India is a huge market. Russia might be the “best bet” as a source of armoured vehicles, aircraft and naval vessels, but there is plenty of room for other nations’ defence industries… particularly if they have the common sense to partner with Indian companies and foster domestic production of licenced products. Can you imagine the unit cost of a Type 26 frigate if BAE Systems could add a dozen Indian Navy vessels to the scant 13 proposed for the Royal Navy? The Indian Shishumar- class submarine is a licenced copy of the German Type 209 (with lead vessels built in India and follow-on vessels built in Indian yards). As the Indian submarine fleet expands – particularly towards nuclear-powered boats – there is a clear opportunity for British, French and American defence companies to reach out and offer alternatives to over-dependence on Russian goodwill.
Why Russia is still India’s best bet for defense procurement despite problems
These are the difficult times for Russia as it no longer finds itself as singularly favored as it once used to some years ago in milking the lucrative Indian defense market. And yet the Russians are the best bet for India when it comes to defense procurement.
Here are the glass half-full and glass half-empty pictures for Russia when it comes to doing business with the new-look of the Indian defense sector.
The Down Side
On the down side, there can be three strong undercurrents which stack up against Russia.
One, Russia still continues to be the single largest defense vendor for the Indian industry and is responsible for over 60 percent of Indian weaponry currently in use by India – a situation that a resurgent India and its military establishment are not happy with and are showing signs of change, much to the chagrin of the Russians.
Two, the Russian defense exports market is shrinking. The Russia-China defense relationship is not in good shape because of various reasons, particularly the fact that the Russian defense imports are no longer welcome by the Chinese. India, on the contrary, remains one of the biggest purchasers of Russian arms purchasers in the world today.
The figures speak for themselves. Even in these hard times of a declining Indo-Russian defense partnership, India accounted for some 25 percent of Russia’s arms sales revenue. In the year 2011 alone, India spent $3.3 billion on Russian arms.
Though the Indian defense procurement policy is rapidly being kept abreast to meet contemporary challenges with a sharply-increased focus on self-reliance as demonstrated by the latest policy changes announced by the Indian defense establishment on June 1, 2013, the political bosses in New Delhi are well sensitized to keep Russia in good humor.
According to the new Defense Procurement Procedure-2013, unveiled by the Indian defense ministry on June 1, 2013, the requirement of the prescribed indigenous content, that is 30% in the Buy (Indian) category, is to be achieved on the overall cost basis, as well as in the core components like the basic equipment, manufacturers recommended spares, special tools and test equipment taken together. In addition, the basic equipment must also have minimum 30% indigenous content at all stages including the one offered at the trial stage. It has further been stipulated that an indigenization plan will be provided by the vendor.
Three, the Russians have of late faced cut-throat competition from the West and even from a small state like Israel in eating into the rapidly-shrinking and competitive Indian defense market. Till a few years ago, it was a rarity for India to buy American defense equipment. But this situation has changed drastically, much to the discomfiture of the Russians.
The Up Side
Simultaneously, there are three very good reasons as to why the Russians are still the best bet for India in defense procurements and why it is a win-win situation for India and Russia to continue their age-old partnership on defense and strategic issues.
First of all, the Russians have an established track record of supporting its friends to the hilt. The biggest contemporary example is Syria.
Russia has sent a loud and clear message through the current Syrian crisis that it will stand by its allies, whatever it takes. This is a husband-like virtue which all states appreciate, cutting across their ideological tilts. In the ongoing Syrian crisis, Russia has demonstrated to everybody that it firmly stands by its proclaimed friends, even when they are in a snake pit.
Therefore, it becomes a Russian USP for selling its armaments. The message is unmistakable: that Russia will stand by you even if you are in the midst of the worst rough and tumble diplomatically.
No country can better vouch for this than India!
The second point is closely inter-related to the first one. It relates to the spin-off effects of tying up your lot with Russia – and not to forget the ever-readiness of the Russians to transfer technology that the US and its Western allies never do for anyone.
While the West is known to bandy about its existing democratic and governance systems and pegging implementation of their defense deals to their own so-called constitutional and legal requirements and ending up in reneging on their promises and pledges, Russia will never do this.
The world needs to learn from India and its political leadership how not to belittle or berate Russia and assess Russia on its impeccably high delivery quotient when it comes to living up to its promises.
Why else is it that the Indian political leadership has never criticized or levied financial penalties on Russia despite the long delays and cost overruns that have plagued a vast percentage of Indo-Russian bilateral defense contracts as well as Indo-Russian joint projects in the defense arena?
Russia’s solid support to India extends well beyond the defense procurement arena. The Indians won’t have been ensconced in their foreign military facilities like Ayni, near Dushanbe and Farkhor, near the Afghan border in Tajikistan, but for an indulgent Russia which wields strong influence over Tajikistan.
Now the third point in favor of Russia flows from the second one. The example in this case too is India again.
India cannot dream of having an effective military defense without access to a satellite navigation system which the Russians have been so gladly and willingly providing: the Glonass (Globalnaya Navigatsionnaya Sputnikovaya Sistema), Russia’s own version of the American Global Positioning System (GPS).
The Glonass system passed a stiff military test in 2008 during Russia’s war with Georgia. During this conflict, the Russians turned to the Americans for help as Glonass lacked the number of satellites that would ensure its proper functioning. But the Americans played dirty and switched off their GPS system in the region, hampering the Russian military operations in a big way. But the Russian Glonass proved its worth.
The Indians know very well that the Americans won’t be of any help in the event of an India-Pakistan conflict. The only fall-back option for the Indians in such an event would be Glonass, and that is why when Russia offered India access to the Glonass military system in October 2011, Indian defense minister A.K. Antony readily and gratefully accepted.
The bottom line is clear. Though the Indian defense procurement conditions are getting tougher and tougher for the Russians, the time-tested strategic partners will do well to stick together, smooth out the rough edges and repair their defense ties in mutual interest.
India should realize that its defense contracts with overseas suppliers may at anytime end up with the latter applying political strings to the done deals. Russia has never done this.