"Let's talk transfer of technology," India tells US

[Zebra]

Defence News - Let's talk transfer of technology , India tells US

Saturday, August 30, 2014
By : The Hindu

It is good that Prime Minister Narendra Modi and Defence Minister Arun Jaitley have made it clear to the U.S. Defence Minister, Chuck Hagel, who was in India earlier this month, that the pure sale of defence hardware by the U.S. to India is far from enough.

The way we should go with the Americans has to be on the lines of the co-development and co-production of the state-of-the-art Fifth Generation Fighter Aircraft (FGFA) with the Russians.

However, India, which agreed to buy 39 AH-64D Apache helicopters for the Army in addition to the 22 now under negotiation, is in talks again for purchase by the Indian Air Force (IAF) from the U.S. manufacturer, Boeing. This is being done without transfer of technology (TOT) to Hindustan Aeronautics Limited (HAL) for the local manufacture of all these 61 helicopters, which is bad for the country. Such a number of helicopters, senior managers and engineers of HAL's Helicopter Division (idrw.org) argue forcefully, is large enough for substantial local content-based production. Neither the IAF nor the Army contracts with Boeing has gone so far as to make TOT result in techno-commercially viable production here feasible and viable. The Ministry of Defence should act immediately to tie-up such TOT-based production by HAL instead of proceeding with mere import of the finished product.

Defence supplies by the U.S.

Will the U.S. government agree? If we use the multi-billion U.S. dollar value of the two contracts as leverage and exert pressure, they will have to. This would mean new jobs for HAL and its sub-contractors. It would also mean we would have a nationally controlled spares production base in the country, which would be orders of magnitude cheaper than supply of spares from the U.S. The bread and butter for the supplier come from hugely priced spares; not from the main equipment.

If one were to analyse defence supplies by U.S. companies under the U.S. government's direction and control even to their "closest allies" such as the U.K., one would find that it is the policy of the U.S. government to severely restrict not only TOT in general, but transfer of technology relating to critical sub-assemblies, modules and components too, making us eternally dependent on them.

A specific case will illustrate the reality. The case pertains to the Sea Harrier, which is aircraft carrier-borne and uses vertical take off and landing (VTOL). The U.K. was the inventor of VTOL technology. India had bought two squadrons (around 30 aircraft) of the Sea Harrier from the British Aircraft Corporation (BAC) way back in the 1970s for its aircraft carriers. When the Atal Bihari Vajpayee-led National Democratic Alliance government was in power (1999-2004), we sent our Sea Harriers to the BAC for a thorough upgrade. At that time, the Ministry of Defence, the Navy and the BAC knew that such an upgrade would call for the BAC importing some critical sub-systems, modules and components (hereafter collectively referred to as "modules") from the U.S. This was because those modules had been imported by the BAC even for the Sea Harriers it had produced in the U.K. and supplied to the British Navy.

That the U.S. government would prove "difficult" in clearing the supply of those modules for our Sea Harriers was recognised by both the BAC and the Defence Ministry. So they sounded out the U.S. government agencies concerned. The U.S. response was non-committal. Nevertheless, the Ministry went ahead. Why? Because we did not have an option. Over 25 years, the Indian Navy operated those aircraft, but no effort was made to successfully indigenise those modules. We just merrily went along with importing those modules from the BAC, (idrw.org) which in turn kept importing them from the U.S. companies concerned at huge increases in prices from time to time.

It was not surprising, therefore, that the U.S. government refused the supplies to the BAC for fitment on our Sea Harriers. The BAC and the British Navy then told India that the U.S. government had done likewise, even in regard to the Harriers of the British Navy despite the U.K. being the country's "closest ally."

The U.S. government finally agreed to the export of the modules concerned, but only after former British Prime Minister Tony Blair flew to Washington D.C. to specifically persuade the U.S. President to release them. As far as our requirements of the modules were concerned, Mr. Vajpayee had done something similar.

This case shows how even British and European defence equipment manufacturers have to constantly face and deal with the U.S. government's export controls on them on a wide array of modules, despite the fact that all of them are supposedly equal members of NATO.

Being circumspect in dealings

This kind of policy and practice by the U.S. government also came up with regard to the "upgraded" F-16 Falcon and the F-18 Hornet fighter-bombers which Lockheed Martin and Boeing respectively had offered India against the global tender put out by the Ministry of Defence/IAF for 126 Medium Multi-Role Combat Aircraft (MMRCA) four years ago. Of all the six bidders, the TOT and terminal local content were the smallest in the case of both the U.S. planes. Therefore we have to be extremely circumspect in dealing with the U.S. government in all high technology defence systems from the transfer of technology and local production content points of view.

 

[Zebra]

re: "Let's talk transfer of technology," India tells US

^^

Looks like the Russian supporter "The Hindu" gone upset all the way.

 

[Yusuf]

re: "Let's talk transfer of technology," India tells US

50 years of Russian "TOT" has led to what? As a businessman I wouldn't part with tech I develop and know I can milk it.

 

[no smoking]

re: "Let's talk transfer of technology," India tells US

If 50 years of Russian "TOT" led to nothing, then US "TOT" will be even worse.
Look at Japan, after 60 years "TOT", Americans have successfully turned Japanese from an independent fighter builder into a fighter importer.

 

[mattster]

re: "Let's talk transfer of technology," India tells US

I think Narendra Modi and Arun Jaitley are sophisticated enough to know that TOT really means advanced manufacturing with a "little bit of design know how passed alone".

India needs good manufacturing jobs that pay good wages more than it needs hi-tech TOT.

For instance - if Boeing decides to build a factory in Indian to build Apaches or whatever defense equipment - that will mean hundreds of well-paying jobs.
The keyword here is "WELL PAYING JOBS". The kind of jobs that allow a man or woman to raise a middle-class family with all the trappings of the middle class - House, cars, flat-screen TV, appliances, etc, etc. This is what will spur the economy.

It doesn't matter if Boeing does not transfer all the secrets of the Apache to the Indians.....its more important for India to build the assemble the damn thing in India......and even better yet if it can get private companies to build the raw components, subassemblies, etc. That will mean even more jobs. It doesn't even matter if the company formed in India is 100% owned by Boeing, as long as it creates jobs for the local economy.

The 3% or whatever portion of the GDP that India spends on defense should be used to generate good jobs.

 

[t_co]

You guys need to read the book "Disclosure" by Michael Crichton. Aside from the salacious and contrived romance story, there is a fair bit of philosophizing on the nature of ToT in globalized supply chains

 

[bose]

No country will give TOT to India be it Russia or France or USA, I am not sure about Israel here...

India have to learn the lessons hard way, invest on Indian scientist and research, more university collaboration and public - Private partnership to build local defense industry...

 

[sob]

Nobody offers TOT on a platter. Why would they squander their years of hard work to us. It is preposterous even to think about it.

The first step is to get the OEMs into India, get our Indian partners in the loop, train our engineers and build a local supply chain. Once these steps are complete then we can have our own homegrown technologies which will be world class.

In the parallel DRDO and some other Pvt. companies are working on R&D, good this will complement very nicely.

 

[pmaitra]

Nobody offers TOT on a platter. Why would they squander their years of hard work to us. It is preposterous even to think about it.

The first step is to get the OEMs into India, get our Indian partners in the loop, train our engineers and build a local supply chain. Once these steps are complete then we can have our own homegrown technologies which will be world class.

In the parallel DRDO and some other Pvt. companies are working on R&D, good this will complement very nicely.

In the absence of ToT, how are we going to train people and build a local supply chain? The only training one could get is in assembly.

India needs to set up competing design bureaux, and fund them appropriately. The hirees should be paid well, successfully completed projects should be generously rewarded, and failures should be appreciated. Once a design lifecycle has reached maturity, they can be handed over to private suppliers (think of NASA and Space-X). One cannot expect private companies to invest in R&D. It is simply not going to happen, because, private companies do not have the money to invest in expensive research.

Our media is also extremely puerlie in its perspective, and they expect everything to work like clockwork.

 

[sob]

In the absence of ToT, how are we going to train people and build a local supply chain? The only training one could get is in assembly.

India needs to set up competing design bureaux, and fund them appropriately. The hirees should be paid well, successfully completed projects should be generously rewarded, and failures should be appreciated. Once a design lifecycle has reached maturity, they can be handed over to private suppliers (think of NASA and Space-X). One cannot expect private companies to invest in R&D. It is simply not going to happen, because, private companies do not have the money to invest in expensive research.

Our media is also extremely puerlie in its perspective, and they expect everything to work like clockwork.

PM, TOT will never be in critical technology areas. That is a fact of life.
They will have to develop vendors with small parts and as the confidence builds up more complex components will be off loaded. It is a slow process and cannot be jump started. There are levels of technology which Indian companies may not be able to absorb immediately also.

 

[Compersion]

TOT with partners that have long-term relationships for today and tomorrow and the years after. Such equipment can be a source not only for India but the country of origin of the partner. It enables strengthening of relationships if done well.