Post U.S. ban lifting, India's DRDO guns for offsets contracts

[Water Car Engineer]

India’s Defense Research and Development Organization (DRDO) which was taken off the U.S. banned entity list will stand to benefit from offsets contracts from American defense companies winning business in India.


DRDO’s strength lies in the fact that its 40 laboratories are attuned for defence equipment manufacturing, something which Indian private sector organizations have so far not tooled up to do.

U.S. companies are likely to receive an increasing number of defence contracts in the coming years following the warming of defence relations between the two countries. It is estimated that Indian may buy defence equipment worth over $50 billion from the U.S. over the next 10-15 years. Given that a minimum of 30% are to be invested back in India in the form of offsets contracts, DRDO along with other Indian government and private enterprises stand to receive contracts worth an estimated $15 billion.

A source told Defenseworld.net that DRDO’s diverse expertise, from land systems to air assets to naval equipment, would help position it as a prime executor of offsets contracts. In the past few years, the DRDO has been trying to commercialize its technology developed for India’s defence forces.

If it receives offsets contracts, the DRDO can improve its R & D and commercialize specific high tech defence products to the Indian industry.

http://www.defenseworld.net/go/defensenews.jsp?id=5215&h=Post%20U.S.%20ban%20lifting,%20India's%20DRDO%20guns%20for%20offsets%20contracts

 

[sageof6path]

DRDO wary despite Obama's 'Entity List' announcement
Ajai Shukla / New Delhi November 10, 2010,

If, as New Delhi has declared, access to US high-technology is a crucial Indian motivator for a close relationship with America, a brief announcement by President Barack Obama, in his address to Parliament on Monday, could have been one of the key achievements of his visit.

Halfway through his speech, President Obama stated, “We need to forge partnerships in high-tech sectors like defence and civil space. So, we have removed Indian organisations from our so-called “Entity List”. And, we’ll work to reform our controls on exports. Both of these steps will ensure that Indian companies seeking high-tech trade and technologies from America are treated the same as our closest allies and partners.”


The Entity List (it is unclear why President Obama referred to it as “the so-called Entity List”) is an American tool to control the export of dual-use and strategic materials and systems. It is maintained under the Export Administration Regulations of the US Department of Commerce (DoC). American firms and businessmen require specific licences from DoC before supplying specified items to foreign businesses, research institutions, government and private organizations and individuals on that list.

Four Indian organisations feature, in part or in full, on the Entity List: Bharat Dynamics Limited, which makes the short-range missiles — called Prithvi and Dhanush — in India’s strategic nuclear deterrent. Also proscribed is the “Missile Research and Development Complex”, a group of four Defence R&D Organisation (DRDO) laboratories near Hyderabad, which make India’s intermediate-range (700-5,000 kilometres) Agni-series ballistic missiles. The list also features key facilities of the Indian Space Research Organisation (Isro). Finally, the Entity List includes several establishments from the Department of Atomic Energy (DAE).

Much remains unclear in Obama’s announcement: Have all Indian organisations been removed from the Entity List, or merely a selected few? Does Obama’s call for partnership in “defence and civil space” mean that military space programmes will continue to face sanctions?

It seems clear that while BDL, Isro and DRDO could well be taken off the Entity List, the DAE entities are likely to remain proscribed until Washington and New Delhi agree on acceptable verification measures.

V K Saraswat, the DRDO director general, told Business Standard before the Obama visit: “The issue is one of dual use technology. What is used in conventional weapons may also be used in strategic systems (like nuclear-tipped missiles). That fear stops the US from transferring high technology.

Despite Obama’s call, India’s defence and space establishments continue to work under the shadow of sanctions, separating civil from military so that a ban on one would not affect the other. The strategic missile programme, under DRDO, was long ago separated from Isro’s space rocket programme, even though they deal in broadly similar technologies. And Business Standard learnt that, in the run-up to Obama’s visit, DRDO also firewalled its planned military satellite programme from Isro’s civil satellite development and launch programme, which could soon be a global leader in commercial launches. This was to ensure that the US could not proscribe ISRO by accusing it of involvement in the militarisation of space.

Prahlada, a DRDO chief controller, explained the rationale to Business Standard just days before Obama’s arrival, “DRDO will soon set up its own exclusive organisation for military satellites. We do not want to involve Isro in the military satellite business. Their collaborations might be questioned; they may not get permits; their satellite programme might suffer. So, we will set up our own laboratories.”

According to Saraswat, DRDO’s satellites will be very different from Isro’s communications, navigation, cartographic and meteorological satellites. DRDO’s disposable mini-satellites, which would be built for surveillance, intelligence and electronic warfare, could be quickly launched into a low-earth orbit over a theatre of battle only for the duration of the conflict. Since these would not need expensive and time-consuming launches into geo-synchronous orbit, they could be written off after fulfilling their purpose.

Currently, 27 Chinese entities, many of which have multiple sub-entities, feature on the Entities List. The list also features 19 Pakistani entities, many of them apparently innocuous, e.g. “Orient Importers and Exporters, Islamabad”.