Nuke sub heads Indian weapons buying spree
The INS Chakra II is heading to its new home as New Dehli indicates it’s become a lucrative but demanding arms customer.
The Chakra II makes India the world's sixth country after US, Russia, France, UK and China to operate nuclear equipped submarines, has greatly boosted India's underwater combat arm. Until now 14 ageing conventional diesel-electric submarines were at India’s disposal. According to the contract, India takes the submarine on a 10 year lease for $900 million. India is also looking to get a second nuclear submarine, but it hasn’t decided when. The country is even flirting with the idea of building its own.
“India has decided it’s not interested in buyer-seller relationships any more, which used to be beneficiary for older suppliers. Now India is trying to develop capacities to be able to move towards some kind of self-reliance in terms of technology and human resources,” says Nandan Unnikrishnan, Vice President for Observer Research Foundation’s Centre for International Relations.
The state of the country’s military has come under the spotlight after the outgoing Indian army chief Gen. V. K. Singh claimed he was offered a hefty bribe to support a contract from a European company. He’s also been reported to have written to the Prime Minister warning that the country’s defence preparedness is very poor.
According to a new report by Jane’s, India will miss its own target of buying 70% of its defence equipment locally due to a lack of local capability combined with bureaucracy and corruption.
The country is planning to change this.
“No less than 35 percent of any new contract that is signed should now be sourced and manufactured in India. Secondly, India is restricting foreign participation in joint ventures to 26 per cent. So the controlling stake will be with an Indian entity. However, currently India doesn’t have the capacity to be self-reliant and buying from abroad will of course continue” says Nandan Unnikrishnan.
It means that some $137 billion of the $195 billion India plans to spend on defense equipment between 2013 and 2022 will go to foreign firms.
And Russia is one of the first to offer its services. According to Viktor Komardin, the Deputy Head of Russia’s Rosoboronexport delegation at the recent Defexpo Indian defense show, India plans to buy Russian weaponry worth up to $3bln annually. Russia-India current military technical cooperation portfolio amounts to $10.5bln with Russia seeking to beat last year’s record, selling weaponry for $13bln.
“Russia has traditionally been very close to India, with the two countries cooperation in different sectors. In the military Russia is a time-honored partner in terms of servicing of existing weaponry as well as acquiring new ones. So Russia will definitely remain to play a key role,” says Sreeram Chaulia, a professor at India's Jindal School of International Affairs.
Until now up to 85 per cent of the weaponry has been bought from the Soviet Union and then Russia
Nandan Unnikrishnan sounds less optimistic though, saying that grabbing lucrative Indian contracts will not be as easy as before.
“Russia understands well Indian needs, but India has other sources of supply with some other countries now offering types of weaponry Russia does not possess, like the A26 aircraft. The contract went to the French for a very simple reason – Russia doesn’t have this aircraft, and India will not buy empty promises.”
Competition is on the increase due to many new players which emerged following the country’s economic growth and as a result more money for the development of the military.
“There’s an attempt from the Indian government to acquire weaponry from Israel and European countries, as well as the US in a bid to diversify, and find the most cost-effective source of supply and not remain entirely dependent on Russia. A French company has recently got a contract, which was quite a surprise, to supply fighter jets. There’s been also bidding from the British for that. The U.S. is also trying hard to get lucrative contracts”, continues Dr. Sreeram Chaulia.
As a result of the recent scandal four foreign companies and two Indian companies have been banned for doing business with the Indian military for ten years. And future contracts are expected to be under significant scrutiny.
Dr. Chaulia stresses that “India doesn’t have domestic weapons production of significant value. In the long-run it will need to involve the private sector in this, but they still need foreign expertise with more transparency of competitive bidding, the problem which has been revealed by the recent corruption scandal. So far it’s hard to predict who will get this new pie due to a lack of transparency, but India definitely has trust in its traditional suppliers, with an aspiration for a balanced list of foreign partners. ”