Editor’s Note
We have a great scope of a technological leap as we go ahead with the spirit displayed in the joint statement issued after PM Narendra Modi’s trip to the United States. However, there is a long and arduous path ahead to be navigated by both sides before the fruits ripen. Technology transfer issues are complicated and require negotiation skills and accommodation from both sides.
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For the sheer array of its theme, Prime Minister Narendra Modi’s state visit to the United States of America from June 21 to 24 may well be the next big landmark in the history of India-US relations after the Civil Nuclear Deal 2008.
The joint statement issued at the end of the visit mentions a ‘deeper engagement’ between the two countries in the coming years across several areas of mutual interest, ranging from health and education to clean energy and preservation of a rules-based international order. The relationship between the two democracies is spurred as much by geopolitical dynamics as by India’s quest to become a developed economy in the not-so-distant future.
Regional security, however, continues to be a source of disquietude for India. The US, too, has its concerns, largely on account of the expanding Chinese footprints across the globe, including in the Indo-Pacific region.
More than any other country in the global south, India has faced this menace for more than half a century, both at its northern and western borders, in the Indo-Pacific region, and even within the country due to cross-border terrorism and violent extremism. The US and other countries across continents from Europe to Oceania face the same threat in different forms and varying degrees. Every responsible nation in the world realises that the menace cannot be tackled without close cooperation.
Driven by the commonality of interest on this count, Prime Minister Modi and President Joe Biden reaffirmed the old concerns over coercive, destabilising, and unilateral actions by unspecified powers that ‘seek to change the (territorial) status quo by force’. No wonder then that, as a part of the ‘deepening strategic convergence’ on global and regional issues, defence cooperation between India and the US figured prominently in the talks between the two leaders.
Expressing their desire to accelerate defence industrial cooperation, they welcomed the adoption of a Defense Industrial Cooperation Roadmap, which will ‘provide policy direction to defence industries and enable co-production of advanced defence systems and collaborative research, testing, and prototyping of projects.’ Both sides also committed themselves to addressing ‘any regulatory barriers to defence industrial cooperation’. It foreshadows a shift in the basis on which the relationship is built, even as many unidentified loose ends remain untied.
Defence cooperation has so far been largely predicated on outright import of military equipment by India from the US -a few odd exceptions to that norm notwithstanding- and collaboration in other fields such as intelligence sharing. It is borne out by the aggregate value of defence purchases by India which have gone up exponentially from a near zero in 2002 to more than $20 billion in 2020 and probably around S25 billion at present.
Some of the major platforms acquired by India from the US include Boeing’s P-8I Poseidon maritime patrol and reconnaissance aircraft, AH-64 Apache twin-turboshaft attack helicopters, CH-47 Chinook heavy-lift helicopters, and C-17 Globemaster transport aircraft. India has also acquired Lockheed Martin’s C-130J Super Hercules turboprop military transport aircraft, Sig Sauer assault rifles, and BAE System’s M777 towed howitzers. Gradually, the profile of the Indian armed forces’ inventory seems to be changing from Russian/Soviet-origin equipment to US (and European) origin equipment.
Except for 155mm light howitzers which were assembled by Mahindra Defence at their production facility at Faridabad, all other platforms were bought without any transfer of production technology from the original equipment manufacturers (OEMs). It does not fit into the ‘Make in India’ policy being doggedly pursued by the government since 2014 when Prime Minister Modi called for making India a manufacturing hub in his Independence Day address on August 15 of that year.
India was designated as ‘a major defence partner’ by the US in 2016, and though this unique status brought India more or less at par with the closest allies of the US, the closeness between New Delhi and Washington did not result in ‘co-development co-production’ of defence equipment in India, despite many rounds of high-level dialogues under forums like Defence Trade & Technology Initiative (DTTI) and the ‘2+2’ Ministerial Dialogue. The joint statement indicates that the old ‘buyer-seller’ relationship is now set to transform into a collaborative relationship in defence production.
There are signs of this transformation in the Memorandum of Understanding (MoU) between General Electric and Hindustan Aeronautics Limited (HAL) to manufacture GE F-414 jet engines in India. These engines will power HAL’s Light Combat Aircraft Mk 2, thus not only supplementing the Indian Air Force’s fighter squadrons but also enable India to make inroads into the global export market with a fairly efficient and reasonably priced fighter aircraft.
Media reports indicate that about 80% of the manufacturing technology will be transferred to HAL as a part of the deal. The joint statement proclaims that this ‘trailblazing initiative’ to co-manufacture F-414 engines in India will ‘enable greater transfer of US jet engine technology than ever before’. Though the deal is not yet done and dusted, it should not take more than a few months to conclude this unprecedented deal formally.
It is unlikely to be an easy ride for both negotiators. Arriving at a mutually acceptable price and the ‘range, scope, and depth’ of technology transfer to the Indian Production Agency (IPA) are tricky issues, especially in the politically charged environment in the country. These issues have been the bane of many an acquisition programme in the past and continue to bedevil defence deals.
One of the reasons for this is the lack of professional training in various aspects of defence acquisitions, which tends to make the procurement personnel extremely guarded while negotiating. a deal.
Several efforts were made in the past to infuse professionalism by emulating the courses run by Defence Acquisition University -a corporate educational institution of the US Department of Defence that trains military officials, civilian staff and contractors in ‘acquisition, technology, and logistics’- but nothing came out of it. It is time for the need for imparting professional training to the acquisition personnel to be revisited by the Ministry of Defence (MoD) without waiting for the Indian National Defence University to start functioning.
The other reason is the absence of a template for undertaking ”co-manufacturing”, much less ”co-development, co-production projects. The Defence Acquisition Procedure 2020 merely instructs that projects for the co-development or co-production of futuristic equipment or platforms or products which offer transformative, unique or niche technology can be undertaken under inter-governmental or project-specific agreements based on the project’s estimated cost. These instructions are too sketchy to inspire confidence in the bureaucracy which mostly functions based on precedents.
Things may become more complicated in future, especially with ‘co-development’ projects being undertaken in collaboration with foreign OEMs. A case in point would be the offer made by French defence major Safran to jointly design, develop, test, manufacture and finally certify an engine to power India’s twin-engine Advanced Multirole Combat Aircraft and a deck-based fighter for the aircraft carriers. In the absence of a cogent policy on how such projects are to be undertaken, negotiations can linger on and possibly culminate in sub-optimal agreements.
A further complication arises if the IPA is to be selected from the private sector. For the MoD, which tends to micro-manage all acquisition projects, selecting a private-sector IPA can be tedious and contentious. It will be shortly tested as India plans to acquire General Atomics MQ-9B HALE UAVs to enhance the armed forces’ ISR (intelligence, surveillance and reconnaissance) capabilities across domains. This project involves the local assembling of the UAVs by an Indian private sector entity and establishing of a Comprehensive Global MRO facility in India by the OEM to support India’s long-term goals of self-reliance.
Successful execution of this project, as indeed other similar projects in future, requires MoD to leave it to the OEMs to select the IPAs of their choice. This was done for the Indian Air Force’s Avro-replacement project in which the OEMs were permitted to select the IPA of their own. In the event, Airbus decided to tie up with Tata Advanced Systems Limited to make CASA C-295 medium tactical transport aircraft in India. This, however, remains a solitary example of its kind. Old habits, as they sat, die hard.
To sum up, while Prime Minister Modi and President Biden have created a broad framework for a qualitatively different kind of defence cooperation between the two countries in future, the results they would have expected may elude both the countries unless the procedural tangles are thrashed out pragmatically in consultation with the industry representatives from both the nations who will ultimately convert the lofty ideas into mutually beneficial smart projects. A dialogue on this must immediately start.
Amit Cowshish
