Dangers of Big Ticket Foreign Arms Deal

Ray

The Chairman
Professional
Joined
Apr 17, 2009
Messages
43,132
Likes
23,835
IT IS GOOD TO BE PREPARED

Abhijit Bhattacharyya

The present piece may look unconnected to macro Indian geopolitical strategy, but it can be potentially valuable for the future course of action or for a course correction, should the need arise. It is well known that in spite of the breakup of the Soviet Union, the new Russia never ceased to be self-sufficient in defence equipment production. However, that did not go on for long as the Russians, for the first time in the post-1945 World War II era, placed an import order worth $1.2 billion for two French made Mistral class amphibious assault ships, with a future option for further two vessels, in 2011. This perhaps signalled the way of the future, as Russia clearly thus fell back from its Soviet-era 100 per cent indigenous defence production capability.

Indeed, this paradigm shift in Russia's defence production, procurement policy and performance stood out in the midst of the latest figures made available by Military Balance 2014, published by the International Institute for Strategic Studies, London. Of the latest 28 "selected arms procurement and deliveries" programme of Moscow, 27 are in the process of being "Made in Russia"; the only exception being the two French vessels referred to above.

The question is, what is the significance or the "news value" of this Russo-French defence import-export deal? Is it not normal business in terms of world armament transaction, trade and industry? Indeed, it is. However, the point to be noted from India's perspective is that banking too much on Western arms producers may not be a sound proposition at a time of unexpected crisis with one's neighbouring country.

Russia had issues with its neighbour, Ukraine. Ukraine sought assistance and help from the West, led by the United States of America. The latter, in turn, put pressure on its European allies, the North Atlantic Treaty Organization and the European Union, to impose sanctions on Moscow. This contaminated the Russo-French defence contract. Although reluctant initially, the French could not withstand the US pressure. Hence, in spite of trying not to be seen for something which could be construed as a breach of bilateral commercial contract between Moscow and Paris, the French government succumbed to the collective pressure of the West and announced in September 2014 that it is halting the delivery of the first of two Mistral class amphibious assault ships planned for the Russian navy. This happened in spite of the contract of 2011, which is still in place, with the understanding that Western sanctions imposed in response to Russian actions in the Ukraine crisis are not to be applied retrospectively.

As an Indian, one's knowledge emanates from the modern information technology highway on Moscow and Paris and the bilateral defence deal thereof. However, my mind goes back to the brazenly unethical and "one-way traffic" sanctions imposed in the recent past on India by the West when India had issues with its militant and terror-infested neighbourhood. What is the guarantee that what the West is doing to Russia today, will not be done to New Delhi in future? In fact, as far back as in March 2014, when the Moscow-Kiev crisis was at a nascent stage, one recalls having seen a report in Jane's Defence Weekly, quoting the French foreign minister, Laurent Fabius, as saying that he "could envisage scrapping the contract" if Russia attempted to annex more territory from Ukraine.

Although one is not privy to the details of the Russo-French arms deal of 2011, what is in the realm of open-source information is that "the extant European Union arms embargo against Russia specifically excludes pre-existing contracts such as the Mistral accord". And here is the potential danger for India. As is universally known and acknowledged, India's Western neighbour, in the words of the former US secretary of state, Madeleine Albright, is the "epicentre of world terror". What happens in case of a sharp deterioration in the future security scenario in the Indian subcontinent? What if the French stop supplying Rafale fighters to India, at the behest of the biggest Western brother, as is being done to Russia?

One is neither a supporter nor an admirer of Russia — as the monopoly manufacturer-supplier of defence equipment to India for more than three decades, Russians have made enough profits and occasionally embarrassed India with unjustified price hikes and avoidable delivery time overrun. However, to be fair to the Russians, it must be admitted that unlike the Western manufacturers and suppliers of defence equipment, Moscow never resorted to any trick of sanction/embargo tamasha on India. In fact, ever since the Indo-Soviet Treaty of Friendship and Cooperation of 1971, Moscow has been a steady contractual partner and an all-weather friend in India's endeavour for defence preparedness.

There is another important factor which is often overlooked. Western equipments, at times, are known to have been supplied to India on the basis of "end use inspection certificates", for which the manufacturer nation goes deep into operational areas of Indian defence to check and verify. Is it not sufficiently humiliating for a nation of 1.25 billion people? Should India continue to accept that, at least in the times of the present dispensation? At a time when India wants to be self-reliant with the brand, "Made in India", is it not necessary to revisit the existing scenario and explore future options?

Compare this with the Chinese position. Like India, China too imported military hardware mostly from the former Soviet Union and a few successor States, like Ukraine. It is well known that the Chinese accept no end use inspection certificate from any foreign supplier and does not allow the entry of any outsider into their military operational arena. The Chinese, being adept at reverse engineering, have taken to indigenous manufacturing of military hardware in a way that is unknown outside the Western military industrial complex. There is lot to learn from China — how to stand up and be counted upon in front of the condescending West.

India today is only 67 years old, and that is too young an age for any nation. But one needs to take a cue from successful nations. And one such successful nation undoubtedly is the US. How did the manufacturing come up there? It began in the late 18th century when the first treasury secretary, Alexander Hamilton, resorted to banks, which he described as "nurseries of national wealth", followed by "protection". Hamilton defended protection on grounds of national security. India needs to remember the words of an American to counter the Western bullying: "Not only the wealth; but the independence and security of a country, appear to be materially connected with the prosperity of manufactures. Every nation... ought to endeavour to possess within itself all the essentials of national supply. These comprise the means of subsistence, habitation, clothing and defence."
It is good to be prepared
There is no doubt that a change in geopolitical and geostrategic equations can leave a contract hanging leading to great disruption of the defence preparedness of India.

What should be done is to simultaneously get the TOT and start the indigenous production line. And that should be in the contractual agreement before it is inked.
 

pmaitra

Senior Member
Joined
Mar 10, 2009
Messages
33,262
Likes
19,594
There are lot of detractors within the armed forces who continue to find flaws with indigenous products, and attempt to block the procurement of armaments domestically. Finding flaws is not a bad thing, but finding ways to rectify them would be useful.

It will benefit the foreign arms exporters each time some domestically produced product is rejected. If the T-90 scandal is anything to go by, we should know that things that look "affordable" prima facie, are actually just a step in the doorway, and what follows is a stream of imports required to keep the already purchased armaments operational.

We need a national consensus on using domestically produced armaments as much as possible, and where deficiencies are found, the critics should be given the responsibility of fixing those deficiencies domestically.
 

sgarg

Senior Member
Joined
Sep 9, 2014
Messages
3,480
Likes
986
There is no doubt that a change in geopolitical and geostrategic equations can leave a contract hanging leading to great disruption of the defence preparedness of India.

What should be done is to simultaneously get the TOT and start the indigenous production line. And that should be in the contractual agreement before it is inked.
Mr Ray, non-engineers talk about TOT very lightly.

In reality, TOT can prove to be more difficult compared to indigenous development. There is a very sound reason why it is so. Building a complex machine involves building its parts first, and the parts require participation of a large number of vendors/sub-vendors which also need to absorb the technology.

Rafale is a very good example of TOT complexity, as India does not have manufacturing techniques to build this class of aircraft.
 

sgarg

Senior Member
Joined
Sep 9, 2014
Messages
3,480
Likes
986
sus on using domestically produced armaments as much as possible, and where deficiencies are found, the critics should be given the responsibility of fixing those deficiencies domestically.
GOI must tell the services to develop local sources. I think this government is telling services repeatedly. The services have not responded properly yet.

Spending 45M per Mirage 2000 is not smart. This is the problem with both IAF and IA that they do not understand the economics of defence.
 

Ray

The Chairman
Professional
Joined
Apr 17, 2009
Messages
43,132
Likes
23,835
Double post.
 

Ray

The Chairman
Professional
Joined
Apr 17, 2009
Messages
43,132
Likes
23,835
Mr Ray, non-engineers talk about TOT very lightly.

In reality, TOT can prove to be more difficult compared to indigenous development. There is a very sound reason why it is so. Building a complex machine involves building its parts first, and the parts require participation of a large number of vendors/sub-vendors which also need to absorb the technology.

Rafale is a very good example of TOT complexity, as India does not have manufacturing techniques to build this class of aircraft.
One of the model of TOT is:

*Carry out pre-investment feasibility to gather information and carry out a techno-economic analysis
to establish project viability.
"¢ Carry out a preliminary identification of technologies needed, based on the feasibility study.
"¢ Carry out basic engineering studies that involve the preparation of process flow diagrams, layouts,
material and energy balances and other design specifications of the plant and machinery and the core
technology to be transferred.
"¢ Carry out a detailed engineering study that involve the preparation of a detailed civil engineering
plan for the facility, including construction and installation specifications and identification of the
peripheral technology needed to make the transfer effective.
"¢ Carry out the selection of suppliers for equipment and subcontracting services to assemble the plant
and machinery and plan for the co-ordination of the work among various parties
"¢ Prepare and execute a training and education plan, in consultation with the suppliers of technology,
for the workers who would be employed in the technology transfer project.
"¢ Construct the plant.
"¢ Commence operations.
"¢ Develop trouble-shooting skills and put in place arrangements to solve design and operational
problems as they arise, especially during the early years of operation.
The important lessons that this model presents include the following:
"¢ A TT project is best studied using a sequential process perspective.
"¢ Any TT project should not be commenced without a careful feasibility study since such projects
often require heavy resource commitments.
"¢ The transferee should be involved in the planning right from the beginning.
"¢ It is important for transferees to develop sound engineering and project management skills without
which the TT process cannot be managed effectively.
 

sgarg

Senior Member
Joined
Sep 9, 2014
Messages
3,480
Likes
986
@Ray, the fact remains that local expertise is limited to building Russian origin fighters. You can call it a flaw in planning or just happenstance, but it is a fact.

India could have built Mirage 2000 but did not. The aviation sector could not absorb Western technology due to GOI's lack of vision and other factors.

The capabilities do not develop without a sound plan. Some people have commented about TOT of Rafale engine. One of my friend told me (somebody based in USA) that it will take at least 2 billion dollars to build an engine plant which is at the level of contemporary European technology.

Plus India does not have the skills - both engineering and technical to use the advanced machines.

There are a lot of games being played in case of Rafale. French themselves have reservations about India's ability to make this plane. However some MOD persons and IAF brass continue to shows things in a light which is impractical and carry very high expectations.

Import deals of weapons have used deception so frequently that everybody thinks this is the correct way to do business. No it is not.
 
Last edited by a moderator:

Latest Replies

Global Defence

New threads

Articles

Top