BAE SYSTEMS PLANS IN INDIA

Lt Col Anil Bhat Interviews Mr Nik Khanna, MD, India, BAE Systems

ANIL BHAT (AB): BAE Systems has recently concluded a sale of 145 M777 Ultra-Light howitzers through the US Government Foreign Military Sales route. Could you give an overview of this landmark sale? What is the latest on the delivery of the guns?

NIK KHANNA (NK):Yes, we are delighted that India and the US agreed to the Foreign Military Sale of 145 M777 Ultra-Lightweight howitzers in December 2016 and an order was placed on BAE Systems in January this year. The Company began working with the US Government and the Indian Army immediately. We committed first deliveries of the weapon system would begin within six months of the two Governments’ agreement and we are very proud that the first two guns arrived in India ahead of schedule in May for an extensive range firing programme in close collaboration with the US Government and the Indian Army. The next batch, consisting of five guns, will arrive in India in September next year. Our focus is on delivering the programme well and supporting the Indian Army with test-bed and range trials as well as induction. India now joins the US, Canadian and Australian forces in gaining the superior artillery capability of the M777. This ultralight weight howitzer will remain at the forefront of artillery technology well into the future through the use of technical insertions, long-range precision guided munition developments and flexible mobility options.

AB: What are the other opportunities BAE Systems is pursuing in India?

NK: India is amongst BAE Systems’ most important markets. Our India strategy is anchored around working with the Indian defence industry across Air, Land, Sea, Cyber and Advanced Electronics, building on the solid foundations we have in our longstanding association with Hindustan Aeronautics Limited (HAL). We are now partnering with Mahindra and several other Indian companies on the M777 Ultra Lightweight howitzer programme. Building on the success of the Hawk Mk132, which has exceeded 100,000 flying hours with the Indian Air Force and the Indian Navy, we continue to stand by for a potential repeat order to fulfil the Indian Air Force’s requirement for its prestigious aerobatic team, the Surya Kiran. BAE Systems and HAL continue to hold positive discussions around collaboration for the provision of fleet support services to India’s Jaguar and Hawk fleets. The modernisation of land systems including munitions is another area of focus which we are well poised and eager to support.

AB:How do you see the Indian defense sector shaping up over the next few years?

NK: The defense sector in India has embarked on an exciting phase with all three armed forces, focusing on modernisation. The Government is continuing to provide a conducive environment with key policies such as Foreign Direct Investment, the new Defence Procurement Procedure including offset policies, and the recently unveiled Strategic Partnership policy towards realising Prime Minister Modi’s vision of Make in India. Over time, these will enable the industry to realise a shared commitment to develop next-generation technologies and platforms for India, in India and from India for the world.

AB: Make in India is now a critical driver in all defense procurement. As an international OEM, what is your approach to this platform?

NK: Make in India has been central to our strategy throughout our long history in India. HAL’s production line in Bengaluru where the Hawk aircraft is manufactured from raw material is a demonstration of the success of Make in India in defence manufacturing,and builds on seven decades of BAE Systems and HAL partnership. The Hawk programme is an outstanding success,as was the Make in India Jaguar programme that came before it. The M777 Ultra Lightweight howitzer is an important Make in India programme. We are well positioned partners for participation in the two other Make India projects, the Futuristic Infantry Combat Vehicle (FICV) and Tactical Communication System (TCS) programmes. Powered by Make in India, we should expect a noticeable reversal of ratios in indigenous manufacturing and imports. Naturally this will require investments and innovation. As a founding partner of defence manufacturing in India, we will continue to invest and grow our footprint and our partnerships, both manufacturing and technology-based, across our capabilities in Air, Land, Sea, Cyber and Advanced Electronics.

AB: The purchase of a third batch of the Hawk advanced jet trainer for the Indian Air Force’s aerobatics team has been on the anvil for some time now? When do you see that concluding?

NK: BAE Systems responded to the Request for Proposal from HAL for a potential order to supply products and services for the manufacture of 20 Hawk Advanced Jet Trainer aircraft in 2013. BAE Systems has worked closely with the Indian Ministry of Defence and HAL to establish a production line in India where the aircraft is now manufactured from raw material. This third batch will sustain these high skill jobs in Bengaluru and ensure continuity of the supply chain which also affords improved efficiency in supporting the existing fleet in India. As a Make in India programme, HAL is the Prime Contractor for Batch 3 and BAE Systems stands ready to support HAL in securing this important order. This is a tremendous opportunity to build on the success of Hawk in India and together with HAL; we look forward to giving the Indian Air Force’s display team a fantastic aircraft.

AB: What are your plans for building your base of local suppliers in India?

NK: Developing domestic industrial capabilities and an in-country supply chain is a crucial part of our Make in India strategy. Indian companies have demonstrated their eagerness and potential to become part of our global sourcing programmes and we continue to work with them to further develop their capabilities to achieve their ambitions. We have qualified Indian companies into our Hawk global supply chain and also initiated sourcing of Mission Computing and Display System for the P-8 Poseidon aircraft from Kineco Kaman Composites India (KKCI) Private Limited. KKCI is the first supplier in India developed through P-8 industrial commitments by BAE Systems.

Looking into the future, with an offset commitment of over $200 million on the M777 programme, we will open opportunities for the Indian supply chain both locally and globally, creating jobs, enhancing skills and building advanced manufacturing capabilities in India. The establishment of the Assembly, Integration & Test facility with Mahindra will further grow the industrial capacity of India. This one-of-its-kind facility is a fundamental part of the M777 production line and will enable the Indian Army to access maintenance, spares and support for the M777 locally.

AB: Are you also interested in the Indian Navy’s 20mm and 40mm guns programmes? If so, what are your offers to meet these two requirements of the Indian Navy?

NK: We are committed to partner India in modernisation of its forces in partnership with Indian industry. Our capabilities in maritime is spread across design and manufacture of naval ships and submarines, as well as their combat systems and equipment, associated services such as training solutions, maintenance and modernisation programmes to support ships and equipment in service around the world and the management of supporting infrastructure. We are committed to share this expertise in the Indian Navy’s programmes.

AB: The Advanced Hawk made its debut at Aero India 2017 earlier this year. Has the Indian or any regional air force show any interest?

NK: The Advanced Hawk aircraft is an industry-funded concept demonstrator, the purpose of which is to stimulate the market by showing the Lead in Fighter Trainer capability that can be provided in a Hawk aircraft. The Advanced Hawk introduces several new features in the aircraft – an upgraded cockpit with a large area display, slatted wing, defensive aids suite, stores capability, being some of the primary enhancements. Training currently being performed on high cost front line fighters can be downloaded to Advanced Hawk, where it can be performed at a fraction of the cost, in a safer training environment whilst also making frontline capacity available.

HAL and BAE Systems have a longstanding association on the highly successful “Make in India” Hawk programme which today benefits from technology transfer around the airframe and engine, with local build and in-country support. For the Advanced Hawk, this joint development under ‘Make in India’ will strengthen the partnership and provide further opportunities for technology transfer.

The aircraft was one of our key displays at Aero India this year, generating active interest and since then flight trials have commenced in the UK at our Warton test facility. This is enabling engagement with operators in all regions to discuss capability requirements either through new build or upgrade to existing aircraft.

AB: What is your view of the Strategic Partnerships policy?

NK: The Strategic Partnerships policy has been long awaited and we’re pleased it is now issued. The policy is an important building block of the Make in India platform and further formalises and incentivises the desired participation of the Indian private sector in defence manufacturing. Partnership being a key pillar of BAE Systems’ strategy in India; we are watching its early implementation with keen interest.

AB: BAE Systems has always been a keen supporter of Corporate Social Responsibility (CSR) programmes and now the Company’s Act also mandates it. Tell us what are your programmes for India?

NK: Our community investments in India support the efforts of the Government and the development sector. Our investment in India in partnership with Smile Foundation in 2012 was in advance of the Company’s Act that mandates companies like ours to invest and engage in Corporate Social Responsibility programmes. The multi-year partnership successfully concluded having provided quality education to more than 1,000 children annually across six locations in five Indian states. It also delivered primary healthcare services to over 50,000 individuals in underprivileged areas of Bengaluru city. In 2016, support was extended to Swachh Bharat Abhiyan (Clean India campaign) and Digital India campaigns.

The current phase of our investment in the community focuses on “Beti Bachao, Beti Padhao Yojana” or Save the Girl Child, Educate the Girl Child platform through our partnership with Room to Read, a global non-profit organisation focused on improving literacy and gender equality in education. We provide comprehensive support to 300 school-going girl children through Room to Read’s Girl Education Programme aligned with United Nations’ Social Development Goal (UNSDG) of Gender Equality and Women’s Empowerment.

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