New Delhi, March 28: As India focuses on enhancing domestic production of military hardware, a surge in its export was recorded in nine months to end-2015, with the net value touching almost $210 million (Rs.1,400 crore). According to the annual report of the defence ministry, the Defence Public Sector Undertakings (DPSUs), Ordnance Factory Board (OFB) and the private sector companies exported products worth Rs.1,397 crore from April to December 2015. The final figures for the fiscal ending March 31 are yet to be tabulated.
Exports in the financial year 2014-15 were valued at Rs.994 crore. “The trend in export shows phenomenal growth by the industry,” the defence ministry report said. It also lauded the role of private companies in the defence sector, stating that the exports by the sector had shown “accelerated growth” by 12-14 companies. The major destinations for defence exports from India include Afghanistan, Algeria, Belgium, Ecuador, Indonesia, Israel, Myanmar, Nepal, Oman, Romania, Russia, South Korea, Sudan, Vietnam and the UK. Among the major items being exported are Offshore patrol vessels, spares for radars, Cheetal helicopters, turbo chargers and batteries, electronic systems, light engineering mechanical parts and personal protective items, which comprise articles like helmets, bulletproof jackets and other types of clothing. The report also observed that the online system for NoCs (No Objection Certificates) which was started in November 2014 is working satisfactorily. In August 2015, the Standard Operating Procedures (SOP) for issuing NOCs for export of military stores by public or private defence industry were also revised. Under this, the requirement of an End User Certificate to be countersigned or stamped by the government authorities has been done away with for the export of items like parts, components or sub-systems. As the government promotes participation of private sector in defence manufacturing, the report also said that the Department of Industrial Policy and Promotion has issued 319 Industrial Licences to 190 companies till January 2016. Of these, 50 companies with 79 licences have started production. The new Defence Procurement Procedure (DPP) envisages providing a boost to the ‘Make in India’ initiative, enhanced role for private sector, and promoting medium and small scale industries. It also has a new category of Buy Indian — Indigenous Design Development and Manufacturing under which indigenously designed equipment with 40 percent content will be procured. According to Sweden-based think-tank Stockholm International Peace Research Institute (SIPRI), between 2011 and 2015 India was the largest importer of arms, accounting for 14 percent of the global trade. It, however, does not appear prominently in the list of defence exporters, with the top slot being taken by the US, which accounts for 33 percent of global arms export, according to SIPRI. According to the Institute’s analysis, adding together the data that states have made available on the financial value of their arms exports, the estimated total value of the global arms trade in 2013 was at least $76 billion. It adds that the true figure is likely to be higher.
A recent European Union intelligence sharing exercise with India has revealed that Lockheed Martin, the US-headquartered company which manufactures the F-16 fighter jets, has been up to mischief mongering on the Rafale issue.
The Rafale jets, which India wants, is manufactured by the French aerospace company Dassault Aviation, a rival of Lockheed Martin.
That Lockheed Martin could be working in the shadows to sour the Rafale deal for India so that it could move in with its own deal was validated when Vivek Lall, Lockheed Martin’s high-profile head of strategy and India operations, said that the company was in the process of finalising the sale of 200 fighters to India.
During the UPA regime, the government had signed an MoU for 126 Rafale fighter jets to replenish a major shortcoming in air defence preparedness because the Indian Air Force did not have quality fighter jets. When the NDA government led by Prime Minister Narendra Modi came to power, this deal was revised and an inter-government deal was struck to receive 36 fully-loaded Rafale jets. The controversy now raging in India is related to the pricing for the fighters negotiated by the NDA.
In December when the Rafale case came before the Supreme Court, Chief Justice Ranjan Gogoi observed that processes were generally followed over the procurement. He also noted that the controversy had been triggered by comments by former French President Francois Hollande over the selection of the offset partner and that mere comments could not form the basis for a probe.
However, this has not prevented the Rafale purchase controversy from becoming a high-octane political battle between the Congress party and the Bharatiya Janata Party (BJP).
Repeatedly over the past few months and more stridently now in the lead-up to the Lok Sabha elections, Congress President Rahul Gandhi has led a no-holds barred attack on the government and the Prime Minister specifically on the issue. From the earlier public disinterest on the controversy, it is now now getting some traction — the Congress party believes this could be possible because it has relentlessly raised the matter at all public forums.
Bringing up the case of the state-owned Hindustan Aeronautics Ltd (HAL) was said to be part of the orhestrated plan to present the case of the American companies while also appearing nationalistic. In the government’s estimate, HAL’s record is abysmal and it cannot be given a big responsibility like building fighter jets — more so in the light of the safety record of MiG fighters purchased from Russia and made under licence from HAL.
The BJP-led government at the Centre believes — and it is certain it has evidence of this — that the Congress party is doing this as it has become a party to corporate rivalry between the US and French aerospace companies. For the record, Lockheed Martin is believed to have found a sympathetic ally in another US aerospace major, Boeing, which manufactures the F-18. Dassault has another rival in French manufacturer Airbus Industrie, which is associated with BAE for the manufacture of the Eurofighter. It is also angling for a fighter jet contract with India.
Rahul Gandhi’s attacks on the government over the Rafale issue started after his visit to the US in August 2017 when he met several defence lobbyists, CEOs of US defence companies and Pentagon officials.
Defence Minister Nirmala Sitharaman has been obtuse in accusing the Congress of becoming a pawn in corporate rivalry. She made the comments during a recent seminar on ‘India’s strategic interest in the context of the Rafale deal’.
The government’s efforts to trace the footprints of the dramatis personae at the forefront of the campaign to target the government over the Rafale deal has produced surprising results. It has found what it believes are eye-opening linkages between Prashant Bhushan, Yashwant Sinha and Arun Shourie — who filed a PIL in the Supreme Court accusing the Prime Minister of corruption in the deal — and arms dealers and defence manufacturers. At least in one case, the linkages show deep connections between members of Shourie’s family with aerospace companies, arms dealers and defence lobbies.
A deeper look found a correlation between the end of Shourie’s dreams of being appointed Union Finance Minister and the beginning of his tirade against the Prime Minister on one issue or the other.
The government is also aware of the links between a top BJP leader’s son-in-law and a French manufacturer. The son-in-law is said to be advising Rahul Gandhi and is believed to be making government documents available to him for the campaign against Rafale.
Lockheed Martin’s alleged actions to work the political ecosystem to pull down the Rafale procurement deal also has a larger strategic context. Contrary to popular perception, the Trump administration is said to be extremely unhappy with India because the NDA government under Modi has been successful in building strong relationships with Saudi Arabia, the United Arab Emirates and Qatar. (IANS)