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Retail but no resale

End-use monitoring of defence equipment from the US is not taboo....

Written by K. Subrahmanyam |
July 25, 2009 3:32:44 am

The ongoing controversy on end-use monitoring of defence equipment from the US takes my memory forty six years back,to 1963 when a hundred member strong team of the United States Supply Mission in India (USMSMI) was accommodated in the Ashoka hotel,Delhi to monitor the military aid extended by the US to India following the Chinese attack.They were monitoring the deployment of infantry equipment provided for the new mountain divisions being raised at that time,and not high tech equipment. In 1964,the Chavan-McNamara agreement provided for 500 million dollars aid — half loan and half grant,for five years.The aid programme was wound up at the outbreak of the Indo-Pakistan war in September 1965. Since India’s foreign exchange position was precarious and the West cut off aid,India had no choice but to turn to the Soviet Union for defence equipment for all three services.The Soviet imports were on 10-12 year credit with very low interest and repayable in non-convertible rupees. The western countries wrongly perceived a close Indo-Soviet military relationship with a large number of Soviet personnel advising and training Indian forces.Therefore they completely cut off all military sales to India under the fear that their equipment technology would be compromised.This fear was totally unfounded but it prevailed. Then came the Pokhran nuclear test of 1974 and the technology denial regime imposed by the West was lifted only recently with the Nuclear Suppliers Group (NSG) waiver.

Indian defence modernisation upto the world class standards is a necessity if India is to play a global role. The international armaments market has undergone a radical change in the post cold war years.Today,the US spends nearly half of the world’s defence expenditure and a much higher proportion of the world’s defence R&D expenditure. It has publicly asserted that it will have greater military capability than any other power or combination of powers. In these circumstances the US happens to be the unrivalled source of military technology. Western Europe and Russia are the other two sources. In case of western Europe,they often depend on the US for subsystems and components. In such cases,the US has a veto on the European countries selling arms to particular countries. Israel too is emerging as a supplier of sophisticated defence technology and most of its systems have US technology or components and are therefore subject to a US veto. Another recent trend is for armament firms to merge and in the process often US connections get established. In the post cold war era,armed forces in most of the countries have been reduced and the world. Demand for armaments has gone down. The revolution in military affairs have led to more accurate,stand-off weapons. The unit costs of weapons have sky-rocketed and R&D costs have gone up manifold.Consequently,in Europe,countries have to develop weapon systems jointly. All these factors have led to the US dominating the armament technology and the market.

Russia after the cold war had to cut down its defence expenditure and defence R&D drastically.They had to get advance payment from India for their frontline aircraft development programme. The delays in refitting Gorshkov illustrates the difficulties the Russian defence industry is facing. While Russia still produces world class combat aircraft,tanks and fighting ships it is not in a position to compete across the board with the US on a whole range of defence technologies. We had to get a Russian aircraft platform to be built into an Airborne Warning and Contol Systems (AWACS) aircraft by Israel using US technology. While India is likely to continue to be a major arms market for Russia in respect of combat aircraft,armour and fighting ships including nuclear propelled vessels,India cannot afford to ignore the US arms market if this country is to face upto the challenge of military modernisation in Asia.

The US is not unique in laying down conditionalities on end use. Most countries in the world that sell arms demand that their arms should not be transferred by the recipient country to others and the high technology should be safeguarded. For all countries in the world,arms exports are governed by regulations of the executive government. In the US alone,it is subjected to legislation and the legislature’s scrutiny. Even European allies of US have no waiver from this. While other countries treat the end use provision as a contractual obligation,the US having such a lead in armament technology,insists on certification after inspection on the site of deployment. Most of the recipients of US high tech are its allies and therefore there are no problems on end use inspection.

Though India did not get its defence requirements from the US,in the last four decades we have been getting on an ad hoc basis,high tech equipment for our defence R&D from US accepting the end use monitoring conditionalities. The US supplied General Electric 404 engines for the Light Combat Aircraft Project and rendered other assistance in its development.The Cray super computer for the Meteorological Department too came under the end use conditionality.The NDA government made the purchase of the weapon locating radar,a combat support equipment. The NDA government permitted the deployment of the radar being inspected right at the front. In such purchases each department and procurement agency negotiated the conditionality in each individual case .That gave the American side an advantage to make the conditionality more stringent in cases where the Indian negotiator was less knowledgeable. Under those circumstances it made eminent sense for the Government of India to standardise the conditionality clause and ensure that the inspection timing and place will be determined by India and not by the US.Then the inspection will not involve US inspectors going to the site of normal deployment of the equipment. After very tough negotiations this has been conceded by the US. Reports suggest there was a lot of resistance by US bureaucracy and it was the intervention of Secretary Clinton and President Obama which led to US concessions.

This agreement is only an enabling provision.There is no compulsion to buy US equipment.But it is undeniable that our men and women in the armed forces deserve the best equipment. In choosing the equipment in each case a judgement has to be made whether the US equipment is superior enough to justify our buying it in spite our dissatisfaction on the conditionality. If in the best judgement of the decision makers on weapon selection,our forces will be at a disadvantage by not choosing the US equipment,then the choice should be in its favour .Otherwise the alternative will be chosen.

One must not overlook the fact that just as the Chinese accepted the nuclear deal with more stringent conditionalities than India,they will be happy to get US defence technology under these or more stringent conditions if the door is opened to them. Are we going to throw away this opportunity available to us and not to China?

The writer is a senior defence analyst

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