Report of the Forum on High-Tech Defence Innovation

2014 11 26 Report of 5th Forum meeting on Hi-Tech Defence Innovation

If quoted please attribute the Forum/ Smita Purushottam


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Science and Technology for the Society

India is rich not only in cultural values, heritage and knowledge power, but also in having tremendous sources of natural energy. Furthermore, in the last decade India has embarked on the development of Science & Technology on a Global Front. Nowadays, we are heavily dependent on technology for our daily routines, for example telephones, television, transportation…etc. Having one of the biggest knowledge pools in the world – which is acknowledged by the international community, what important is to utilize this rich source of the knowledge in a correct manner to empower the nation in the real sense.

Majority of the Indian population is stationed in rural areas and this rural community plays a vital role in the sustainability of the urban areas. Rural areas need basics like electricity, employment, food…etc. If the science and technology is adopted by our modern society, why not it can also be utilized to empower the rural sectors of the country?

Today, the daily consumption of power of mega and metro cities enjoy power is sufficient for under privileged rural and/or coastal areas for at least one week. The needless usage of technology by modern society is actually usurping the rights of our brothers and sisters in the rural areas. If we share the technology with our brothers and sisters in the rural community, we will help them to not only sustain but to live a quality life and enjoy the same comfort level which we have.

We have large coastal areas. Just like European countries, if the water turbines are placed across the coastal line, we can have continuous power supply generated through these water turbines and sufficient for coastal communities. The wind turbines should also be stationed at various places which can produce power that can be utilized to provide basic electricity to the villages. Also, many villages are now having solar panels and bio-gas plants for the purpose of providing electricity for street lighting.  New ways should be innovated by which the society – as a whole, can be benefitted. For example, I am a space scientist, so I will comment that utilizing space technology and remote sensing applications can be beneficial in monitoring the agriculture, urban planning, observing rich heritage of the country, health monitoring, preparing mitigation guidelines for the disaster risk reduction, telemedicine…etc. There are many more applications of the present technologies, in each sector, which can benefit the society, contributing in the development of the country.

The focus on utilization of Science & Technology for development will not only help to empower the rural sector of the country, but also create a greater impact as the growth engine for the development of the country. Also, this will trigger healthy competition amongst the states within the country to be the model state through development in education, growth of commercial activities and industrial development, strengthening the rural communities, showcasing the hidden treasure of rich heritage and culture…etc. Above all of these, the real actions in this direction will bring the communities together for the harmonious growth and the ancient adage – “Vasudhaiva Kautumbakam” will be seen in the country in real sense.

 – R. Ghadawala

US report on the Impact of Defence Offsets on Its Defence Industrial Base

The  16th  Annual  Report  to  Congress  on  the  Impact  of  Offsets  in  Defence  Trade  has  the  following  to  say:

  1. Between  1993-2010,  US  firms  agreed  to  $78.08  billion  worth  of  Offsets  out  of  defence  exports  worth  $111.59  billion,  or  nearly  70%.    Technology  transfer  was  among  the  top  3  offset  categories.


  1. The  report  however  warned  that  Offsets  would  “limit  future  business  opportunities  for  U.S.  subcontractors  and  suppliers,  with  negative  consequences  for  the  domestic  industrial  base.  Other  kinds  of  offsets,  such  as  technology  transfers,  may  increase  research  and  development  spending  and  capital  investment  in  foreign  countries  for  defence  or  non-defence  industries,  thereby  helping  to  create  or  enhance  current  and  future  competitors  to  U.S.  industry….”

Which  is  exactly  the  point  of  Offsets,  that  they  should  help  in  boosting  the  defence  industrial  base  and  wean  developing  countries  off  the  need  to  keep  importing  in  perpetuity.


  1. However  the  report  also  notes  –  ‘anecdotal  information  obtained  from  industry  suggests  that  “cutting  edge”  or  nascent  technologies  under  development  in  the  United  States  are  less  likely  to  be  transferred  to  foreign  companies  in  fulfillment  of  offset  obligations  than  are  mature  technologies’.   
  2. Also,  Offsets  involving  technology  transfers  were  only  $985.0  million,  equivalent  to  only  0.24%  of  total  US  R&D  spend.
  3. The  report  further  notes  “Despite  the  capabilities  that  may  accrue  to  foreign  firms  resulting  from  offset  agreements  signed  with  U.S.  industry,  purchases  from  foreign  firms  do  not  represent  a  significant  share  of  DOD’s  total  purchases.    Purchases  of  defence  manufactures  from  US  sources  by  DOD  totaled  $102.46  billion  out  of  total  purchases  of  $106.80  billion  in  2010,  with  purchases  from  foreign  entities  only  $4.34  billion,  or  4%  of  the  total.   
  4. Moreover,  the  US  recorded  ‘an  overall  net  gain  …  a  positive  $7.2  billion  in  added  “input”  opportunities  for  the  U.S.  industrial  base,  and  a  net  gain  of  22,553  in  employment  opportunities  created  or  sustained  during  the  2009-2010  period’.   


  1. Interestingly,  one  discovered  that  the  analytical  report  is  written  in  pursuance  of  a  US  Defence  Production  Act,  whose  existence  one  was  unaware  of.    The  Defence  Production  Act  has  helped  the  US  develop  a  number  of  new  technologies  and  composite  materials  and  has  also  hand-held  startups  to  commercially  produce  technologies  they  could  not  have  done  on  their  own.   
  2. The  Defence  Production  Act  also  enjoins  on  the  government  to  very  closely  scrutinise  foreign  investment  proposals  in  the  United  States.    It  is  under  the  provisions  of  this  Act  that  some  Chinese  Investments  have  been  denied  in  the  US.
  3. The  point  is,  even  as  many  countries  have  benefited  from  leveraging  Defence  Offsets,  India  is  probably  not  among  them.  This  has  to  change.   
  4. The  above  also  imply  that  negotiating  defence  offsets  is  a  tough  business,  but  other  countries  have  succeeded  and  India  too  needs  to  stick  it  out.
  5. The  other  point  is,  the  US,  the  quintessential  free  marketer,  has  a  wide  variety  of  industrial  promotion  policies  to  help  maintain  its  technological  and  industrial  edge  and  fend  off  foreign  competition.  All  countries  follow  policies  that  are  conducive  to  promoting  their  own  domestic  industrial  base.    As  this  Livemint  article  (“An  economic  roadmap  for  India”points  out  –  it  is  not  healthy  that  India  has  failed  to  nurture  its  manufacturing  base:  “The  fact  that  India  has  moved  from  an  agricultural  economy  to  a  service-driven  economy  with  almost  no  growth  in  industry  is  not  a  virtue;  it  is  an  outcome  of  policies  that  have  hampered  manufacturing  and  mining.    With  production  costs  rising  in  China,  international  buyers  are  looking  for  alternative  sourcing  destinations  for  manufactured  products.  If  India,  with  its  large  labour  force,  is  to  seize  this  opportunity,  it  must  nurture  its  industrial  sector”.

Other  factoids  that  it  would  be  useful  for  our  policymakers  to  be  aware  of:

  1. “DOD  is  willing  to  use  reliable  foreign  suppliers  when  such  use  offers  comparative  advantages  in  performance,  cost,  schedule,  or  coalition  operations.    DOD  has  negotiated  bilateral  Reciprocal  Defence  Procurement  Memoranda  of  Understanding  (RDP  MOUs)  with  21  countries”  –  based  on  these  MOUs,  the  US  has  made  blanket  public  interest  exceptions  to  the  Buy  American  Act  for  20  of  these  countries,  as  a  result  of  which,  their  “products  are  evaluated  on  the  same  basis  as  domestic  products  in  competitive  DOD  procurements.”
  2. The  US  also  conducts  a  Dialogue  with  other  countries  on  Limiting  the  Adverse  Effects  of  Offsets  in  Defence  Procurement.  It  has  set  up  an  interagency  team  to  study  the  issue  and  report  to  Congress.  The  team  concluded  that  other  industrialized  nations  are  also  very  concerned  about  offsets  in  defence  procurement.
  3. The  European  Union  (EU)  Defence  Procurement  Directive  in  August  2011  was  a  very  significant  event  in  defence  offsets.    But  even  in  Europe  the  Code  states  that  offsets  will  not  exceed  the  value  of  the  procurement  contract  (100  percent  offset  limit).    
  4. 100%  is  way  above  the  highly  diluted  30%  offsets  provided  in  India,  and  even  this  we  have  been  unable  to  implement.




Uploaded here – AGENDA INDIAN A&D INDUSTRY GROWTH is an excellent report prepared by Commodore (Rtd) Sujeet Samaddar, NM, Director and CEO, ShinMaywa Industries India Private Limited and member of the High Tech Forum on Defence Innovation launched at IDSA.

To encourage indigenous high-tech manufacture, he has outlined several measures that would help provide a level playing field for Indian industry. Till now, the system was skewed towards PROCUREMENT, not PRODUCTION. A beginning has been made with DPP 2013, which according to a highly placed source “now requires justification for not taking recourse to Indigenous products. That needs to be followed strictly. There is already a shift towards Buy Indian on account of this but will need to be nurtured.”

So the test, as always, will lie in implementation. We have many apologists for foreign products deeply embedded in our system. It was noted at the 4th Forum meeting that the heads of 4 governments visited India to promote their jets for the MMRCA acquisition, whereas we shy away from promoting our own products and host huge air shows which promote the aircraft of other countries! This is despite the fact that Indian products are greatly appreciated far and wide.

Commodore Samaddar suggests several measures to equalize the field between Indian and foreign players, and even tilt it a bit towards Indian firms, an endeavour we fully support. No country has become strong without strong indigenous firms. 

Ideas such as a streamlined defence exports policy and “deemed exports” which will “make it attractive for foreign OEMs to contract in India and thus create capacity capability and jobs in India” are great and even overdue. So are the suggestions on amending taxation policy to encourage indigenous production, “prepared in consultation with leading tax and legal experts” and “attached separately as Annexure”. And all the other suggestions to flatten the playing field.

Please read the report, comment and send feedback to him and also yours truly.


US Universities to help Indian Researchers

Great! American universities are the foundation of America’s innovation eco-system and we should learn from them how to set up one in our country. The more such collaborations the more we can upgrade our own educational system, hopefully stemming some of the huge forex outflow incurred in sending Indian children to foreign universities and attracting foreign students to our shores.  

US varsity to connect Indian researchers to the world

By Papri Sri Raman

Chicago/New Delhi, April 15 (IANS): In a move that will empower Indian researchers and help them connect with rest of the world, the University of Chicago (UC) and two other American universities will help Indian universities ramp up their computing ability to fulfill the scientists’ dream of sharing data with the international fraternity.

The connectivity will be via high-speed ‘cloud’ computing clusters and superfast internet.


How Green is my Valley (India)?

Along with high-tech, Vistas Bharat is dedicated to a green India.  A new startup Afforest has been launched to undo the damage of industrialization and grow new forests as fast as old ones are cleared away.

At the same time the European Investment Bank has tied up with India Infrastructure Finance Company Ltd (IIFCL) to extend a Euro 200 mn loan for projects related to renewable energy and emissions reductions.  These initiatives will provide new opportunities for Green Entrepreneurs and keep the balance between a rapidly industrializing hi-tech India and nature.  Because at the same time as we seek to create an advanced economy, we also want to nurture the environment – to combat the frightening effects of climate change. The IPCC has just published its latest assessment of the damage we are inflicting on our blue and beautiful planet.

Some industrial houses have kept their promises, the huge world class Jamnagar refinery has been “offset” by more than a million fruit trees, which not only produce revenue but have also been credited with re-balancing the ecology of the region. More firms need to follow this example and not evade their obligations to the environment.