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India chooses Multi-Role Transport Aircraft produced jointly with Russia, cancels tender

Yeah, it is a major disappointment. Forget about anything else but having the kind of expertise in testing, quality control, certification etc of a large transport (military) aircraft in the hands of a PRIVATE player in India would really have been a game changer for India as a whole...
I think we are blaming the wrong dog over here.
Instead of MoD shouldn't TATA be proactive to get into the market to compete with HAL. Antony baba specifically kept HAL out and laid this on TATA's platter.

True sir, but they certainly have the potential to do so do they not? They are a huge corporation with vast amounts of skilled human capital and massive funds, if they put their minds to something they are likely to succeed. If they are given the chance that is.

Remind me how old is tata, and how old are Honda, Toyota, Hyundai ?
 
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I think we are blaming the wrong dog over here.
Instead of MoD shouldn't TATA be proactive to get into the market to compete with HAL. Antony baba specifically kept HAL out and laid this on TATA's platter.
Well TATA (and other private players) can only operate where there is a) a market that they can access i.e. low barriers of entry and b) a level playing field.

On a) it is only recently certain deals/sectors have been opened up to the private sector to bid alongside DPSUs

on b) this is still lacking, whilst HAL has the monopoly on almost all aviation deals coming out of the MoD the private sector barely get a look in. I believe there was news the Kaylani group (maybe someone else) weren't given permission to test their own arty guns on the IA's test ranges- the only such arty test ranges in India whilst the OFB have no such issue in testing.

TATA (or other private sectors) can hardly invest in multi billion dollar production lines with no orders on the horizon, this is not how private companies operate, there needs to be proof the return on investment will come. I don't see how one can blame TATA in all this, they were the only ones in India who seemed to take this deal seriously and threw their hat into the fray. It was the single vendor coupled with other factors that scuppered this deal, hardly TATA's fault.
 
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So isn't it a travesty on Tata's part, when they have the opportunity to get their foot in the door with long term prospective of completely rooting out HAL as many have hinted in the past. Why would they give up such a golden opportunity?

No one cares about rooting out HAL, OFB, whatever. This status quo has to change, India absolutely needs more alternatives to armored and aerospace projects. And the government should throw incentives and create a better playing field for private players.


Remind me how old is tata, and how old are Honda, Toyota, Hyundai ?


Okay?

Lets look at it from an Indian narrative

Hindustan Motors

ambassador-production3526-699x380.jpg


TATA

Tata-Bolt-front-three-quarter-Geneva-Live.jpg

tata_plant_dharwad.jpg

Tata-Zest-production-3.jpg


Mahindra

Mahindra_XUV_500_W6_2013.jpg

Mahindra_1934832f.jpg

reva1--621x414.jpg

973642d1345648266-reva-nxr-auto-expo-2012-20120822_152441.jpg
 
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Remind me how old is tata, and how old are Honda, Toyota, Hyundai ?
Ah I see what you are getting at now sir, but I still think the socialist mentality that existed within the GoI until the 90s stifled this sort of thing, no major aviation manufacturer (there maybe a few exceptions) has become what they are without initially having the support of their respective governments in form or another (look at Boeing, Lockhead Martin, Northrup Gruman, Dassualt, Sukhoi etc etc). In fact why HAL is the success story it is is directly because of GoI backing.
 
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Ah I see what you are getting at now sir, but I still think the socialist mentality that existed within the GoI until the 90s stifled this sort of thing, no major aviation manufacturer (there maybe a few exceptions) has become what they are without initially having the support of their respective governments in form or another (look at Boeing, Lockhead Martin, Northrup Gruman, Dassualt, Sukhoi etc etc). In fact why HAL is the success story it is is directly because of GoI backing.
It's not HAL that is the problem, it is essentially a government enerprise, it will o what ever is needed. It has no ambitions to become a globl giant, it does what it is supposed to.

Now look at TATA, it is a private company. It had complete monopoly on the Indian market and what did it do. It's ambitions are not governed by the Indian government. Even today it struggles to compete in the international markets, there is just no innovation, and this is not just the case with TATA, same with all of the bunch. all of them. And no Boeing , NG, LM did not get there because of government support, they got here by out performing Huges, Curtis, Mc D, North American and acquiring most of them. Then there are the japanese korean, and american Auto Giants. which despite setbacks after the other can compete with the best out there.

If Tata or mahindra, puts up the effort to transform themselves to become major players in the market, I absolutely believe the Indan Governemnt especially the IAF will stand 100% behind them, and this Hs 748 replacement deal was specifically done to facilitate the same.... and the Indian Private Sector's reaction was completely disappointing.

No one cares about rooting out HAL, OFB, whatever. This status quo has to change, India absolutely needs more alternatives to armored and aerospace projects. And the government should throw incentives and create a better playing field for private players.





Okay?

Lets look at it from an Indian narrative

Hindustan Motors

ambassador-production3526-699x380.jpg


TATA

Tata-Bolt-front-three-quarter-Geneva-Live.jpg

tata_plant_dharwad.jpg

Tata-Zest-production-3.jpg


Mahindra

Mahindra_XUV_500_W6_2013.jpg

Mahindra_1934832f.jpg

reva1--621x414.jpg

973642d1345648266-reva-nxr-auto-expo-2012-20120822_152441.jpg


hehe, so HM is the comparison benchmark....

Well TATA (and other private players) can only operate where there is a) a market that they can access i.e. low barriers of entry and b) a level playing field.

On a) it is only recently certain deals/sectors have been opened up to the private sector to bid alongside DPSUs

on b) this is still lacking, whilst HAL has the monopoly on almost all aviation deals coming out of the MoD the private sector barely get a look in. I believe there was news the Kaylani group (maybe someone else) weren't given permission to test their own arty guns on the IA's test ranges- the only such arty test ranges in India whilst the OFB have no such issue in testing.

TATA (or other private sectors) can hardly invest in multi billion dollar production lines with no orders on the horizon, this is not how private companies operate, there needs to be proof the return on investment will come. I don't see how one can blame TATA in all this, they were the only ones in India who seemed to take this deal seriously and threw their hat into the fray. It was the single vendor coupled with other factors that scuppered this deal, hardly TATA's fault.


India's aviation market is will be about a 150 billion market in next 30 years...

50 + a/c on a platter with specifically keeping HAL out was given brought out.... What else did the private sector need to get it's foot in the door? What else did TATA want?
 
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Not sure what to think of this.... especially considering that fact that this plane is still years away from becoming operational while the Avro fleet needs desperate replacements.
 
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Make in India even if it was restricted to only licence production would still be a very worthy ambition given the number of jobs it would create and the kind of investment such a manufacturing base in India would bring. The level of manufacturing in India is pitiful to day. ToT and such will come but are not always the be all and end all.

Very nicely put.
I think government needs to realize this that they must follow two separate paths for growth and maturity of domestic defence industry. First they must allow certain serious private players in serial production so that they develop a skilled pool of man-power and business model to participate in true manner for govt contracts through JVs. It will also allow influx of FDI in private sector which the industry can then use to its advantage by leveraging it core strengths.
Secondly as far as design and R&D is concerned, govt must allow Tax benefits to some or all of projects taken by local industry to meet govt. specifications in defence sector procurement. This should also be allowed for customization of any specific product by a foreign supplier being procured through Make in India route. Benefits like duty reduction etc can also be passed on to private players as incentives to boost R&D.
This way not only our manufacturing capability improves, but development of newer products will also start (even if at a basic level) which will ultimately lead to goal of true developed and manufactured in India defence product in future.
 
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QUESTION? Why didn't the contract attract private industry... as far as I remember you said Tata was doing something about this

Reportedly because the licence production of just 40 aircraft didn't promised too much benefits, which is why the privat industry wanted higher orders of MoD / IAF. TATA was ready to do the production, sadly no other companies came forward.
 
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Reportedly because the licence production of just 40 aircraft didn't promised too much benefits, which is why the privat industry wanted higher orders of MoD / IAF. TATA was ready to do the production, sadly no other companies came forward.
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Assume tomorrow, HAL is bought out by say a TATA or a Mahindra, what would happen to non-profitable projects for Indian establishments ... like say a jaguar upgrade, or LCA Mk2 (with exceptionally low book orders, or a NLCA mk2 with 50 odd units)...

It is quite surprising to me, that every one on the forum vehemently agrees to need of private participation and when Anthony baba lays 50 odd transport aircraft right on the platter, private industry squirms it's nose about a low book order?
This is the same market which airbus predicts will see 1000 aircrafts in next 20 years, and this is the level of strategic planning on the private industry side....

The same order, the exact same order is taken up by HAL with a JV with RAC... now if Tata wouldn't have made any money, rest assured HAL will lose money on it. That right there shows the vision and convictions of the entities in question here.


And if you remember correctly I had long ago said that Tata will eventually chicken out ... and that is exactly what has happened here.

Make in India even if it was restricted to only licence production would still be a very worthy ambition given the number of jobs it would create and the kind of investment such a manufacturing base in India would bring. The level of manufacturing in India is pitiful to day. ToT and such will come but are not always the be all and end all.
Forget the defence industry, look a the private manufacturing industry on it's own. Show me one brand that is a global innovator.

Well, I suppose it is a benchmark of what happens when you dont promote open competition and have a company get used to being a dependency of the government.

Was it a government diktat, that tata cannot become a global automibile giant to compete in american and european markets in the 70's?

Was it the Indira Gandhi who told HM that you have to make ambassadors and you cannot make platforms to compete with corrolas and camry's in the global market.

Lets no blame everything on the government. It wasn't the Italian government pleading Enzo ferrari to build road cars and become the sign of excellence in super cars, neither did japanese government ask toyota to innovate modern production quality management protocols to go on to become a benchmark in the manufacturing industry....

Lets not forget Tata has existed since the Mid 1800's.
 
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Assume tomorrow, HAL is bought out by say a TATA or a Mahindra

That's not possible, since even the NDA government would retain state owned companies to keep control in the strategic defence industries.

It is quite surprising to me, that every one on the forum vehemently agrees to need of private participation and when Anthony baba lays 50 odd transport aircraft right on the platter, private industry squirms it's nose about a low book order?

That's surprising because you put on your HAL glasses again and doesn't see anything else. :)

A) we need privat industry to commit themselfs to defence production and even better to defence developments. Antony had started that with FICV, the self propelled howitzer or the Avro replacement tender and only because it doesn't work in the latter doesn't make it a bad idea in general.
B) the Avro replacement is only for 40 aircrafts and MoD under Antony, as well as the current are ignoring the fact that we need more of the same aircrafts in other forces too, so easily could increase the order, which then would attract more privat industry players and foreign vendors. Just as they are ignoring the similarities of the Avro replacement and the RTA 70 development, which easily could be combined to increase the potential too.

So it's neither surprising why everyone wants the privat industry to come in and be a credible competition in the Indian aviation industry, nor is it surprising that not even the NDA government was able to get more privat companies in, if the basics of the tender are not right.

The fact is, we had more than a decade where only HAL, NAL and DRDO were players in the aviation industry and the result is bad to say it politely, which is why the hope on getting the privat industry on board is so important for Indias future in this field. And that is even positive for HAL as we already can see, because HAL has to change it's policies to retain the leading player, be it the pre-emptive investment strategy that they now show (and that would had made HTT40 available today, if they came up with it earlier), or that they open up to privat partners in developments and don't see them only as outsourcing companies for minor production parts. That's the result of competition and the obvious change of the ground reality under the NDA government, that doesn't support HAL anymore as it was in the past.

And if you remember correctly I had long ago said that Tata will eventually chicken out ... and that is exactly what has happened here.

Not at all, TATA is still in just as their combined bid with Airbus, the problem is the single vendor situation and the fact that the new DM seems to have a focus on less types of aircrafts. That's why he wants to increase the availability of the MKI and add some more, as a possible alternative to MMRCA, or why he sees the MTA here as an alternative for the Avro replacement. In both cases he is pretty mistaken, since he will end up with high operational costs, using medium class transporters flying with half or even less payload in basic logistical roles, just as using heavy class fighters in air defence roles of light to medium class once.
In fact, IAF had evolved under Antony, to not only look at the unit cost of an aircraft, but to inculde the operational cost as an important factor, Parrikar now seems to make a U-Turn on that and I'm not sure if he just tries to keep is budget under control or if it's just his different way of leading the MoD yet.
 
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Was it a government diktat, that tata cannot become a global automibile giant to compete in american and european markets in the 70's?

Was it the Indira Gandhi who told HM that you have to make ambassadors and you cannot make platforms to compete with corrolas and camry's in the global market.

Lets no blame everything on the government. It wasn't the Italian government pleading Enzo ferrari to build road cars and become the sign of excellence in super cars, neither did japanese government ask toyota to innovate modern production quality management protocols to go on to become a benchmark in the manufacturing industry....

Lets not forget Tata has existed since the Mid 1800's.

You want them to compete in American and European markets when they cant even move properly in their home base, who does that?

Yes, the government had a lot to say back then, and should take a lot of blame. The damn country was a command economy.

The Licence Raj was a result of India's decision to have a planned economy where all aspects of the economy are controlled by the state and licences are given to a select few. Up to 80 government agencies had to be satisfied before private companies could produce something and, if granted, the government would regulate production.

They discriminated against private players,gave out licenses very rarely, plus, they choose the prices, volume of production, distribution. Not by the free market demand.

And you want them to complete with American, European, Japanese players? Show me a Maoist Chinese, USSR, Cuban, etc. global private player.

And is it just a coincidence TATA, Mahindras, LT, etc, etc. started to expand rapidly after the economic liberalization? More than half that damn company's revenue is coming from outside India now.
 
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B) the Avro replacement is only for 40 aircrafts and MoD under Antony, as well as the current are ignoring the fact that we need more of the same aircrafts in other forces too, so easily could increase the order, which then would attract more privat industry players and foreign vendors. Just as they are ignoring the similarities of the Avro replacement and the RTA 70 development, which easily could be combined to increase the potential too.

Avro replacement was a strategic opportunity for the Private industry and it absolutely chickened out. If


Not at all, TATA is still in just as their combined bid with Airbus, the problem is the single vendor situation and the fact that the new DM seems to have a focus on less types of aircrafts.
Lets focus on topic on hand and not htt and mki.... the bottom line is Antony baba intentionally kept HAL of Avro replacement deal, and handed the order to Tata. What did Tata do? Did they chicken out? If no where are thier platform and why are they not protesting to scrapping the deal...
 
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Avro replacement was a strategic opportunity for the Private industry and it absolutely chickened out. If

I guess there is a part missing of your post, but as said licence production of 40 aircrafts is surely not a strategic opportunity.

Lets focus on topic on hand and not htt and mki.... the bottom line is Antony baba intentionally kept HAL of Avro replacement deal, and handed the order to Tata. What did Tata do? Did they chicken out? If no where are thier platform and why are they not protesting to scrapping the deal...

First of all, the deal was not handed to TATA, but to the privat industry (which I criticize too as you know), which includes L&T or Mahindra. Secondly, where has TATA chickened out when they went ahead teamed up with Airbus and proposed a bid? Again TATA is in the tender and did their part, sadly no other privat partner did the same and HAL was excluded from being a competitor and that is the problem now.
 
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