Indo-US Military Trade: A Decade of Wasted Opportunities
Star Rating Loader Please wait...
Issue Vol. 27.2 Apr-Jun 2012 | Date : 26 Sep , 2014

The Indian Air Force’s (IAF) fourth Boeing C-17 Globemaster III departs for India from Long Beach

The Incompatibilities

Following are the fundamental incompatibilities between America’s FMS and India’s DPP:

India is wary of the US laws which impose sanctions even on purely commercial transactions.

  • DPP mandates procurement on the basis of QRs that reflect Indian military’s requirements in terms of capability desired with minimum required verifiable functional characteristics. On the other hand, FMS offers equipment that has been developed as per the specifications provided by the US armed forces. In other words, India has to accept equipment that may not fully satisfy its QRs but carry many unusable high-tech features.
  • FMS implies single-source procurement and hence, precludes competition. On the other hand, DPP wants maximum competition to be generated. It considers single-vendor purchases to be the last resort.
  • FMS exports carry contractual obligations as mandated by the US laws that are heavily loaded in favour of the US Government. For a buyer country, it is purely a ‘take-it or leave-it’ option. It can neither negotiate contractual provisions nor seek price rationalisation. On the other hand, DPP directs that a duly constituted Contract Negotiation Committee (CNC) should safeguard Indian interests through diligent negotiations.
  • Whereas DPP seeks unencumbered procurements, FMS sales are governed by ‘Golden Sentry’ End Use Monitoring (EUM) programme that covers the complete spectrum of all activities from shipping, receiving, use and final disposition. It is generally called ‘cradle-to-grave’ monitoring.

It is apparent that India opts for FMS route only in respect of high-tech systems, which no other nation possesses or is ready to offer.

Reasons for Sluggish Progress

It will not be correct to assume that incongruities between DPP and FMS are the only reasons for sluggish progress in Indo-US military trade. The following issues also merit discussion:-

The US licensing system is not only rigid and time consuming but also a little unpredictable…

Divergence of Objectives

Sale of weapons is a major strategic and foreign policy tool of the US through which it seeks to develop close military-to-military relationships with recipient countries. India is no exception. The US wants a deeper bonding with India to help it achieve its strategic objectives in East and South East Asia region. For that, it aims at building the military interoperability between the two countries through deeper geo-strategic alliance.

Although the irksome issue of End Use Monitoring appears to have been satisfactorily resolved, the US continues to urge India to sign ‘Logistics Support Agreement’ and ‘Communications Interoperability and Security Memorandum of Agreement’. Both the agreements are considered as essential prerequisites by the US before it agrees to sell sensitive equipment with advanced technologies.

On the other hand, while valuing close relationship with the US, India is wary of getting drawn into an exclusive defence embrace. It appreciates US willingness to sell high-tech defence systems to it, but expects this seller-buyer relationship to be based on an even keel, without any strings attached. More so as India pays full market price for every item it buys with no subsidies or concessions. Additionally, India cherishes its time-tested association with Russia and does not want to weaken it.

AN TPQ-37 Fire Finder Radar

Baggage of History and Trust Deficit

It is a fact that the past track record of the US does not inspire confidence. India is wary of the US laws which impose sanctions even on purely commercial transactions. Having suffered earlier, India is unwilling to have the threat of unilateral abrogation of agreements impinge on its freedom to take decisions in its national interests. Lack of credibility of the US commitments has made India realise the perils and uncertainties of US obligations. When questioned at Aero India 2005, the Defence Minister identified the lack of reliability of supplies to be the primary stumbling block in enhanced Indo-US military trade.

It is also a well-known fact that Indian military leadership carries deep-seated suspicions about US reliability as a supplier especially in times of conflict. Indifferent after sales support for equipment like weapon locating radars has further reinforced the above apprehensions. It must be admitted in support of the US functionaries that they appreciate Indian misgivings and try their best to allay all fears. However, they express their helplessness in view of the US statutes.

No agreement for the transfer of military technology has been signed so far…

Technology Transfer and the US Licensing Regime

All US military sales are governed by Arms Export Control Act and Foreign Assistance Act. All requests are examined, reviewed and validated for their compliance with the US laws and to ascertain whether the requesting country is eligible for the receipt of the said technology or not. Licensing procedure in respect of items categorised as Significant Military Equipment (SME) is more tedious. SME is an item designated in the International Traffic in Arms Regulation that warrants special export controls because of its capacity for substantial military utility.

The US licensing system is not only rigid and time consuming but also a little unpredictable. US companies are hesitant to submit their bids as they are not confident of getting export clearance in the time available.

As stated earlier, no agreement for the transfer of military technology has been signed so far. It is a sore point with India as it wants to develop indigenous defence industry through infusion of technology and joint ventures.

Both sides should strive to draw benefits through bilateral or even multi-lateral consortiums.

Attitudinal Problems

The US is undoubtedly the sole super power and a technology powerhouse. Unfortunately, many US functionaries tend to hurt the sensitivities of others through their condescending attitude. They fail to appreciate the difference between military sales and military aid. Virtually every single clause of the US drafted contract reads like an undertaking being extracted from a helpless buyer.

India’s insistence on field trials to validate performance parameters is seen as an affront. Many US functionaries are convinced that any equipment that has been inducted in the US forces ought to be good enough for India. Very unfairly, a buyer’s right to assure himself and indemnify his interests is totally disregarded.

The sense of shock, hurt and incredulity that the US displayed at the elimination of F-16 and F-18 fighters from MMRCA competition is symptomatic of their haughty and somewhat disdainful mindset. It was hard for them to believe that any country could have the temerity to reject their much-vaunted machines.

The Way Forward

India acknowledges the technological superiority of the US weapon systems and wants to develop and produce them through joint ventures. It seeks partnership and not seller-buyer relationship. However, India must appreciate that being a global power, US has a different perspective of world issues. It wants to safeguard its knowledge-superiority and prevent proliferation of critical technologies. Therefore, US laws concerning export of weapons are extremely comprehensive.

Only a mutually beneficial association based on commonality of interests and realistic expectations can prosper…

India should not let the baggage of the past blinker its vision of the future. There has been a distinct realisation amongst the US law makers that unilateral abrogation of sovereign agreements harms their credibility and shows them as unreliable partners.

On the other hand, the US authorities have to be careful of Indian sensitivities. They must change their condescending attitude. Many US observers express surprise that India shows intolerance for even minor defaults by the US companies in fulfilling their contractual obligations whereas other foreign vendors are dealt with more indulgently. There may be some truth in these allegations. The fact of the matter is that most Indians have an emotional bonding with the US due to the presence of a large Indian diaspora in the US. Resultantly, their expectations from the US tend to be unrealistically high and their non-fulfillment leads to disappointment. On the other hand, relationship with other countries is more formal and restricted to government-to-government contacts.

Both sides should strive to draw benefits through bilateral or even multi-lateral consortiums. Co-development and co-production should be the objective, with shared costs and export potential. India has a huge pool of technical manpower and IT professionals. It will help India graduate from the present position of being a supplier of components to the level of a systems integrator. Due to the cost advantage, it can become a global hub for outsourcing of weapon systems.

Building up relationships between nations is an arduous, excruciatingly slow, challenging and convoluted process. In the case of Indo-US dealings, the burden of long periods of non-engagement and past misapprehensions makes the task more onerous. Only a mutually beneficial association based on commonality of interests and realistic expectations can prosper. No unequal or one-sided relationship can ever be long lasting. Both sides must understand each other’s concerns and try to address them. Spirit of accommodation should be the ruling mantra.

1 2
Rate this Article
Star Rating Loader Please wait...
The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Maj Gen Mrinal Suman

is India’s foremost expert in defence procurement procedures and offsets. He heads Defence Technical Assessment and Advisory Services Group of CII.

More by the same author

Post your Comment

2000characters left

One thought on “Indo-US Military Trade: A Decade of Wasted Opportunities

More Comments Loader Loading Comments