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Make-in-India: U.S Defence firms want to retain control on proprietary technology

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Make-in-India: U.S Defence firms want to retain control on proprietary technology

By Aditya Kalra and Sanjeev Miglani

US-India Business Council says foreign partners in defence production can’t be held liable for defects in products manufactured in collaboration

New Delhi: U.S. defence firms offering to set up production lines in India to win deals worth billions of dollars want stronger assurances they won’t have to part with proprietary technology, according to a business lobby group’s letter to India’s defence minister.

The letter had been sent a month before Prime Minister Narendra Modi reshuffled his council of ministers and was thus addressed to Arun Jaitley who then held additional charge of the defence portfolio.

These companies are also saying they shouldn’t be held liable for defects in products manufactured in collaboration with local partners under PM Modi’s ‘Make-in-India’ drive to build a military industrial base.

Lockheed Martin and Boeing are both bidding to supply combat jets to India’s military, which is running short of hundreds of aircraft as it retires Soviet-era MiG planes, and its own three-decade-long effort to produce a domestic jet is hobbled by delays. Lockheed has offered to shift its F-16 production line to India from Fort Worth, Texas, and make it the sole factory worldwide if India orders at least 100 single-engine fighters.

The U.S. firm has picked Tata Advanced Systems as its local partner under the defence ministry’s new Strategic Partnership model under which foreign original equipment manufacturers (OEMs) can hold up to a 49 percent stake in a joint venture with an Indian private firm which will hold the majority of shares.

The US-India Business Council (USIBC) wrote to India’s defence minister last month seeking a guarantee that U.S firms would retain control over sensitive technology – even as joint venture junior partners. “Control of proprietary technologies is a major consideration for all companies exploring public and private defence partnerships,” the business lobby, which represents 400 firms, said in the Aug. 3 letter, reviewed by Reuters and previously unreported.

“To allow foreign OEMs to provide the most advanced technologies, the partnership arrangement between an Indian owned ‘strategic partner’ company and a foreign OEM needs to provide an opportunity for the foreign OEM to retain control over its proprietary technology,” it said, noting this wasn’t explicit in the policy document.

TECHNOLOGY TRANSFER

Technology transfer is at the heart of Modi’s drive to build a domestic industrial base and cut reliance on imports that has made India the world’s biggest arms importer in recent years.

Without full tech transfer in previous arms deals, India’s mainly state-run defence factories have largely been left to assemble knock-down kits even for tanks and aircraft produced under licence from the foreign maker. Modi’s advisers have vowed to change that, insisting on transfer of technology so that critical military equipment are designed and manufactured in India.

Benjamin Schwartz, USIBC’s director for defence and aerospace, said the new Indian policy offered a roadmap for establishing partnerships between U.S and Indian companies, but it raised some questions for the firms. He said he was not in a position to name those companies concerned by the Indian policy, but there was a “general desire to see increased clarity” on several aspects, including the control of proprietary technologies.

QUALITY ISSUES

The USIBC also opposed a clause in the new rules that held foreign firms jointly responsible for the quality of the platforms provided to the military, saying legal liability is a significant factor in business decisions.

“We recommend the MoD (Ministry of Defence) affirm that foreign OEMs will not be liable for defects outside their company’s control,” the USIBC said.

Lockheed did not respond to a request for comment. Boeing, which is bidding for a separate contract to sell its F/A-18 Super Hornets for India’s aircraft carrier fleet, declined to comment on the USIBC letter, but the company’s India president, Pratyush Kumar, said there were concerns about Indian private firms’ lack of experience in the aerospace sector.

Only state-run Hindustan Aeronautics Ltd had made planes under licence, while some private players were starting from scratch, having never built even an aircraft component. Kumar said he could not find a single example worldwide of a private enterprise with limited experience building out a plane under transfer of technology.

“Look at Turkey, look at Japan, look at Brazil – look at multiple countries. In all cases there is a fine balancing act of co-opting the capabilities of both public and private enterprise,” Kumar said.

India’s defence ministry offered no response to the concerns expressed by the trade lobbying group on the strategic partnership model, which will also apply to building submarines and helicopters as part of a $150 billion modernisation drive. But an official, referring to sensitive technology, said the government has made clear in the past that foreign firms can be allowed to increase their stake beyond 49 percent if the technology they bring in is state-of-the art.

“It can be done on a case-to-case basis,” the official said. Mukesh Aghi, president of the US-India Strategic Partnership Forum, said that despite the starting problems, defence manufacturing looked set to be a breakthrough area in ties between India and the United States. “It’s the next big thing. There is strong support from the (U.S President Donald) Trump administration to take this forward.”

– With Reuters

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Heathrow airport shut down after fire in London substation, Air India flights cancelled or diverted

A fire at a London substation forced the shutdown of Heathrow airport, disrupting over 1,300 flights including several Air India services.

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Fire at London substation causes Heathrow airport shutdown

A major fire at an electrical substation in Hayes, located in the Hillingdon borough of London, triggered widespread chaos on Friday, resulting in the shutdown of Heathrow airport, one of the busiest in the world. The incident has led to the cancellation or diversion of at least 1,351 flights, including multiple Air India services.

Among the affected Air India flights were AI129 from Mumbai and AI161 from Delhi. While the former was ordered to return mid-air, the latter was diverted to Frankfurt, Germany. The airline also confirmed the cancellation of all remaining flights to and from Heathrow for March 21, including AI111 from Delhi. However, it clarified that flights operating through Gatwick airport will continue as scheduled.

The power outage, caused by the blaze at the substation, left more than 16,000 homes in the UK capital without electricity. The Scottish and Southern Electricity Network, which provides power to over 3.8 million households, confirmed the disruption.

At the time of the shutdown, around 120 flights were airborne over Heathrow, either en route to land or having just departed. The airport, which is central to London’s air traffic network, warned of ongoing “significant disruptions” in the coming days due to the extent of the damage.

Other global carriers were also hit by the incident. British Airways issued an advisory asking passengers to avoid travelling to Heathrow until further notice. Cathay Pacific cancelled all six of its scheduled flights between Hong Kong and London, including CX257 which was recalled after departure. Amsterdam’s Schiphol Airport reported that half of its 30 scheduled flights to and from Heathrow had also been cancelled.

Emergency response teams, including 70 firefighters and 10 fire engines from the London Fire Brigade, were deployed to contain the fire. Dramatic visuals of the incident showing thick smoke and bright flames lighting up the night sky were widely circulated on social media.

The timeline for restoration of services at Heathrow remains unclear, as authorities continue to assess the damage and work on restoring power.

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Hamas fires rockets at Tel Aviv in response to Israeli attacks in Gaza

Iran’s Supreme Leader Ayatollah Ali Khamenei also weighed in, calling Israel’s strikes a “catastrophic crime” and holding the United States partly responsible.

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Hamas launched rockets at Tel Aviv on Thursday, marking its first military response to Israel’s resumption of air and ground operations in Gaza, which has resulted in a rising civilian death toll. The armed wing of Hamas, the Ezzedine al-Qassam Brigades, stated that the rocket attack was in retaliation for Israel’s “massacres” of civilians in Gaza.

The Israeli military confirmed intercepting one projectile, while two others landed in uninhabited areas. Meanwhile, Israel announced the closure of Gaza’s main north-south route, Salaheddin Road, as it expanded its ground operations. Army spokesman Avichay Adraee stated that the move was part of efforts to “expand the security zone” between northern and southern Gaza.

The renewed violence has shattered the relative calm that had prevailed since a ceasefire took effect on January 19, 2025. Gaza’s civil defence agency reported that 504 people, including more than 190 children, have been killed since Israel resumed its offensive earlier this week.

At the Indonesian Hospital in northern Gaza, grieving families mourned their loved ones, with some appealing for an end to the violence. “We want a ceasefire! We are defenceless Palestinian people,” said Mohammed Hussein, a bereaved family member, in an emotional plea to the international community.

The Israeli army has banned traffic on Salaheddin Road, urging residents to use the Al-Rashid coastal road for travel between northern and southern Gaza. However, it remains unclear whether movement from south to north is permitted. An official from Gaza’s Hamas-run interior ministry reported that Israeli tanks had deployed at Netzarim Junction, a key crossing point on Salaheddin Road, following the withdrawal of American private security contractors earlier this week.

The ceasefire, which had been brokered in January, expired earlier this month amid deadlock over its extension. Israel had demanded the return of all remaining hostages before discussing a lasting ceasefire, a condition rejected by Hamas as an attempt to renegotiate the original agreement.

Philippe Lazzarini, head of the UN agency for Palestinian refugees (UNRWA), condemned the ongoing violence, describing it as “an endless unleashing of the most inhumane ordeals” on Gaza’s population. “Under our daily watch, people in Gaza are again & again going through their worst nightmare,” he wrote on X.

Iran’s Supreme Leader Ayatollah Ali Khamenei also weighed in, calling Israel’s strikes a “catastrophic crime” and holding the United States partly responsible.

The conflict, which began with Hamas’s 2023 attack on Israel, has resulted in significant casualties on both sides. According to Israeli figures, the initial Hamas attack killed 1,218 people, mostly civilians. In Gaza, the health ministry reported an overall death toll of over 48,570 as of Monday, before the latest round of intense strikes resumed.

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Amazon to slash 14,000 managerial jobs in cost-cutting drive

Amazon is set to cut 14,000 managerial jobs by early 2025 as part of a cost-cutting drive, reducing bureaucracy and streamlining operations.

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Amazon headquarters with workforce restructuring news

Amazon is set to cut 14,000 managerial positions by early 2025 as part of its ongoing cost-reduction strategy, according to reports. This move, which accounts for a 13% reduction in its global management workforce, is expected to help the company save between Rs 210 crore and Rs 360 crore annually. Following the layoffs, Amazon’s total managerial headcount will drop from 1,05,770 to 91,936, according to the report.

Part of broader restructuring strategy

The job cuts come as Amazon continues to restructure its workforce, having previously trimmed roles in its communications and sustainability divisions. CEO Andy Jassy has been leading a strategic overhaul to eliminate bureaucratic layers and enhance operational efficiency.

In line with these changes, the company has launched a “bureaucracy tipline”, allowing employees to report inefficiencies. Additionally, Amazon has revised its managerial directives, focusing on:

  • Expanding the number of direct reports per manager
  • Limiting senior-level recruitment
  • Reviewing compensation structures

These steps are aimed at improving productivity and profitability while ensuring a leaner management structure.

Focus on core business operations

Amazon has also discontinued certain initiatives, including the ‘Try Before You Buy’ clothing programme and a rapid brick-and-mortar delivery service, as it shifts focus to its core business areas.

CEO Andy Jassy’s strategy includes raising the ratio of individual contributors to managers by at least 15% by 2025. His approach is designed to streamline decision-making and remove unnecessary management layers, facilitating faster operations.

Changes in workplace policies

The restructuring follows Amazon’s decision to enforce an in-office work policy, requiring employees to return five days a week starting January 2025. Jassy previously stated that office-based work would enhance collaboration and efficiency.

According to an October 2024 report by Morgan Stanley, Amazon’s restructuring is expected to eliminate around 13,834 managerial roles by early 2025.

Workforce expansion and previous layoffs

During the COVID-19 pandemic, Amazon saw a surge in its workforce, growing from 7.98 lakh employees in 2019 to over 16 lakh by the end of 2021. However, the company later scaled back, cutting 27,000 jobs in 2022 and 2023.

With these latest layoffs, Amazon continues its transition towards a more cost-effective and streamlined workforce, prioritizing efficiency over managerial expansion.

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