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Analysis: India's defense sector

By KRISHNADEV CALAMUR, UPI International Security Editor

India launches possible Israeli spy satellite

India's launch of an Israeli satellite that may be used to spy on Iran cements the two countries' already-close defense relations.

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India's Antrix Corp., the marketing agency of state-run Indian Space Research Organization and the Department of Space, launched Israel's Tecsar satellite from a base in Sriharikota.

The 661-pound satellite is owned by Israel Aerospace Industries and has a resolution of 1 meter, leading to speculation that it will be used to spy on Iran. This could be tricky for India as New Delhi and Tehran have close economic and cultural relations and are negotiating at least two energy-supply contracts. ISRO Chairman G. Madhavan Nair downplayed those assertions, however.

"I don't think there is a view that there is a class of satellites called spy satellites," he said. "Applications are in the minds of the people. It (satellite) is only a tool."

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

Nair also denied there had been pressure from Persian Gulf countries to scrap the launch, which was originally scheduled for September 2007.

Israel's Haaretz newspaper reported this week that the Tecsar uses radar to identify targets under poor weather conditions; Israel's Ofek series reconnaissance satellites use cameras.

"This satellite joins a long list of satellites developed and launched by IAI," IAI head Yitzhak Nitzan said. "To date we have launched 11 EROS, Ofek and Amos satellites, seven of which are in orbit."

Information to determine if the satellite works will be gleaned in 13 days from the launch, Haaretz reported. The paper quoted officials in the security establishment as saying the satellite's systems could spot an object the size of a license plate or "even smaller."

The launch cements Israel's position as one of the world's top countries for satellite technology and India's place as a world-class but relatively inexpensive launch option.


Indian military outpost work in Tajikistan continues despite "problems"

Work on India's first overseas military outpost is nearing completion in the Central Asian nation of Tajikistan, but "technical problems" are preventing it from functioning fully, India Defense Minister A.K. Antony said Monday.

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"The base in Tajikistan is almost complete," he told reporters in New Delhi. "But some technical problems are there."

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

Antony and his Tajik counterpart, Khairullaev Sherali, held talks on the issue in New Delhi last week, PTI reported.

Tajikistan's Ayni air base is already home to some 150 Indian military personnel, and the news agency quoted unnamed official sources as saying the two sides were still split on the type of aircraft to be stationed at the air base, which is 9.3 miles outside the capital, Dushanbe.

A base in Tajikistan gives India a vantage point in the region. The former Soviet republic borders India's traditional rival Pakistan, its ally Afghanistan, and its rival for Asian supremacy, China.

But there has been some opposition to the Indian plans from an unlikely source: Russia.

India wants the base to be a long-term home for MiG-29 fighter jets and a short-term home for at least one squadron of Mi-17 helicopters, the Times of India reported. Russia is cool to those plans, at least in part because of India's strategic tilt toward the United States.


Analyst: Indian defense industry could earn big

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The Indian defense industry could reap the rewards of a new government policy that mandates that between 30 percent and 50 percent of orders come from domestic firms, according to a research note.

"With the Defense Offset Facilitation Agency estimating the expenditure on the sector at $100 billion for next five years, offset benefits for Indian companies could be about $30 billion," Alchemy Capital Management Chief Investment Officer Hiren Ved said, according to the Press Trust of India.

State-run Hindustan Aeronautics Ltd. as well as private players such as Larsen and Toubro and the Tata Group are likely to be the beneficiaries.

Ved said the deals could mean up to $10 billion in investment that will be met through both private-equity deals and the capital markets.

"The current size of the industry catering to the defense sector is very small and the entry barriers are huge due to R&D and technology intensity and long lead time," he said.

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