Scorpene Class Submarine INS Kalvari set afloat at Naval Dockyard, Mumbai. (Source: Indian Navy’s website) 

Defence Acquisition Policy: Indian And Foreign Firms That May Vie For Contracts

The defence ministry has released a new policy that seeks to boost private participation in domestic manufacturing of defence equipment.

The Defence Acquisition Policy, which awaits approval of the Cabinet Committee on Security, has selected four key strategic platforms that require private participation – submarine, helicopter, single-engine aircraft and armoured vehicle/main battle tank. The policy proposes one strategic partner for each platform that will act as a ‘System of Systems’ integrator and partner with not just original equipment manufacturers or foreign suppliers, but other domestic manufacturers with defence capabilities. It seeks to create an ecosystem for micro and medium and small enterprises who will contribute to the strategic partner.

BloombergQuint looks at which Indian and foreign companies currently have capabilities in each of the four platforms identified by the Defence Acquisition Council (DAC), an arm of the defence ministry that cleared the policy.


The government plans to build at least six submarines at an estimated cost of Rs 60,000 crore under its Project 75 (l) in various shipyards across the country. The DAC had approved the project in 2014 but the contracts were withheld till a Strategic Partner Policy was finalised. The diesel-electric engine-powered submarines will be equipped with advanced air independent propulsion (AIP) systems that allows submarines to remain under water for a longer duration.

Germany’s ThyssenKrupp Marine Systems and France’s DCNS could be in the fray for the OEM status, while Reliance Defence and Engineering Ltd. and Larsen & Toubro Ltd. have capabilities to build submarines as strategic partners.

“DCNS is involved with P-75, so they will certainly remain in picture, but ThyssenKrupp is the only one which has proven AIP today. DCNS doesn’t have anything called an AIP, while the Russians are ahead on AIP than DCNS. We have our own indigenous AIP solution developed along with Defence Research and Development Organisation,” said Jayant Patil, senior vice-president and head of defence and aerospace at L&T.

L&T is the only company which participated in the construction of country’s first indigenous nuclear submarine, Arihant.

Although we don’t speak about Arihant in public, in the strategic programme we have an involvement.
Jayant Patil, Senior Vice President And Head-Defence & Aerospace, L&T
An employee looks at the propeller of a Scorpene submarine at the industrial site of the naval defence company and shipbuilder DCNS in France. (Photo: Reuters)
An employee looks at the propeller of a Scorpene submarine at the industrial site of the naval defence company and shipbuilder DCNS in France. (Photo: Reuters)


The government has floated a proposal seeking private sector participation to build 110 indigenous helicopters under the Naval Utility Program. These helicopters will replace the Navy’s Cheetah helicopters. The programme, spread over 10-15 years, is likely to cost close to Rs 12,000 crore. U.S.-based Bell Helicopters and Europe’s Airbus Helicopters could vie to become partners. The third player, Italy’s Leonardo Helicopters (erstwhile AugustaWestland), has been blacklisted by the government.

In India, the Mahindra Group and the Tata Group have capabilities to build helicopters. Mahindra Defence has been supplying aerostructure parts to Airbus and in January last year, extended its partnership with the European aircraft maker to build military helicopters in India.

Tata Son’s arm, Tata Advanced Systems Ltd., tied up with Boeing in November 2015 to make aerostructures and parts for the U.S. major’s AH-64 Apache Helicopters.

A Bell AH-1Z helicopter on show during the Dubai International Airshow (Photographer: Jason Alden/Bloomberg)
A Bell AH-1Z helicopter on show during the Dubai International Airshow (Photographer: Jason Alden/Bloomberg)

Single-Engine Aircraft

India has been looking to replace its ageing fleet of over 200 MIG-21s fighter aircraft for many years. As a short-term measure, India struck a government-to-government partnership to acquire 36 Rafale aircraft from France for more than $8.5 billion. The off-the-shelf acquisition of Rafale was a setback to the country’s Medium Multi-Role Combat Aircraft Programme. India is now looking for a strategic partnership to build single-engine multi-role aircraft locally. American F-16 fighter aircraft maker Lockheed Martin, Sweden’s SAAB Group that makes Gripen, and Rafale maker Dassault Aviation of France could be in the fray to be OEMs.

Indian companies in the space include Tata Advanced Systems, which already has a tie-up with Lockheed Martin to make aerostructures for the C-130J Super Hercules.

The Adani Group is said to be in discussion with SAAB for a tie-up to manufacture Gripen-E in India, according to a February report in the Mint. Reliance Defence has partnered with Dassault Aviation to make aerostructure parts for Rafale aircraft. The joint venture will execute an offset obligation as the deal requires Rafale to engage Indian suppliers for components. However, while Rafale is a twin-engine fighter, the government seeks strategic partnership for a single-engine aircraft.

The new indigenously built Tejas Aircraft for IAF. (Photo Courtesy: ADA/Dev Rana)
The new indigenously built Tejas Aircraft for IAF. (Photo Courtesy: ADA/Dev Rana)

Armoured Vehicle/Main Battle Tank

The government has already invited proposals for armoured vehicles under its ‘Make in India’ programme, seeking bids from Indian companies to showcase prototypes of armoured vehicles to be used by the army and para-military forces. Four consortiums including L&T, M&M, Tata Motors-Bharat Forge and Tata Power-SED have been shortlisted and are undergoing technical evaluation. The Futuristic Infantry Combat Vehicle (FICV) program has been kept outside the strategic partnership, said L&T’s Patil.

The armoured vehicle platform will primarily replace the ageing fleet of main battle tank Arjun. The government has already started replacing the old Arjun tanks with Russian build T-90 tanks. The value of orders in this segment would be upwards of over Rs 30,000 crore, he added.

“Only one program in the armoured program is yet to be initiated, which is the MBT (main battle tank). If it is an SP (strategic partner), they may not allow us, but if there are four FICV players in India, they would bid for the MBT. FICV and MBT technologies are not different. What is different is the physical power or mobility in terms of mass,” said L&T’s Patil.

Indian players shortlisted for the FICV program will bid for the MBT program. Foreign companies in the space include U.S.-based General Dynamic and state-owned Russian firms.

T-90 Tank used by the Indian Army. (Source: Wikimedia)
T-90 Tank used by the Indian Army. (Source: Wikimedia)