The ShinMaywa US-2i and Indian Ocean Strategy

Extracted from Bharat Karnad’s book ‘Staggering Forward’

Bharat Karnad’s new book Staggering Forward, an analysis of India’s evolving social political and economic milieu, under Prime Minister Narendra Modi, is a critical perspective, both argumentative and thought provoking. The chapter on the manner in which bureaucratic turpitude has blocked the strategically important ShinMaywa US-2i amphibian aircraft for the Indian Navy is reproduced for readers of this Journal.

India and Japan are intent on a concert of like-minded states in the Indo-Pacific to block China. Prime Ministers Modi and Shinzo Abe get along well and aspire to mesh Indian manpower with Japanese financial resources to construct a chain of seaports and related infrastructure in island nations and along the East African, Gulf, South Asian and South East Asian littorals to facilitate intra Indian Ocean Region trade and commerce ( the Asia– Africa Growth Corridor) as a rival to China’s BRI. It conceives of economic triangles of cities and manufacturing hubs connecting regions with the promised infusion of $200 billion in this region. And yet the flagship project, other than the Shinkansen high-speed railway linking Mumbai with Ahmedabad, of setting up a production plant in India with transferred technology of the ShinMaywa US-2 amphibious aircraft, a project Tokyo lays much importance by, has not taken off, owing to the obdurate defence ministry bureaucrats in Delhi and, surprisingly, Modi’s inaction in pushing this project over the hump.

The Indian bureaucracy is justly famous for being a wrecker of dreams, for gutting the best-laid plans of Indian leaders, but only because the prime ministers have not held the bureaucrats accountable, and otherwise failed ruthlessly and fearlessly

to rewrite rules of business and eradicate what a senior diplomat called ‘atomised’ bureaucratic decision-making in the Indian government. Absent is the possibility of being kicked out of service, courtesy Article 311 of the Constitution guaranteeing lifetime job security, the default option of the lowest civil servants is to do nothing or as little as possible to get by unless topdriven to produce time-bound results or in crisis situations when non-performance can have costs. Some examples of the MEA’s egregious inaction have already been retailed. Even so, a couple more stand out.

In 2013, in the lead-up to the annual India-Russia summit, Manmohan Singh’s PMO succeeded in convincing the Russian President Putin, who was pressing the Indian government to buy four Grigorovichclass frigates, that because India was as keen to strengthen its own warship- building industry as Russia was in building and selling its frigates, the two sides could compromise by constructing all these ships in India and sharing equally in equity and effort. Putin was persuaded and agreed to this scheme. That’s where the deal still stands with not an inch of movement by the Indian side on this project, because the defence ministry bureaucrats cannot seem to agree on which public sector shipyard to assign the work to and what the role of private-sector shipyards should be. Moscow, meanwhile, has fretted and fumed. Modi hasn’t instructed the ministry to get going and, therefore, nothing has happened.

Stunning Example

A more stunning example of Indian bureaucratic turpitude is the ShinMaywa US-2 programme that Prime Minister Modi and Abe had agreed on but this is twisting slowly in the Indian bureaucratic wind with no push from the PMO, or the MoD, and thereby hangs a tale that is as much farce as national tragedy.

India’s immense maritime domain– 1208 islands, most of them bunched in the Andaman Sea, and an EEZ of 2.2 million square miles in the Indian Ocean–cries out for a fleet of amphibious surveillance aircraft to patrol this vast area, a role that the land-based Dornier aircraft with the Navy and the Coast Guard can only inadequately perform. In late 2010, discussions formally began on acquiring an amphibious aircraft and decision made that the navy would be the lead agency for procurement purposes because it would operate it, and because seaplanes defined under UNCLOS regulations have to comply with numerous nautical guidelines that the navy is familiar with.

So a request for proposal (RFP) was issued in January 2011, to which seven or eight international companies responded, ranging from the smallest carrying four people to the largest able to carry 200. There were many concerns with range, speed, sea-keeping ability, the amount of cargo that would go through and the kind of specialised roles it would need to perform. A series of discussions within the MoD with the Navy, Coast Guard, Air Force and the Headquarters Integrated Defence Staff followed. After examining all the proposals, it was concluded that there was only one aircraft type that met the mission-role: the US-2 aircraft produced by the Japanese ShinMaywa Corporation.

This aircraft has several unique features which are not found in any other seaplane. First is its ability to operate in ‘sea-state 5’ which means 3-metre wave heights which many Indian naval ships find difficult to handle. The second is its short take-off and landing capability-it can take off in 7 seconds inside of 300 metres versus 40 seconds of its nearest competitor. It needs very short runways and can align to whichever direction the wind is blowing and become airborne. The third factor is that it has very low draft-it can go very close to the beach, lower the undercarriage and taxi up the beach as long as it is a hard beach. It also has a glass cockpit and search and rescue (SAR) systems, all very high-technology: No other aircraft in the world has all these features and it is the only military-certified amphibious plane of its kind.

While these discussions were on, India–Japan relations were developing fast with an agreement to ratchet up the ‘special relationship’ to a higher level. There were also things happening within Japan at the time. The South China Sea issue was on the boil and Tokyo was looking to find allies and partners to hold its own against North Korea and China, and India was its preferred potential partner. There were staff level talks, 2x2 meetings of defence and foreign ministers, defence and foreign secretary–level talks and a large number of interactions of the Track 1.5 and Track 2 variety between think tanks–the United Service Institution, National Maritime Foundation and the Institute of Defence Studies and Analyses on the Indian side, and the Japan Institute of International Affairs and the National Institute for Defence Studies on the Japanese side. These dialogues tackled maritime issues as that was the easiest thing to do because of the common maritime interests- securing sea lines of communication, accessing markets and resources, maintaining sovereignty at sea and freedom of navigation and of air space.

At this time the Pentagon, particularly the US Navy, was wrestling with China’s anti-access, area denial (A2AD) wherewithal and strategy while keeping an eye cocked towards defence budget sequestration, and President Obama’s ‘Pivot to Asia’. Except that the cuts in the US defence spend led to America spending neither on anti-A2AD technology nor on enlarging the contingent of deployable forces. Questions were raised in US circles about whether there was enough funding to field twelve aircraft carriers and how many could be spared for the Indo-Pacific. It was in this context that the issue of Indo-Japanese defence collaboration first came up. It was preceded by Abe’s speech in 2007 about the ‘confluence of the two seas’ and the full-blown emergence of the China threat.

Simultaneously, the Japanese government realised that they couldn’t have complete confidence in the US security umbrella because, in a confrontation with China, there were doubts about whether Washington would enter the fray. That’s when the Japanese armed forces started reorganising themselves. For the first time, they created seven theatre commands with the lead service, the navy, looking after it and a CDS system was installed with all the necessary resources assigned. This process of reorganisation and change was finished inside of a year-something India has been only debating since 1997and

was imposed on the Japanese military by a political directive, so the services could like it or lump it. Around the same time, the disputed Senkaku/Diaouyu Island dispute started to heat up.

Just then, Beijing came up with its expansive Nine Dash Line claim in the South China Sea, exacerbating Japan’s anxiety. It resulted in the Japanese defence forces shifting their focus away from Russia and the Kurile Islands with its naval activity centred on the Hokkaido island base to keep Russian submarines out. This was also the time when the Japanese industry started moving as well on the India front. As a prelude to this development Tokyo had relaxed the rules on arms sales and created a new strategy, with an entirely new department established in the Japanese Ministry of Defence to push military sales, which they had never done before owing to the strictures in the Peace Constitution. Offshore patrol vessels (OPVs) were leased or sold to the Philippines, Indonesia and other countries, and aircraft to Manila. That’s when the Indian RFP for the amphibious aircraft was issued and the US-2 shortlisted.

Manmohan Singh’s PMO decided that, given its politico-military significance, this was a programme of national importance and should not merely be an MoD project. The concept that was envisioned was that of ‘a chariot with two wheels’: one was the US-2 aircraft, the other the commercial aspects of the deal about making India part of the global supply chain of Japanese companies, which produced components for Boeing and Airbus aircraft, some of which work the Japanese hoped to pass on to Indian firms involved in the US-2 work. A joint working group (JWG) was formed to advance this objective with NSA Shivshankar Menon, who saw the potential in this opportunity, leading the initiative.

This is where things began going wrong. The MoD adopted dilatory tactics, claiming the Defence Procurement Policy (DPP) procedures were not followed. A joint secretary in the defence ministry reportedly played a “bad role”. On the basis of hearsay, she charged that such a deal would hurt relations with China and, more farcically, that the US-2 aircraft was worth nothing because it carried no weapons ! The navy responded tartly that a fighter aircraft carries only one passenger—the pilot—and cost in excess of Rs 300 crore each and, therefore, was worth nothing either ! “This ignorant and uninformed joint secretary was a complete disaster and really damaged the country,” reflected a former MoD official.

But now the institutional egos were engaged. The defence secretary, on account of his junior colleague being slighted and because this deal of “national importance”, was handed over by the PMO to Amitabh Kant, then secretary, Department of Industrial Policy and Promotion, to oversee, decided to take his ministry out of the decision-making loop altogether without taking it out of the procurement process. The crafting of the deal for this “national project” assigned to Kant, presently CEO of NITI Aayog, was aimed at building the aerospace business capability and infrastructure in India with a network of micro, small and medium enterprises (MSMEs), with the JWG constituted between the Indian and Japanese governments to explore technical collaboration. Three visits were made by Indian members of the JWG, with the MoD representative instructed to be on a “listening brief” only, and to say nothing. The rest of the Indians in the group did an independent appraisal and came back very satisfied with what the Japanese were offering.

What Japan was offering–and this was before Make in India– was, firstly, a parts manufacturing project not just for the US-2 but for Boeing and Airbus aircraft.

The plan was for this capacity to become the source base for eventually exporting wholly manufactured Indian US-2s to third countries. Secondly, Tokyo offered that ShinMaywa would do the final assembly and integration of the entire aircraft in India after Indian manpower achieved a certain level of expertise and competence. The time-frame for this stage was to be three years. Thirdly, Indian-built US-2s would thereafter be exported to meet the requirement of third countries, with an order of thirty- eight aircraft already in the company’s order book. Fourthly, ShinMaywa undertook to create an entire maintenance, repair, overhaul ( MRO) facility for this aircraft in India. It was, and remains, a transformational offer. As far as price is concerned the Japanese attitude, according to an industry source, was: “This is the listed price, but we are prepared to negotiate it.” In addition, the Japanese government and defence ministry said they were willing to look at the additional official development assistance (ODA)–driven offsets in the deal to build up air fields, seaports, navigational aids and other infrastructure around India’s peninsular coastline to serve this aircraft, and allotted $200 million of the total offsets commitment of some $750 million to this task. The business model was that the Indian government would incur an expenditure of $2 billion but the revenue the country would earn from worldwide sales would exceed $6 billion.

A bureaucracy scorned can be a dangerous thing. With its institutional bureaucratic ego on the line, the MoD prevented this programme from going through–even though the fully articulated proposal went to the Defence Acquisition Council (DAC) twice. In both instances, the defence secretary asserted that because the PMO had initiated this project, the decision was for the prime minister to make and that the DAC had no locus standi in the matter. The anomalies in the ‘rules of business’ are such that the prime minister cannot order the MoD to do anything; he can only send an advisory. Despite the serious interest in obtaining the US-2 by all the end-users and support organisations–the Navy, Air Force, Coast Guard, Army and even elements in the defence ministry–it hasn’t taken off.

For once, all the armed services were on the same page. The IAF was interested because they knew its flying characteristics, the army because of its utility to the Special Forces, including operations in the north

west against China in the Pangong Lake area, and in the north-east, because the aircraft can land on the Brahmaputra river, as it requires just one and-a-half metres of water depth to operate from. Because of its ability to land on any body of water anywhere, it would be a huge strategic asset. Further, the US-2 can carry 32 fully armed troops, 2 tonnes of cargo and can get the Special Forces troops fast to wherever they have to be, with a flying speed of 470 km per hour. This aircraft would eliminate the need for paradropping of commandos, which is a more onerous job. It can airlift a battalion-sized force with just ten sorties.

Besides the maritime dimension, there is island support for operations off Sri Lanka, Lakshadweep, the Maldives, Mauritius and Seychelles. For a perspective on the potential of the US-2, consider the much-lauded evacuation of 4748 Indians and 1962 foreign nationals from Yemen in 2015 (Operation Raahat). It involved two warships, two passenger ships, several Ilyushin Il-76s of the IAF and a couple of Air India jumbo jets, and took a month. The US-2 on its own could have fetched up at the Sa’ana airport, four-and-a-half-hours flying time from Mumbai, and, in SAR configuration, run like point-to-point buses, packed in the evacuees and completed the entire airlift mission in five days. Ten US-2s, each able to transport 80 people or 3 tonnes sortie, would have brought in 800 people at a time. In military operations, it can lift twenty troops and a full combat load.

Operational range-wise, the US-2 can be in the Red Sea in four and a half hours, and in the same time reach Port Blair in the Andamans or the Maldives in one and a half hours. “Indeed, one can draw 470 km arcs from anywhere in coastal India as the aircraft’s reach. The awful thing is that this joke of a joint secretary, incidentally, a woman, who had originally stiffed the deal, then returned to the ministry!” said the source. Thus, when the navy put up the proposal again, the MoD reacted with the same objection about the prime minister needing to approve the US-2 deal on his own. Whereupon the navy once again very strongly pitched for this aircraft. This time the MoD put a different spin on the issue. It asked the navy to prioritise between its various needs: US-2s, helicopters, carrier aircraft, etc. “This is standard stuff from the MoD,” said the source. “You can’t say you have dal or roti, you have to have both. You need both and there has to be some balance.”

Understanding the importance

The Navy understands the importance of the US-2, because it combines response and surveillance. Experts explained the plane’s utility to the Navy thus. ‘Take an example of apprehending a dhow sailing in from the Gulf with smuggled goods or terrorists. The operation can take over twenty hours and involve a Dornier aircraft to spot it, whence a warship is dispatched to the site by when the whole operation is already compromised: after watching the Dornier circling overhead, the smugglers will simply throw all incriminating goods and papers overboard. A US-2 could land with a Marine commando team next to the dhow and finish that operation inside of an hour and capture the smugglers or terrorists with evidence on them. Just one such demonstration of capability will end all such activity because everybody would come to know that such clandestine forays are not worth the risk.

Then there’s the problem with floating derelict ships that get beached’ (like the ship that ran aground on Mumbai’s Juhu beach in 2011).

The Navy looked at all these roles: longrange SAR, fleet deployments, operational defects at sea and their rectification that can be carried out by US-2 transporting equipment, spares to the stricken ship midsea, and crew rotation. It will save money and time. It takes three months to ferry naval crews manning facilities for seaward surveillance from land-based radarsweeps and surveillance patrols in the Maldives, Mauritius and Seychelles. With US-2 the crew rotation can be completed in ten days. Then there are the issues of sovereignty at sea and force projection. A US-2 can put a battalion-sized force in the Maldives in next to no time, obviating the need for paratroops. “The flexibility US-2 offers is tremendous.”

According to inside sources, the US-2 team briefed the prime minister with a presentation which was restricted to five slides as advised by the PMO. The slides explained all that this aircraft can do, the diverse missions it can perform including rescuing carrier aircraft pilots flying the MiG-29K off Vikramaditya who ditch at sea, which capability the navy does not currently possess. They showed the aircraft’s ‘footprint’ covering compass points on the Red Sea in the west, the South China Sea in the east and even talked of the competitive Chinese amphibian aircraft the Chinese displayed at the Zhuhai Air Show based on a stolen US-2 design but scaled up in size, which will allow the Chinese forces to go anywhere in the Indian Ocean. It was explained to Modi that the underlying aim of the US-2 deal was to create a world-class aircraft industry, rapidly develop skills by setting up a world- class aero- structures design and engineering centre at IIT, Roorkee. This centre was estimated to cost $30 million, with India and ShinMaywa sharing this cost.

And the prime minister was told of the setting up of an MRO for the US-2 aircraft, and the programmes for its Dowty propellors and Rolls- Royce engines for capacity building for high technology, technology integration and for the full manufacture in India, as also about the scheme to export the Indian-built US-2s to numerous countries, and how all these various streams would lead to designing and developing a nineteen-seater aircraft in India for the global market that the Japanese would be very keen to help India develop –and to market.

The time-frame for the first Indian-built aircraft is four years with the production reaching the planned rate of one aircraft every nine months. The total project cost is $3 billion with offsets of $900 million.

The obstinate attitude of the bureaucracy is because, as a senior civil servant noted, bureaucrats see themselves as ‘landlords’ who have to look after the assets and permanent interests of the state, and political leaders are seen as “often unruly tenants who are here today, gone tomorrow” who have by whatever means to be reined in. Juxtaposed against Japanese Prime Minister Abe’s get-go attitude and removal of corporate and procedural obstructions at the Tokyo end, Modi’s inability to get the Indian defence ministry to play ball is a sad commentary as much on his limitations as mover and shaker as the dysfunctional Indian bureaucracy. So, the country is stuck with a seemingly unalterable reality: Its leaders are all affirmative but the bureaucracy is all inaction.