The American aerospace giant Boeing is to sell 37 military helicopters
to India, a major blow to Premier Narendra Modi’s high-profile “Make in
India” campaign to wean the country off imported arms.
for 22 Apache AH-64Ds and 15 Chinook CH-47F heavy-lift aircraft, which
has been bottlenecked for years because of red tape, will further
entrench American presence in the burgeoning Indian defense market,
military analysts say.
New Delhi scrambled to get the deal
through as Boeing had threatened to ramp up the price after Sept. 30 by
nearly 40 percent after holding it steady for nearly six years. The
big-ticket purchase will take the tally of defense contracts won by
American companies from India to US$10 billion over the past decade.
transaction will have two components — one with Boeing for the
helicopters and a second contract with the US government for the
helicopters’ weapons and other equipment. The AH-64 Apache is the
world’s most advanced multi-role combat helicopter, boasting night
vision capability, stealth characteristics and beyond-visual-range
missiles. The workhorse CH-47 F Chinook, which has played a crucial role
for the US Army and Marines since it came into service in 1951, is a
twin-engine equipped with a fully-integrated digital cockpit management
Interestingly, the contract comes at a time when Modi is
on a visit to New York, where he will meet US President Barack Obama
ahead of the United Nations General Assembly. The Indian premier will
also travel to Silicon Valley on the West Coast, to hobnob with American
IT chiefs and promote India as an attractive business destination to
help revive the economy.
Since Modi’s inauguration last May, his
nationalist government has approved an assortment of military projects
that had stalled under the previous Congress regime, in part over
corruption scandals. New Delhi also lifted the cap on foreign investment
in the defense industry to 49 percent and bolstered tie-ups between
foreign and local companies. The overarching reason behind these
multi-million dollar deals lies in geopolitical compulsions, said a
ministry of defense official who preferred that his name not be used.
hostile neighborhood consists of a nuclear-armed Pakistan and
big-spending China,” the official said. “The two are also in a campaign
to form an antagonistic nuclear and defense partnership. Already, 54
percent of Chinese arms exports go to Pakistan. So in such an
environment, India fears its scarcity of fighter jets, submarines,
helicopters and howitzers etc. will reek of a lack of defense
India, now the world’s largest arms importer,
expects to spend US$130 billion over the next decade to upgrade its
Soviet-era fleets of fighters, sea vessels and war machinery. The
country’s volume of major weapons imports more than doubled between 2009
and 2013 while its share of the volume of international arms imports
increased from 7 percent to 14 percent, according to the Stockholm
International Peace Research Institute.
India’s military spending
in the draft budget for fiscal 2015 rose 7.7 percent from the previous
year to Rs2.46 trillion, equal to about 1.8 percent of the country’s
gross domestic product, roughly 2.7 times the level of fiscal 2007.
government is also prioritizing the deregulation of foreign direct
investment in the defense sector and attracting private sector
resources. Ironically, India’s helicopter deal with the US is in stark
contrast to the one New Delhi inked recently with Russia, India’s
largest arms supplier. Under the Russian agreement, both New Delhi and
Moscow have agreed to manufacture 200 helicopters in India with Russian
collaboration as part of intensification and diversification of
strategic ties. The agreement is part of the ‘Make in India’ program.
the light of the Russian deal, as well as Modi’s push for domestic
production, the Boeing chopper pact raises questions about the need for
spending such whopping sums on defense acquisition. “Continued reliance
on foreign suppliers exposes India’s lack of a clear-cut vision of its
defense industry,” said a former Indian Army officer, Pravesh Bishnoi,
who was posted in Ladakh during the Kargil War.
Russia continues to be one of India’s most significant strategic
partners and the biggest arms supplier, grabbing about 75 percent of its
weapon imports. The remaining 25 percent is made up of the US and
Western European countries, particularly France, Britain and Germany. Do
we really need so much equipment? If we do, why not make it at home?”
India’s propensity for big-ticket defense purchases, American defense
giants such as Lockheed Martin and Boeing, are all too thrilled about
the vast business potential in Asia’s third largest economy.
Unsurprisingly, the US has now emerged as India’s second largest arms
supplier, accounting for 7 percent of the total.
defense procurement is a double-edged sword, Bishnoi said. “The
purchases may have augmented India’s defense capability, but it has
scuppered indigenous research as technology has been imported rather
than developed here. The domestic industry gains zilch from such deals.
On the contrary, it only creates rancor among private players who have
been keen to leverage Modi’s ‘Make In India’ mantra.”
defense analysts feel that India is “arming without aiming” or ploughing
money into military purchases without a serious effort to reinvent its
“India is being torn by two conflicting goals: the
nationalistic aspiration to produce weapons locally and the urgent need
to modernize militarily, said Charat Bharadwaj of the Institute of
Defense Studies & Analysis, a New Delhi-based think tank.
“Procurement of more mega-weapons to meet traditional security
challenges is meaningless without a strategic dimension.”
to the confusion is the government’s ambiguity over what exactly its
short-term policy about such imports is going to be. Last August, Modi’s
government surprised many by abruptly scrapping the request for global
bids to buy helicopters that the defense department had been shopping
for over the past 10 years, in favor of manufacturing them domestically.
India also reversed two more proposals for buying transport aircraft
and submarines and decided to make them at home.
many is how India’s security interests are being advanced by sacrificing
a solid domestic arms-production base because of the country’s
dependency on imports from Russia and the US. The biggest gainer seems
to be the US.
Policy analysts say that to be prudent, India
should freeze all purchases of mega defense equipment to first
strategize its priorities. Cleaning up the defense procurement system,
encouraging domestic players to invest at home and building a sound
manufacturing base are the way to go. For this India need look no
further than its archrival China, which has transformed itself from a
major arms importer about 10 years ago to become the world’s third
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