Analysis: India's defense sector

Russia quiet at India's DefExpo 2008

Russia's presence at DefExpo 2008, India's bid to attract major foreign players for a piece of its $30 billion arms industry, has been relatively muted.

For years, India's No. 1 arms supplier, Russia finds itself being outflanked by defense firms from Israel, the United States and Europe. Last year, Russian companies did nearly $15 billion worth of business at DefExpo, but this year, Moscow has been quiet -- losing ground to U.S. players like Lockheed Martin Corp., which said it signed a letter of intent in January with India for six Super Hercules C-130Js in a deal worth $1 billion.

Moscow and New Delhi have clashed in the recent past over the work on the Admiral Gorshkov, the T-90 tanks and missiles, the semiofficial Press Trust of India reported.

Russian officials at DefExpo denied a rift, however.

"The Russian way of doing business is different from that of the West," said Commodore H.S. Kang, an executive with Russia's Rosoboron. "The Russians do business at government-to-government level."

India vows to boost private defense players

India is looking to shore up its private defense sector amid an overwhelming global response to the DefExpo 2008 arms conference in the country.

"The defense manufacturing has the potential to propel our economy to a great extent," Minister of State for Defense Rao Inderjit Singh told an audience at the defense confab.

The comments were reported by the semiofficial Press Trust of India.

Promising government support for private players, Singh called for a stronger private-public partnership to meet India's security needs.

The expo helped the country to evaluate "how far we have climbed up the ladder to be at par with other countries," he said, according to PTI.

Additional Secretary (Defense Production) Ajay Acharya said the expo resulted in 20 major deals in the first three days.

India's Mahindra Group eyes $3B in defense revenues

India's auto giant Mahindra & Mahindra says it is looking at revenues of $3 billion from the defense sector over the next decade.

"We expect to continue with our dominant position in the defense sector and remain one of the largest players," said M&M Group Vice Chairman and Managing Director Anand Mahindra. "In the total $5 billion Indian market for land systems, we intend to have a 60 percent share.

"We have the largest range of vehicles for the defense market and have launched two new platforms, Axe and Marksman, which will help us consolidate our position in the market."

The comments were reported by the Economic Times.

The bids are likely to be made through M&M's defense subsidiary Mahindra Defense Systems by forming joint ventures with global equipment manufacturers.

A joint venture has already been signed with Italy's Whitehead Alenia Sistemi Subacquei, a subsidiary of the Finmeccanica Group, to develop underwater weapon systems, the newspaper said.