doesn't make a difference if we take Indian government owned companies or privat companies to account, we simply are noth at such a level yet!

This is again wrong. The HAL cannot absorb technology for the upcoming MMRCA even if they get the design because they do not have the equipments.

Understanding this and getting a realistic view about our capabilities, is the first step to imporove ourself, while we can take advantage of our access to foreign industry and partners. That is the only way for India to improve the forces with highly capable techs, to improve the industry and all this in much lesser time!

Sir ji, there is a Industry Park scheme finalized in 2002 still pending and in 2005-2006 the decision came and the decision is to postpone the decision. In the year 2009 letters were desiginated to know the report on the contractors and since 2009 the answer is still pending. This is the way our Industry work. When there is no work done how do you manage to think of building big industries. There are many schemes in India pending like that. This is not the way.

 

[sancho]

that is a wrong perception. They don't have because they DIDNOT build, India does not have because we CANNOT build.

Provenly wrong, we can build nearly everything under licence, or through JVs, be it fighter, radars, tanks, weapons, helicopters, or subs..., where we lack is the R&D side, that's why we need foreign help navalise LCA, to fix Kaveri issues, to develop the right modes for the indigenous MMR, to develop Barak 8 and Maitri SAM..., or why our private companies are buying foreign companies to absorb this know how in their own ways.

The HAL cannot absorb technology for the upcoming MMRCA even if they get the design because they do not have the equipments.

That's your claim, but more difficult will it be to find Indian partners that can produce the parts in India, which HAL then could use for the licence production. HAL is the top of our industry in this field, but we have too less and too less capable partners in this field, a field where even TATA and Mahindra are still learning!

 

[Screambowl]

Provenly wrong, we can build nearly everything under licence, or through JVs, be it fighter, radars, tanks, weapons, helicopters, or subs..., where we lack is the R&D side, that's why we need foreign help navalise LCA, to fix Kaveri issues, to develop the right modes for the indigenous MMR, to develop Barak 8 and Maitri SAM..., or why our private companies are buying foreign companies to absorb this know how in their own ways.

sir ji, can you tell me how many equipments in HAL or any other Plants are built in India. That is what I am talking about.
Research and development is a different issue are more related to intellectual world but one simple question, is there any company in India which can produce Iphones if given license? This is what I am talking about that Industry should just not to be confined within defence technology. If you get any technology, we should use it even in civil areas too.

We are building satellites but we cannot build a simple mobile phone having Indian tag on it. The view must be broad.

 

[Abingdonboy]

@sancho will this affect the IA's plans for FICV and SPG/SPH?

 

[axisofevil]

Because we don't need to have anything that others have. Japan send their stealth fighter prototype to France, to test the stealth capability of the airframe, because they don't have such facilities in Japan and they Japanese have one of the most modern industry in the world!
So that has nothing to do with how modern your industry is, infact you can take TATA as an example as well. With highly modern factories, able to produce cabins for Sikorsky or even entire helicopters for Agusta Westland, but they can't develop an own helicopter, and own aircraft, or even an own howitzer at the moment, because they simply lack the knowledge. That is the same case with DRDO, or HAL as well and why it doesn't make a difference if we take Indian government owned companies or privat companies to account, we simply are noth at such a level yet!

Understanding this and getting a realistic view about our capabilities, is the first step to imporove ourself, while we can take advantage of our access to foreign industry and partners. That is the only way for India to improve the forces with highly capable techs, to improve the industry and all this in much lesser time!

Learn from China and self reliant.

 

[Screambowl]

Learn from China and self reliant.

China is a different system. No one is willing to share such technology with china ad we have the upper hand there but chinese industries have some how managed to become self reliant, copy paste whatever they did. In India the problem is much bigger and we have challenges but these should not stop us now from bringing Industrial revolution.

 

[axisofevil]

China is a different system. No one is willing to share such technology with china ad we have the upper hand there but chinese industries have some how managed to become self reliant, copy paste whatever they did. In India the problem is much bigger and we have challenges but these should not stop us now from bringing Industrial revolution.

I know. But re read what you wrote. CHina has no help, no access and still made it happen. Whereas India has the help, the access, etc. but cannot. Why does the govt push the domestic private players away?