It is a strategic tie-up that has yielded a rich harvest, at least for the US. In the last decade, the Americans have made considerable forays into the Indian defence market, bagging deals worth Rs 45,000 crore and waiting to sign more contracts worth nearly Rs 30,000 crore in the next couple of years. With bilateral narrative changing course after the 2005 civilian nuclear deal, and despite nuclear trade not witnessing an uptick, traction has been achieved by the two in the field of defence trade, armed forces interoperability and best military practices with intelligence sharing on an upswing.
But the real story lies in the defence trade sector. At least one defence deal among the half-a-dozen, worth nearly Rs 30,000 crore, is likely to be signed at the earliest.
With the Defence Ministry giving its nod and the Cabinet Committee on Security (CCS) likely to give its approval this week, it is now possible that a Rs 4,000-crore government-to-government contract for six C-130J special operations planes may be inked when Prime Minister Manmohan Singh is in New York this month end, where he is scheduled to meet US President Barack Obama.
Manmohan Singh will be in New York for the United Nations General Assembly, an annual fixture of the Indian PM this time of the year, when there is always a summit meeting with the US President.
“The Defence Ministry is working towards getting this contract for additional six C-130J planes signed soon, preferably during the PM’s New York visit,” an Indian Defence Ministry official said, but did not categorically state that the deal would be done.
“Though all initial approvals have been obtained from the Defence Acquisition Council (DAC), the CCS is the next stop for the file on the plane purchases and then the finance ministry vetting. With just about a week left, let’s hope for the best,” the official added.
Another deal for 145 M777 ultra light howitzers that US is ready to sell to India for Rs 3,500 crore through the foreign military sales route too has been pending for three years now, but there is no indication this would be signed anytime soon.
But the good tidings in the bilateral defence relations between India and US were signalled by American Deputy Defence Secretary Ashton B Carter, who was in New Delhi for three days last week. Carter signalled that US and India were moving forward from a seller-buyer relations in the defence trade sector to becoming equal partners through co-development and co-production.
After years of Indian complaints about how the US was placing hurdles in the form of their internal legal provisions on export of critical defence technologies, Washington has now come to see the benefit of its easing these bottlenecks and even go beyond and work together with India.
Carter, who met National Security Adviser Shivshankar Menon, Defence Secretary R K Mathur and Foreign Secretary Sujatha Singh, talked about streamlining “bureaucratic processes” and make defence trade “more simple, responsive and effective,” in particular, “to move from a vendor/buyer relationship to one of partnership in co-developing and co-producing defence systems.”
He also commented that no one nation in the world could lay claim to the best of all defence technologies and there was scope for mutual benefits if they worked together and learnt from each other.
In this regard, Carter referred to the Defence Trade Technology Initiative (DTI) that was agreed to between the two nations when former US Defence Secretary Leon Panetta had visited New Delhi a year ago, promising that the present US Defence Secretary Chuck Hagel, who took over in February, was committed to the DTI.
One system that the US is now ready to offer to India is the next generation Javelin Anti-Tank Guided Missile (ATGM) for the Indian Army, on the lines of the Indo-Russian joint venture BrahMos supersonic cruise missile, an example Defence Minister A K Antony keeps referring to as a future partnership that the Indian defence sector should look for. Israeli Spike ATGM has been preferred by the Indian Army over Javelin, though a deal is yet to be formalised with Tel Aviv.
US has slowly, but steadily, emerged as the third largest arms exporter to India, the world’s largest arms importer, in the last one decade. Only Russia and Israel are supplying more to India than the US—much more than the United Kingdom and France.
Since 2007, when USS Trenton, a used amphibious warfare vessel, was bought by India for a throwaway price of Rs 250 crore, many Indian defence deals—almost 80 per cent—have gone the American way.
With many more arms deals with American firms lined up, India’s largest defence supplier, Russia, who were the first to establish strategic ties and have remained committed friends, are fuming, to say the least.
Russians, who still remain the largest defence supplier to the 13-lakh-strong Indian armed forces, have openly expressed their displeasure.
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