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It's time to expedite defence acquisition

By K Subrahmanyam
March 25, 2010 21:44 IST
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Defence equipment should be chosen on the basis of technology-transfer and co-production considerations, K Subrahmanyam observes.

Money allocated in the Defence Budget for capital acquisition is surrendered in thousands of crores of rupees every year. There are complaints from the strategic community about procedural delays, time taken in successive user trials and bureaucratic hurdles originating in what may be dubbed the "Bofors syndrome" in weapons acquisition and defence modernisation.

A matter of this importance should have been considered by the National Security Council (NSC) and appropriate directives should have been obtained. Unfortunately, successive prime ministers and national security advisers have never thought of getting such issues tackled by the NSC and have been satisfied with its functioning as a sanctioning Cabinet committee for specific proposals.

It is relevant to recall there were no delays in weapon acquisition and modernisation during the Cold War period when India had only one source for weapon acquisition. The MIG series of aircraft, the SA series of missiles,130 mm gun, F-class and Kilo-class submarines, the Petyas and other Soviet naval vessels, the T-55, T-72 and T-90 tanks, and the Mirage 2000 aircraft were all obtained without being subject to qualitative requirements (QRs), scrutiny and competitive user trials.

The only consideration that weighed with the users and the decision-makers was whether they could compare favourably with equipment possessed by potential adversaries. Those were strategic decisions taken without worrying about QRs and lowest tenders, amply justified by subsequent events.

Once the selection of equipment started on a competitive basis, scandals started. Jaguar, DKW submarine and Bofors involved corruption since there were competitive bidders. So long as competitive bidding and user trials are involved, there will be vulnerability to bribery and corruption at various levels. It is a matter of recorded history that prince consorts, prime ministers, defence ministers, sons and sons-in-law of prime ministers and senior service officers have been involved in arms sales corruption all over the world.

The latest case is of British Aerospace Systems being fined $400 million in the US. Devising ways and means to expediting our arms acquisition with minimum vulnerability to corruption is a matter of national security strategy of highest priority and has to be handled by the NSC. It should issue directives to the Ministry of Defence on the broad framework of a strategy to acquire modern defence equipment and, more importantly, up-to-date defence technology and associated strategic partnerships with leading military powers which will enhance the credibility of the country's defence posture.

Acquisition of defence weapons and equipment is not like buying a consumer durable, like a TV, a refrigerator or a washing machine. In such one-time purchases, a consumer looks for the lowest price and the maximum number of functions in the equipment. One tries to optimise these two factors in arriving at a decision. In purchasing defence equipment, the most important consideration is whether it will match or be superior to the analogous weapon or equipment it will face in combat. The QR is relevant when one is planning development of the equipment.

When a country is compelled to resort to purchase of equipment, it has to select from among the available ones. Since India wants to acquire defence technology also, a crucial consideration will be transfer of technology. In today's world, there are only two major sources of defence technology -- the US and Russia. Though Europe tries to be an independent source of technology, with restricted availability of markets for the Europeans, company mergers and acquisitions, and the US incurring a major share of world military R&D expenditure, Europe's role as a defence equipment developer and manufacturer is shrinking.

India is today a favoured destination for US companies for setting up R&D centres and offshoring manufacture of components and sub-systems to effect cost-reductions. The main advantage India has in coping with China's challenge is that all major powers of the world, including Russia, are prepared to supply India with high-tech weapons and equipment while they have reservations in supplying the same to China. Secondly, India is in a position to make large purchases of equipment, enter into licensed production and co-production arrangements and offer joint R&D collaboration.

India is and will be one of the largest arms markets in the world. That gives India an advantage over Pakistan since the latter has to depend on Chinese imports or US equipment obtained on credit or in aid.

There have been three cases of countries getting wholesale transfer of military technology from another country. Soviet Union did so after the Versailles Treaty from Weimar Germany under the Treaty of Rapallo; China got wholesale transfer of defence technology from the Soviets in the 50s during the Sino-Soviet alliance; and, the present transfer of technology from Russia to China. This is supplemented by a large number of former employees of the Soviet defence industry joining the Chinese industry.

India has a long-established defence relationship with Russia. But Russian excellence in defence is today very much less than what it used to be during the Cold War, though it continues to be a leading designer and producer of combat aircraft, naval vessels, including the nuclear submarine, armour and missiles.

The US is and will continue to be a leader in all defence equipment production, especially those involving very sophisticated electronic and sensor technologies. The US is now enthusiastic about selling equipment to India. The reservations about the US as a supplier of equipment are wholly misconceived. A country which maintains adequate war reserves cannot be hampered in short-term defence operations which are the most probable ones.

Russian and US equipment will more than match anything that Pakistan or China can hope to procure. All major powers have two lines of production in combat aircraft. So should India, if it is to have an air force which will be an effective non-nuclear deterrent.

The NSC should call for a choice of equipment to be purchased on the basis of technology transfer and co-production considerations from the two major sources -- the US and Russia -- and give a general authorisation to the Ministry of Defence to negotiate acquisition deals and forget the QRs and competitive user trials. That will expedite the acquisition and modernisation process, and will be the most effective way of ensuring India's security.

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K Subrahmanyam
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