Art of deal-making

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India and the United States resemble an old, estranged, couple who are too irked by each other’s frets and foibles to stay together but aware of too many shared interests to live apart. Their relations reek of familiarity even in their differences. These impressions are reinforced every time one engages with official Washington as happened last week whilst attending a conference as part of which I, along with three other Indian invitees, had the opportunity to discuss issues currently troubling bilateral ties with Republican congressman Steve Chabot, chairman of the sub-committee on West Asia and South Asia of the House Foreign Relations Committee and his staff, and separately with senior advisers to several US senators.

Apparently, India’s Medium-range Multi-Role Combat Aircraft (MMRCA) decision shortlisting Rafale and Eurofighter, with the former finally being selected, at the expense of the Lockheed F-16IN and the Boeing F/A-18IN, still rankles. Plainly, the US strategic community is perplexed that so important a decision was made not on “political grounds” as they believed should have been done, but on “technical” basis. They felt specially aggrieved because, or so it was hinted, the Manmohan Singh government had assured Washington that an US plane would be chosen. As a result, the Obama administration was primed to politically cash in on the deal as were many American legislators, Mr Chabot among them.

The congressman from Ohio’s 1st congressional district, Mr Chabot, vented his displeasure, indicating that the engines for both the US-sourced aircraft — the F-414 engine in the F/A-18 and the F-110 engine in the F-16, would have come from the GE factory in his constituency. I pointed out that GE’s Evendale facility in Cincinnati had already been afforded considerable business by India with orders for the GE F-404 engine for the Mk-I version of the Tejas Light Combat Aircraft, the GE F-414 engine for the Mk-II version, and the LM2500 marine gas turbine power plant in the CODOG (Combined diesel or gas) configuration driving the indigenous Shivalik-class stealth frigates with the Indian Navy. Mr Chabot may know little about specific defence deals, but his protest proves that all politics is local. What matters to influential US lawmakers are less the common values and the geopolitical convergence of interests animating Indo-US relations — though these provide the justification — than the reality of commercial deals that generate jobs.

It leads one to wonder if the reluctance of the US government to part with source codes, flight control laws, and other super-sensitive information as part of a comprehensive transfer of technology deal — one of the reasons for rejecting the US aircraft, could have been moderated by carefully cultivating strategically important US senators and congressmen, and orchestrating sufficient pressure from the Capitol Hill. A senior official of an US aerospace major, speaking to me on the sidelines of the conference, emphatically suggested as much. Indeed, he went on to castigate both the US government for imposing a ceiling on technologies that could be sold to India, and the Indian government for quietly accepting these limits instead of forcefully using the “leverage” India has to insist, demand, and otherwise extract more advanced technology than what US companies are permitted to sell.

He further averred that India did not quite appreciate the leverage it has. Riled by the European Aeronautic Defence and Space Company (EADS) consortium (Eurofighter) and Dassault Avions (Rafale) not being similarly constrained, the US aviation industry official stated unequivocally that American aerospace companies would willingly sell sophisticated technology, source codes and all, to India; the trick, he said, lay in Delhi mounting sustained government-to-government pressure on Washington in tandem with the Indian embassy channelling to important US legislators election campaign funds generated by politically active and wealthy non-resident Indians and NRI associations in America.

There will always be some payoffs from such pressure tactics. But the US government does not, on principle, allow even its closest Nato allies to access its cutting-edge technologies, so India stands little chance, realistically, of doing so, no matter what’s at stake and how much it is willing to put out. In the event, a far better way to reap technology benefits is to do so indirectly, by mining the American military’s incomparable operational experience with advanced systems and its high-tech savvy.

In fact, the US armed services’ eagerness to render this sort of assistance is reflected in a pioneering venture involving the naval variant of the Tejas. The Indian Navy had reportedly considered consulting with EADS and Dassault in areas such as determining the location of the arrester hook-landing system, ways to test this system, “aerodynamic fixes” to improve carrier takeoff and landing, optimising landing gear design to handle larger operating weight, integrating operational payload, reduction of aircraft weight, selecting an alternative engine for a better power-to-weight ratio, etc. The US Navy, which has the most extensive carrier aviation experience, was finally approached for advice.

The Indian Navy’s gambit paid off. Its Letter of Request, while occasioning a short but intense debate in the Office of the US Chief of Naval Operations, elicited a positive response. A Letter of Agreement and consultancy contract soon followed, and veteran US naval aviators, deputed for the job, began working seamlessly on the Light Combat Aircraft many months back. The reason for the success of this scheme, according to a Pentagon officer, was that all relevant decisions on the Indian side — from initial contact, drafting the consultancy contract, to payments and arrangements for hosting the American naval aviators — emanated from a single source, the officer heading the programme, Commodore C.D. Balaji, with the redtape-inclined defence ministry having no role.

Given its success, this seems an excellent means of encouraging high-value, home-grown, military R&D projects and enabling them to gain from practical knowledge and hands-on expertise transferred by stalwarts of the US forces. It is a model Air Force and Army will do well to emulate: create a stake in, and take charge of, projects that will produce in-country worthwhile military hardware.

[published simultaneously in ‘The Asian Age’ at www.asianage.com/columnists.art-deal-making-480 and in ‘The Deccan Chronicle’, Thursday, February 2, 2012]

About Bharat Karnad

Senior Fellow in National Security Studies at the Centre for Policy Research, New Delhi, he was Member of the (1st) National Security Advisory Board and the Nuclear Doctrine-drafting Group, and author, among other books of, 'Nuclear Weapons and Indian Security: The Realist Foundations of Strategy', 'India's Nuclear Policy' and most recently, 'Why India is Not a Great Power (Yet)'. Educated at the University of California (undergrad and grad), he was Visiting Scholar at Princeton University, University of Pennsylvania, the Shanghai Institutes of International Studies, and Henry L. Stimson Center, Washington, DC.
This entry was posted in Defence Industry, India's strategic thinking and policy, Indian Air Force, Indian Army, Indian Navy, Military Acquisitions, Strategic Relations with the US & West, Technology transfer. Bookmark the permalink.

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