public sector defense production is dead. it does not work
Image Courtesy: Deb Rana (ADA)
by Bharat Karnad
DEPENDING ON WHAT’S involved, legacy can be a good thing or a bad thing. In the case of the Indian state, bureaucracy, and especially the military, legacy has proved a liability. The colonial system and approach were retained in every aspect of government for want of ready alternatives and the fear of disruption. It has particularly hurt the armed services because they have stayed stuck in time. Thus, the Army’s main force is arrayed northwestward, the Air Force thinks as a tactical regional adjunct of another out-of-area air force (with the Royal Air Force missing), and the Navy imitates the attitude and outlook of the US Navy, which replaced its British counterpart, replete with a tilt towards big ships at a time when supersonic and hypersonic cruise missiles and remote-controlled mini-submarines and attack boats are making them obsolete.
The three services also have in common the acute institutional hankering for Western military hardware, which was thwarted for 30 odd years (the mid-60s to mid-90s) by Cold War politics and the availability of Russian equipment in the Soviet era at ‘friendship prices’. Now that that constraint is lifted, they are reverting wherever possible to buying cost-prohibitive Western armaments with a vengeance, often at the expense of indigenously designed and developed weapon systems, such as the Arjun Main Battle Tank and Tejas Light Combat Aircraft (LCA), that have proved as good, when not better, than foreign items.
No, a kill order by the Ministry of Defense (MoD) for the LCA program is not in the offing because it is advisable for the politician and the military brass to talk desi and not openly prefer firang (refer the glossy Aero India pullouts in newspapers). A high technology ‘prestige’ project capable of seeding a burgeoning aerospace sector in the country and imperiling imports will, however, be undermined on the sly, by restricting funds and the off take of the indigenous on the plea that the monies are needed to finance imports of combat aircraft to meet immediate requirements, and by simultaneously diverting the attention, effort and resources of the LCA program into the Mk-II version and the more ‘futuristic’, ‘super-stealthy’, Advanced Medium Combat Aircraft project. By insisting on stiff specifications and delivery deadlines, these programs will be set up for eventual rejection. Meanwhile, the Defense Research and Development Organisation (DRDO) and Aeronautical Development Agency (ADA)— the progenitors of the Tejas—will be thus kept occupied and out of the IAF’s hair, which will shield the service from unwanted political pressure to ‘buy Indian’ or to invest in the LCA. But we are getting ahead of the story.
The Aero India 2017 Air Show, that opened in Bangalore on Valentine’s Day and ends on February 18th, features the foreign accomplices—the Swedish Saab Gripen E, the Super Hawk optimized for short-range air defense and touted in some quarters as the UK’s answer to the LCA, the French Rafale, and the American fighter planes, the Lockheed Martin ‘Block 70’ F-16 and the Boeing F-18E/F with the prospective payoffs overcoming the initial resistance from President Donald Trump. Except for the Super Hawk, these are all aircraft that had been entered in IAF’s Medium Multi-Role Combat Aircraft competition, won in 2012 by the Rafale. Except, new-generation warfare featuring drone-swarms and advanced air defense systems are expected to make manned fighter planes extinct.
But why the immense foreign interest? Firstly, because India is expected to buy 200-250 of the chosen plane with a full weapons suite and costing $250-$300 million each, for a total contract with only limited holdings of spares and service support of around $7.5 billion to $9 billion. Every supplier also promises to set up a modern global manufacturing and servicing hub for his aircraft and a technology innovation and industrial eco-system of small and medium scale enterprises (SMSEs) to generate employment, and, with full transfer of technology, a capacity locally to design and develop follow-on fighter aircraft. This will take many years to realize. So add another $3-4 billion to the bill for hub-development. After factoring in inflation and currency fluctuations, over the 30-40 year lifetime of the aircraft, the total take from this deal for a single-engine fighter for the winning foreign firm could be as much as $50 billion. To get perspective, this sum equals the cost of the China-Pakistan Economic Corridor with networks of roads and power plants stretching from Baltistan to Gwadar, which will be that state’s infrastructure and economic backbone.
Secondly, India’s track record of squandering high-cost transferred technology by the Defence Public Sector Units (DPSUs) and ordnance factories, and their never venturing beyond licence manufacture (LM) entailing Meccano-level screwdriver technology, is well known. Thus, no technologies were ingested from the MiG-21, Jaguar, and Su-30MKI LM contracts nor any design bureaus for technology innovation created. The international arms peddlers are only too aware of this situation and of the likelihood that LM agreements will inevitably lead to cascading sales of tech upgrade packages and CKD (completely knocked down) and SKD (semi-knocked down) kits to assemble the aircraft with. For the foreign supplier, it is an endlessly profitable cycle ensuring that, in real terms, at least 80 per cent of the monetary value of the contract is returned to the home country, and the remaining treated as ‘offsets’ mandated by the Indian Government that have so far produced few real benefits.
Thirdly, just as India’s buy of the Hawk trainer rescued British Aerospace, and that of 36 Rafales—with possibly another 80-100 of these planes in the pipeline—has put the French Company Dassault in the clover, New Delhi’s purchase of the Gripen will throw a lifeline to the combat aviation industry in Sweden, and Lockheed’s worn-out F-16 assembly line in Fort Worth, Texas, instead of being discarded, will be sold to India to earn revenue. Too much is at stake for the foreign companies in the race not to over-promise and under-bid. The extent of under-bidding is evidenced in Dassault’s original price for 126 Rafales of around $12 billion that actually ended up fetching the IAF a mere 36 planes. The larger pattern that has emerged over the past many decades is for an apparently ‘very rich’ India to subsidize and sustain defense industries in seemingly ‘poor’ states—namely, the United States, Russia, France, United Kingdom, France, and Israel.
The Indian defense industry has ‘largely failed to produce competitive indigenously-designed weapons’, a view the Indian military endorses. But why is this so? Principally because the armed services obstruct indigenous arms projects from succeeding
US defense sources estimate India’s military procurement outlays in the next few decades to be of the order of $250 billion. If roughly 10 per cent of any contracted deal is the usual down payment—in the Rafale case, for instance, it amounts to Rs 9,700 crore—a staggering $25 billion will have to be shelled out before a single item turns up on Indian shores. One can see why India is the consumer of choice in the international arms market.
IT IS WORRISOME that the Government, trapped in its ‘Make in India’ rhetoric, doesn’t see that the commercial bonanza for foreign countries will choke off the funds necessary for the home-grown, and for investment to build a comprehensively capable defense industry in the country. Prime Minister Narendra Modi and Defense Minister Manohar Parrikar appear not to have caught on to the fact that foreign arms suppliers are not in the business of making customers independent of them, but of bolting them down as dependents. Making the country a minor partner in the global supply chains of major transnational defense industrial corporations—the best that the present tilt of ‘Make in India’ policy can achieve—begs the question if this is all India should aspire to. And more, importantly, whether India will ever have the kind of financial cushion needed for $250 billion worth of military wherewithal, even as the trade-offs between social welfare and developmental needs on the one hand and nation security demands on the other hand get starker.
If such massive defense capital expenditure is somehow managed, whether frittering away the country’s wealth when it perpetuates only a hollow national security, is politically prudent. But there’s no gainsaying that it will firm up the country’s reputation as the largest arms importer in the world. India accounts for 14 per cent of the world’s arms imports, followed by China at 4.7 per cent (except China has compensated by increasing its arms exports 143 per cent in 2010-2015 to reach $1.6 billion). Put another way, over 2000-2015, India bought weapons valued at $120 billion: money that could have obtained for the country sizable defense industrial infrastructure and skilled manpower instead of military hardware that can be ground to a stop anytime any of a host of suppliers decide for whatever reasons to withhold spares. So, not only is India’s security hostage to the interests of external players, but the country is paying exorbitantly for it too.
The reason adduced for this sorry state of affairs by the Stockholm International Peace Research Institute is that the Indian defense industry has ‘largely failed to produce competitive indigenously- designed weapons’—a view the Indian military heartily endorses. But why is this so? Principally because the armed services obstruct indigenous arms projects from succeeding. The Tejas programme has progressed in fits and starts, and been delayed interminably, in the main, for two reasons. One, the Air Staff Requirements were changed numerous times on the plea of the IAF wanting an up-to-date plane. Thus, re-design and structural alterations became necessary, for example, when the IAF demanded installation of a refuelling probe after prototypes had already been built. It imposed significant time and cost penalties and hurt the delivery deadline. Two, the IAF insisted on a ‘finished product’ with all weapons trials and fitments completed and Initial Operational Clearance (IOC) and Final Operational Clearance (FOC) secured, before accepting it.
This is contrary to the procedure followed by all other major air forces. In the US, its newest joint strike fighter, the F-35, first entered squadron service with the US Air Force and the US Marines with technical refinements, structural modifications, and proper weapons and avionics integration being carried out on the basis of continuous feedback from frontline pilots after the plane’s induction. Some serious problems with the F-35, such as with the zero- zero ejection seat system, helmet-mounted sensors, avionics, and the F-135 power plant, are all being corrected even as the aircraft is flying around. This rigmarole is called ‘concurrency’, meaning induction and capability improvements happening simultaneously after the user-service has taken charge of the combat plane. In the case of the Tejas though, the onus is entirely on the development/ production unit to put in IAF’s hands a battle-ready fighter aircraft, inclusive of the promised weapons load. It reflects IAF’s reluctance to take ownership of the Tejas even after it has proved its druthers. The truly dastardly aspect is that the standard applied by the IAF to the LCA does not apply to imported aircraft. Thus, the Mirage 2000 inducted in 1985 flew unarmed for the next three years because the contracted weapons had not been delivered. It was political prompting alone that hastened the formation of the so-far-only-Tejas unit in the Air Force, the 45 Squadron with only a handful of LCAs, based in Sulur, Andhra Pradesh.
The other means adopted by IAF to undercut the Tejas program is to order only a few aircraft at a time to deny the production units economies of scale. Thus, the official indent is just for 20 LCAs after IOC, and another 20 for post-FOC, with the possibility held out for 43 planes for a total strength of only 83 Tejas, when the actual requirement is for 200-250 single-engined combat aircraft of this type, which IAF proposes to meet by buying one of the foreign aircraft displayed at AeroIndia. This is because IAF doesn’t take pride in the LCA, or care to have it in its fleet, and also perhaps, because the Tejas programme offers no material inducements for persons in the procurement loop, such as endless trips to Paris, Stockholm, etcetera, what is risibly called ‘pocket money’, and so on. With the IAF variant of Tejas so stymied, its navalized version too will be emasculated, with the Indian Navy now joining the Air Force in opting for imported aircraft for its carriers—the navalizzed Rafale, Gripen, F-18, and the MiG-29K all seen at the Air Show.
Settling on licence manufacture of foreign planes serves yet another purpose. It preserves the monopoly of aircraft production for the highly inefficient DPSUs, like Hindustan Aerospace Ltd. DPSUs are controlled by the Department of Defense Production (DPP) in the MoD and is valuable turf that its bureaucrats are loath to lose, which can happen if, despite every obstacle, a project climbs reaches the cusp of commercial success.
Tejas is a success if only it is given a chance. A 4.5-generation aircraft, like the Rafale, the LCA is far stealthier, more agile, and with a far bigger potential for growth as a versatile fighting platform. Significantly, it has clocked in excess of 3,000 flying hours without a single incident—a record unsurpassed by any combat aircraft under development anywhere, at any time. Its sleek looks and ease of handling, evident in the demonstration flights at the Bahrain Air Show last year, evinced praise from experts and enormous interest world-wide, with many countries inquiring about its availability. Naturally, fear has arisen in HAL and DPP/MoD circles that the Tejas may elicit commercial interest in the private sector, and private sector proposals for producing this aircraft for the IAF and for profit from exports, may follow. This would set a precedent of a DPSU being bypassed, of the technologies required to be transferred to a private sector consortium by the Aeronautical Development Agency and DRDO, and the diminishing of the stake and role of the public sector and DPP/MoD in the budding Indian defense industry of the future.
It is an end-state the IAF-DPP/MoD-DPSU complex will not abide, and what it doesn’t want, it will do away with. It has a stellar record of success in eliminating inconvenient indigenous conventional armaments projects that threaten its vested interests, usually by ‘throttling them in the cradle’. In the late-70s, the Mk-II version of the Marut HF-24 multi-role fighter was terminated by the Indira Gandhi regime siding with the IAF to buy the Jaguar low level strike aircraft. The original Marut was designed by one of the greatest designers of the World War II-era, Dr Kurt Tank of Focke-Wulfe fame, who was imaginatively brought in by Jawaharlal Nehru to design and produce the first supersonic fighter outside of the US and Europe. Tank had a prototype flying by 1961, inside of six years of his getting the commission.
Tank’s most gifted Indian protégé, Raj Mahindra, designed the Mk-II, which was eliminated by the Jaguar buy, whence began India’s rapid slide towards an all imported Air Force. If Mahindra’s Marut successor aircraft was killed by jhatka, the Tejas will be bled slowly, killed by the halaal method.