Friday, April 6, 2012

India Can’t Shoot Straight

April 4, 2012, 12:24 p.m. ET

Without foreign investment, India won’t get the arms it needs to defend itself.

The leaked contents of a letter India’s army chief sent to the prime minister sent shock waves around the country last week. In the letter, Gen. V.K. Singh warns that the military is obsolete and unfit to go to war. The government is furious about the leak, while it’s also battling suggestions that its relationship with the military is strained. Yet New Delhi hasn’t acknowledged its own failure to liberalize the defense industry is a big part of the problem.

The government has been quarrelling with Gen. Singh recently over a legal challenge about his mandatory retirement age and allegations of a lobbyist offering him a bribe. In this, as well as a media report this week of unauthorized troop movements toward Delhi, the spotlight is on how the secret letter was leaked. Regardless of who slipped a copy to the press, this missive performs a useful public service in highlighting just how unprepared the country is for military action.

Though its defenses aren’t in immediate peril, India is nowhere near having the robust military its government expects to cope with a possible two-front war against China and Pakistan, its main adversaries. The letter notes that Indian army’s air defenses are "97% obsolete"; its tank fleet lacks ammunition and is night-blind; its artillery has huge shortfalls; and its elite forces lack essential arms.

No branch of the military has the hardware it needs. Of the target strength of 39.5 combat squadrons for the air force, only 28.5 are combat-worthy today. The navy will be left with only 9 operational submarines this year against a requirement of 30. The infantry likewise lacks basic equipment, with half of the 1.3 million-strong army’s foot soldiers yet to receive combat kits to replace their World War II-vintage gear.

Ground-based air defense is practically non-existent, the saving grace being that the air force provides 90% of the air defense cover. India’s T-72 tanks from Russia can’t fight at night, unlike Pakistani tanks. Though New Delhi can deploy T-90 tanks with night-fighting capability, ordnance factories can’t produce sufficient ammunition for them. Meanwhile, India last bought artillery guns 25 years ago.

While no country can afford 100% modern weaponry, most militaries strive to maintain a balanced equipment profile—a mix of 30% modern, 40% matured and 30% obsolescent. But more than half of India’s equipment has slipped into the last category.

These shortfalls have potentially serious consequences. Unless the trend is reversed, India will find it hard to deter Pakistan’s army from misadventures in Kashmir, such as happened in 1999 when Islamabad felt confident enough to occupy the area around Kargil. And if its conventional forces can’t compel Pakistan’s army to keep jihadis in check, India will struggle to prevent terror attacks on its soil.

Pakistan now poses less of a conventional threat to India than in decades past, but China has potent and growing military capabilities that test India’s readiness. Although Delhi’s nuclear arsenal provides strategic deterrence, a limited conflict under the nuclear threshold would expose its under-resourced military. Beijing could capitalize on this weak deterrence and become more aggressive along the disputed Sino-Indian border. Meanwhile, the rest of Asia, which considers Delhi a counterweight to Beijing, could look elsewhere for support.

The big problem isn’t a lack of resources. Delhi procures $15 billion worth of weapons every year and it has ironically been the top importer of military equipment in the last five years. Over the next five years, India will spend an estimated $90 billion on arms.

Instead, it’s a mixture of bureaucracy and bad policy. Overly complicated procurement procedures take a minimum of 36 months to buy an item. The defense minister, conscious of his honest image, has blacklisted arms manufactures at the slightest bribery allegation. How can India buy an artillery gun when all the major gun manufacturers are blacklisted by Delhi?

Besides imports, what money does get spent ends up dumped into inefficient production which New Delhi wants done at home. Although domestic supply meets barely 30% of India’s equipment needs, India employs as many workers in its state-owned defense companies and ordnance factories as the U.K. or France—two of the world’s biggest arms exporters.

An insignificant private presence and a 26% cap on foreign investment mean that the state-owned units monopolize defense manufacturing and predictably weaken it. New Delhi mandates that a foreign company like Boeing that wins an Indian arms contract use these local units for a set percentage of production. All technology transfers in import agreements also fatten these incumbents. In an uncompetitive market, they profit by just importing equipment, assembling it and selling it to the military at a high profit.

This chicanery in the name of "indigenization" must stop. Removing the foreign investment cap would do this, and provide a better investment climate to attract foreign manufacturers. Gen. Singh rightly warns about a "lack of urgency at all levels" on matters of national security. If the government doesn’t urgently bridge shortfalls in equipment, simplify procurement methods and open the defense industry to foreign investors, the world’s largest democracy won’t get the modern military it needs to defend itself.

Mr. Singh heads the national security program at the Takshashila Institution and is editor of Pragati—The Indian National Interest Review.

Also see:

"CAG report on gaps in India’s security failed to bother MPs"

"Ajai Shukla: Made by India, not Made in India"

"B G Verghese: Is India’s defence establishment ROTTING?"


"Pentagon Pushes Crowdsourced Manufacturing"

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