The arms bazaar

An array of arms, ammunition and other assorted military hardware is on offer before India, which now has a significantly enhanced budget allocation for defence.

EVIDENTLY, news is out that the Government of India may go in for some major defence purchases in 2002. New Delhi has been mulling over the purchase of an aircraft carrier from Russia and Advanced Jet Trainers (AJTs) from Britain for quite some time now. Although Defence Minister George Fernandes was to visit Russia in the last week of March to finalise some agreements, the visit was postponed because of certain "domestic compulsions". Top Russian sources have been hinting that many other major defence deals are on the verge of being clinched.

There are reports that India is exploring possibilities of forging a partnership venture between Hindustan Aeronautics Limited (HAL) and Russia's Ilyushin Design Bureau and Irkutsk Aviation Production Organisation for the development and production of a medium transport aircraft. The Indian Air Force (IAF) has indicated that it would need 35 such aircraft in the near future. Deliveries for the IAF are expected to start within the next seven years.

New Delhi is also planning to buy weaponry from the United States. High-level military teams from the U.S. have visited New Delhi in recent months to resume talks on arms sales to India. Washington's agreement to sell eight pieces of the Raytheon AN/TPQ-37 Firefinder Weapons Locating Radar is an indication of the growing bonhomie in Indo-U.S. relations after September 11. U.S. Ambassador to India Robert Blackwill has been stressing the importance of arms sales as an important factor in increasing the scope of bilateral relations. The Bush administration has already cleared the sale of engines and avionics for the long-delayed Indian Light Combat Aircraft (LCA) project. Senior Indian defence officials are expected to hold talks with their U.S. counterparts soon to explore the possibilities of joint research, development and production of military systems. Indian officials are also scheduled to attend a Security Cooperation Group meeting to be held in Washington to discuss the possible purchase of more weapon systems.

The new Budget presented by Finance Minister Yashwant Sinha has raised the allocation for defence to Rs.65,000 crores, a huge increase over last year's revised estimates of Rs.57,000 crores. With the imposition of an additional defence surcharge of 5 per cent on all categories of tax-payers, the Finance Minister made it clear that national security is "an overriding concern".

However, the fact remains that a big chunk of last year's allocation for the Defence Ministry remained unspent. George Fernandes, after resuming charge as Defence Minister in September 2001, said that his priority would be to utilise the unspent funds urgently to buy much-needed equipment for the armed forces. The Navy, which has 70 ships, is in need of replacements for its aging fleet. No replacement was made for most of the 1990s, while earlier about three new ships were being inducted every year.

The Air Force needs replacements for the aging Mirages and MiG-21s, and the Army for its old tanks. Fernandes had given priority to the acquisition of the Russian aircraft carrier, the Gorshkov, and the British Hawk Advanced Jet Trainers (AJT). On his return to the Ministry, he told mediapersons that he was prepared to place "his neck on the block" in order to procure urgently needed equipment for the armed forces. However, the "coffin scam", which broke out soon afterwards, brought Fernandes back into the eye of a storm.

The former Chief of the Army Staff, General Shankar Roy Chaudhary, is one among many senior retired defence officers who think that some armaments and equipment requested by the armed forces are long overdue. The Defence Procurement Board (DPB) was set up six months ago to provide a single-window facility to the three Services to put up jointly their case for defence purchases. However, no significant arms deals were signed in the last six months. The result was that almost Rs.5,000 crores earmarked for defence procurement remained unspent. The government has indicated that the amount will be utilised to meet the costs of the deployment of the armed forces along the western borders since two and a half months ago.

Gen. Chaudhary said that it would be difficult for the government to go in for a big arms deal at this juncture given the political climate. In fact, retired generals are not the only ones who feel that the recurring scandals relating to defence purchases have dented the credibility of the government in the eyes of the public. Fernandes, on the other hand, has been insisting that the allegations of corruption in defence deals are baseless. With his oft-repeated view that "national security" is of paramount concern being echoed loudly in this year's Budget, indications are that the government will go in for major defence purchases in the coming financial year. Moreover, the government has opened the defence industry for 100 per cent Indian private sector participation, with foreign direct investment.

IT was against this background that leading armament companies from various parts of the world set up shop in New Delhi in the third week of February. The occasion was the defence exhibition, Defexpo-2002, organised jointly by the Ministry of Defence and the Confederation of Indian Industry (CII). Defexpo-2002 was inaugurated by Fernandes on February 19. Fernandes described the exhibition as an endeavour to "showcase India's technological capabilities in ground and naval systems". The focus of the armed forces is on acquiring long-range precision strike capability and state-of-the-art force multipliers. The $2.3-billion Gorshkov deal is likely to materialise in the near future. The agreement in this regard, which was signed during President Vladimir Putin's visit to India in 2001, also includes the purchase of 28 MiG-29 K aircraft, which will be on board the aircraft carrier.

Another $1.5 billion has been earmarked for the purchase of AJTs. South Africa is trying to sell 300 G-6 self-propelled guns worth $1.5 billion. The Swedes are confident that India will opt for the latest version of the Bofors howitzer, first introduced in the Army in 1986. The Swedish media have carried reports about an imminent deal with India. In fact, a senior representative of SWS Defence, the company that now owns Bofors, told this correspondent that the company expected a deal worth more than $1 billion for the purchase of more than 3,000 Bofors howitzers to materialise in the near future.

Gen. Chaudhary said that the request from the Army for more Bofors howitzers had been a longstanding one. According to retired senior Army officers, a Bofors howitzer is comparatively cost-effective. They point out that even a rich country like the United States finds the use of laser-guided missiles and bombs to be too expensive. Moreover, the howitzer proved its effectiveness in the Kargil conflict. However, senior Defence Ministry officials deny that any new deal is in the offing with SWS Defence. (SWS is now a fully owned subsidiary of a U.S.-based company.) There seems to be a great deal of competition between the South Africans and the Swedes to bag the howitzer deal. Both are going out of their way to express their desire to invest in the ordnance factory to be set up in Nalanda. Incidentally, Nalanda is the constituency of George Fernandes.

Russian, Israeli, French and South African companies, which are among the leading suppliers of weaponry and defence technology to India, occupied substantial space at the exhibition grounds. Also in attendance were prominent U.S. manufacturers of defence hardware, reflecting the growing political and strategic ties between New Delhi and Washington. According to the Defence Ministry, the Bush administration has already cleared the way for the sale of weapons-locating radars and spares for the Navy's Sea King helicopters.

Some of the equipment advertised at Defexpo-2002, which found favour with Indian officials, included precision-guided munitions from France, Sweden, Israel and Russia. Vendors from these countries offered bombs that could penetrate bunkers and tanks. The South African-made 155-mm S.P. howitzer, which was on display, was also an attraction. The gun has a 41 km range and a 52-calibre barrel.

A wide range of radars, sensors and other sophisticated intelligence equipment were on display. Other items of interest were anti-terror equipment which included bullet-proof jackets, pistols, machine guns, rifles and vehicle ballistic armour protection equipment. The Navy showed interest in advanced helicopters and will choose from the Eurocopter, the Russian Kamovs and India's own advanced light helicopters (ALHs).

In the aftermath of the Kargil War, a lot of defence equipment has been bought from Israeli firms. Israel has supplied India with expertise in airborne early-warning and control, anti-radar systems and fly-by-wire technology. In the late 1990s, Israel clinched a $80-million deal to supply electronic warfare systems for India's MiG-21 Bis. The much publicised $1 billion Phalcon deal with Israel still awaits final clearance from Washington.

Meanwhile, Russia is not happy with the rapid pace at which India is diversifying its defence purchases. Moscow wants to have a long-term and mutually beneficial relationship with New Delhi in the defence field. The latest example of such collaboration was the joint production of the BrahMos supersonic anti-ship cruise missile. It can carry a warhead of 300 kg and has a maximum range of 300 km. However, the delay in expediting the Gorshkov deal has not helped matters. India claims that Russian "hard sell" is partly responsible for the delay.

The Russians are keen to sell two Amur class submarines along with the Gorshkov. The Russian stall at Defexpo-2002 was one of the most impressive. Organised under the aegis of Rosoboronexport, there were 330 kinds of armaments on display. Among them were models of the new Amur-1650 and Amur-950 diesel-electric submarines, which are comparable to the most modern submarines.

The Defence Research and Development Organisation (DRDO) too put up impressive exhibits at Defexpo-2002. Among the main attractions were the all-terrain ambulance, which is to be inducted into the Army by the end of the year. The Mobile Decontamination Unit, designed by the DRDO, was also on display. According to DRDO officials, it has the capability to decontaminate personnel and weapons systems from any nuclear exposure. Also on display was the new EX tank - an upgraded version of the Arjun, which has incorporated many features of the Russian T-72. A Bridge Layer Tank (BLT), a Multi-Hop Assault System - Sarvatra - and a bridging system capable of spanning a width of 100 metres, were also among the DRDO exhibits.