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Indian Weapon Imports Under the Gun
By Sudha Ramachandran
BANGALORE - Suspected irregularities in the purchase in 2000 of seven Barak anti-missile defense (AMD) systems and 200 missiles from Israel Aircraft Industries Ltd (IAI) have kicked up a political storm in India.
But even as political parties seek to score points over each other, there is concern in defense circles that should the government break ties with the Israeli arms company at the heart of the scandal, it would have serious implications for India's military
Modernization program.
Last week, India's Central Bureau of Investigation (CBI) filed charges against former defense minister George Fernandes, retired chief of naval staff Admiral Sushil Kumar and the president of the Samata Party (to which Fernandes belongs) , Jaya Jaitly, in the purchase of the Barak weapon system.
It has alleged that Fernandes went ahead with finalizing the deal despite objections raised by the government's then scientific advisor, Abdul Kalam, (now the country's president) and the government-run Defense Research and Development Organization (DRDO). The CBI has said that Kumar had recommended the missiles based on misrepresentation of facts. It has alleged that kickbacks amounting to about $450,000 were paid to Jaitly.
According to the CBI statement, "The then-defense minister not only approved the proposal for import of Barak AMD Systems, but tried to get the proposal approved by the Cabinet Committee on Security." The negotiated rate of $268 million also was $17 million more than an earlier agreed rate, for which there was no proper justification, the statement said.
India's then-scientific advisor had objected to the Barak deal on the grounds that "[the] imported anti-missile defense systems have a failure rate of nearly 50% as witnessed by DRDO during trials by the services" and that delivery would take one to two years. By that time the indigenously developed Trishul would be ready. These objections were overruled by the defense minister and the deal was signed.
The controversy over kickbacks in negotiating defense contracts has brought the role of middlemen under scrutiny. Currently, India's Defense Ministry does not recognize a role for middlemen in negotiating defense deals. The government appears to be realizing that given the fact that defense deals are not possible without middlemen it would be better to make the process more transparent by registering the middlemen.
The kickback controversy has also thrown the spotlight on whether the decision to award the contract to Barak was faulty, that is, was DRDO's rejection of the Barak system valid. Senior officials in the armed forces point out that the DRDO has often managed to veto defense purchases, claiming that it could deliver similar weapon systems, but had repeatedly failed to match its promises.
In the process, "our military preparedness has been severely compromised", is a lament that army officers frequently articulate. The Trishul system, for instance, which DRDO offered as an option to the Barak system, is nowhere near becoming operational.
There is concern now that when the CBI sends its report to the Ministry of Defense, the latter will have to blacklist Israel Aircraft Industries Ltd, which supplied the Barak systems, and impose a blanket ban on dealings with it. The government is bound by law to blacklist and freeze all deals with firms found paying bribes and using other irregular methods to win a defense contract.
When bribes were found to have played a role in winning contracts for guns from the Swedish firm Bofors, submarines from the German company Howaldstswerke (HDW) and guns from South African Denel, the government blacklisted all of them. Whether deals with IAI will suffer a similar fate is a question that is worrying the armed forces.
Analysts point out that the cancellation of contracts with Bofors, HDW and Denel cost India's defense preparedness dearly. The Bofors scandal derailed the army's artillery modernization plan, from which it is still to recover. The blacklisting of HDW brought to an end a project that would have transferred submarine building know-how to India and adversely affected maintenance of submarines bought earlier from the company.
Retired Rear Admiral Raja Menon draws attention to how India ended up alienating the Germans, who now dominate the submarine industry. "It was a **** thing to do to land up on the wrong side of the Germans. They are now coming out with the most advanced air-independent propulsion system," he points out.
Breaking ties with IAI is likely to be far more injurious to India's military modernization and defense and security interests, say analysts. The DRDO might have dismissed its efficacy but today Indian defense officials firmly believe that India needs the Barak system and to shut off its supply would be foolish.
On Monday, India's navy chief Admiral Arun Prakash came out in strong support of the Barak systems. "Of the 14 evaluation tests conducted, 12 were absolutely direct hits and the other two failed, one because of human error and other due to technical reasons," he noted. "It's a very good system. I don't think there is anything comparable today in any navy."
"Barak-I is by far the best system we have to protect our warships from sea-skimming missiles like Exocet and Harpoon acquired by Pakistan and others," a senior naval officer was quoted as saying in the Times of India. "It is the only AMD system compatible with India's Brahmaputra-class warships. We evaluated several AMD systems, including French and Russian ones, but only Barak-I met the naval staff qualitative requirements," he added. In fact, so impressed is India with Barak-I that it is now collaborating with IAI in the development of Barak-II, a new-generation surface-to-air system with a 60-kilometer strike range.
But blacklisting IAI is not just about scrapping deals for purchase of the Barak systems. IAI's links with India's defense go deeper. It is one of India's most critical military suppliers and is involved in over a dozen other defense deals and upgrades. It is supplying the Indian Air Force with the $1.1 billion Phalcon Airborne Early Warning and Control System (AWACS) and all three services with unmanned aerial vehicles.
It is a key player in the upgrade of several fighter jets in the Indian Air Force, such as the Jaguar, MiG-21, MiG-29 and Mirage-2000, and helicopters such as MI-8, MI-17 and MI-35 and Antanov-32 transport aircraft among others. It is a partner of Hindustan Aeronautics Ltd (HAL) in the development of the advanced light helicopter, Dhruv. And India is on the verge of inking a deal for purchase of the Spyder missile system, a truck-mounted air defense system which can track up to 60 targets at a time, for which IAI is the main subcontractor.
Given the depth and expanse of its relationship with IAI, any break would have serious implications for India's defense preparedness. Defense officials say that India's relationship with IAI cannot be put in the same category as that with Denel, so the response cannot be the standardized. India's Defense Minister Pranab Mukherjee admitted recently that "these are totally different situations. The case of Denel and Barak is not comparable."
There is the larger India-Israel defense relationship as well that Delhi would be reluctant to unsettle. India acquires cutting-edge military technology from Israel. Israel is India's second largest (after Russia) defense supplier with military sales worth about $900 million a year.
The left parties in India have been demanding that ties with Israel be scrapped. The controversy over the alleged payment of bribes by IAI has now provided them with additional reason to demand action against Israeli companies. "They should be prohibited from any future transactions," said a statement issued by the Communist Party of India (Marxists) (CPI-M).
The ruling Congress Party, meanwhile, is playing its cards carefully. It is seeking to separate the payment of bribes in negotiating the Barak deal from the quality of the missiles. It would like to watch Fernandes - a bitter critic of Congress chief Sonia Gandhi and an ally of the previous government - sink.
But it does not want the Barak deal and India-Israel ties to get hit in the process. "A sharp distinction has to be made between defense preparedness, the product in question, and corruption in the defense deal," says Congress spokesman Abhishek Singhvi. "The security of the country is paramount. No one is alleging that the product lacks quality. But no matter how meritorious the quality of the product, corruption in a deal cannot be allowed to be condoned."
Separating the corruption issue from questioning the quality of the Barak systems is the easy part. The Congress is likely to find the act of balancing the country's interests in maintaining defense ties with Israel and the party's interest in calming its left allies a far more difficult task.
Sudha Ramachandran is an independent journalist/researcher based in Bangalore.
By Sudha Ramachandran
BANGALORE - Suspected irregularities in the purchase in 2000 of seven Barak anti-missile defense (AMD) systems and 200 missiles from Israel Aircraft Industries Ltd (IAI) have kicked up a political storm in India.
But even as political parties seek to score points over each other, there is concern in defense circles that should the government break ties with the Israeli arms company at the heart of the scandal, it would have serious implications for India's military
Modernization program.
Last week, India's Central Bureau of Investigation (CBI) filed charges against former defense minister George Fernandes, retired chief of naval staff Admiral Sushil Kumar and the president of the Samata Party (to which Fernandes belongs) , Jaya Jaitly, in the purchase of the Barak weapon system.
It has alleged that Fernandes went ahead with finalizing the deal despite objections raised by the government's then scientific advisor, Abdul Kalam, (now the country's president) and the government-run Defense Research and Development Organization (DRDO). The CBI has said that Kumar had recommended the missiles based on misrepresentation of facts. It has alleged that kickbacks amounting to about $450,000 were paid to Jaitly.
According to the CBI statement, "The then-defense minister not only approved the proposal for import of Barak AMD Systems, but tried to get the proposal approved by the Cabinet Committee on Security." The negotiated rate of $268 million also was $17 million more than an earlier agreed rate, for which there was no proper justification, the statement said.
India's then-scientific advisor had objected to the Barak deal on the grounds that "[the] imported anti-missile defense systems have a failure rate of nearly 50% as witnessed by DRDO during trials by the services" and that delivery would take one to two years. By that time the indigenously developed Trishul would be ready. These objections were overruled by the defense minister and the deal was signed.
The controversy over kickbacks in negotiating defense contracts has brought the role of middlemen under scrutiny. Currently, India's Defense Ministry does not recognize a role for middlemen in negotiating defense deals. The government appears to be realizing that given the fact that defense deals are not possible without middlemen it would be better to make the process more transparent by registering the middlemen.
The kickback controversy has also thrown the spotlight on whether the decision to award the contract to Barak was faulty, that is, was DRDO's rejection of the Barak system valid. Senior officials in the armed forces point out that the DRDO has often managed to veto defense purchases, claiming that it could deliver similar weapon systems, but had repeatedly failed to match its promises.
In the process, "our military preparedness has been severely compromised", is a lament that army officers frequently articulate. The Trishul system, for instance, which DRDO offered as an option to the Barak system, is nowhere near becoming operational.
There is concern now that when the CBI sends its report to the Ministry of Defense, the latter will have to blacklist Israel Aircraft Industries Ltd, which supplied the Barak systems, and impose a blanket ban on dealings with it. The government is bound by law to blacklist and freeze all deals with firms found paying bribes and using other irregular methods to win a defense contract.
When bribes were found to have played a role in winning contracts for guns from the Swedish firm Bofors, submarines from the German company Howaldstswerke (HDW) and guns from South African Denel, the government blacklisted all of them. Whether deals with IAI will suffer a similar fate is a question that is worrying the armed forces.
Analysts point out that the cancellation of contracts with Bofors, HDW and Denel cost India's defense preparedness dearly. The Bofors scandal derailed the army's artillery modernization plan, from which it is still to recover. The blacklisting of HDW brought to an end a project that would have transferred submarine building know-how to India and adversely affected maintenance of submarines bought earlier from the company.
Retired Rear Admiral Raja Menon draws attention to how India ended up alienating the Germans, who now dominate the submarine industry. "It was a **** thing to do to land up on the wrong side of the Germans. They are now coming out with the most advanced air-independent propulsion system," he points out.
Breaking ties with IAI is likely to be far more injurious to India's military modernization and defense and security interests, say analysts. The DRDO might have dismissed its efficacy but today Indian defense officials firmly believe that India needs the Barak system and to shut off its supply would be foolish.
On Monday, India's navy chief Admiral Arun Prakash came out in strong support of the Barak systems. "Of the 14 evaluation tests conducted, 12 were absolutely direct hits and the other two failed, one because of human error and other due to technical reasons," he noted. "It's a very good system. I don't think there is anything comparable today in any navy."
"Barak-I is by far the best system we have to protect our warships from sea-skimming missiles like Exocet and Harpoon acquired by Pakistan and others," a senior naval officer was quoted as saying in the Times of India. "It is the only AMD system compatible with India's Brahmaputra-class warships. We evaluated several AMD systems, including French and Russian ones, but only Barak-I met the naval staff qualitative requirements," he added. In fact, so impressed is India with Barak-I that it is now collaborating with IAI in the development of Barak-II, a new-generation surface-to-air system with a 60-kilometer strike range.
But blacklisting IAI is not just about scrapping deals for purchase of the Barak systems. IAI's links with India's defense go deeper. It is one of India's most critical military suppliers and is involved in over a dozen other defense deals and upgrades. It is supplying the Indian Air Force with the $1.1 billion Phalcon Airborne Early Warning and Control System (AWACS) and all three services with unmanned aerial vehicles.
It is a key player in the upgrade of several fighter jets in the Indian Air Force, such as the Jaguar, MiG-21, MiG-29 and Mirage-2000, and helicopters such as MI-8, MI-17 and MI-35 and Antanov-32 transport aircraft among others. It is a partner of Hindustan Aeronautics Ltd (HAL) in the development of the advanced light helicopter, Dhruv. And India is on the verge of inking a deal for purchase of the Spyder missile system, a truck-mounted air defense system which can track up to 60 targets at a time, for which IAI is the main subcontractor.
Given the depth and expanse of its relationship with IAI, any break would have serious implications for India's defense preparedness. Defense officials say that India's relationship with IAI cannot be put in the same category as that with Denel, so the response cannot be the standardized. India's Defense Minister Pranab Mukherjee admitted recently that "these are totally different situations. The case of Denel and Barak is not comparable."
There is the larger India-Israel defense relationship as well that Delhi would be reluctant to unsettle. India acquires cutting-edge military technology from Israel. Israel is India's second largest (after Russia) defense supplier with military sales worth about $900 million a year.
The left parties in India have been demanding that ties with Israel be scrapped. The controversy over the alleged payment of bribes by IAI has now provided them with additional reason to demand action against Israeli companies. "They should be prohibited from any future transactions," said a statement issued by the Communist Party of India (Marxists) (CPI-M).
The ruling Congress Party, meanwhile, is playing its cards carefully. It is seeking to separate the payment of bribes in negotiating the Barak deal from the quality of the missiles. It would like to watch Fernandes - a bitter critic of Congress chief Sonia Gandhi and an ally of the previous government - sink.
But it does not want the Barak deal and India-Israel ties to get hit in the process. "A sharp distinction has to be made between defense preparedness, the product in question, and corruption in the defense deal," says Congress spokesman Abhishek Singhvi. "The security of the country is paramount. No one is alleging that the product lacks quality. But no matter how meritorious the quality of the product, corruption in a deal cannot be allowed to be condoned."
Separating the corruption issue from questioning the quality of the Barak systems is the easy part. The Congress is likely to find the act of balancing the country's interests in maintaining defense ties with Israel and the party's interest in calming its left allies a far more difficult task.
Sudha Ramachandran is an independent journalist/researcher based in Bangalore.
