Future of India-US defence ties – Indian Defence Research Wing


One critical aspect of the India-US bilateral relationship has been defence ties. The hiccups in this particular sector illustrate the different priorities and worldviews the two countries have of defence and consequently why the bilateral relationship will never progress beyond the current point.

India, for the longest time, viewed its “eclectic” defence purchases as a smart move. The standard explanation was we were “multi-sourcing” so as to wear off the effects of any sanctions, interruptions in spare parts supply and any medium gestation design flaws. This of course was relevant when India was a heavily sanctioned country. Technologically too, this made perfect sense. After all in a Russian plane, with a reasonable level of metallurgy, you could latch on an American pod mounted gun and run a wire through to the cockpit.

This was after all the time when all phones—be they American, German, French, Russian, Chinese or North Korean—were the same and could be used interchangeably. When the first push button landlines came in it became a bit more complex between “pulse and tone” phones and even there, phones started being made where you could switch between pulse and tone.

Today, India is not sanctioned and jerry rigging heavy parts of metal does not constitute the cutting edge of technology. America has moved on, but India is still stuck in a time warp, be it on technology, the nature of technology and its linkage to industrial systems or the very nature of the defence trade. How do we know this? Very simple, from the crude terminology we use, one can figure out how arcane our understanding of the evolution of technology and business is.

The very fact we use terms like “technology transfer”, “original equipment manufacturer (OEM)” and “offset” not only makes us the laughing stock of the international defence trade, it also shows we are simply incapable of absorbing transferred technology, manufacturing it or getting any serious “offsets”. The problem starts with our industrial structure itself. In India HAL etc., want to manufacture everything to do with a plane. In the West, the hyper specialisation of technology means that almost every single part is manufactured by a different MSME company. The size of these companies (unlike India) is not dictated by government fiat, but rather by the rate of replacement of what they produce. This is why technology changes so rapidly that every year’s iPhone iteration represents a substantial leap over the previous years. Note, Apple does not manufacture these, they source it from thousands of different manufacturers (including arch-rivals Samsung) and they merely do the technology and software design and interfacing. Similarly, in the 1970s, Boeing used to manufacture over 80% of its own aircraft. Today, Boeing is lucky if it manufactures even 20% of its commercial aviation flagship, the 787 Dreamliner.

In such a context, “technology transfer (TOT)” and “OEM” make no sense. As shown above the “OEM” owns only 20-25% of the final product. At best they are a brander and integrator, but our persistence with this terminology means we can’t execute the kind of sub-deals required for an in depth transfer of technology. The word ToT is even more dangerous. Because our MSMEs simply aren’t as developed, we don’t have the industrial depth or breadth to be able to absorb the vast scope of technologies that get transferred. India’s arcane tech education system means that most of these sciences aren’t even taught in India. Further, each of these US MSMEs have their own patent and IPR policies, which means they will not be willing to share and legal protections in the US are so strong, that the government cannot force them to share either. In case some of the technologies are shared, they make no sense for private companies to absorb, because all these technologies remain commercially viable only if they can be leveraged into civilian uses. The lack of negotiating “work share agreements” (as opposed to the “offsets” we negotiate) burdens the private sector with technologies it cannot use and sell without appropriate workshare agreements and re-selling and competition rights. In short, most of the technology is private and not up for sale; what is up for sale, we cannot absorb intellectually or industrially and we certainly cannot do either in a commercially viable way.

Now contrast this with the way the US thinks about defence-technology. In many ways this is like functioning in an Apple ecosystem—your Mac desktop synchronises perfectly with your Mac laptop, iPad and iPhone. Using an Android in this environment you can still get the job done, but not with the enormous efficiency that a full Mac ecosystem provides you. This is what modern defence is about—not the kinetics of a weapons system, but rather its networking and data sharing technology based on an enormous pile of highly accurate intelligence gathering. In that sense, when the US sees an F-35 they see it merely as the tip of an iceberg—a complex network of systems working together to make the F-35 invincible. This iceberg includes real time data gathered by drones, AWACS aircraft, electronic and image intelligence gathering assets including satellites. This data is then fused together to make it comprehensible and transmitted to the plane and it is this data that enables the F-35 to see the enemy further out, understand his actions, his tactics and his escape routes and shoot him down before the enemy even knows what has happened.

When the UK or Singapore sees the F-35, they understand this and they know that by joining the programme, the amount of commercial contracts they get related to the F-35 will more than adequately compensate their investment in the platform through global sales. But when an Indian sees the F-35, all he looks at is a shiny stand-alone gadget, not merely as one piece in a jigsaw. He sees it as wasteful purchase like a kitty party aunty buying a BMW, rather than as an investment as a shopkeeper would in a scooter, the home delivery revenues more than compensating his initial investment.

This then is the conundrum that India-US ties are stuck in. What the US is offering India doesn’t understand. The problem is one of comprehension, it is a problem of the incompatibility of first world and third world. The answer doesn’t lie in tinkering with documents like treaties and defence procurement procedures, rather it lies in educating India’s military thinkers outside their silo into the sectors of education, industrial policy and such. Till then the bilateral defence relationship will remain where it has been—stuck in a plateau.

Abhijit Iyer-Mitra is a senior fellow at the Institute of Peace and Conflict Studies.

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