Implosion (44 page)

In the Indian Air Force, the problem is different. Orders for new aircraft can be excessively slow – it took India 20 years to order Hawk trainers from the UK in 2004 – but they do happen. There is, however, a high rate of crashes. Out of 872 Russian (originally Soviet) MiG fighters bought, or partially made in India by the government-owned Hindustan Aeronautics (HAL), between 1966 and 1980, as many as 482 had crashed by mid-2012, killing 171 pilots. Reporting the figures to parliament in May 2012, Minister of Defence A.K. Antony said that the causes of accidents were both human error and technical defects
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– inadequate pilot training, poor-quality manufacture and maintenance by HAL, cannibalization of aircraft for spares, and tough conditions.
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Ajay Shukla, a journalist and former army officer who specializes in defence issues, wrote in March 2013 that over the previous five years, a total of 50 aircraft had crashed, including 37 fighters and 13 helicopters, causing the death of 17 pilots, 18 service personnel and six civilians.
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Quoting figures released by the defence ministry in parliament, he said that the air force lost the equivalent of one fighter squadron (16–18 fighters) in crashes every two years. Consequently, it had only 32 or 33 operational squadrons compared with a minimum requirement of 42. ‘With each [Russian] Sukhoi-30, the cheapest aircraft being currently inducted, costing close to Rs 350 crore, the loss of eight fighters per year to crashes amounts to an annual loss of over Rs 2,800 crore,’ he added. Costs would rise if and when the Rafale, a French fighter produced by Dassault of France which was then being considered, was purchased at perhaps Rs 450–500 crore per aircraft. That was also the anticipated price for an Indo-Russian fifth-generation fighter aircraft scheduled to become operational towards 2020.

The Indian Navy has a better record than the other armed services. It has been developing a capacity to design and build most of its warships in India,
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which the army and air force do not have for their equipment. It also goes for gradual improvements in its equipment, whereas the army and air force tend to look for dramatic new prestige weapons that slow down purchases.

India initially learned its shipbuilding skills from British Leander-class frigates that it built in the 1970s, and from Kashin-class destroyers sourced from Russia in the 1980s. The Delhi class destroyer was built in the 1990s followed by successfully designed frigates and corvettes and, more recently, an aircraft carrier that benefited, along with other navy ships, from the development in India of warship-grade steel at half the cost of imports.
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‘The navy’s import content is noticeably lower than the other services,’ says Shukla.
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‘In the current crop of warships being built, there is 90–95 per cent indigenisation in the “float” section such as the hull, about 60 per cent in the “move” section (engine, transmission), and 40–45 per cent on weapons and sensors.’ The DRDO’s few successes include the development of this special steel with the Indian public and private sector, and the design of a sonar radar. The navy’s weapons systems are still imported, the DRDO having failed with the Trishul missile.

But the navy’s fleet is ageing, and the introduction of new warships is years behind schedule. This is mainly because of inefficient and overmanned public sector naval dockyards that produce ships slowly – by international standards – and have prevented the private sector from establishing a significant role. The CAG estimated in 2008 that the ageing and mostly Russian submarine fleet had only a 48 per cent operational availability,
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and it has not improved since then. A 30-year submarine-building plan was approved by the government in 1999 but none of the planned 24 submarine vessels has gone into service. The country’s underwater capability took a hit in August 2013 when the navy’s most modern submarine, which had recently had an $80m refit in Russia, was destroyed in an explosion.

There is a lack of expertise in submarine design, which could have been met by collaboration with HDW of Germany if a 1980s deal had not been scrapped, after four vessels had been delivered, because of allegations of bribes. Progress on building six Scorpene submarines in India under a 2005 contract with France has been slow and the first is not expected till 2016–17, over four years late.

Foreign Suppliers

India’s foreign suppliers have traditionally been led by Russia, which inherited the overwhelming dominance of the old Soviet Union and still has around 80 per cent of the orders, according to the Stockholm International Peace Research Institute.
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Between 1950 and 2012, the Soviet Union and Russia (excluding other former Soviet bloc countries) had 69 per cent of the sales, rising to 77 per cent between 2000 and 2012 (83 per cent in 2012 alone). In the same period, the UK slipped from the number two spot with 15 per cent to 4.3 per cent in 2000–12 (6 per cent in 2012). Israel rose from 1.5 per cent to number two with around 4.8 per cent (5.3 per cent in 2012), while France fell from 3.8 per cent to 1.4 per cent. In two years of negotiations from 2011, two European groups were short listed, led by Dassault of France’s Rafale fighter, on an $11bn-plus contract for 126 multi-role combat aircraft, defeating both American and Russian contenders and boosting France’s role.

The total US order book of concluded or pending deals by mid-2013 amounted to nearly $11bn,
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which will probably make it the third-biggest supplier. It delivered virtually nothing between 1964 and 1986 and then only tiny amounts till 2006, because it was boycotting India for the supply of lethal and technologically sensitive items. It is now picking up from just over one per cent between 1950 and 2012 to around two per cent to three per cent in the last two or three years following a New Framework for India–US Defence Relationship that was agreed in 2005. India is, however, still wary of buying essential equipment from America because of the risk that supplies would be stopped if Washington disapproved of something India had done, for example in the development of nuclear arms. This may have affected decisions in 2011 on the big fighter contract, where Boeing and Lockheed Martin’s aircraft were rejected, much to America’s amazement and annoyance (though its Boeing and Lockheed fighters were said by experts to be inferior to the short listed European jets).
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The 2005 agreement led, in 2009, to a $2.1bn contract for eight Boeing P-81 maritime surveillance aircraft and a $1bn deal for six Lockheed Martin C-130J Hercules military transport aircraft
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– neither of them seen as being essential as fighters and hence not so sensitive in terms of availability of spares – and ten Boeing C-17 Globemaster heavy lift transport aircraft for $4bn.

The public sector has become increasingly dependent on imports for its supposedly India-based manufacturing and assembly projects. Many DPSUs and ordnance factories order components quietly from abroad and cloak them in apparently Indian-made defence equipment – as was illustrated by the Tatra truck story. That enables them to avoid having to develop their own technologies and opens the door for them to accept foreign bribes. ‘We are manufacturing high-end products like SU 30 MKI, Brahmos and Scorpene subs, but these are licensed productions of foreign-designed weapons, and even here we know that key assemblies will be imported till the very end of the programme,’ says Manoj Joshi, referring to Russian Sukhoi aircraft, Indo-Russian Brahmos missiles and French Scorpene submarines.
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The DPSUs then charge the defence forces much higher prices than they have to pay their foreign suppliers, thus increasing their profits. ‘There is evidence which seems to suggest that the DPSU managers were actually going out of the way to serve the interests of the foreign company, rather than the company they headed,’ wrote Joshi.
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‘Insiders will tell you that this is not as uncommon a phenomenon in our DPSUs and ordnance factories as it may seem.’ Another expert describes many DPSUs as ‘traders not manufacturers’.

This poses the question, why such a situation has been allowed to continue for so long. The immediate answer is that the characteristics of jugaad and chalta hai provide the cover for the powerful defence establishment’s vested interests to maintain the status quo and enjoy the consequential hefty bribes and other favours. Foreign suppliers support this because they prefer to manufacture and assemble expensively abroad, and pay the bribes (usually indirectly to obscure the sources), while relying on India’s low-cost manufacturers for relatively minor components. Such an approach prevents Indian companies growing into competitors as final assemblers of complex weaponry.

Everyone, with some exceptions of course, from public sector chairmen down to office peons and manual labourers, thrives on a system that, despite the patriotism and loyalty of many of those involved, sees the protection of employment as its primary aim, with technical, commercial and financial issues as subsidiary considerations. Along with the DPSUs, the defence ministry does not want change, and nor do the mass of the armed forces, despite considerable unhappiness with what is available from the public sector. There are also politically powerful trade union federations in the industry that thrive in the present set-up and resist change.

Senior retired officials, who have spent large parts of their careers in the defence establishment, are amazingly critical of how they had to work, citing misguided procedures, excessive secrecy, and a lack of planning, communication and transparency.
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I have heard them talk about how procedures are aimed more at spending budgeted funds than building defence capability, and that procurement of weaponry is ‘not seen as an issue of national security’ but as a bureaucratic exercise.

Antony and Other Blockages

In recent years, the failure to introduce reforms has been led by the defence minister, A.K. Antony, a mild veteran Congress politician from the southern state of Kerala, where he was earlier chief minister. He is proud of his uncorruptable reputation, and is regarded as one of the politicians most trusted by Sonia and Rahul Gandhi. This has made him secure in the post, despite increasing criticism of his lack of drive and effectiveness. Appointed in 2006, he shied away from as many reforms as he could, and slowed down plans that were being backed by his predecessor, Pranab Mukherjee, now India’s President. Antony’s Kerala base is significant because the Congress there is pulled leftwards by a communist-led coalition that is its main rival for power in the state assembly. This strengthens his support for public sector trade unions that resist change to protect their members’ jobs. Uday Bhaskar, a defence and security policy expert and former navy officer,
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wrote Antony an open letter in May 2012, saying his track-record was ‘disappointing’. Bhaskar taunted him by suggesting that the defence forces were so ill-prepared that India could ‘inadvertently repeat the 1962 experience’ – a reference to its defeat that year by China. The Cabinet Committee on Security and Political Affairs, Bhaskar added, suffered from ‘perceived abdication in decision-making’ and there was ‘stasis in higher defence management’.
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Even though Antony’s stance accounts for policy blockages from 2006 to 2013, there is a larger question of why earlier governments did not try to improve domestic performance and reduce India’s reliance on foreign suppliers. Structurally, the problem lies in the make-up of the Ministry of Defence where, under the defence secretary, who is the top bureaucrat, there are two secretaries separately responsible for production and procurement. The defence production secretary has line management responsibility for the performance of DPSUs and the ordnance factories, so is in effect required by his remit to support the public sector and not the private sector, which therefore has no top official in the ministry whose job it is to argue its case.

‘Arming without Aiming’

More broadly, it has been suggested that tolerance of the current system stems both from a deep post-colonial ambivalence about the use of force, and from the country’s avoidance of foreign entanglements, which together limit its desire for foreign clout. This lack of a broad-based strategic foreign and defence culture means it is only necessary for India to equip its army and air force, and to a lesser extent the navy, to defend the country against its neighbours, notably on the long and disputed Himalayan borders with China, where it lost in 1962, and with Pakistan, against which it has fought and won three wars and one undeclared near-war. Based on that argument, guns, tanks, missiles and aircraft can be bought haphazardly or developed domestically, even more haphazardly and unreliably, to fight across mountains and deserts, plus ships that are required more now that China is muscling in on nearby oceans and seas. For this limited canvas, defence and arms equipment do not need to be planned at the strategic policy level that happens, for example, in the US, the UK and China.

Stephen P. Cohen and Sunil Dasgupta of America’s Brookings Institution described this as ‘the puzzle of enduring shortcoming in Indian defense policymaking’, in
Arming without Aiming
, a book that was originally published in 2010. They looked at ‘the enduring nature of these weaknesses’, and why the Indian political system had allowed them to persist for so many years. ‘Previously, others have argued that culture and identity, caste and class divisions, poverty, the absence of political will, and the threat environment, explain Indian defense policy choices,’ they wrote in a new preface to a paperback edition.
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‘But we noted that India’s defense policy was rooted in a doctrine of military-strategic restraint that was, at its outset, an ideological rejection of the use of armed force as the tool of colonizers. In rejecting colonization, India also rejected the instruments used by the colonizers. After independence, the cold war’s neo-colonial hue solidified Indian preferences for restraint. Since then, the bureaucracy has institutionalized restraint in so thorough a manner that a breakout is hard to imagine in the absence of a major crisis.’