‘No Curbs on Tech Transfer to India’

By Editor 19-Jul-2017


Sergei Viktorovich Chemezov, CEO of Rostec Corporation, has said  Russia is the only country which, without any restrictions, transfers all technologies to India. The head of Rostec,  formed to promote development, production and export of hi-tech products for defence and civil sectors, spoke on India-Russia military-technical cooperation, the new MC-21 passenger aircraft and a host of other topics at MAKS-2017.

Could you describe the role of India in Russia’s global strategy for the development of military-technical cooperation?

India has been and remains our strategic partner. The bulk of our exports go to Southeast Asia, India and China. They are our two major partners. Every year, we supply products to India amounting to more than $ 2 billion. Sometimes it is more. Therefore, we have about the same volumes last year as before. That is, there are changes, but insignificant, somewhere in the range of 10-15% is the fluctuation. Therefore, with regard to cooperation with India, it is aimed not only at selling products, but we are also transferring technology. It began with the late 1990s with the sale of licences for SU-30MKIs. Today, these planes are manufactured in India. The T-90 tank India has already mastered production, we continue to provide assistance, we supply the components, but for the most it is already localised. Most recently we signed a contract for the joint production of Ka-226 helicopters. We have to supply a certain amount, most will be localised, in total, in the amount of 200 helicopters. But in the future this amount can be increased. We are working on the 5th generation aircraft, the work continues. That is, our cooperation is very wide.

How would you describe the military-technical cooperation (MTC) relations between India and Russia? What are the main projects?

Rostec has been partnering fruitfully with India for many years. Military and technical cooperation is certainly the main area for Rostec and Indian partners that has been carried out since 1960. First the USSR and then Russia were the main suppliers of weapons and military equipment to India. In fact, the USSR and Russia played the key role in establishing and developing the Indian defence industry. According to some estimates, 40% of weapons and military equipment of the Indian land forces, 80% of the Indian air forces and 75% of the Indian navy were manufactured by the USSR and Russia or produced in India under the Soviet and Russian licenses.

The cost of contracts signed during the cooperation period is tens of billions of US dollars. These included airplanes, helicopters, infantry combat vehicles, tanks, artillery, anti-aircraft defences, frigates, submarines, Vikramaditya aircraft carrier, etc. Annually, component parts for manufacturing of weapons and military equipment are supplied to India in large volumes.

I would like to stress that India is a privileged strategic partner of Russia.  Despite the tough international competition, we demonstrate that the military and technical cooperation between Russia and India does not only develop stably but also deepens. Our strategy is to further expand the cooperation with Indian manufacturers in compliance with the ‘Make in India’ policy proclaimed by the Government of Prime Minister Narendra Modi.

Today's portfolio of Rosoboronexport orders in India exceeds $ 4 billion. Currently, the MTC cooperation between Russia and India is planned in the long run prospective. The parties are currently implementing the MTC Programme for 2011-2020. We have recently registered Russian Helicopters, which is a joint enterprise of Rosoboronexport and Indian corporation Hindustan Aeronautics Limited (HAL).  The JV production plan stipulates the launch of up to 35 Ka-226T helicopters per annum with the possibility to increase the output.

Could you share details about your common project with India on Ka-226T?

Rostec's strategy is to further expand cooperation with Indian manufacturers in compliance with the ‘Make in India’ policy.

The project for localisation of production of Ka-226T helicopters in India is currently implemented together with HAL that has significant experience in the transfer of Russian technologies to India.

At the Russian-Indian summit in Moscow in late December 2015, an intergovernmental agreement was signed for implementation of the project for production of Ka-226T helicopters in India. On October 15, 2016, at the Russian-Indian summit in India (Goa), the parties signed a Partner Agreement and ratified the Memorandum and Articles of Association of the new JV, and this was announced at the BRICS summit. Shares: 51% at HAL and 49% at Rostec (Russian Helicopters and Rosoboronexport being parts of the corporation). The minimum project volumes are the procurement of 40 helicopters from Russia and the production of 160 helicopters in India with different localisation degrees. In May 2017, the JV was registered in India and Russia and became a fully legitimate company.

We expect that the target location to implement the project will be in Bangalore on the production capacities of HAL that are currently used in the assembly project of Su-30 MKI. There are all necessary conditions including human resources for successful project implementation.

Within implementation of the joint project of Rostec and HAL for Ka-226T production in India, it is possible to engage other companies, including private ones, depending on the Indian party. They have to evaluate and affirm the readiness and reliability of private companies for most of which it is a new business domain. Rostec sees no problems in collaborating with private companies, but we understand that engagement of other partners in the project could make the project implementation more difficult or increase the implementation deadlines. But we are ready for this.

When will the first deliveries of Ka-226 be to India?

As you know we have established a joint venture in India. And we expect an official request from the Ministry of Defence of India, the customer. Accordingly, after the contract is signed, in two years, the first deliveries of helicopters will be made. The agreement for that is signed and is being exercised.

What is the stage of the agreement over the S-400 Triumf systems with India? When can the supply begin?

You know, until the contract is signed I would not be able to answer precisely on this topic. It’s not customary for us. When we finalise the deal and sign it, and if our India partners agree, we could announce details of this contract.

Could you tell us what is the status of the 5th-generation fighter (Russian-Indian FGFA) programme? What other programs and projects are planned between the two countries?

As for the 5th generation - the work is underway. Stage 1 is over. Now we are discussing the second stage. And I think that in the near future all decisions will be made. And the contract documents will be signed. But the work is going, it is very complicated, so it is not going fast.

I have already mentioned Ka-226.

We have an enterprise that has been working for a long time producing cruise missiles BrahMos. They are already completely localised today and are already completely produced in India. This is one of the first projects that we implemented in India. As well as, T 90, Su-30MKI. That is a fairly large number of projects - some have already been implemented, some are being implemented.

That is, the only country for India which without any restrictions transfers all technologies is Russia.                           

What are the prospects for cooperation with India, taking into account its growing cooperation with western countries, for example, Israel? What are the advantages of further work with Russia?

Cooperation with India will certainly continue. Regardless of whether India cooperates only with Russia or also with Israel and other countries. And France also, and USA. We have our own niche, these countries have their own directions for cooperation. Therefore, this does not mean that if India will work with some other countries, cooperation with Russia will cease. No. There are things that no one else will give except Russia. Therefore, Russia has always been and will be a strategic partner of India.

Indian Air Force has a large operational experience of SU-30MKI, while Russia has experience in combat use of the aircraft. What are the opportunities for joint exercises, exchange of experience?

(Answered by Russia’s Deputy Minister of Defence) We always go in contact with our Indian colleagues, we have an intergovernmental commission, on our side it is headed by our Defence Minister - Sergey Shoigu. We constantly meet and discuss the issues. As for the SU-35, which showed itself very well in Syria. Do not forget about the SU-34 - also a good aircraft, which is very well proven. On the way we have a promising aviation complex of frontline aviation. This the main product line, it does not stop here, so there is every opportunity for further cooperation in exchange of experience.

Could you tell us about the products shown at MAKS-2017?

Traditionally, we demonstrate a wide range of our products at MAKS, which we offer to foreign partners. Delegations from foreign countries  are especially interested in such planes like Su-39, Su-35, MiG-29M/M2 and Il-76MD-90A, MiG-35, and such helicopters as Mi-28NE, Mi-35M, Mi-17, Mi-26T2 and Ka-52. Moreover, foreign customers show interest in air defence products, such as the long-range anti-aircraft weapon system S-400 Triumf, the surface-to-air missile systems Tor M2E and Buk-M2E, the surface-to-air missile and anti-aircraft artillery weapon system Pantsir-C1, as well as in electronic warfare devices.

What are the currently most promising markets?

Overall, it is not customary to talk about contracts in the MTC system even after they have been signed, and all the more so — before that.

All I can say is that in the first half of 2017, the exports of weapons and military equipment under our contracts were $2 billion. The overall military exports by Rosoboronexport in 2016 amounted to $13.1 billion. Over the last five years, the exports were insignificantly going up and down, but in general the real annual indicator of Rosoboronexport remained at this level. The overall order portfolio of Rosoboronexport amounts to about $45 billion.

Based on the supply statistics for 2016, we can say that the share of the Middle East and North Africa in the total exports of Rosoboronexport has increased.

In recent years, we have renewed the close contacts with some of our traditional partners in the Middle East and are now continuing to strengthen them. We are interested in more active cooperation with the UAE, Kuwait, Saudi Arabia, Bahrain and other countries of the region.

Meanwhile, the turbulence in the Middle East and North Africa implies that the region will become one of the largest recipients of military equipment; however, the Asia-Pacific Region is still interested in purchasing of defence products.

The volume of supplies to Middle Eastern and North African countries is increasing due to implementation of large-scale modernisation and rearmament programmes. In particular, in 2016, the region's share in the air defence imports accounted for more than 50% and for about 40% in the total imports of aviation equipment and related products.

India and China remain the most crucial partners for Russia in the field of MTC. The share of Southeast Asia and Asia-Pacific Region is about 50%. Quite many products are supplied to Vietnam, which has built its own submarine force and the entire related infrastructure with Russia's support. Russia has quite favourable prospects in the military markets of Indonesia, Malaysia, Bangladesh, Myanmar and other countries of the region.

The cost of our weapons and military equipment supplied to Latin American countries since 2001 is more than $10 billion. In recent years, the region has seen the toughening of competition from American and European arms producers, but we are ready to fight for the customer.

The latest Russian short-range airliner MC-21 performed its maiden flight in the end of May. What prospects do you see for this plane? Will it be able to compete with  Boeing and Airbus?

MC-21 is the latest Russian short-mid-range airliner created by a number of Rostec's holding companies such as ODK, KRET, Technodinamika, RT-Chemcomposite and VSMPO-AVISMA.

MC-21 lays a claim to the same commercial niche as Boeing-737 MAX and Airbus A320neo. However, its performance characteristics and cost-effectiveness are the best in its class. It is the wing, with its polymer composite materials supplied by Rostecthat, that will make the largest contribution to improving the performance characteristics of the jet. It is for the first time in history that this type of wing was created for the single-aisle aircraft with the carrying capacity of over 130 passengers. Generally, the share of composite materials in the construction of MC-21 aircraft is over 30%, which is unique for this class of liners.

Rostec's enterprises also manufacture composite aviacomponents of the tail. It is the manufacturing technology of components for finbox and stabilizing fin from polymer composite materials that will provide competitiveness of the airliner. Their peculiarity is the significant automation of the process. The amount of composite details in the construction of the jet will be over 30%. Besides, Rostec's enterprises fully provide the need of the MC-21 program for titan, supply parts (chassis) and airborne avionics.

The plane is aimed at the largest mass segment of the airline industry; its carrying capacity is from 163 to 211 passengers. The largest fuselage diameter in the class of single-aisle aircraft allows MC-21 to ensure new standards of passenger comfort. Due to this solution, each passenger's personal space will grow significantly, service trolleys will not block passage, and airlines will see the reduction of turnaround time in airports. Installing large windows allowed to raise the level of natural illuminance of the passenger cabin. Comfortable air pressure and improved microclimate will be maintained within the jet.

An innovative ergonomic cockpit was also developed for the MC-21 pilots; this will make aircraft management easier and aircraft piloting quality higher.

Estimated direct operating cost reduction when operating MC-21 will be 12-15 % compared to the analogues. The starting portfolio of standing orders for 185 planes MC-21 provides full capacity utilization in the coming years. Advance payments were made for standing orders.

All these facts speak volumes about the liner's success. We highly evaluate the export potential of the new airliner, in the first place, for dynamically growing aviation markets of South-East Asia, Latin America, India and Middle East. Rostec has been long operating successfully within the framework of both military cooperation and civil projects, so we are prepared to fully support UAC in promoting MC-21 abroad.

After its first flights, MC-21 was highly commended by professional pilots. Last week, I was in Irkutsk andpersonally attended its flight. I can safely say that it is an excellent plane.

Tell us about your international cooperation on engine building?

One of the most successful programmes today is the Russian-French programme SaM146 – SaM146 power unit created jointly by Rostec (represented by PJSC UEC-Saturn) and Safran Aircraft Engines powers Sukhoi Superjet 100 liners of both Russian and foreign air carriers. SaM146 has proven to be highly reliable during operation in Mexico in the highlands and at extremely low temperatures of Yakutia. Accumulated burn time has exceeded 600 thousand hours.

Apart from carrying out civilian aircraft engine building projects and the government defence contract, Rostec represented by UEC takes part in implementation of a number of programmes in the field of military and technical cooperation. For instance, in 2016 the Corporation executed a contract for manufacturing and supplying RD-33MK turbojets for MiG-29K/KUB deck-based fighters to the Indian Navy. The supply of engines was conducted within the framework of a contract concluded earlier between JSC RAC MiG and the Ministry of Defence of India. Another example is the successful implementation of a project for licensed production of the AL-31FP engine at a division of Hindustan Aeronautics Limited (HAL) in compliance with contracts concluded earlier within the framework of JSC Rosoboronexport. In 2016, UEC concluded a number of contracts for the support of operation and supply of spare parts for AL-31F and D-30KU/KP engines of the PRC aircraft fleet with Chinese companies.

How is the PAK FA development programme going?

Today one of Rostec's key project milestones is the development of the second stage engine for PAK FA. New construction solutions have been used in the development process, which are unparalleled in Russian engine building. In 2016, bench tests of the engine were started, and preparation for flight testing is currently underway. PAK FA will meet the following requirements:  supersonic flight without afterburners, low visibility (for radar, optical, acoustic, and other detection systems), supermaneuverability and an ability to make relatively short takeoff and landing.