A huge boost for indigenous industry—Astra and Nirbhay missiles worth over Rs 10,000 crore to be purchased

The Defence Acquisition Council (DAC) today cleared acquisitions worth Rs. 38,900 crore for three services. Key projects cleared by the DAC, headed by defence Minister Rajnath Singh, include 33 Russian fighter jets for the Indian Air Force, air-to-air and cruise missiles for the IAF and Indian Navy, and rocket warheads and radios for the Army.

The missiles cleared include the 100-km range Astra Beyond Visual Range (BVR) missiles; and the 1,000-km range Nirbhay cruise missile for the IAF and Navy, worth over Rs. 10,000 crore, are among the largest for indigenously designed and developed missiles.

The DAC also cleared the purchase of 33 fighter aircraft from Russia—12 Su-30MKIs and 21 refurbished MiG-29 fighters, a key agenda point during Singh’s visit to Moscow, Russia, last month. The 21 MiG-29 are to be refurbished and rebuilt by Russia for Rs 7,418 crore. The Su-30MKI will be locally assembled by Hindustan Aeronautics Ltd at their Nashik facility for Rs. 10,730 crore. They will likely be the last orders for the Russian-designed air dominance fighter that has been in continuous production for nearly two decades. The DAC also cleared the upgradation of the IAF’s existing fleet of 59 MiG-29 aircraft.

A defence ministry release noted that a majority of the deals—Rs. 31,130 crore—involved Indian defence industry, with participation of several MSMEs, as prime tier vendors. The indigenous content in some of these projects is up to 80 per cent of the project cost.

The MoD will purchase 250 indigenously designed and developed Astra missiles for the IAF’s fleet of Su-30MKIs and the Navy’s MiG-29K fighter aircraft. These missiles, defence, officials say, can be delivered next year onwards.

The Nirbhay is armed with a conventional warhead of around 300 kg. The six-metre long indigenously-designed and developed missile, similar to the US Tomahawk, completed six tests in its basic configuration, the last of them on April 17, 2019. The missile is powered by a Russian turbofan, though production variants of the missile will use an indigenous turbofan in advanced development at the Gas Turbine Research Establishment (GTRE). While a ground-launched variant has been tested and can be easily adapted for the IAF, the DRDO plans to mount the missile on a naval warship for sea-to-shore tests of the naval variant.

Defence sources say it would take the DRDO around three years to start production of the cruise missile. The DRDO is yet to identify a production agency—the defence public sector undertaking Bharat Dynamics Ltd appears to be one of the frontrunners.

The DAC also cleared a project to upgrade the army’s fleet of 1,500 BMP-2 infantry combat vehicles. The upgrade of the indigenously-produced ICV, built at the Ordnance Factory Medak since 1987, will cost over Rs 7,000 crore. It involves replacing the vehicle’s engine with a 380 horse power engine, day and night sights, fire control systems and third generation fire-and-forget anti-tank missiles.

Also cleared today was an unspecified quantity of Software Defined Radios for the Indian Army. These handheld radio sets developed by the Defence Electronics Application Laboratory (DEAL) and produced by Bharat Electronics Limited (BEL) is where some or all of the radio’s operating functions are implemented through modifiable software operating on programmable processing technologies. SDR systems are highly secure and jamming resistant. Last year, BEL received the first order for the indigenous SDR radio—a Rs. 488 crore order for 260 SDR sets for the Indian Navy. A DAC clearance, however, is only an ‘acceptance of necessity’ (AON), the first step in a lengthy series of procedures and price negotiations that culminates in the final approval by the Cabinet Committee on Security (CCS) chaired by the Prime Minister. There are six more stages to go before an AON turns into a formal signed contract. Each proposal has to go through a technical evaluation committee, a field evaluation team, staff evaluation, a technical oversight committee, a cost negotiation committee and, finally, an approval from the Competent Financial Authority (CFA) before it is sent to the Cabinet Committee on Security.

However, the fact that all the deals approved today are essentially single vendor procurements—placed on government agencies in India and Russia—could speed things up. In single vendor deals, firms are ‘nominated’ for contracts skipping the time consuming process of competitive bidding. This means today’s AONs could potentially turn into contracts as early as within 12 to 15 months.