India Buys US War Equipment

(Asia Sentinel) Thanksgiving present for Obama when he arrives in Delhi in November

India is making a definitive turn away from Russia and other long-time weapons suppliers France, Sweden and the United Kingdom towards the US and Israel, a fact that should considerably sweeten the visit of US President Barack Obama to India in November.

Ties between India and America thus follow a strategic shift in the relations between the two countries over the last couple of years that began with the signing of a landmark civilian nuclear deal by the administration of former President George W Bush, as well and other defense agreements. America has been promoting India as a counterweight to China in the region as well as seeking to tap new business opportunities.

The emergence of the US as India's new military partner has ripened even as New Delhi looks beyond Russia, India's traditional supplier dating well back into the Cold War era. Problems with Russia include servicing and spare parts delays and obsolete technology. As Asia Sentinel reported in March, the purchase and retrofitting of an elderly Russian aircraft carrier, the 28-year-old Admiral Gorshkov, is far behind schedule. Expected to be launched in 2012 as the INS Vikramaditya, its retrofitting cost has skyrocketed from US$750 million to US$1.5 billion. In December 2009, the Indian Air Force had to ground its entire fleet of 105 Sukhoi fighter jets after two crashed.

The US, presently India's sixth-biggest arms provider, will likely be among the top three alongside Israel and Russia in the next couple of years. Indeed, in its second stint in power the Congress-led Manmohan Singh government has been unshackled from the tricky task of managing anti-American leftist parties that it faced in the earlier coalition government. With the exit of the left from the ruling national coalition, the role of Indian private firms in defense production has got a boost, while American defense supplies and contracts are on the rise.

While much of the Congress-led government's energies last term went into tying up the Indo-US civilian nuclear deal and dealing with recalcitrant communist allies, security and defense are key focus areas this time around in the wake of events such as the Mumbai terror attacks in 2008.

In a buyer's market, India is looking to negotiate deals from a position of strength. Offset investment requirements in local defense companies and easing of foreign direct investment requirements can be expected to boost domestic private players.

Eager to diversify its weapons procurement sourcing, India has told the US to ease its export control restrictions to allow high-end weapons technology tie-ups between the two nations. India's defense minister, A K Antony, who visited America last month to iron out matters with US Defense Secretary Robert Gates prior to the Obama visit, said that India is eager to "diversify its defense procurement sourcing and wants America to ease export control restrictions" for fully-fledged military exchanges.

Over the last couple of years, the big arms deals inked with America include six C-130J Super Hercules aircraft for almost US$1 billion (2007) and eight Boeing P-8I planes for more than US$2 billion (2009).

India has also acquired the Airborne Early Warning Air Craft, Hawkeye E-2D, developed by US firm Northrop Grumman, much to China's irritation. There is a pending multi-billion-dollar deal for American C-17 cargo planes.

America has also been looking to bag a mammoth US$12 billion deal to supply 126 advanced fighters with an option for 60-odd more, as Asia Sentinel reported on Aug. 24, 2009. Six global aerospace companies, Lockheed Martin and Boeing (American), Dassault's Rafale (French), Gripen (Sweden), MiG (Russian) and Eurofighter Typhoon (a consortium of British, German, Italian and Spanish companies), are bidding for the multi-role combat aircraft (MRCA) deal.

The MRCAs will replace long-obsolescent, crash prone MiG-21 interceptors and fit between the more powerful Sukhoi-30 and the low-end indigenous Tejas LCA lightweight fighters.

"The Pentagon is working with India to put three foundational agreements in place with New Delhi that would allow American frontline technologies to be shared with the country," a Defense Department spokesman in Washington recently said, in an attempt to tilt the MRCA bids.

Indeed, events such as the Kargil incursion in 1999 during which the country nearly went to war with Pakistan and the November 2008 Mumbai terror attacks, have only heightened India's quest to stock pile arms, mostly acquired from abroad as the domestic industry remains incipient.

In the decade that has followed the Kargil war, India's arms purchase deal value has crossed a big US$50 billion, with every sign of such momentum being carried over the next decade and crossing US$100 billion.

Pakistan remains the immediate focus of India's military upgrade as evidenced by the recent successes in test firing of nuclear capable short range Prithvi missiles in quick succession for the first time. The Prithvi missiles are aimed at targets in Pakistan.

Interestingly, India's arms acquisitions have more than doubled over the last five years from 2004-2009 (US$35 billion) compared to 1999-2004 (US$15.5 billion), as defense plans of the earlier period due to the Kargil conflict have been followed to fruition. The defense ministry has signed more than 450 arms contracts worth over US$30 billion within the last three years alone.

Further, in response to perceived threats following the Mumbai attacks, India's defense budget (2009-10) was raised by 34 percent to US$30 billion, while officials say that defense modernization expenditure should easily scale over US$100 billion between the years 2000-2020. More than US$10 billion was set aside by the government for net capital expenditure for the 2009-10 fiscal year, clearly indicating the impact of the Mumbai attacks.

The Stockholm International Peace Research Institute (Sipri), a reputed arms trade monitor, in its report for 2009, has said that India was the world's second-largest arms buyer over the five-year period from 2005-2009, importing 7 percent of the world's arms exports. The top spot went to China. India could well take the number one spot as China is turning self sufficient in arms, while the former's procurements continue to rise.

Even as America emerges as the new defense partners, others continue to sustain their high defense presence.

Deals with Israel include 3 Phalcon AWACS for over US$1 billion (2004) and a US$2.5 billion project to jointly develop medium-range surface-to-air missile systems (2009). India and Israel have finalized deals for the Barak-8 Naval air-defense system, and the Spyder surface-air-missile system.

Israeli defence contracts have not been without problems. Israel Military Industries was kicked out of the country in 2009 for being charged with complicity in bribery with a top Indian defense procurement official. IMI supplies the Uzi and Tavor 21 submachine gun, variants of which cater to the needs of the Indian forces as well as 125mm tank shells and manufactures Zitara carbines and cargo ammunition (a variant of cluster bombs).

Although India may be turning away from its traditional suppliers, they still have plenty of residual business. France has been involved in supplying and building six Scorpene submarines, a US$4.5 billion project (2005) Britain has been involved in the 66 Hawk Advanced Jet Trainer (AJT) US$2 billion project (2004).

Russia's stakes in India's defense continue to be high with the US$1.5 billion Admiral Gorshkov and MiG fighter package deal, now nearly doubled due to increased costs of the aircraft carrier's refit, and 230 Sukhoi-30MKI fighter jets for US$8.5 billion and T-90 tanks.