An IDC Analysis


New Delhi, 26 June 2005

Is India in control of its security postures, or are circumstances of goodwill propelling the country to greater heights in most sectors, and lows in some others? The world is looking to India as the new star on the horizon to contain China and pushing us ahead with investments and consumerism and flattering us to do business with us, and we are drunk with it. At least the media seems to think so and media today appear to be the drivers of events. Is there an Indian strategy to take full advantage of this new factor of good fortune? We sincerely hope so but cannot see one. An NSA can do only so much to keep the PM abreast and on track and also possibly brief the UPA Chairperson but no more –– and the NSC is supposed to formulate strategy but since the battle of Panipat we do not seem to have had one.

We highlight the new Armed Forces Procurement Procedure manual as an example, as some of its clauses appear bizzare. The new rules say multiple bids and standard offsets of 10% will be required for all purchases of over Rs 300 crores, and there must be commonality of choice of the three services in their QRs. In this commonality we see a push for the MiG 29 M2 choice for the IAF's 126 fighters, as the Navy is already committed to buy 12 MiG 29Ks and 4 Mig 29KUBs for $470m. The Russians have offered sops and it makes sense as the Su 30 MKI programme is going strong.

Standardisation for cost reduction and inventory control has been practiced by Armed Forces the world over but we are still to do so. There were several reasons for this and partly also due to India being a ‘buyer’ and not a ‘maker’ of military equipment so far. For standardisation across the board offers economies of scale. For example in Russia, the same gas turbine powers naval and merchant ships, fighter aircraft and meets civil industry needs. The Kelkar Committee report had recommended commonality/ standardisation in equipment procurement for the Armed Forces but so far the MOD, the Chiefs and the DRDO had disregarded this vital factor for years. Even communication frequencies were varied. It is therefore heartening to see the MoD and particularly the Defence Secretary espousing the cause of commonality.

Ajai Vikram Singh has tried this in promotions too but the Navy complied much after the Army and after objections. Now all officers with 11 years service will be of Commander rank and called ‘Tsunami Commanders’, as their promotions came as suddenly as the Tsunami and this will take a toll in the long run. In phase two all will be Brigadiers when they retire. This is what happens when you do not have a CDS and the IAS take charge –– since a Kargil II is unlikely we may have a long wait for a CDS. The bane is that we may have to wait till some one needs to be fitted into the CDS slot and then the decision will come like a bolt form the blue, like another Tsunami!

These are choices of political nature, though the three Service Chiefs can get together for national need and clear one of themselves or possibly an Army General who can serve three years for startrers, accept the inter se change in seniority and come down and force the Government hand with media help for the decision -- but that is very unlikely. Egos will be hurt even by this suggestion.

The IAF never wanted a CDS since ACM PC Lal's time and Field Marshal Sam Manekshaw got his rank but not the position he was slated for. Admiral S M Nanda whose son was a Lt Cdr in the Navy when he left for greener pastures and is now a business tycoon employing service officers world wide from London, has a story to tell on this. When asked if he had any objection to Manekshaw becoming Field Marshal and CDS he replied from Mumbai, "As long as you do not remove any stripes from my shoulders you can give as many as you like to anyone and do what you like". Lal objected. Hence again we ask are we in control of our security postures and does any one know when a CDS will be appointed to head the huge headless IDS in Kahmir House and all over Delhi including the Strategic command in West Delhi in an IAF station. The CDS proposal was a Kargil war post mortem requirement, and the war and its lessons are being forgotten.

As regards procurement of military hardware India could not make up its mind on an AJT for 20 years, Gorshkov for 5 years, Bofors 155mm with complicated off sets and ‘No Agents’ clause for 9 years and now the Scorpene submarine deal for 5 years. However, in BJP times the VIP 5 Embraer deal went through in a few months, as the VIPs needed them for peace time travel and the first with anti-missile defence from USA will be here in August. There is good in all this except, that costs go up horrendously for the delays in decision making and so the poor will have to suffer until that changes and the Government has less deficit. We admit the IAF will finally get the best AJT, the Hawk 132Y and 65 pilots will be trained in UK, which is total luxury and the first batch were given certificates by Prince Charles!

The carrier Gorshkov will be good for Indian Ocean dominance and it looks like we can afford the massive cost, but let us hope not at the cost of the other assets needed for the Navy. Otherwise it will be a case of the King with no clothes in the Indian Ocean, which has happened when the Navy is treated to a feast and then goes through famine, as it is now experiencing. It needs some second hand ships of the line and MR aircraft urgently and submarines need to be ordered. Armies and Air Forces can be raised but Navies have to be built, and that takes time and planning. Those who have spent time building houses know the pains. The 155mm 39 cal Bofors 177 saved us in Kargil and now the new order for self propelled and towed guns if it goes to Bofors, will give the Indian Army, a very good, almost best gun in the world.

The Scorpene deal had come in for criticism for its huge cost overruns because of the escalation cleared by the MOD under George Fernandes. Also professionally it is admitted the MESMA internal breathing steam system is cumbersome in dived mode, and not yet proven. Pakistan has it in its second Agusta II being built at Karachi and reports indicate that it may come a cropper. We do not want that to happen do we in a professional Indian Navy? When Scorpene Type 75 was thought of there was no other choice for a good diesel sumarine builder. At that time HDW had bought out Kockums the only other western builder and the BJP Government and NDA boss George Fernandes and his Samata party relations with the French for valid reasons, were good. But now that the HDW has been exonerated by the Delhi High court of any wrong doing, so like Bofors they are now eligible to bid. The new procurement procedure manual requires 3 bids and so the earlier Scorpene deal stands void in legal terms in the new procurement code and the Congress has dealt with HDW before, and they know the systems and how to build the boats at Mazagon Docks Ltd. So if the Navy can accept delays (do they have a choice?) then the Scorpene bidders have work to do all over again. In India equations can change overnight as we are more emotional than logical and can connive. The Indian Navy may have to wait in this deep game but the 214 export submarine version of the German NATO 204 offered by the HDW with the fuel cell AIP is already proven and if that decision is taken for other reasons it may be good by accident.

We cannot write about the baits because the new procurement procedure says NO BRIBES PLEASE in the future and sign an integrity clause. Yet in defence circles the names of all the "big in between operators is well known", and some money always goes into deep pockets. In the past the Indian Ambassador in Germany had asked in writing whether the extra 7% paid on the first 4 HDW boats was to be paid for the 6th and 7th? Now all have learnt to keep shut and put nothing in writing and if you know something discuss it at the bar and if you are in trouble and have contacts in the MOD and Armed Forces, take a job with the operators. Let us admit this is common the world over as up to 10 % of the deal is always allowed to "in betweens " in arms, shipping and oil deals and in India it is routine. Look at Tehelka or the latest ban on Denel where the small $3.9m deal has posed the question who is Varas Associates, a British intermediary based in the Isle of Man?

The Indian stock market is keeping up with the heat in India and it is zooming ahead just like the temperatures. There are rumours that Indian parties in collusion with some FII (Indians again included) are colluding to see the market perceptions increase upwards and when the time comes to make the kill, get their profits. Reliance's Anil Ambani has added to the perception. He has good supporters –– his Gulf Sream Jet is used by party leaders.

Finally the Government raised petrol and diesel prices and there is no let up in the world's crude oil prices now touching $60 per barrel. One is reminded of the Philipines where consumerism has kept the country moving along and corruption is rampant so the bureaucrats, politicians and their cronies keep in good fettle but the country has never raised the quality of life of its people. The common folk in Philipines are wonderful people, like Indians but they do not have a caste system so there is a little more happiness. The Philipines' armed forces are a bunch of time passers.

India hopes to control the Indian Ocean and safeguard it but in the neighbourhood its Nepal policy is going adrift. This does not augur well for its control and strategy. We have 55 battalions of Gorkhas. With India and the US and Britain putting a brake on the supply of weapons to Nepal till democracy is restored they have played the Pakistan and China card and put out a global tender. This will introduce a wider element to the situation by raising the moot point whether any of these three countries, particularly India, will allow the delivery of weaponry to take place and what steps will be employed to prevent it.

India has a bilateral arrangement with Nepal for the supply of weaponry for the Royal Nepal Army and the police, with an element of exclusiveness built into it. Some years ago when a similar situation arose and Nepal decided to import weapons from China it created a piquant situation especially since the consignment included anti-aircraft weapons which could only have been used against the Indian Air Force and the air wing of the Indian Army. This time around Pakistan has already made known its intention to fish in troubled waters. It has already made known its willingness to supply weaponry to Nepal. It remains to be seen which companies submit tenders in response to the Nepalese Home Ministry’s notice issued in mid-May.

Pakistan would want to respond to Kathmandu’s global arms tender. It has long used Nepalese soil for subversive activity against India. Pakistan’s ISI has perfected the use of airlines for smuggling of drugs, counterfeit currency and the movement of Kashmiri terrorists, the Jehadis and the Khalistanis into India and also their safe evacuation after an operation was executed. This is best highlighted by the hijack flight IC-814 to Kandahar (from Kathmandu during NDA regime) to secure the release of three Jaish-e-Mohammad terrorists languishing in Indian jails. The Babbar Khalsa activists who were involved in the recent cinema hall blasts in Delhi were also nabbed as they were fleeing to Nepal.

The LTTE has a Navy of sorts and is getting a few planes and setting up an airfield and all India is doing is studying Sri Lanka's needs for radars and air defence. Hence the question we pose ‘are we in control of our security and defence postures?’

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