India-US ties: Defence ties poised to be next big thing

us-defence1WASHINGTON: The landmark nuclear deal, that transformed relations between India and the US, may take some more time to fructify, but defence ties are on an upswing and may well emerge as a key focus area of Indian Prime Minister Manmohan Singh’s visit to Washington this week.

The talks between Manmohan Singh and US President Barack Obama in the White House September 27 are expected to underline the dramatic acceleration in defence trade and the ongoing transformation of defence ties from one of arms trade to co-development, joint design and co-production of cutting-edge military hardware.

In a seminal sense, defence relations could become a key propellant, which will power the strategic relations between the two largest democracies in the world in the next few years.

At today’s exchange rates, the US has in the last six years, since India bought the USS Trenton (a used amphibious warfare ship) for a dirt cheap $50 million, bagged Indian defence deals worth over $10 billion and it is readying itself to bag another $5 billion worth of military equipment deals over the next two years.

us-defenceAhead of the Manmohan Singh-Obama talks, India’s Defence Ministry cleared the purchase of six C-130J special operations military aircraft from the US firm Lockheed Martin in a deal that is worth about $700 million. This order will be a repeat of the six of these planes bought by India in 2010 for $1.1 billion then.

Another deal for 145 M777 ultra light howitzers from the BAE Systems stable is also in the offing and the US will sell these to India, for its Army, at a cost of $694 million through the foreign military sales route too. This deal has been pending for three years now.

Co-development New Mantra

The new salience on accelerating defence ties between the two countries was more than evident during US Deputy Defence Secretary Ashton B. Carter’s visit to New Delhi last week.  Carter held talks with senior officials in New Delhi, including National Security Adviser Shivshankar Menon and Defence Secretary R K Mathur, and signalled that the US and India are moving from a vendor/buyer relationship in the defence trade sector to one of partnership in co-development and co-production. What he clearly meant was the US was ready to accept India as an equal partner, a close ally and share with it whatever modern military technologies it can.

After years of Indian complaints about how the US was placing hurdles on the export of critical defence technologies in the form of their internal export control laws on dual use items, it has dawned on Washington that defence trade is beneficial to not only its arms companies, but also to its economy in the form of jobs and export revenues.

And only now it has showed willingness to ease these bottlenecks and even go beyond just selling defence equipment to work together with India in jointly developing and producing them to cater to both their markets and may be even export to friendly nations. “In the trade area, we’re building on the rapid transformation of the defence relationship over the past decade and today, the US is a significant provider of some of the best US equipment and technology to India’s military modernisation efforts,” Carter told Indian journalists in New Delhi.

“We want India to have all of the capabilities it needs to meet its security needs and we want to be a key partner in that effort,” he said.

Defence Technology Initiative

us-defence2The Defence Trade and Technology Initiative (DTI) is the next big idea and is a work in progress. Alluding to it, Carter underlined the US’ commitment to streamline our bureaucratic processes and make our defence trade more simple, responsive and effective. “In particular, to move from a vendor/buyer relationship to one of partnership in co-developing and co-producing defence systems,” he noted, and pledged that US Defence Secretary Chuck Hagel was committed to the idea.

He also admitted there were benefits in such a tie-up for the US too, noting that no one nation in the world could lay claim to the best of all defence technologies and there was scope for mutual benefits if they worked together and learn from each other.

Carter has already made offers to India for co-development and co-production of Raytheon-Lockheed Martin Javelin Anti Tank Guided Missile (ATGM) for its Army, Sikorsky-Lockheed Martin MH-60 Romeo helicopter for its Navy and BAE Systems Mk 45 127 mm naval gun, again for its Navy.

In particular, the US official offered the Javelin missile – which has already been rejected by India in favour of the Israeli Spike – on the lines of the BrahMos cruise missile Indo-Russian joint venture, a successful effort that is referred to as a model for future Indian collaborations with foreign nations and vendors.

In return, he expected India to ease a bit on its strict implementation of the offsets clause under which any deal worth over $60 million that a foreign vendor bagged, it has to plough back at least 30 per cent of it in Indian defence, aerospace and homeland security industry or provide training in technologies related to these sectors. He also wanted India to limit the post-delivery liability of US firms and for faster decision-making on the deals.

More deals on the way

Among the other deals waiting to be signed are the 22 AH-64D Apache attack helicopter worth $1.5 billion, 15 CH-47F Chinook heavy lift helicopter worth $1 billion, four P-8I Neptune Maritime Reconnaissance Plane worth $1 billion, all from American aerospace giant Boeing. US firm Honeywell is all set to bag a contract for supplying 125 of its F-125IN engines for Indian Air Force’s Jaguar combat jets at a cost of $700 million.

The US has already emerged as the third largest arms exporter to India in the last decade. Only Russia, which has been a traditional supplier, and Israel are ahead of the US in defence trade with India. In fact, the US is slowly, but steadily, stealing a march — to borrow a cliché – over its two main rivals, having bagged nearly 80 per cent of all the new deals signed by India in the last decade.

US firm Boeing has bagged from India the $2.1-billion deal for supplying eight P-8I Neptunes, $.1.1-billion deal for six C-130J Super Hercules, $4.1-billion contract for 10 C-17 Globemaster-III strategic air lift planes from Boeing, $ 600-million contract to supply 99 General Electric F-414 aeroengines for Light Combat Aircraft MkII planes of India, $200-million deal for 21 Boeing’s Harpoon missiles for P-8I, and another 24 of these missiles for Jaguar combat planes worth $170 million.

The escalation of India-US defence ties is being resented by its rivals. In the last few years, India’s most-trusted strategic ally Russia has been sniping at New Delhi over losing some of prized Indian defence contracts.

 

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