By Avascent Analytics team
India’s defense market—the fifth-largest in the world at over $53 billion—is also one of the most competitive. Supported by the government’s “Make in India” initiative, the indigenous share of defense investment is set to grow over the next five years. Avascent Analytics Senior Analyst Shane Mason takes a deeper look at the competitive landscape in India and how domestic defense firms compare to historically dominant foreign firms in India’s defense market. Click here to check out the interactive data story.
A quick look at the biggest stories of the week
Saudi Arabia • Germany • Pakistan • Malaysia • Czech Republic
On April 13, Saudi Arabia signed a Letter of Intent to purchase five Avante 2200 corvettes from Navantia S.A. The deal is valued at approximately $2.5 billion, but the details about the delivery schedule were not disclosed. The new vessels will be used for offshore patrols and security operations. Saudi Arabia will also be forming a joint venture with Navantia to cover issues surrounding naval combat systems integration.
Germany is looking to finalize a deal with Airbus to acquire armed drones by mid-May, according to US media outlets that obtained the German government’s response to the deal on April 14. Germany is looking to acquire several Israeli-made Heron-TP drones in a deal worth $1.1 billion, which includes training and maintenance costs. The acquisition of armed drones became the center of political debate last June when the Social Democratic Party blocked the acquisition of the UAVs for ethical reasons, despite what was largely seen as a bipartisan deal. No further delays are expected this time around after the Social Democratic Party pulled back on its objection to purchase the UAVs following an agreement to maintain the coalition with Chancellor Merkel’s Christian Democratic Union. Germany expects the UAVs to be operational by the mid-2020s.
On April 17, Leonardo announced that the Pakistan Army would procure another batch of AW139 helicopters. The financial value of the contract was not disclosed. Although the announcement didn’t specify the number of helicopters included in the award, Avascent Analytics estimates that the five helicopters will be delivered in early 2019 are worth $110 million. Pakistan currently fields 16 AW139 rotorcraft in support of utility, passenger transport, and emergency medical service missions, and will receive five more in 2018 before the Army receives this most recent batch next year. The new AW139’s will address coming retirements in Pakistan’s fleet of utility helicopters, particularly the Army’s inventory of Bell Jet Ranger II, Grkiffin HT1, Bell 47, and Bell 412 rotorcraft.
At the Defence Services Asia 2018 exhibition in Kuala Lumpur, the Royal Malaysian Navy (RMN) selected Kongsberg to supply Naval Strike Missiles (NSM) worth approximately $153 million. The NSM will be deployed on the RMN’s six new Littoral Combat Ships, also known as the Maharaja Lela-class. These ships are based on the French Gowind-class design and will begin entering service in 2019. The RMN is also planning on procuring six anti-submarine helicopters to operate off the new ships, but this procurement has not yet been budgeted for. Although the 2018 Malaysian defense budget increased more than 5% compared to the previous year’s budget, it does not make up for the large 13% cut from the 2017 budget. Continued problems with piracy around the Strait of Malacca, and militants in East Sabah state will mean that higher end capabilities like anti-submarine warfare helicopters and multirole fighters will be more susceptible to delays.
The Czech Minister of Defence Karla Slechtova has reiterated plans to acquire 12 new multipurpose helicopters in the summer of 2018. The acquisition would be aided by an exemption clause that would allow the Czech Republic to procure the helicopters through a rapid acquisition process by making direct inquiries to two or three potential contractors. The twelve aircraft would be part of a deal valued between $240 million and $480 million, and would help recapitalize an aging helicopter fleet that consisits of Soviet-era Mi-171S transport helicopters and Mi-24/25 combat helicopters. The competition is likely to include both the Leonardo AW139M and the Bell UH-1Y Venom, the latter of which has already been approved via the DSCA FMS process.
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