Showing posts with label defence. Show all posts
Showing posts with label defence. Show all posts

Monday, 18 July 2016

Strapped but Wiser ENSURING CASH FOR R&D COs, SMALL FIRMS - MoD Looking at Rs 30kcr Defence Venture Funds

Foreign companies to be allowed to invest in VCFs as part of offset obligations
A Rs 30,000-crore corpus for venture capital funds (VCFs) for defence production by foreign companies -that's the big idea the government is working on.

A ministry of defence (MoD) concept note, which ET has reviewed, proposes that foreign defence companies that have sold equipment to India can invest in VCFs as part of their offset obligations (at least 30% of the contract value must be invested back in India).
Foreign companies can invest up to 25% of their offset obligations in such funds. But the capital won't be repatriable, only dividends will be. Such VCFs will be cleared by the defence ministry. They will have to register with the Securities & Exchange Board of India, as all other funds do. The government sees a `30,000-crore potential for such VCFs. Investment, the note says, will be in companies undertaking defence research and in medium, small & micro enterprises (MSMEs).MSMEs are typically part of the supply chain for larger projects.
“It is expected that in a span of the next five years, the fund will be of the size of `30,000 crore,” another note on the defence offset fund drawn up by the MSME ministry says.
“This (the idea for a VCF) is to enable MSMEs to access funds in order to receive technology and contribute to the growth of Indian defence manufacturing and exports, hitherto perceived to be constrained by lack of access to funds,” the MoD note reads. Ankur Gupta, vice-president of EY India, told ET: “The proclivity of foreign vendors to utilise this proposed avenue could depend upon the lock-in period, guaranteed rate of return, if any, and safety of the principal.”
There have been at least two efforts in the past year to set up a defence-focussed VCF, but neither received MoD clearance. Senior officials told ET the government has been in consultations with funds such as Blackstone and Sequoia to understand global best practices.
The fund is the latest in a series of efforts by MoD to make offset obligations easier to meet. Fines of over $35 million have been imposed on foreign vendors over the past few years. Foreign companies have invested just half of the $1.3 billion investment obligation they had under offset clauses.

Source – The Economic Times (Delhi)

Tuesday, 21 June 2016

FDI Ammo for Big Guns in Small Arms Manufacturing

No change in FDI limits, but `state of art' tech not needed for foreign inflow of over 49% in defence
India has relaxed foreign direct investment norms in defence sector, doing away with the clause that allowed only “state of the art“ technology to be considered for stakes of more than 49% and thereby giving the government more power to decide on investment proposals by foreign entities.
Although the government kept the FDI limit unchanged ­ at 49% under the automatic route and 100% under approval route ­ it ushered in a major boost to the small arms manufacturing sector.
The decision announced on Monday to allow 49% FDI in manufacturing of small arms and ammunition under the automatic route is expected to attract major firms such as Heckler and Koch, Beretta, Colt and IWI to India, which has a huge requirement of firearms for the armed forces, paramilitary as well as police forces.
“The private sector has been striving to share the workload of the OFB (Ordnance Factories Board) for small arms and ammunition manufacture, but the ambiguity in law prevented it from doing so. Now, with this being clearly brought under the defence FDI policy regulations, it will provide a strong impetus, a definite path for the sharing of workload,“ said Ankur Gupta, vice president, aerospace and defence at EY India.
The industry, however, reacted with caution over the removal of the clause which mandated that only state of the art technology be allowed for consideration of investments for over 49% share in projects. Proposals of over 49% FDI are decided jointly by the ministries of defence, commerce and home. As per the revised rules, such proposals will be permitted “in cases resulting in access to modern technology in the country or for other reasons to be recorded”.
This has given the government more authority to decide on foreign investments, leaving overseas entities unclear about which of their proposals will be allowed.

“The ambiguity on what is modern technology remains and there is no clarity on what are the norms to be followed for investing over 49%. This has led to even more confusion,” said an executive at a foreign firm, requesting anonymity.

Wednesday, 15 June 2016

Defence Agents Out of Shadows But have to Walk with Riders

New rules allow defence ministry to access company books, annual reports on payments made to agents
Foreign entities have been allowed to engage agents for defence deals under a strict set of conditions, which includes giving defence ministry access to company accounts.
This is part of the new defence procurement policy, which also bars the practice of paying commissions depending on the success or failure of the effort. The policy, which has been under deliberations for more than a year, was finally put in place on June 8. A key chapter on `strategic partners' is still not ready and will be added later, said officials.
The policy outlines seven specific conditions for employing agents. This includes a clause that they would not be engaged to manipulate contracts or indulge in unethical practices. Besides access to financial documents, no fees linked to the progress of the contract would be allowed. Also an annual report on payments made and full disclosure of past payments will have to be submitted to the defence ministry.
Violation of the conditions would invite penal action but the policy does not state the exact nature of punishment. This, officials said, would be elaborated in a new blacklisting policy that is still in the works.
Interestingly, the provisions also empower the defence ministry to reject any agent hired by the foreign company. This has been put in place to keep out undesirable contact persons out of the procurement loop based on past dealings or controversy. “MoD reserves the right to inform the vendor at any stage that the Agent so engaged is not acceptable whereupon it would be incumbent on the vendor either to interact with MoD directly or engage another Agent. The decision of MoD on rejection of the Agent shall be final and be effective immediately,” the DPP section on agents reads.
The new policy also addresses the issue of payment of commission to agents that is linked to the value of a particular contract. In the ¤556 million AgustaWestland VVIP chopper scam for instance, it was accused that 10% commission was paid.
“The contract with the Agent will not be a conditional contract wherein payment made or penalty levied is based, directly or indirectly, on success or failure of the award of the contract,“ the new policy states. Industry experts have welcomed the MoD move of bringing clarity to the issues.

“The role of `defence agents' has always been under a shroud and this at times has led to delays and even contract cancellations that adversely affect force preparedness. With the norms of appointing and utilising defence agents by foreign vendors being clarified, their role becomes a part of the system and lends overall transparency,” said Ankur Gupta, vice-president A&D, EY India. While technically, agents were allowed in the past, they were never openly appointed by defence companies as their role could be questioned by the ministry. Several contracts, including a recent one for counter mine vessels have been cancelled due to a lack of clarity on the role or mandate of an agent.

Source: The Economic Times (Delhi)

Monday, 29 September 2014

Indian PM Modi rocks Madison Square Garden – New York

NEW YORK: Indian-Americans from across the nation gave a “rock star” treatment to Prime Minister Narendra Modi at the prestigious Madison Square Garden in the Big Apple, where nearly 20,000 strong gathering of Indian Diaspora welcomed the Indian leader.

Shouting slogans like ‘Narendra Modi Zindabaad’, ‘Bharat Mata Ki Jai’ and ‘Welcome Modi’, Indian-Americans started arriving at the venue since early in the morning. People were seen waiting in long queues. By 9 p.m. a large number of people were dressed in Modi T-shirt with portrait of Modi on it. Many were holding banners and slogans like ‘America Loves Modi’.
Some 20,000 people packed the Madison Square Garden for the largest event of its kind for the Indian-American community organised by the recently formed Indian-American Community Foundation (IACF), and supported by more than 400 Indian-American organizers from across the country.
“He is a rock star,” said young college going Deepa Kaur. “We have a lot of expectations from him,” she said. Never seen before, the organisers had lined up a number of cultural events including popular songs, folk dances. People were seen dancing to the tune of these cultural events.
More than 200 media, a significantly large number of them from India, had registered for the event; which organisers said is unprecedented for an Indian American event.
“He is the first Prime Minister who is connected to the NRI (non-resident Indian community). That’s why you see such a large number of people. We filled up the seats in just two weeks. It has never happened in the history of the Madison Square Garden that seats gets filled up some three weeks before the event,” said Anil Sharma, one of the volunteers of the event.
In fact, more than 2,000 volunteers worked day and night for the past three weeks to make he program a success.
“It’s Modi Mania,” said Ankit Patel. “It’s a life time event,” he said.
In fact the event attracted some three dozen Congressmen including several power lawmakers like Senator Robert Menendez, Chairman of the Senate Foreign Relations Committee; Congressman Ed Royce, Chairman of the House Foreign Relations Committee, and Congressman Ami Bera.
South Carolina Governor Nikki Haley, Assistant Secretary of State for South and Central Asia Nisha Desai Biswal were also present. A huge contingent of Indian-American corporate leaders and IT professionals came in from the Silicon Valley for the mega event.
The New York Times in a headline ‘Indian Leader Narendra Modi, Once Unwelcome in US gets a Rock Star Reception’ story today wrote Modi will receive a rally fit for a rock star.
Modi’s fans were seen carrying the Indian tricolour and wore traditional Indian garb with several groups of performers carrying drums and ‘dhols’ to give him a rousing welcome.
There was also a group of Tibetan women carrying banners in support of Modi.
Strict security arrangements are in place with police barricades at several locations.
Besides the main venue, there would be at least 50 other locations across the country where special arrangements have been made for the live telecast of the prime minister’s speech and other events that include a nearly two-hour-long entertainment programme.
At 16.4 per cent, Indian-Americans are the third largest Asian-American group in the US, numbering 2.8 million strong, which is almost 1 per cent of the US population.
Source: Defence News

Saturday, 27 September 2014

Air Force Takes off With Plans to Make Aero India Bigger

BANGALORE: The Indian Air Force (IAF) has begun the preliminary rounds of preparations for the 10th edition of the biennial air show to be held at the Air Force Station (AFS) Yelahanka, in Bangalore, from February 18 to 22, 2015.

With Prime Minister Narendra Modi’s ‘Make in India’ pitch the Aero India-2015 will be seen through ‘a new window of opportunity’ by the aerospace and defence industry now. The IAF officials said they are preparing the ground to accommodate more participants during the air show.
Speaking to Express on the sidelines of a media visit to AFS Yelahanka on Wednesday, ahead of the 82nd IAF Day celebrations on October 8, Air Commodore S C Gulati, Air Officer Commanding of the station said initial talks with various state government agencies have already begun.
“These are early days of preparations and we have the SOPs (standard operating procedures) in place. We hope that the coming show will be bigger in all aspects and AFS Yelahanka is warming up for the task,” said Gulati, a seasoned IAF pilot with close to 8,000 hours of flying. Survey of hospitals and helipads in Bangalore are underway as part of the disaster management plan.
To a query whether the training activities at AFS Yelahanka would be hit if HAL Airport is reopened for commercial operations, Gulati said the IAF’s modern traffic management systems were capable of handling the situation. To another query whether the current activities at the Kempegowda International Airport (KIA) have eaten into the traffic space of the base (as reported by the media earlier), he said the training schedules have not been affected.
“Our training patterns have not changed and are proceeding as planned. We operate on the assigned air space and both the HAL and KIA too do the same. Paris has got three airports and London has four,” said Gulati, who was part of the Air HQ Communication Squadron, flying the Boeing Business Jets, carrying VIPs.
The AFS Yelahanka has the record of being the single largest base in India with maximum number of flying hours. It has to its credit over 20,000 hours of flying, annually.
As part of the IAF’s ongoing modernisation mission, AFS Yelahanka will soon get a new station HQ with the construction work almost entering the last lap. An official said the induction of AFS Yelahanka is poised to increase in the near future.
SOurce : Defence News

Thursday, 25 September 2014

India-U.S. Relations: The View from New Delhi

In this India-U.S. Policy Memo, W.P.S. Sidhu writes that the India-U.S. relationship has progressed significantly over the last 25 years. He outlines areas ripe for deeper cooperation, as well as issues that have the potential to derail ties.
There was a time when India-U.S. relations were summed up in platitudes like “world’s largest democracies,” while seasoned pundits lamented that they were in fact “estranged democracies” that had very little in common. Today, with nearly 30 separate dialogues, the India-U.S. agenda involves issues ranging from the TTP (Tehrik-i-Taliban Pakistan) to the TPP (Trans-Pacific Partnership) and a spate of acronyms in between.
For New Delhi, the principal driver behind the transformation of its relations with Washington lies in the Indian ambition to become the world’s third-largest economy by 2025 and, consequently, also emerge as one of the key global political and security actors. This fundamental objective requires two external conditions: first, at the very least, ensuring a no-war environment, particularly in India’s immediate neighborhood; and second, the ability to shape global rules in terms of existing and emerging norms and institutions that have a direct impact on India’s ambitious development goal and economic well-being—particularly multilateral norms and institutions related to climate, cyber, energy, food, outer space, trade, and water (rivers and oceans) policy.
New Delhi grudgingly recognized that a partnership with the United States was indispensable to attain these twin external conditions. Consequently, it was essential to cooperate not only at the bilateral level but also critical to reach common understanding (if not agreement) in various multilateral and plurilateral fora.
Such bilateral and multilateral interactions have the potential to take India-U.S. relations forward but also to stymie them. Thus, it is crucial to manage the ever widening and deepening India-U.S. relationship carefully if it is to make progress and contribute to India’s primary objectives.
At present three areas are particularly ripe for cooperation and should be prioritized by New Delhi and Washington: clean energy, defense, and infrastructure and investment.
Clean energy: In the lead-up to his election, Narendra Modi’s Bharatiya Janata Party (BJP) pledged to “give a thrust to renewable sources of energy,” and the Modi government’s first budget included significant investments for research and development of solar, wind, clean coal, and other renewable energy sources. The joint statement of the fifth strategic dialogue strengthens institutional structures to enhance cooperation in this area. Now India and the United States need to operationalize these mechanisms for additional cooperation.
Defense: In an effort to bolster domestic arms production and create jobs, the Modi government has raised the limit on foreign direct investment (FDI) in the defense sector from 26 percent to 49 percent. U.S. officials applauded the adjustment and the Indian government and American corporations have said they would like to move forward on a host of sales, and co-development and co-production projects. The parties should capitalize on this moment of mutual agreement.
Infrastructure and investment: Prime Minister Modi’s budget allocated massive sums for urban renewal, transportation, and sanitation projects, and eased restrictions on FDI for construction. The establishment of two collaborative infrastructure efforts launched during a recent visit by top U.S. officials suggests this is another area ripe for movement.
While traction in each of the areas above can help to re-energize India-U.S. ties in the near term, a handful of other issues have the potential to derail them:
Free trade: India’s blocking of the World Trade Organization (WTO) trade facilitation agreement (TFA)—while the fifth strategic dialogue was ongoing—disappointed U.S. officials. India’s justification of its actions, on the grounds that it did not get assurances on food subsidies and stockpiling programs, was grudgingly acknowledged by the U.S. However, diplomats on both sides should find a compromise solution to ensure that the WTO fracas does not derail the revived dialogue.
Intellectual property rights: Western pharmaceutical companies have been at loggerheads with India for years over patent laws and regulations on generic drug production, and India is one of just 10 countries currently on the U.S. Trade Representative’s intellectual property rights watch list. With the Indian government and electorate focused on growth and development, discussion of any measures that could significantly hinder Indian industry and deprive access to cheap medication could backfire.
Regional geopolitics: India is anxious about the upcoming U.S. withdrawal of troops from Afghanistan, suspicious of the American approach vis-à-vis a rising China, and disdainful of U.S. coziness with Pakistan. With hard national interests and a slew of historical grievances at stake, differences of opinion here will be immensely challenging to reconcile.
Diplomatic decorum: The bungled arrest of an Indian consular officer in New York in December 2013 and the lasting—if presently downplayed—effects of the denial of a U.S. visa to then-Chief Minister Modi over his alleged involvement in the 2002 Gujarat riots highlighted a considerable lack of understanding and coordination between the two sides. Rebuilding trust and comfort will take time and dexterity.
Finally, the two parties would do well to seek an early resolution of a couple of other vexing issues, which have the potential either to provide a fillip to or to wreck bilateral relations. If, however, an early resolution is not possible, then both sides should shelve the issues until the new Indian government has had the opportunity to flesh out its policies more clearly.
Civil nuclear deal: The landmark India-U.S. civil nuclear deal lies dormant, due to a dispute over India’s Nuclear Liability Act and the United States backsliding on key elements of the nuclear agreement. Prime Minister Modi has expressed a desire to implement outstanding bilateral nuclear agreements, and American officials have registered hopes that progress will be possible. Still, if large gaps remain, then it might be more sensible to put off trying to find solutions to a later date.
FDI in retail: While India has taken steps to open up various sectors of its economy to FDI—defense, insurance, e-commerce—the multi-brand retail sector remains largely insulated due to sourcing requirements. Reports suggest the BJP-led government is considering a number of adjustments to its retail FDI policies; until their approach is ironed out, it is best to hold off on any related discussions.
Prime Minister Modi’s election provides a unique opportunity to re-energize relations between India and the United States. The parties should recommit themselves to a dialogue of candor and mutual respect, and focus on those areas ripe for progress in order to build much-needed confidence. Only then can India-U.S. ties become what President Obama has called “one of the defining partnerships of the 21st century.”

Source : Brookings

Monday, 22 September 2014

France asks India to finalise joint missile project soon

NEW DELHI: France has asked India for early finalisation of the long-pending Rs 30,000-crore project for joint production of short-range surface-to-air missile (SR-SAM) systems.

In a letter, the French Defence Ministry has told its Indian counterpart that “it will carry out substantial transfer of technology and know-how, especially in the field of missile guidance”.
The French side has proposed that the project “would enable India to get in a few years in areas of strategic missile, the maximum autonomy you have called for”.
SR-SAM is proposed to be a joint venture between India and France and they have nominated the DRDO (Defence Research and Development Organisation) and a French multinational firm for the programme.
The deal has been under negotiations for over five years and has been awaiting final clearance after French President Francois Hollande and then Prime Minister Manmohan Singh in 2013 announced that talks have been concluded between both the sides on the missile development project.
The IAF had raised certain objections over the programme but the Defence Ministry has to take a final call on the programme after holding discussions with all stakeholders.
The French Defence Ministry said it wants to actively participate in new Indian government’s plans to achieve autonomy in field of military hardware production.
It has said that the missile programme would help in meeting India’s domestic market and can also be supplied to future export markets.
Source  : Defence News

Friday, 19 September 2014

First set of defence sector FDI proposals gets FIPB nod

NEW DELHI, SEPT 16:  
The Foreign Investment Promotion Board (FIPB) has given its nod to the first set of defence proposals. The Government had notified new norms allowing higher FDI in the defence sector on August 26.
A senior Finance Ministry official said that the board, at its meeting on Tuesday, cleared 21 of the 35 proposals brought for its consideration. The approved proposals are worth ₹988 crore.
The 21 approved projects include those of Bharti Shipyard, Solar Industries and Kineco Kaman Composites India relating to the defence sector. Though another proposal, of Hatsoff Helicopter Training, came through the Civil Aviation Ministry, it involves the Defence Ministry.
The board also gave its nod to two proposals, of IndusInd Bank and ANZ Capital, related to the financial sector.
However, Sistema Shyam Teleservices’ proposal was rejected. “There were problems in the way the proposal was structured, and also security concerns,” the official said.
(This article was published on September 16, 2014)

Source : Hindu Business Line

Thursday, 18 September 2014

STATOISTICS

China started its economic reforms in the late 1970s. In 1980, China’s GDP–both in absolute and per capita terms in PPP dollars–was smaller than India. In 1984, the Chinese economy overtook us in terms of absolute value of output.
Interestingly, until 1991, the year when India started its economic reforms, India’s GDP per capita was higher than China’s. Since then, the gap between the two economies has only widened. Some experts believe that the economic reforms did not work that well in India because before opening its economy China managed to bring some level of social equality by doing land reforms and ensuring access to education to all section of society. Also its economy is growing at a faster rate while the population growth has stabilized

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Source : TOI

Thursday, 11 September 2014

11 Unbelievable Weapons That Only America And Its Closest Allies Have

U.S. policymakers are girding the American public for a long fight against ISIS, with Secretary of State John Kerry saying that the jihadists could take several years to defeat.
ISIS has one of the most extensive arsenals of any non-state armed group in modern history. But even if not all of their weaponry is applicable to the fight against extremists in the Middle East, it’s worth remembering that the U.S. and its partners still have the overwhelming advantage in hardware.
And it’s not just an advantage over nonstate groups like ISIS.
The U.S. is in possession of a range of weapons that the rest of the world simply doesn’t have.

Weapons like the MQ9 Reaper Drone, the Laser Avenger and the ADAPTIV cloaking give U.S. troops the a leg-up on any battlefield around the world – including in the ongoing battle against jihadist groups across the Middle East.

Monday, 8 September 2014

INDIA as a Great Power

UNLIKE many other Asian countries—and in stark contrast to neighbouring Pakistan—India has never been run by its generals. The upper ranks of the powerful civil service of the colonial Raj were largely Hindu, while Muslims were disproportionately represented in the army.
 
On gaining independence the Indian political elite, which had a strong pacifist bent, was determined to keep the generals in their place. In this it has happily succeeded.
But there have been costs. One is that India exhibits a striking lack of what might be called a strategic culture. It has fought a number of limited wars—one with China, which it lost, and several with Pakistan, which it mostly won, if not always convincingly—and it faces a range of threats, including jihadist terrorism and a persistent Maoist insurgency. Yet its political class shows little sign of knowing or caring how the country’s military clout should be deployed.
That clout is growing fast. For the past five years India has been the world’s largest importer of weapons (see chart). A deal for $12 billion or more to buy 126 Rafale fighters from France is slowly drawing towards completion. India has more active military personnel than any Asian country other than China, and its defence budget has risen to $46.8 billion. Today it is the world’s seventh-largest military spender; IHS Jane’s, a consultancy, reckons that by 2020 it will have overtaken Japan, France and Britain to come in fourth. It has a nuclear stockpile of 80 or more warheads to which it could easily add more, and ballistic missiles that can deliver some of them to any point in Pakistan. It has recently tested a missile with a range of 5,000km (3,100 miles), which would reach most of China.
Which way to face?
Apart from the always-vocal press and New Delhi’s lively think-tanks, India and its leaders show little interest in military or strategic issues. Strategic defence reviews like those that take place in America, Britain and France, informed by serving officers and civil servants but led by politicians, are unknown in India. The armed forces regard the Ministry of Defence as woefully ignorant on military matters, with few of the skills needed to provide support in areas such as logistics and procurement (they also resent its control over senior promotions). Civil servants pass through the ministry rather than making careers there. The Ministry of External Affairs, which should be crucial to informing the country’s strategic vision, is puny. Singapore, with a population of 5m, has a foreign service about the same size as India’s. China’s is eight times larger.
The main threats facing India are clear: an unstable, fading but dangerous Pakistan; a swaggering and intimidating China. One invokes feelings of superiority close to contempt, the other inferiority and envy. In terms of India’s regional status and future prospects as a “great power”, China matters most; but the vexatious relationship with Pakistan still dominates military thinking.
A recent attempt to thaw relations between the two countries is having some success. But tension along the “line of control” that separates the two sides in the absence of an agreed border in Kashmir can flare up at any time. To complicate things, China and Pakistan are close, and China is not above encouraging its grateful ally to be a thorn in India’s side. Pakistan also uses jihadist terrorists to conduct a proxy war against India “under its nuclear umbrella”, as exasperated Indians put it. The attack on India’s parliament in 2001 by Jaish-e-Mohammed, a terrorist group with close links to Pakistan’s intelligence service, brought the two countries to the brink of war. The memory of the 2008 commando raid on Mumbai by Lashkar-e-Taiba, another terrorist organisation, is still raw.
Pakistan’s nuclear capabilities are a constant concern. Its arsenal of warheads, developed with Chinese assistance, is at least as large as India’s and probably larger. It has missiles of mainly Chinese design that can reach most Indian cities and, unlike India, it does not have a “no first use” policy. Indeed, to offset the growing superiority of India’s conventional forces, it is developing nuclear weapons for the battlefield that may be placed under the control of commanders in the field.
Much bigger and richer, India has tended to win its wars with Pakistan. Its plans for doing so again, if it feels provoked, are worrying. For much of the past decade the army has been working on a doctrine known as “Cold Start” that would see rapid armoured thrusts into Pakistan with close air support. The idea is to inflict damage on Pakistan’s forces at a mere 72 hours’ notice, seizing territory quickly enough not to incur a nuclear response. At a tactical level, this assumes a capacity for high-tech combined-arms warfare that India may not possess. At the strategic level it supposes that Pakistan will hesitate before unleashing nukes, and it sits ill with the Indian tradition of strategic restraint. Civilian officials and politicians unconvincingly deny that Cold Start even exists.
Bharat Karnad of the Centre for Policy Research, a think-tank, believes Pakistan’s main danger to India is as a failed state, not a military adversary. He sees Cold Start as a “blind alley” which wastes military and financial resources that should be used to deter the “proto-hegemon”, China. Others agree. In 2009 A.K. Antony, the defence minister, told the armed forces that they should consider China rather than Pakistan the main threat to India’s security and deploy themselves accordingly. But not much happened. Mr Karnad sees feeble civilian strategic direction combining with the army’s innate conservatism to stop India doing what it needs to.
The “line of actual control” between China and India in Arunachal Pradesh, which the Chinese refer to as South Tibet, is not as tense as the one in Kashmir. Talks between the two countries aimed at resolving the border issue have been going on for ten years and 15 rounds. In official statements both sides stress that the dispute does not preclude partnership in pursuit of other goals.
But it is hard to ignore the pace of military investment on the Chinese side of the line. Brigadier Gurmeet Kanwal of the Centre for Land Warfare Studies points to the construction of new railways, 58,000km of all-weather roads, five air bases, supply hubs and communication posts. China would be able to strike with power and speed if it decided to seize the Indian-controlled territory which it claims as its own, says Mr Karnad. He thinks the Indian army, habituated to “passive-reactive” planning when it comes to the Chinese, has deprived itself of the means to mount a counter-offensive.
Unable to match Chinese might on land, an alternative could be to respond at sea. Such a riposte was floated in a semi-official strategy document called “Nonalignment 2.0”, promoted last year by some former national security advisers and blessed by the current one, Shivshankar Menon. India’s naval advantage might allow it, for example, to impede oil traffic heading for China through the Malacca Strait.
China and India are both rapidly developing their navies from coastal defence forces into instruments that can project power further afield; within this decade, they expect to have three operational carrier groups each. Some Indian strategists believe that, as China extends its reach into the Indian Ocean to safeguard its access to natural resources, the countries’ navies are as likely to clash as their armies.
An OCEAN needs a navy ::
China’s navy is expanding at a clip that India cannot match—by 2020 it is expected to have 73 major warships and 78 submarines, 12 of them nuclear—but India’s sailors are highly competent. They have been operating an aircraft-carrier since the 1960s, whereas China is only now getting into the game. India fears China’s development of facilities at ports in Pakistan, Sri Lanka, Bangladesh and Myanmar—a so-called “string of pearls” around the ocean that bears India’s name; Mr Antony called the announcement in February that a Chinese company would run the Pakistani port of Gwadar a “matter of concern”. China sees a threat in India’s developing naval relationships with Vietnam, South Korea, Japan and, most of all, America. India now conducts more naval exercises with America than with any other country.
India’s navy has experience, geography and some powerful friends on its side. However, it is still the poor relation to India’s other armed services, with only 19% of the defence budget compared with 25% for the air force and 50% for the army.
The air force also receives the lion’s share of the capital-equipment budget—double the amount given to the navy. It is buying the Rafales from France and upgrading its older, mainly Russian, fighters with new weapons and radars. A joint venture between Hindustan Aeronautics Limited (HAL) and Russia’s Sukhoi is developing a “fifth generation” strike fighter to rival America’s F-35. As well as indulging its pilots’ need for speed, though, the air force is placing a new emphasis on “enablers”. It is negotiating the purchase of six Airbus A330 military tankers and five new airborne early-warning and control aircraft. It has also addressed weaknesses in heavy lift by buying ten giant Boeing C-17 transports, with the prospect of more to come. Less clear is the priority the air force gives to the army’s requirements for close air support over its more traditional role of air defence, particularly after losing a squabble over who operates combat helicopters.
With the army training for a blitzkrieg against Pakistan and the navy preparing to confront Chinese blue-water adventurism, it is easy to get the impression that each service is planning for its own war without much thought to the requirements of the other two. Lip-service is paid to co-operation in planning, doctrine and operations, but this “jointness” is mostly aspirational. India lacks a chief of the defence staff of the kind most countries have. The government, ever-suspicious of the armed forces, appears not to want a single point of military advice. Nor do the service chiefs, jealous of their own autonomy.
The absence of a strategic culture and the distrust between civilian-run ministries and the armed forces has undermined military effectiveness in another way—by contributing to a procurement system even more dysfunctional than those of other countries. The defence industrial sector, dominated by the sprawling Defence Research and Development Organisation (DRDO), remains stuck in state control and the country’s protectionist past. According to a recent defence-ministry audit, only 29% of the products developed by the DRDO in the past 17 years have entered service with the armed forces. The organisation is a byword for late-arriving and expensive flops.
The cost of developing a heavy tank, the Arjun, exceeded the original estimates by 20 times. But according to Ajai Shukla, a former officer who now writes on defence for the Business Standard, the army wants to stick with its elderly Russian T-72s and newer T-90s, fearing that the Arjun, as well as being overweight, may be unreliable. A programme to build a light combat aircraft to replace the Mirages and MiG-21s of an earlier generation started more than quarter of a century ago. But the Tejas aircraft that resulted has still not entered service.
There are signs of slow change. These include interest in allowing partnerships between India’s small but growing private-sector defence firms and foreign companies, which should stimulate technology transfer. But the deal to buy the Rafale has hit difficulties because, though Dassault would prefer to team up with private-sector firms such as Tata and Reliance, the government wants it to work with stodgy HAL. Even if Dassault had a free choice of partners, though, it is not clear that Indian industry could handle the amount of work the contract seeks to set aside for it.
Richard Bitzinger, a former RAND Corporation analyst now at the S. Rajaratnam School of International Studies in Singapore, sums up the problem in a recent study for the Zurich-based International Relations and Security Network. If India does not stop coddling its existing state-run military-industrial complex, he says, it will never be capable of supplying its armed forces with the modern equipment they require. Without a concerted reform effort, a good part of the $200 billion India is due to spend on weaponry over the next 15 years looks likely to be wasted.
The Tiger and the Eagle ::
The money it will spend abroad also carries risks. Big foreign deals lend themselves to corruption. Investigations into accusations of bribery can delay delivery of urgently needed kit for years. The latest “scandal” of this sort surrounds a $750m order for helicopters from Italy’s Finmeccanica. The firm denies any wrongdoing, but the deal has been put on hold.
Britain, France, Israel and, above all, Russia (which still accounts for more than half of India’s military imports), look poised to be beneficiaries of the coming binge. America will get big contracts, too. But despite a ground-breaking civil nuclear deal in 2005 and the subsequent warming of relations, America is still regarded as a less politically reliable partner in Delhi. The distrust stems partly from previous arms embargoes, partly from America’s former closeness to Pakistan, partly from India’s concerns about being the junior partner in a relationship with the world’s pre-eminent superpower.
The dilemma over how close to get to America is particularly acute when it comes to China. America and India appear to share similar objectives. Neither wants the Indian Ocean to become a Chinese “lake”. But India does not want to provoke China into thinking that it is ganging up with America. And it worries that the complex relationship between America and China, while often scratchy, is of such vital importance that, in a crisis, America would dump India rather than face down China. An Indian navy ordered to close down China’s oil supplies would not be able to do so if its American friends were set against it.
India’s search for the status appropriate to its ever-increasing economic muscle remains faltering and uncertain. Its problems with Pakistan are not of the sort that can be solved militarily. Mr Karnad argues that India, from a position of strength, should build better relations with Pakistan through some unilateral gestures, for example cutting back the size of the armoured forces massed in the deserts of Rajasthan and withdrawing its short-range missiles. General Ashfaq Parvez Kayani, head of Pakistan’s army, has declared internal terrorism to be a greater danger to his country than India. That may also offer an opportunity.
China’s confidence in its new military power is unnerving to India. But if a condescending China in its pomp is galling, one in economic trouble or political turmoil and pandering to xenophobic popular opinion would be worse. Japan and South Korea have the reassurance of formal alliances with America. India does not. It is building new relationships with its neighbours to the east through military co-operation and trade deals. But it is reluctant to form or join more robust institutional security frameworks.
Instead of clear strategic thinking, India shuffles along, impeded by its caution and bureaucratic inertia. The symbol of these failings is India’s reluctance to reform a defence-industrial base that wastes huge amounts of money, supplies the armed forces with substandard kit and leaves the country dependent on foreigners for military modernisation.
Since independence India has got away with having a weak strategic culture. Its undersized military ambitions have kept it out of most scrapes and allowed it to concentrate on other things instead. But as China bulks up, India’s strategic shortcomings are becoming a liability. And they are an obstacle to India’s dreams of becoming a true 21st-century power.
Source : Defence News

Friday, 5 September 2014

India is an emerging Democratic Superpower : Australian PM

MUMBAI: Describing India as an “emerging democratic superpower”, Australian Prime Minister Tony Abbott today said he looks forward to making the most of the abundant opportunities for business in the country.
Kicking off his two-day India visit from the commercial capital, Abbott said Prime Minister Narendra Modi’s call “come, make in India” was “close in spirit and in intent” to the phrase he had used in respect of Australia that “we are open for business”.
“This is a country which has amazed the world over the last few decades with its growth and its development – the world’s second most populous country; on purchasing power terms, the world’s third largest economy, clearly, the emerging democratic superpower of the world and a country with which Australia has long and warm ties.
“The purpose of this trip, as far as I am concerned, is to acknowledge the importance of India in the wider world, acknowledge the importance of India to Australia’s future, to let the government and the people of India know what Australia has to offer India and the wider world for our part, and to build on those stronger foundations,” he said addressing a 30-member business delegation accompanying him on the trip at Hotel Taj Palace.
Noting how India has changed “enormously” since his last visit 33 years ago as a backpacker, Abbott, who has expressed keenness to sign a nuclear deal with the country, said, “I can remember on my first day in Mumbai watching a bullock cart take material to a nuclear power station.
“Well, 33 years on, there aren’t that many bullock carts left in urban India, and the power stations – the nuclear power stations – are more sophisticated than ever,” he said.
Abbott, who had visited Taj Hotel, India’s icon of hospitality, during his 3-month trip in 1981, and had lunch there, described it as one of the truly magnificent hotels in the world.
“Back in 1981 I spent three months as a backpacker roaming around India – this mysterious, fascinating, enthralling sub-continent, this world in one country – and I spent a lot of time in third-class compartments of railway carriages, I’d spent a lot of time in two rupee a night hotels and I thought, I’m going to have to treat myself.
“So, I came here to the Taj Hotel and I had the best lunch this hotel could provide and I’m sure that the breakfast we’re about to enjoy will be no less splendid than the lunch I had here 33 years ago,” he told the delegates, fondly reminiscing about his visit.
Abbott said though there is no dearth of opportunities elsewhere in the vicinity of Australia, there is “an abundance of opportunities” in India.
“I am determined to make the most of them, I know all of you are determined to make the most of them and I look forward to working very closely with you and with our Indian interlocutors over the next two days,” he told the delegation.

Source : Defence News

Tuesday, 2 September 2014

India, Japan agree to strengthen defense ties

In his first state visit, Indian Prime Minister Narendra Modi has met with a kindred spirit, Japanese Premier Shinzo Abe. The two leaders, wary of China's glowing clout in Asia, have agreed to strengthen defense ties.
India, Narendra Modi, Japan Shinzo Abe, visit 1.9.
semco tech services
During his visit to Japan on Monday, Indian Prime Minister Modi warned Asian powers against territorial expansionism, in a veiled reference to China's ambitions in the region.
"The 18th century situation of expansionism is now visible," Modi said, after holding talks with Japanese Prime Minister Shinzo Abe in the historic city of Kyoto. "Such expansionism would never benefit humanity in the 21st century."
Modi didn't specifically mention Beijing, but China and India contest several regions along their common border. Abe shares Modi's suspicion of China's intentions in the region. Beijing and Tokyo dispute the Senkaku Islands, called the Diaoyu in Chinese.
Over the summer, Prime Minister Abe's Cabinet approved a reinterpretation of Japan's pacifist constitution, permitting Tokyo to defend allies and deploy troops abroad for combat missions.
'Strategic, global partnership'
Although Abe and Modi failed to set up a permanent forum for their foreign and defense ministers to hold regular consultations, they did agree to "upgrade and strengthen" their defense ties. Tokyo is keen to sell New Delhi US-2 amphibian aircraft. The two countries also agreed to participate in joint maritime drills, and for Japan to continue participating in US-India drills.
"Together, working hand-in-hand with Prime Minister Modi, I intend to fundamentally strengthen our relationship in every field to elevate our relationship to a special strategic and global partnership," Prime Minister Abe said.
The two leaders also agreed to double Japan's investment in India over the course of five years to a total of 3.5 trillion yen ($33.6 billion, 25.5 billion euros).
slk/kms (AFP, dpa, Reuters)
Source : http://www.dw.de/