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Defence Import: Shifting Scenario

Despite India and Russia sharing a strong defence and bi-lateral relationship, the ties between the two countries have been drifting as India slowly and steadily have started becoming an important partner to the US. The Article throws light on shifting defence import scenario of India in this backdrop.

While there has been a continuing tradition of dependence of defence weaponries and technologies from Russia since last few decades, however the Indo-Russia relationship is no longer what it was with Russia steadily losing market share in India to western suppliers especially United States (US) on the backdrop of India intending to diversify its arms portfolio coupled with improved strategic relationship with US which is rapidly increasing its arms sales to India year on year. From 2013-2018, Russia accounted about 58% of the total arm imports followed by Israel, US and France respectively which all increased their arms exports to India in 2014-18, while the share of Russia declined. Noteworthy, from 2008 to 2013 India imported 76 percent of its defence items from Russia; however, in the next five-year i.e. from 2013 to 2018, this came down 58 percent witnessing a decline of 42 percent, while for the same period the imports from the United States to India increased by 569 percent.

Imports from Russia

India has remained the chief recipient of Russian arms with the country still remaining top/largest supplier of weaponries to India. From air defence systems to missiles to nuclear submarines, the Soviet Union has enjoyed a longstanding, profitable defence export relationship with India. There is a possibility the way India could develop its own know-how and acquire sensitive technology that other countries are reluctant to share. One of the examples is the recent JV between India and Russia (India's Ordnance Factory Board (OFB) and Russia's Rosoboronexport and Kalashnikov Group parented by Rostec) – Indo-Russian Rifles Private Limited – for production of Kalashnikov assault AK-203 Rifle that will cost close to $1000 each and there will be options to export these to friendly foreign nations in the future too. About 40,000 AK-203 rifles will be directly imported for the Indian Army (IA) over the next few months to meet urgent operational requirements, following which the JV is expected to manufacture 70,000 units per year until the entire contract is completed under 'Make in India' initiative. These are likely to be supplied to paramilitary forces in the future also. Initially the JV will assemble each rifle from knocked-down kits and then localise components and sub-assemblies to further indigenize production. Apart from this, some of the other deals inked and in pipeline that are strategically important and will boost the declining relationship include:

  • $5.43 billion contract for S-400 Triumf missile
  • $3 billion deal for lease of a Akula-1 Nuclear Powered Attack Submarine.
  • $950 million contract for two upgraded Krivak III-class stealth frigates through G2G
  • JV to produce AK-203 assault rifles
  • Kamov-226T utility helicopters
  • Mi-17 helicopter
  • Short-range air defence systems

India’s defence industrial base is still developing one and could take decades for India to catch up. So Russia has many more years left to stay in Indian market, though Russia’s arms sales to India have fallen in recent years with India looking to diversify its arms purchases and also seeking specialized weaponry coupled with a strategic tilt towards the US in the last decade.

Also jolts have been witnessing by India and Russia as they have failed to move forward on a number of joint projects including a medium-airlift military transport aircraft, the UAC/HAL II-214 Multi-role Transport Aircraft (MTA), and a joint Indo-Russian Fifth Generation Fighter Jet Program. Furthermore, Russia has had difficulties in meeting the so-called ‘Make in India’ clause in some defence contracts, including in a recently concluded government-to-government deal over the purchase of 200 Kamov-226T.

However, keeping in mind the profound bi-lateral and military relationship the two countries share dating back over 50 years, India can never think of abandoning its defence ties with its long time ally Russia who has always stood by the country.

Arms Imports from US

US, which happens to be a late entrant to the Indian defence market, has emerged as a major arms supplier to India since strategic relationships between the two countries have improved. Considering just last three years, US have emerged as the major defence supplier to India and have signed numerous defence contracts worth Rs 32000 Crores displacing Russia which had a share of Rs 25400 Crores. See Graph.

Some of the major acquisition contracts signed between US and India are mentioned in the below given Table 1. Noteworthy, most of the above mentioned weapon contracts signed between India and US has been through government-to-government/FMS route with no competitive bidding.

At present, India-US bilateral relations have developed into a ‘global strategic partnership’, and their Defence relationship has now been extended until 2025. Under Defence Trade and Technology Initiative (DTTI) launched in 2012, US  has made proposals in specific areas for participation in multinational operations, expanding two-way defence trade, expanding collaboration on missile defence, conducting exchanges on defence strategy and increasing intelligence cooperation, etc and co-manufacture and co-develop modern defence equipment with India. The US said to have offered India some hi-tech items of military hardware for co-production and co-development under DTTI. Although the details of technologies for the co-development & co-production on offer are not known, however, the following is the likely list:-

  • Javelin, an infra-red guided missile, co-development.
  • Electro-Magnetic Aircraft Launch System (EMALS) for aircraft carriers
  • Vehicle-Based Mines Scattering System
  • Scorpion mutation bomb with in-built sensors
  • Micro-observers or unattended ground sensors for deployment on the border.
  • MH-60R helicopters and drones.
  • Hot-engine technology for indigenous Light Combat Aircraft Mark II.
  • Signature Aperture Radar
  • Stealth-coating technology
  • Long-endurance high-altitude Global Hawk UAV
  • Hand-held Unmanned Ariel Vehicles (UAVs) RQ-11, "Raven" for tactical surveillance
  • Specialized surveillance and intelligence gathering equipment 'roll-on roll-off' for the C-130-J transport planes.
  • Mobile Electric Hybrid Power Sources (MEHPS)
  • Uniform Integrated Protective Ensemble
  • High-end counter-IED technologies
  • 30-40mm AA Gun

Identified Pathfinder Projects

However, in terms of tangible deliverables, the two countries have identified and formalized 'pathfinder projects' for co-production and co-development understandings and are likely to be ice-breakers. All the projects are experiments in making simpler technologies and easy-to-produce equipment. If successfully executed, they will help India build advanced weapons systems in the future and co-develop other weapons technologies with the U.S. The “pathfinder projects” include:

As of now, the final agreements for these projects have yet to be inked. However, none of these require cutting-edge technology or engineering and, to that extent, are unexciting for India’s military. This list is more representative of the 17-odd proposals the US has presented in the DTTI than the 6-odd Indian proposals and licence requirements under the DTTI which incorporate advanced technology that India has requested. These are:

  • "Hot-engine technology" for indigenous light combat aircraft Mark II to be powered by GE-414 jet engine. This technology allows fighter to operate in hot weather conditions like in deserts without any possibility of an engine failure.
  • Raytheon-manufactured "Signature Aperture Radar" that can penetrate thick forests.
  • Stealth-coating technology. The coating deadens radar images and would give Indian jets minimum radar profile and maximum survivability in hostile conditions.
  • Long-endurance high-altitude UAV, the Global Hawk, being manufactured by Northrop Grumman. Equipped with synthetic aperture radar, the drone can fly at an altitude of 65,000 feet, stay air-bound for more than 14 hours and survey upto 40,000 sq km terrain in a day.
  • Textron-manufactured Scorpion mutation bomb, used for protecting military installations.
  • Predator Drones

Also at issue is India’s refusal thus far to sign what the U.S. calls three “foundational agreements” for transferring technology to India and which allows sharing of classified information, logistics and geo-spatial cooperation - Communications Interoperability And Security Memorandum Of Agreement (CISMOA), Basic Exchange And Cooperation Agreement For Geo-Spatial Cooperation (BECA) and the Logistics Support Agreement (LSA). There has been no agreement so far within the Indian establishment on signing any of these three agreements with the US as India considers these three agreements as “intrusive”.

There is some dissent which cautions that initiating the DTTI, US is trying to enter the Indian defence market from the back door by avoiding the long queue of Indian and foreign players as at the front most of the projects under DTTI are likely to be again under Government-To-Government (G2G)/Inter-Governmental Agreements or FMS like previously signed orders resulting India to continue remain dependent and in turn non development of DIB.

Further, US unlike Russia is trying to arm twist through putting sanctions by deploying Countering America’s Adversaries Through Sanctions Act (CAATSA). This allows the US to impose sanctions on individuals and countries that deal with Russia's intelligence and defence sectors and India being the largest user and buyer of Russian weapons is vulnerable to Section 231 of this new law. This is definitely one of the ways it wants to trim down the ties shared between India and Russia. However, India has made it clear that it will not back off from the deals including the latest S-400 deal with Russia.

Conclusion

India is strategically important to both Russia and the US and both can’t lose their foothold and with India’s Defence Industrial Base still under developed, so it is likely that it will be taking the route of defence imports from these countries in coming years. However, the need of the hour is to guard our own self interest and ensure that further imports from either US or Russia come along with either co-development or ToT which in turn will help in developing and strengthening the DIB rather than opting G2G or FMS route like in the case of US which only increase the import dependency. Also need to be pointed out that despite the close and growing defence ties with US shortcomings in defence trade remain. The Defence Framework and Defense Technology and Trade Initiative to pursue joint development and co-production of defence equipment have failed to address India’s needs. In comparison Russia has and is still helping India with strategic technologies like leasing and developing nuclear-powered submarines and AK-203 rifles to name a few while the US is still not open to supplying India with advanced weapons platforms and military technologies which India requires.

 

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