Myth and re­al­ity

US tech­nol­ogy and ex­ports con­trol ar­eas were be­ing looked at so that In­dia has the same sta­tus as the clos­est al­lies of US, for the US sys­tem to op­er­ate on a timescale con­sis­tent with the needs for the In­dian side to make de­ci­sions


With over 77 per cent of de­fence im­ports, In­dia needs se­ri­ous in­tro­spec­tion to keep pace with the mod­erni­sa­tion that its de­fence forces ur­gently need. The hike of for­eign di­rect in­vest­ment (FDI) in de­fence from 26 per cent to 49 per cent with state-of-the-art tech­nol­ogy trans­fer dur­ing 2013 has not at­tracted any worth­while cap­i­tal be­cause of the bu­reau­cratic red tape and de­fence pro­cure­ment pol­icy that is not found at­trac­tive by for­eign firms due to un­cer­tain­ties and the time fac­tor.

The US Deputy Sec­re­tary of De­fence Ashton B. Carter, dur­ing his visit to In­dia last Septem­ber, said that US tech­nol­ogy and ex­ports con­trol ar­eas were be­ing looked at so that In­dia has the same sta­tus as the clos­est al­lies of US, for the US sys­tem to op­er­ate on a timescale con­sis­tent with the needs for the In­dian side to make de­ci­sions, aim be­ing to take the Indo-US de­fence re­la­tion­ship to the next level and help In­dia raise the in­di­geni­sa­tion of its de­fence sys­tems.

Past Indo-US ex­pe­ri­ence has hardly been good in this re­gard. What­ever tech­nol­ogy came from the US was decades old and in some cases like the ANTPQ-37 radar not only was it 25 years old but had been given to Pak­istan 10 years ear­lier. Fac­tu­ally, In­dia has been get­ting far more ad­vanced tech­nolo­gies from Rus­sia and Is­rael than from the US. Then is the ques­tion whether US re­ally want a strong In­dia? This is rel­e­vant be­cause the track record of the US in defin­ing ‘strong al­lies’ and dump­ing them at the drop of a hat in its per­ceived na­tional in­ter­ests has not been good ei­ther.

There was also the case of sab­o­tag­ing In­dia ac­quir­ing Rus­sian cryo­genic tech­nol­ogy through a chain of events im­pli­cat­ing se­nior In­dian Space Re­search Or­gan­i­sa­tion (ISRO) sci­en­tists Nambi Narayanan and Sasi Ku­maran in a spy­ing scan­dal that pointed to Cen­tral In­tel­li­gence Agency (CIA) in­volve­ment, US mak­ing ef­forts to scut­tle it since 1992 with Ge­orge Bush de­nounc­ing it as vi­o­la­tion of the Mis­sile Tech­nol­ogy Con­trol Regime (MTCR).

This apart, in re­cent years In­dia has pro­cured de­fence equip­ment from the United States, lat­est ac­qui­si­tions in­clud­ing the C-130Js, with M77 How­itzers of BAE Sys­tems next on the anvil. One can ex­pect com­plete weapon plat­forms and sys­tems to keep com­ing in with the at­ten­u­ated cost and po­lit­i­cal fac­tors. Carter’s state­ment and his di­a­logue with the In­dian Na­tional Se­cu­rity Ad­vi­sor nat­u­rally has caused in­ter­est in terms of fu­ture Indo-US joint ven­tures (JVs); shar­ing tech­nol­ogy and co-pro­duc­tion.

But while the US is ex­am­in­ing its tech­nol­ogy and ex­ports con­trol ar­eas to fa­cil­i­tate Indo-US JVs for help­ing In­dia in­di­genise de­fence sys­tems, it is equally im­por­tant for us to in­tro­spect – some­thing that should have been done when we failed to at­tract FDI in de­fence de­spite hik­ing the limit from 26 to 49 per cent. For that mat­ter, lit­tle at­ten­tion has been be­ing given to why our own pri­vate in­dus­try does not find the de­fence sec­tor at­trac­tive enough or rather their par­tic­i­pa­tion is far less than de­sired.

Now take the ‘Buy and Make’ projects, which are the cor­rect way to go about de­vel­op­ing sys­tems in or­der to leapfrog tech­nol­ogy. We would float a re­quest for in­for­ma­tion (RFI) giv­ing the usual re­sponse time of three months or so. A US firm has to ob­tain per­mis­sion from the US Govern­ment ev­ery time for ex­ports to the con­cerned coun­try. Then, if the equip­ment or sys­tem is it­self a JV within the US (items, parts taken from dif­fer­ent firms), then each of these firms too have to ob­tain US Govern­ment ap­proval for ex­port of spe­cific tech­nol­ogy or item to the con­cerned coun­try. This process re­quires any­thing up to 12 months or more. Next comes the more dif­fi­cult part in a US firm team­ing up with the In­dian firm in a ‘Buy and Make’ project. Be­fore such a joint ven­ture is es­tab­lished, the In­dian firm needs to put down on paper what items and in what spe­cific quan­ti­ties would form part of the ‘Buy’ from the US firm.

More im­por­tantly, the US firm can­not ex­port the said items di­rectly to the In­dian firm of the JV. As per cur­rent rules, these items can only be ex­ported un­der the FMS route on a govern­ment-to-govern­ment ba­sis. The im­pli­ca­tions are that first the In­dian firm lists out the items spec­i­fy­ing quan­ti­ties and ob­tains Govern­ment of In­dia ap­proval, which it­self is li­able to nu­mer­ous queries, file push­ing and con­se­quent loss of time. There­after, Govern­ment of In­dia would need to take up a sep­a­rate case with the US Govern­ment to ob­tain these items through the FMS route, im­port them and then pro­vide these to the con­cerned In­dian firm to kick off the ‘Buy and Make’ project. On bal­ance, it can be safely as­sumed that un­less these se­ri­ous bot­tle­necks are re­moved, Indo-US JVs in any ‘Buy and Make’ project will re­main a dis­tant dream. SP The views ex­pressed herein are the per­sonal views of the au­thor.


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